TaxTMI 
TaxTMI 
2010 (5) TMI 766
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....product is covered by the word "bicycle", as such, the same is exigible to tax at four per cent as it falls under Schedule C, entry 14 which reads thus: "Bicycles, tricycles, cycle rickshaws and parts, components and accessories and tyres and tubes thereof." The appellant, therefore, filed an application under section 56(1)(e) of the Maharashtra Value Added Tax Act, 2002 (in short, "the VAT Act, 2002") before the Commissioner of Sales Tax, Maharashtra State, Mumbai for determination of the rate of tax on "E-bike-Matrix". It is the case of the appellant that the product sold by the appellant is not "motor-vehicle" and therefore, the same is covered by Schedule C, entry 14 which is exigible to tax at four per cent. In support of its contentions, the appellant produced on record various documentary evidence including a certificate issued by the Automotive Research Association of India stating therein that the said product is not "motor vehicle". The appellant also produced the affidavits of its clients, who had purchased the said product as "bicycle". The said application was decided by the Sales Tax Commissioner, Mumbai vide its order dated December 17, 2007 holding that the said ....
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....hways by which the Central Motor Vehicles Rules, 1989 has been amended by the Central Motor Vehicles (Fifth Amendment) Rules, 2005 and the following clause has been inserted defining the "battery operated vehicle ": " 'Battery operated vehicle' means a vehicle adopted for use upon road and powered exclusively by an electric motor whose traction energy is supplied exclusively by traction battery installed in the vehicle: Provided that if the following conditions are verified and authorized by any testing agency specified in rule 126, the battery operated vehicle shall not be deemed to be a motor vehicle. (i) The thirty minutes power of the motor is less than 0.25 k/w. (ii) The maximum speed of the vehicle is less than 25 km./h. (iii) Bi-cycles with pedal assistance which are: (a) equipped with an auxiliary electric motor having a 30 minute power less than 0.5 kw whose output is progressively reduced and finally cut off as the vehicle reaches a speed of 25 Km/h, or sooner, if the cyclist stops pedalling and, (b) fitted with suitable brakes and retro reflective devices, i.e., one white reflector in the front and one red reflector at the rear. Explanation: The thi....
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.... the product in question can more appropriately fall, then it is not permissible to have resort to a residuary entry. Mr. Patkar, thus, submitted that in the present case the appellant's product squarely stands covered by the word "bicycle" and, therefore, the authorities below erred in coming to the conclusion that there is no specific entry in the Schedule and therefore, the same would fall under the residuary entry. Mr. Patkar further relied on the judgment in the matter of State of Maharashtra v. Bradma of India Ltd. reported in [2005] 140 STC 17 (SC); [2005] 4 RC 400. In this case, the apex court held that a specific entry in the Schedule to a taxing statute would override a general entry. Resort can be taken to the residuary entry only when a liberal construction of the specific entry cannot cover the goods in question. On the basis of this interpretation, Mr. Patkar urged that the appellant's product is squarely within the sweep of Schedule C, entry 14 and, therefore, there is no question of putting the same under the residuary entry. Per contra Mr. Sonpal, learned "A" Panel counsel for the respondents/Revenue, submitted that both the authorities below have right....
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....fined in local dictionary. In common as well as in commercial parlance, "bicycle" is what as defined earlier whereas the product involved in the present case is battery operated "E-bike". In support of this submission, he relied on the judgment in the matter of Commissioner of Sales Tax v. Suraj Rubber Industries reported in [2008] 11 VST 480 (All). In this case, the Allahabad High Court held that in interpreting the entries of taxing statutes, preference should be given to the common parlance meaning over the one as defined in a dictionary. The commodity should be understood in the sense in which persons dealing with it understand. He also relied on the judgment in the matter of Commissioner of Sales Tax, Madhya Pradesh, Indore v. Jaswant Singh Charan Singh reported in [1967] 19 STC 469 wherein the apex court held that while interpreting items in statutes like the Sales Tax Acts, resort should be had not to the scientific or technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense. Mr. Sonpal further relied on the judgment in the matter of Plasmac Machine Manufacturing C....
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....ave to be taxed at four per cent only which in fact taxable at 12.5 per cent. Mr. Sonpal further submitted that the brochure produced by the appellant clearly shows that the appellant's product cannot be classified as bicycle. After perusing the salient features and specifications of the product of the appellant, no one can say that the appellant's product falls under the category of "bicycle". Salient features and specifications given in the said brochure are as under: "Salient features: Attractive, affordable and useful for entire family; Having aerodynamic shape, elegant look; Can travel 100 kms, per charge; Travel 100 kms in Rs. 7; Eco-friendly; No pollution; No fuel required; No driving licence; Powerful headlights; Strong shock absorbers; Maintenance free; Available in attractive colours; Comfortable and easy to drive; and no hassle of changing gears. Specifications Standard load capacity : 120 Kg Weight : 60 Kg Max. Speed : 25 Km/Hr. Gradibility : 6 degrees Charging Time : 6 hours Rated voltage : 48 V Input voltage of charging : 220 V Running distance per charge : 100 Kms. Battery : Sealed lead acid maintenance free. Charger : 220 V.CE ....
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....chart that the appellant is charging near about 50 per cent on the total cost of their product towards battery price. If the appellant's product is classified under Schedule C, entry 14 then indirectly the sales tax on battery shall be at four per cent, whereas if a person purchases a battery separately he has to pay the sales tax at 12.5 per cent. On this backdrop, submission of Mr. Patkar if accepted it shall create anomalous situation not contemplated by the law. On this count also, it is not possible to hold that the appellant's product falls under Schedule C, entry 14. The appellants in support of their contentions relied on the three judgments in the matters of La Bela Products [1985] 59 STC 221 (Bom), Bhagwati General Agency (Import) [1991] 83 STC 347 (Guj) and Bradma of India Ltd. [2005] 140 STC 17 (SC); [2005] 4 RC 400. In the matter of La Bela Products [1985] 59 STC 221 (Bom), this court held that the entries in a Schedule to a sales tax must be interpreted in the light of current conditions. We know that in India generally the people understand the meaning of "bicycle" as a pedal driven, human powered, single track vehicle, having two wheels attached to....
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....own the contention of the appellant that the appellant's product is "bicycle" and should be classified in Schedule C, entry 14 to the Sales Tax Act. At this juncture, let us test the above view on the touchstone of general cannons of statutory constructions. It would not be out of place to mention that the maxims in law are said to be somewhat like axioms in geometry. They are principles and authorities and part of general customs and common law of land. These are sorts of legal capsules useful in dispensing justice. In other word, maxims can be defined as established principle or of interpretation of statutes. With this understanding, let us turn to the maxim "noscitur a sociis", which means the meaning of a doubtful word may be ascertained by reference to the meaning of words associated with it. A man may be known by the company he keeps and a word is known by the accompanying words. Words derive colour from the surrounding words. The coupling of words together shows that they are to be understood in the same sense. Where the meaning of a particular word is doubtful, it may be ascertained by looking at adjoining words. In the construction of statutes, the rule noscitur a s....