Strict construction of declared goods classification kept tractor tyres and tubes at the lower additional tax rate.

Tractor tyres and tubes were treated as not falling within the category of declared goods under Section 14 of the Central Sales Tax Act, 1956, because the reference to wheels, tyres, axles and wheel sets was construed strictly and, applying ejusdem generis, was not extended to tractor tyres and tubes. As a result, additional tax under Section 3-A of the Uttar Pradesh Value Added Tax Act, 2008 remained payable. The later notification dated 7 September 2012 was read as a clarificatory indication that tractor tyres and tubes were never intended to be covered by Entry 5 of the earlier notification dated 31 March 2011, so the lower 1% rate applied instead of 3%.

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Issues: Whether tractor tyres and tubes were liable to additional tax at 1% or 3%, and whether they were declared goods excluded from the higher levy.

Analysis: Tractor tyres and tubes were held not to be declared goods under Section 14 of the Central Sales Tax Act, 1956. Clause (xiv) referring to wheels, tyres, axles and wheel sets was construed strictly and, applying the principle of ejusdem generis, was found not to extend to tractor tyres and tubes. Under Section 3-A of the Uttar Pradesh Value Added Tax Act, 2008, additional tax remained payable on such goods, and the later notification dated 7 September 2012 was treated as a clarificatory indication that tractor tyres and tubes were not intended to fall within Entry 5 of the earlier notification dated 31 March 2011. In a taxing statute, where two views are possible, the one favourable to the assessee was preferred.

Conclusion: Tractor tyres and tubes were not declared goods and were chargeable to additional tax at 1% under Entry 1 of the notification dated 31 March 2011, not at 3% under Entry 5. The revisionist succeeded and the tribunal order was set aside.

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