TaxTMI 
TaxTMI 
1981 (1) TMI 213
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....al leave raises the question whether on a true construction of entry No. 15 of Notification No. ST-II-4949/X-10 (2)-74 dated May 30, 1975, issued under section 3-A of the U.P. Sales Tax Act, 1948, the negotiated sale of a thermal power plant by appellant No. 1 to appellant No. 2 is exigible to sales tax thereunder. The short facts giving rise to the question may be stated: A thermal power plant at Rampur comprising seven boilers, five turbines together with its associate auxiliaries, components and accessories originally belonged to the U.P. State Electricity Board. The Board, after selling it in working condition to appellant No. 1 on May 29, 1974, for Rs. 41.31 lakhs, called upon the latter to pay sales tax thereon which was paid under....
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.... 2 was not exigible to tax. The Commissioner by his order dated February 19, 1977, negatived the contention holding that the four words "old, discarded, unserviceable or obsolete" had been used disjunctively and each adjective had its own meaning and sense and that since the power plant had been used before its sale by appellant No. 1 to appellant No. 2 it was old machinery and the sale thereof was liable to tax under the said entry. Feeling aggrieved by that order the appellants preferred an appeal to the Allahabad High Court being F.A.F.O. No. 39 of 1977 and a learned single Judge of the Lucknow Bench on April 18, 1979, dismissed the appeal and confirmed the Commissioner's view that since the concerned power plant had been purchased by....
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....--------- I II III IV -------------------------------------------------------------------------------- 15. Old, discarded, unserviceable or Sale to 5 per cent. obsolete machinery, stores or consumer. vehicles including waste products except cinder, coal-ash and such items as are included in any other notification issued under the Act. -------------------------------------------------------------------------------- The question is whether the negotiated sale of the thermal power plant at Rampur by appellant No. 1 to appellant No. 2 falls within the aforesaid entry so as to attract sales tax at 5 per cent on the sale price charged by appellant No. 1 to appellant No. 2. In other words the quest....
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....ression "old" which is more general should be restricted to a sense analogous to that of the less general expressions, namely, "discarded, unserviceable or obsolete" and read in this manner the sale of the power plant in question could not be regarded as sale of old machinery falling within the entry. On the other hand counsel for the respondents supported the view taken by the Commissioner of Sales Tax as well as by the High Court, for, according to him, the principle of noscitur a sociis would not apply to the construction of the expression "old" occurring in the entry. He urged that the four adjectives have been used disjunctively and each must be given its own separate meaning and pointed out that in two decisions, namely, State of B....
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.... it were, their colour from each other, the meaning of the more general being restricted to a sense analogous to that of the less general." Moreover, even in the two decisions relied upon by counsel for the respondents where this Court refused to apply the principle of noscitur a sociis while construing the definition of "industry" in the two concerned enactments because the legislature had deliberately used wider words in order to make the scope of the defined word correspondingly wider, the court has observed that "it is only where the intention of the legislature in associating wider words with words of narrower significance is doubtful, or otherwise not clear that the present rule of construction can be usefully applied". In other wo....
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.... "old" has been deliberately used in a wider sense. In the absence of any indication to that effect and when the expression "old" is by itself vague, imprecise and ambiguous, being too general, the principle of noscitur a sociis will have to be applied, i.e., all the associated words will take colour from each other, the meaning of the more general adjective, viz., "old", being restricted to a sense analogous to the less general adjectives "discarded, unserviceable or obsolete". In other words in order to fall within the expression "old machinery" occurring in the entry, the machinery must be old machinery in the sense that it has become non-functional or non-usable. In our view, therefore, on a true construction the sale of the thermal ....