RAINBOW STEELS LTD. AND ANR. versus COMMISSIONER OF SALES TAX, UTTAR PRADESH AND ANR.

Citation: [1981] 2 S.C.R. 727 · Decided: 30-01-1981 · Supreme Court of India · Bench: V.D. TULZAPURKAR · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

727 
RAINBOW STEELS LTD. AND ANR. 
v. 
COMMISSIONER OF SALES TAX, UTTAR PRADESH AND ANR. 
January 30, 1981 
[V. D. TULZAPURKAR AND R. S. PATHAK, JJ] 
Uttar Prlldcsh Sales Tax Act 1948 S. 3A-State Government nptifying 
"Sale of old discarded, unserviceable or obsolete machinery" as liable to 
tax--Sale vf ti/Ci 111al power plant in running condition-Whether exigible 
to 
.tax. 
InterpretatiOI/ of Statutc:c.-Principle of noscitur a 
sociis-When 
can 
be 
invoked. 
Jn exercise of the power under section 3A of the U.P. Sales Tax Act, 1948 
the State Government, issued a notification dat~d May 30, 1975 which provided 
that the tu1nover in respect of "old, discarded, 
unserviceable 
or 
obsolete 
machinery, stores or vehicles etc." shall be liable to tax at the point of sale at 
the rate of five per cent. 
A Thermal Power Plant together with its associate auxiliaries, components 
and accessories belonging to the State Electricity Board was sold in a working 
condition to the Appellant No. 1, who paid sales tax on the sale under protest 
The power plant was used by Appellant No. l and as the power position in the 
State improved, Appellant No. 
1 discontinued the 
generation of electricity 
through this power plant and negotiated its sale to Appellant No. 2. 
Since there was dilTerence of opinion between the parties as to the pa•yment 
of sales tax on the machinery the question was referred for clarification to the 
Commissioner of Sales Tax under section 35 of the Act. The Commissioner 
·was of the view that the four words, "old, discarded, unserviceable or obsolete" 
had been used disjunctively and each adjective had its own meanin& and seme 
and that since the power plant had been used before its sale 
it 
was "old" 
machinery and the sale was liable to tax under the said Entry. 
The order of thP. Comn1issioner was confirmed by the High Court. 
E 
In the appeal to this Court, on behalf of the Appe1lants it was submitted 
invoking the principle of no"Seitur a sociis that th~ expression 'old' which is 
G 
more general should be restricted to a sense analogous to that of the less gene-
ral expressions. namely "discardedi unserviceable or obsolete,, and read in this 
manner the sale of the power plant could not be re.i.;arded as sale 
of "old" 
m:ichinerv falling within the Entry. 
On behalf of the Respondents it was contended that the 
four 
adjectives 
occurring in the Entry have· been used disjunctively and each must be given 
H· 
its own separate meaning, 3nd 'that the principle of noscitur a sociis would nm: 
apply to the construction of the expression 
1old'. 
728 
SUPREME COURT REPORTS 
[1981] 2 S.C.R. 
A 
Allowing the appeal, 
8 
c 
D 
E 
F 
G 
n 
HELD : 1. The thermal power plant was in perlect running condition and 
was 1:iold as such. 
Jt would not faII within Entry No. 15 of the Notification. 
[733D] 
2. The four adjectives "old, discarded, unserviceable or obsolete·" which 
are susceptible to analogous meaning are clubbed 
together 
while 
qualifying 
machinery in the Entry. The first adjectiv~ 'old' is clearly more. general than 
the other three and as such all the four would take their colour from 
each 
othc.:r. the meaning of the more general adjective 'old' being restriicted to a 
sense analogous to that of the less general namely "disca•rded, unserviceable or 
obsolete". 
All the four adjectives ·which qualify the word "machinery" have 
been used disjunctively. The adjective 'old' by itself is vague, 
imprecise 
and 
ambiguous for there is no indication as to how n1uch old the machinery should 
be before it could be described as 'old machinery'--one day old, one month 
old, one yea.r old, five years old or even ten years old (the degree of oldness 
being a relative concept). 
l732F-733A] 
3. In the absence of any indication that the adjective 'old' has been deli-
berately used in a wider sense ¥.1hcn the expression 'old' is by 
itself 
vague, 
imp1ecise and ambiguous, being too general, the principle of noscitur a sociia 
will have to be applied i.e. all the associated words will take colour from each 
other. 
[733Bj 
4. (i) The principle of noscitur a sociis is clearly applicable to the cons~ 
truction of the expression ·old' occurring in Entry No. 15, and that expression 
will have to be given a restricted 1neaning-a sense a·nalogous to that of the less 
gene!·al \.Vottls clubbed \.Vith it. 
[732A] 
(ii) ]f the \:vider words used are in themselves va.gue imprecise or ambi-
guou~ and there is no indicatio

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