RAINBOW STEELS LIMITED MUZAFFARNAGAR AND BIRLA COTTON SPINNING AND WEAVING MILLS LIMITED DELHI Vs. C S T U P AND STATE OF UTTAR PRADESH

JUDGEMENT

(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.

(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.