TaxTMI 
TaxTMI 
TaxTMI 
2010 (7) TMI 879
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....8.2.1995 for the assessment year 1993-94 the assessing authority took the view as under in para 5. "5) They have effected dyes colours to the tune of Rs.29,35,055.00 during the year 93-94. Perusal of the sale bill revealed that they have effected dyes colours to the leather manufacturers for Rs.15,10,202.00. Thus is evident that the sales of dyes colours effected to the leather manufacturers are only for the use on leathers and that for on any other purposes. The sales of dyes colours for use on leathers would attract liability to tax at 12% under item 16 of the Part E of the I Schedule. But they have paid the sales tax at the rate of 5% under entry 49 of Part C of I schedule. Hence the turnover of Rs.15,10,202/- is assessable to the tax at 12%." At that point of time since there was a clarification issue pending before the Special Commissioner and Commissioner (CT), Madras with regard to the rate of tax to be applied on the sale of "dyes" used on leathers, namely, whether to be taxed at 12% or 5% for a sum of Rs.15,10,202/-, the assessing authority determined the tax liability at the rate of 5% subject to revision if any to be made based on receipt of clarification. Subsequently....
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....along with "pigments including water pigments", the "dyes" being a colourant and used for finishing of leather it would fall under entry 16(iii) and therefore the rate of tax applicable for entry 16(iii) of Part E was correctly applied by the lower authorities as well as the Tribunal. (ii) The learned Special Government Pleader placing reliance upon the decisions reported in INDUSTRIAL GASES LTD., V. COMMISSIONER, SALES TAX, U.P., LUCKNOW (Vol.XXI (1968) STC 124) and STATE OF GOA AND OTHERS V. LEUKOPLAST (INDIA) LTD (Vol.105 (1997) STC 318) contended that such an approach made by the lower authorities does not call for interference. (iii) The learned Special Government Pleader lastly contended that in any event if there is any doubt as to the applicability of appropriate entry, namely, whether entry 49 of Part C or under entry 16(iii) of Part E, the issue should be left to be decided by the assessing authority by making a detailed study about the nature of products and its application by the appropriate users by remitting the matter back to the assessing authority. 7. Having heard the respective counsel, at the outset we hold that having regard to the nature of orders passed and....
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.... we are convinced that with the details available in the order of the assessing officer, the lower appellate authorities as well as the Tribunal, we would be able to answer the issue raised in the revision petition by applying the appropriate provisions contained in the Act. 9. With that we proceed to deal with the question raised in these revision petitions, namely, whether "dyes" sold to merchants dealing with finishing of leather would fall under entry 49 of Part C of the I schedule or entry 16(iii) of Part E. The said entries as they stood in 1993-94 and 1994-95 in the statute book was reading as under: Entries extracted from the first schedule to the TNGST Act (as they stood in 1993-94, 94-95) Part-C, Sl.No.49 Part-E, Sl.No.16 (Rate of tax 5% (Rate of tax 12% first salefirst sale point point) 49.Dyes, that is to say- (i) Acid Dyes 16(i) Paints and enamels not otherwise specified in this schedule including power paints, stiff paste paints and liquid paints (ii)Alizarine dyes (ii)Colours (iii)Bases (iii)Pigments including water pigments and leather finishes (iv)Basic dyes (iv)Dry distempers including cement based water paints, oil bound distempers, Plastic emulsion pain....
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....f dyes colours for use of leathers would attract liability to tax at 12% under item 16(iii) of Part E of the I schedule. No other reason has been attributed for reaching the said conclusion. Therefore, the assessing authority based his conclusion by applying "user theory" in order to apply entry 16(iii) of Part E. 11. When we examine the order of the Appellant Assistant Commissioner, we find that according to him, entry 49 is a general entry and entry 16(iii) is a specific entry and therefore 'the general entry' should yield to a 'specific entry' and consequently the rate of tax as specified in the 'specific entry' alone would apply. As far as the Tribunal is concerned it took the view that the sales effected by the assessees to leather merchants were involved in leather finishing work and therefore entry 16(iii) alone would apply. 12. In our considered opinion none of the above conclusions were justified inasmuch as we find that "dyes" as a colourant has been specifically mentioned in entry 49 of Part C while the entry contained in 16(iii) of Part E only relates to "pigments including water pigments". At best the expression "leather finishes" used in entr....
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....e of product, its application as well as its effect when applied on different substances as between "dyes" and "pigments". Therefore, in our considered opinion, when "dyes" and "pigments" have been classified as two different and distinct substances, it would be travesty of justice to hold that "dye" should also be classified as "pigment" though there is no such mentioning to that effect in the entry relating to "pigments" as contained in entry 16(iii) of Part E. We are not therefore persuaded to approve of any of the conclusions of the lower authorities as well as that of the Tribunal and also the submissions of the learned Special Government Pleader that since because the "dyes" are used in the process of finishing of leather, the dyes should be held to be a 'pigment' and thereby bring them under entry 16(iii) of part E. 15.In this context, we are reminded of the well settled principle that in taxing statutes, strict interpretation of the provisions should be made and there is no scope for either liberal interpretation or any interpretation by way of inference as regards any of the provisions contained in the taxing statutes. In the decision reported in A.V.Fernandez Vs.....
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....erpretation, etc. can only be resorted to when the plain words of a statute are ambiguous or lead to no intelligible results or if read literally would nullify the very object of the statue. Where the words of a statute are absolutely clear and unambiguous, recourse cannot be had to the principles of interpretation other than the literal rule, vide Swedish Match AB Vs. Securities and Exchange Board of India (AIR 2004 SC 4219)......." 16. Therefore, going by the provisions, namely, the entry as contained in Serial Number 49 of Part C we hold that "dyes" would fall under the said entry while the same cannot by any stretch of imagination be brought under entry 16(iii) of part E which specified "pigments including water pigments". At the risk of repetition we hold that the expression "leather finishes" used in entry 16(iii) of Part E can only be understood by applying the well known legal maxim "Ejusdem Generis," namely, the context in which it is used and state that the "pigments including water pigments" when used in the process of leather finishing works would fall under the said category. In other words, while "pigments" would straightaway fall under entry 16(iii). "pigments or wa....