TULZAPURKAR - (1.) THIS appeal by special leave raises the question whether on true construction of Entry No. 15 of the Notification No. ST-II-4949/X-10 (2)-74 dated 30/05/1975 issued under Section 3-A of 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?
(2.) 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. 1/05/1974 for Rs. 41.31 lakhs called upon the latter to pay sales tax thereon which was paid under protest. Appellant No. 1 used it for generating electricity from 29/05/1974 to Sept. 30, 1975. As the power position improved in the State of U. P. appellant No. 1 discontinued the generation of electricity through this power plant and finding it expedient to realise its investment negotiated a sale thereof in perfect working condition to appellant No. 2. Appellant No. 1 desired to charge sales tax on the said negotiated sale but appellant No. 2 informed appellant No. 1 that it had obtained considered opinion that no sales tax on such a transaction was leviable inasmuch as the sale was not of "old, discarded. unserviceable or obsolete machinery", falling within Entry No. 15 of the concerned Notification dated 30/05/1975. Both the appellants thereupon referred the question for clarification to the Commissioner of Sales Tax U. P., Lucknow under Section 35 of the U. P. Sales Tax Act, 1948. It was contended on their behalf that the word (adjective)" old" occurring in the Entry would take colour from the other words (adjectives) that follow it and the cumulative effect of all the words taken together showed that those words were either synonymous or near synonymous suggesting that the machinery in order to fall within the Entry should become non-functional or non-usable and that since the power plant in question had not become "old" in that sense and was in perfect working condition it would not fall within the Entry and the sale thereof by appellant No. 1 to appellant No. 2 was not exigible to tax. THE Commissioner by his order dated 19/02/1977 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 the 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. 0. No. 39 of 1977 and a learned single Judge of the Lucknow Bench on 18/04/1979 dismissed the appeal and confirmed the Commissioner's view that since the concerned power plant had been purchased by appellant No. 1 long ago and had been put to use it was "old machinery" within the meaning of the Entry, observing that "the degree of oldness has to be greater than recently manufactured machinery used only for the some time". The Commissioner's view as confirmed by the High Court is challenged by the appellants before us in this appeal. Section 3-A of the U. P. Sales Tax Act, 1948 empowers the State Government to specify the rates of taxes and the point at which the tax can be imposed, subject to a maximum of 12 per cent. on the turnover in respect of the goods specified in the First Schedule to the Act and clause (b) empowers the State Govemment to amend the entries in the Schedule. In exercise of the aforesaid power the State Government issued the Notification No. ST-II-4949/X-10 (2)-74 dated 30/05/1975 which provided that with effect from 1/06/1975 the turnover in respect of the goods specified in column II of the Schedule to this Notification shall be liable to tax at the point of sale and at the rate specified respectively in columns III and IV thereof: Schedule. 'M' Stands for sale by manufacturer in Uttar Pradesh. 'I' Stands for sale by the importer in Uttar Pradesh. JUDGEMENT_141_2_1981Html1.htm The question is whether the negotiated sale of the Thermal Power Plant at Rampur by appellant No. I 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 question is whether it is a sale. of "old machinery" within the meaning of the Entry and what is the true meaning of the expression 'old machinery"? It is undisputed that the Thermal power Plant in question when it was sold by U. P. State Electricity Board to appellant No. 1/05/1974 was in perfect running condition and the sales tax on that transaction was paid under protest. It is further undisputed that appellant No. 1 used that power plant for generating electricity for about a year and four months and because the power position improved in the State of U. P. the appellant No. 1 negotiated the sale thereof to appellant No. 2 with the view to realise back its investment and the power plant had been kept in perfect running condition with periodical checks by the Inspector of Factories as also by the Inspector of Boilers and when sold it was in perfect working and running condition. Question is whether such power plant could be regarded as "old machinery" within the meaning of Entry 15.
(3.) COUNSEL for the appellants contended that it could not be regarded as old machinery in the sense that it had become non-functional or non-usable which meaning should be given to the expression 'old' occurring in the Entry. In other words, he sought to invoke the principle of noscitur a sociis for construing the expression 'old because of its association with the other expressions like "discarded, unserviceable or obsolete" occurring in the Entry. According to the counsel the expression '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 Bombay v. The Hospital Mazdoor Sabha, (1960) 2 SCR 866: ( AIR 1960 SC 610) and the Corporation of the City of Nagpur v. Its Employees, (1960) 2 SCR 942 : (AIR 1960 SC 675) this Court refused to apply the said principle while construing the definition of 'industry' given in. Section 2 (j) of Industrial Disputes Act, 1947 and in Section 2 (14) of the C. P. and Berar Industrial Disputes Settlement Act, 1947 respectively, and that in Letang v. Cooper, (1965) 1 QB 232 Diplock, L. J., has observed thus: "The maxim noscitur a sociis is always a treacherous one unless you know the societas to which the sociibelong." According to him further the ejusdem generis principle would be clearly inapplicable inasmuch as it was not a case where some general words follow' any particular, generic or specific words. Having given our anxious consideration to the rival contentions urged before us, we are clearly of the view that the principle of noscitur a sociis is clearly applicable to the construction of the expression 'old' occurring in Entry No. 15, and that expression will have to be given restricted meaning- a sense analogous to that of the less general words clubbed with it. The principle is explained in Maxwell on the Interpretation of Statutes (12th Edn.) at page 289 thus: "Where two or more words which are susceptible of analogous meaning are coupled together, noscitur a sociis. They are understood to be used in their cognate sense. They take, as 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 defined word correspondingly wider, the Court has observed that "it is only when the intention of the Legislature in associating wider words with words of narrower significance is doubtful or is otherwise not clear that the present rule of construction can be usefully applied'' In other words, if the wider words used are in themselves vague, imprecise or ambiguous and there is no indication that these have been deliberately used to infuse wider meaning then this rule of construction can be invoked. ;