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2007 (4) TMI 602 - HC - Indian LawsInterpretation of statute - Adhesive - Synthetic adhesive - Whether vulcanizing solution used in tyre retreading work is a synthetic adhesive taxable at the rate of 16% with reference to aforesaid Entry No. 91 under the notification dated 27-3-1995 or at general rate of 10% - HELD THAT:- The commodity in question vulcanizing solution is an adhesive is beyond the pale of doubt because it is used for sticking together two layers of rubbers in the tyre retreading industry of the respondent assessee. The chemical composition of the vulcanizing solution also indicates that they have the adhesive value in them. The rubber compound, polymers and solvent used along with natural rubber to make the vulcanizing solution makes it a synthetic adhesive used for the purpose of sticking. A bare and close reading of the said Entry No. 91 clarifies the issue that it is only the synthetic adhesive used by the paints industry which are intended to be taxed at the rate of 16%. The principles of ejusdem generis or noscitur a sociis are well settled principles of interpretation and the words of general and wider import used in an entry surrounded by other relevant terms has to draw its colour and meaning from such surrounding words and that cannot be lost sight of. Thus, going by the rule of interpretation, this Court is of the opinion that the learned Assessing Authority was not correct in applying 16% rate of tax on the commodity in question i.e. the vulcanizing solution with reference to Entry No. 91 of notification dated 27-3-1995 and the Appellate Authorities were justified in setting aside such additional tax, interest and penalty thereon though for different reasons. Accordingly, it is held that vulcanizing solution was rightly taxable at general rate of 10% under Entry No. 100 and not at the rate of 16% under Entry No. 91 under the aforesaid notification dated 27-3-1995 during the relevant period. The revision petitions are accordingly dismissed with no order as to costs.
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