TMI Blog2017 (7) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... to determine the meaning of the relevant provision by looking at what it meant in a previous statute, including by reference to authority on the provision as it appeared in that statute. Evolution of entry 20 of the IV schedule to the AP VAT ACT - Held that: - From 1.01.2000 onwards, the APGST Act, in its first schedule, incorporated a distinct entry i.e. Entry 203 which specifically provided for a higher rate of tax at 8% in respect of “Mosquito repellants and devices of all kinds including electronic repellant devices, refills, mats, coils and accessories thereof”. Are the subject goods insecticides falling under entry 20 of the IV schedule? - Held that: - Under the 1968 Act, insecticides intended for ‘household use’, which are formulations consisting of a small portion of ‘active ingredients’, are considered a different class/category of insecticides. When the rigor of the Insecticides Act is relaxed for “household insecticides”, which the subject products admittedly are, can the extremely wide definition of an “insecticide” therein be applied to the said word used in Entry 20 of the IV Schedule, and the said Entry be understood to bring within its ambit all forms of insec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntain a small percentage of ‘Insecticide’, are used as a formulation not exceeding the percentage prescribed by the Government in terms of Section 36 (z-b) of the Insecticides Act, and are registered and packed as specified for being sold as “household insecticides”. They are not ‘insecticides’ as commonly understood, and considered by people dealing with it or by those who put it to use. These products are largely urban household products, and are not connected with plant protection which alone fall under Entry 20 of Schedule IV of the VAT Act. Can the statements of objects and reasons of an earlier statute and the white paper on VAY be relied upon? - Held that: - While Entry 17 of Annexure I to the White Paper does not include plant protection equipment, it includes, among others, insecticides and pesticides under the head “goods with 4% floor rate”. Under the caption “VAT rates and classification of commodities” the 4% VAT rate category was to comprise of items of basic necessities such as all agricultural and industrial inputs. It is evident therefore that only pesticides and insecticides, used as agricultural and industrial inputs, were extended the concessional rate of 4% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Entry 20 of schedule IV of the A.P. VAT ACT? - Held that: - A pesticide formulation is a combination of active and inert ingredients that form an end-use pesticide product. Active ingredients in pure (technical grade) form are not suitable for application, and pesticides are formulated to make them safer or easier to use. Entry 78-A of the I Schedule to the APGST Act brought within its scope technical grade pesticides or pesticides concentrate. Pesticide formulations (including household pesticides) do not fall within its ambit. If Entry 78 were to be read widely, and construed as bringing within its fold all kinds of pesticides, then pesticides concentrate and technical grade pesticides would also fall within the ambit of Entry 78, and it was wholly unnecessary for the legislature to have prescribed a separate entry i.e., Entry 78-A for pesticides concentrate and technical grade pesticides. Such a construction would also have rendered Entry 78-A redundant. Scope of Entry 100(140) OF THE IV Schedule - Held that: - Entry 100 of the IV Schedule relates to goods when sold as industrial inputs, and contains 235 sub-entries. It is only if all of them are sold as industrial inputs wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... “Plant protection equipment”, which was classified within Entry 78 of the I Schedule to the APGST Act earlier, are now brought under Entry 20 of the IV Schedule to the VAT Act. Even under the APGST regime, “other plant protection equipment” were brought within a separate Entry (i.e., Entry 78) other than the entry relating to agricultural implements (i.e., Entry 226). The mere fact that both of them are in Schedule IV and are liable to tax at the same rate is of no consequence as “pesticides and insecticides used for plant protection” and “technical grade pesticides and insecticides” also fall within Schedule IV albeit in two separate entries (Entry 20 and Entry 100 (140)). Doctrine of NOSCITUR A SOCIIS and EJUSDEM GENERIS - Held that: - The rule of “nositur a sociis” cannot, however, prevail where it is clear that the wider words have been deliberately used in order to make the scope of the defined word correspondingly wider. It is only where the intention of the legislature in associating wider words with words of narrower significance is doubtful, or otherwise not clear, that this rule of construction can be usefully applied; it can also be applied where the meaning of the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... des and herbicides, what we are called upon to examine is whether the subject products fall within the ambit of an Entry in a Schedule to a Sales Tax enactment. As a Sales Tax enactment relates to levy of tax on commercial goods, the words used in an Entry in a Schedule to a Sales Tax Act must be given the meaning attributed to it in the market by persons dealing with them daily, and not in their technical or scientific sense. When construed in its popular sense, it is evident that the words “pesticides” and “insecticides” used in Entry 20 relate to chemicals used as inputs for agriculture or plant protection, and not to “household insecticides” used to kill household insects and pests. Reasons for exclusion of 'mosquito repellents' from the ambit of entry 20? - Held that: - exclusion of “mosquito repellants” from Entry 20 can be traced to the fact that the Sales Tax Appellate Tribunal had treated mosquito repellants as “Insecticides”. The legislature, in its wisdom, has excluded mosquito repellants in any form from its ambit. Thereby the Entry has been confined to agriculture/plant protection products only. It is not applicable to the assessee’s products. Effect of an exclus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch, 2014; April, 2014 to March, 2015; April, 2011 to March, 2012; and April, 2012 to March, 2013 respectively. W.P. Nos.15982 and 15983 of 2014 are filed questioning the penalty orders passed by the assessing authority for the tax periods April, 2011 to March, 2012 and April, 2012 to March, 2013 respectively. M/s. Godrej Consumer Projects Ltd (the petitioner in W.P. No.6365 of 2016) is engaged in the business of manufacture and sale of Mosquito Repellant Instruments, Mosquito Repellant Mats, Refills (Vaporizers), Coils and other products like flying insect killers and crawling insect killers (popularly known as Lal Hit and Kala Hit ), Rat Killing Cakes, Chalk Pencils for killing cockroaches etc. They claim to have launched a new product called HIT Anti-Roach Gel intended to kill hidden cockroaches, especially certain species like American and German cockroaches. The goods manufactured by M/s.Godrej Consumer Products Ltd, which are the subject matter of these proceedings, are HIT AEROSOL CIK, HIT AEROSOL FIK, HIT Rat and HIT Chalk. HIT AEROSOL CIK, popularly known as Lal Hit, is an aerosol spray used for killing hidden cockroaches. It is said to contain poisonous chemical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Johnson as insect killers / insecticides . Product Name Insecticide Reg . No . Trade Mark Remarks CIK (Crawling Insect Imiprothrin (0.07% w/w) and CIR- 56,039/2007- Imiprothirn + Baygon Recommended to be used against Killer) Cypermethrin (0.02% w/w) (BAYGON) Aerosol Cypermethrin (A) (270)-4 Cockroaches MIK (Multi Insect Killer) Cyfluthrin (0.025% w/w) and Transflutrin (0.04% w/w) Aerosol CIR 41,056/2002- Cyfluthrin + Transflutrin (HH) 225-21 Baygon Recommended against cockroaches, flies and Mosquitoes FIK (Flying Insect Killer) Cyfluthrin (0.025% w/w) and Transflutrin (0.04% w/w) Aerosol CIR 41056/2002- Cyfluthrin + Transflutrin (HH) 225-21 Baygon Recommended against Flies and Mosquitoes AIK (All Insect Killer) Delamethrin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar, Learned Counsel for the petitioners. Written submissions were also filed, on behalf of the petitioners, by their Counsel Sri Vivek Chandrasekhar and Sri Karan Talwar. Oral submissions were made, and written submissions were filed, on behalf of the revenue by Sri M. Govind Reddy, Sri T. Vinod Kumar and Sri J. Anil Kumar, Learned Special Standing Counsel for Commercial Taxes. It is convenient to examine the rival submissions, urged by Learned Counsel on either side, under different heads. I. FACTORS TO BE TAKEN INTO CONSIDERATION IN DETERMINING THE CLASSIFICATION OF A PRODUCT IN TAX STATUTES: The dispute, in the present batch of cases, relates to the classification of the subject goods. While the petitioners claim that they are pesticides and insecticides under Entry 20 of the IV Schedule to the VAT Act and are liable to be subjected to tax at the concessional rate of tax of 4%/5%, it is the case of the revenue that these goods do not fall within the ambit of Entry 20 of the IV Schedule, and are therefore liable to tax at 12.5%/14.5% under the residuary Schedule V of the VAT Act. Before examining this question in its various facets, it is necessary at the outset to bri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l requisites for agricultural production, the government proposes to restrict the levy of tax to single point . . ( emphasis supplied) When the scope of Entry 78 was expanded in 1976 it included insecticides, fungicides, weedicides, etc. Prior to the year 2000, Entry No. 78 of Schedule I of the APGST Act provided for a tax rate of 1% on Pesticides, insecticides fungicides, herbicides, weedicides and other plant protection equipment and accessories thereof. From 1.01.2000 onwards, the APGST Act, in its first schedule, incorporated a distinct entry i.e. Entry 203 which specifically provided for a higher rate of tax at 8% in respect of Mosquito repellants and devices of all kinds including electronic repellant devices, refills, mats, coils and accessories thereof . Entry 78 of Schedule I of the APGST Act as it stood, before introduction of the VAT Act, read thus:- Pesticides, Insecticides, fungicides, herbicides, weedicides and other plant protection equipment and accessories thereof . The evolution of Entry 78 of the First Schedule to the APGST Act, 1956 is as under: Act No. Notification No. and Date Effective date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... classifiable under the expression insecticides (prior to its amendment), there is no reason why the subject goods are not classifiable as insecticides under the VAT Act; the decision of the Commercial Tax Department, to classify the subject goods under the residuary entry, runs counter to the decision of this Court in Godrej Hicare Ltd v. Joint Commissioner of Commercial Taxes (Legal), Hyderabad (2007) 6 VST 639 (AP) ; the subject goods are preparations of chemicals designed to kill insects and pests; such products can only be classified as insecticides and/or pesticides; any preparation, containing any substance specified in the Schedule to the 1968 Act, is an insecticide; HIT CIK contains D-trans Allethrin which is an insecticide; HIT FIK contains imiprothrin and cypermethrin which are insecticides; HIT Chalk contains cypermethrin which is an insecticide; HIT Rat cake contains bromadialone which is a rodenticide; rat is a pest and thus HIT Rat is a pesticide; HIT Anti Roach-Gel contains fipronil which is an insecticide; the subject goods are insecticides within the meaning of the term insecticide as defined in the Insecticides Act, 1968; insecticide is a generic product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; it is because of the medium through which it is used, such as electric units , that its effectiveness changes; if the same repellant is applied through some kind of aerosol, these products would be more effective; the medium, through which the products are used, cannot form the basis for determination/classification of the products; Section 18 of the Insecticides Act imposes a prohibition on the sale of insecticides by any person without a licence; the subject products are being sold off the shelf in the market, which shows that the petitioner s claim, on the basis of their having obtained registration under Section 9 of the Insecticides Act, is contrary to the provisions of the Act; registration under Section 9 serves a different purpose; in the absence of any material being placed on record, in relation to compliance with Section 13 or 18 of the Insecticides Act, no reliance can be placed thereupon; Rodenticide is not included in Entry 20; and, therefore, it must be treated as unclassified goods. As the words pesticides , insecticides , fungicides , weedicides and plant protection equipment , used in Entry 20 of the IV Schedule, are not defined in the VAT Act, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... veloped, and new application techniques were discovered, new audience found uses for pesticides, and today pesticides are still a major part of agriculture's production tools, but have also found uses by industry, State and Federal Governments, municipalities, commercial pesticide applicators, and the public as a whole including home-owners and backyard gardeners; many species of insects are important pests which affect almost all of man's activities and there are well over one million known species of insects in the world, but a very small percentage of these are considered as economically important pests. The expression pesticide has been defined in the aforesaid book, in the glossary for Pesticide Users , as follows : Pesticide (economic poison) - As defined under the Federal Insecticide, Fungicide, and Rodenticide Act, economic poison (pesticide) means any substance or mixture of substances intended for preventing, destroying, repelling, or mitigating any insects, rodents, nematodes, fungi, or weeds, or any other forms of life declared to be pests; and any substance or mixture of substances intended for use as a plant regulator, defoliant or desiccant. ( Sonic E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a desiccant (i.e a substance that promotes drying and is used to remove moisture). It is evident, therefore, that a pesticide is used mainly for protection of plants. Hawley s Condensed Chemical Dictionary, by Richard J. Lewis, SR. Fifth Edition, defines Insecticide as : Insecticide : A type of pesticide designed to control insect life that is harmful to humans, either directly as disease vectors or indirectly as destroyers of crops, food products, or textile fabrics. General types are as follows: (1) Inorganic: arsenic, lead, and copper (inorganic compounds and mixtures); the use of these has diminished sharply in recent years because of the development of more effective types less toxic to humans. (2) Natural organic compounds, such as rotenone and pyrethrins (relatively harmless to humans since they quickly decompose to nontoxic compounds), nicotine, copper naphthenate, and petroleum derivatives. (3) Synthetic organic compounds: (a) Chlordane, lindane, pdichlorobenzene; (b) the organic esters of phosphorus (the parathions and related substances). (4) Of comparatively recent development are pyrethroids, or insect growth regulators, which act as neurotoxins, preventing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Society of Chemistry, explains the Non-agricultural Uses of Herbicides as under:- Herbicides have been used to control weeds in non-agricultural areas for around 50 years, Non-agricultural uses cover very diverse situations from forestry to parks and gardens, from waterways to roads and railways, and from pavements to industrial sites. Not only area the uses varied, but also the uses, many of whom have little knowledge of plants, weed control or the use of herbicides. Perhaps the greatest volume of herbicide is used to maintain man-made surfaces such as railways ballast, road edges, pavements and channels, gravelled areas etc. These are now officially called land not intended to bear vegetation by the Pesticides Safety Directorate. They are often referred to as hard surfaces , and can be divided into porous or non-porous surfaces. The equipment and its accessories, used for protection of plants, are plant protection equipment and accessories thereof. It is through such equipment that pesticides etc are applied to optimise efficiency in pest control management and thereby maximise plant health. The National Institute of Plant Health Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the period prior to the 1976 amendment, fell under Entry No.3; however, multi-purpose batteries, not specified for use in transistors alone could not be treated as accessories thereof of wireless reception instruments etc., for the purpose of Entry 3. By the use of the word thereof , the deciding factor is the predominant or ordinary purpose or use and it is not enough to show that the articles can be put to other uses also. The general or predominant user seems to determine the category in which an article will fall. On a comparison between different entries in which the term accessories is used in the Schedule to describe goods, the word should be construed taking into account whether the goods have been manufactured for use as an aid or addition to any of the specified articles in that entry or not. When it is intended to confine the entry to particular gadgets and particulars thereof, the entry would say so. Therefore, the expression accessories thereof 'must mean the general or predominant user of the article only as an accessory of one of the specified items mentioned in that entry. ( Union Carbide India Ltd. 1995 (76) ELT 489 (SC). The word ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aning of the word insecticide in the VAT Act can be borrowed from its definition in the Insecticides Act, it is necessary, in the first instance, to consider the scope and object of the said Act. The Statement of Objects and Reasons of an Act can be referred to for the limited purpose of ascertaining the conditions prevailing at the time which actuated the sponsor of the Bill to introduce the same, and the extent and urgency of the evil which he sought to remedy. ( State of West Bengal v. Subodh Gopal Bose 1954 SCR 587 ; M.K. Ranganathan v. Govt. of Madras (1955) 2 SCR 374 = AIR 1955 SC 604 ; Chern Taong Shang v. Commander S.D. Baijal (1988) 1 SCC 507 ). For determining the purpose or object of the legislation, it is permissible to look into the circumstances which prevailed at the time when the law was passed and which necessitated the passing of that law. For the limited purpose of appreciating the background and the antecedent factual matrix leading to the legislation, it is permissible to look into the Statement of Objects and Reasons of the Bill which actuated the step to provide a remedy for the then existing malady. ( A. Thangal Kunju Musaliar v. M. Venkitachalam P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to refer to the other provisions of the 1968 Act, and the Rules made thereunder. Section 9 of the 1968 Act relates to registration of insecticides and, under sub-section (1) thereof, any person, desiring to import or manufacture any insecticide, may apply to the Registration Committee for the registration of such insecticide, and there shall be a separate application for each such insecticide. Section 9(3) stipulates that, on receipt of any such application for the registration of an insecticide, the Committee may, after such enquiry as it deems fit and after satisfying itself that the insecticide, to which the application relates, conforms to the claims made by the importer or by the manufacturer, as regards the efficacy of the insecticide and its safety to human beings and animals, register, on such conditions as may be specified by it and on payment of such fee as may be prescribed, the insecticide, allot a registration number thereto, and issue a certificate of registration in token thereof, within a period of 12 months from the date of receipt of the application. Under the second proviso thereto, if the Committee is of the opinion that the precautions claimed by the applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n sub-rule (2). Rule 10(2) prescribes that the fee, payable under sub-rule (1) for grant or renewal of licence, shall be ₹ 500/- for every insecticide for which the licence is applied. There shall be a separate fee for each place, if any insecticide is sold, stocked or exhibited for sale at more than one place. Under the first proviso thereto, the maximum fee payable in respect of insecticides, commonly used for household purposes and registered as such, shall be ₹ 7,500/- for every place. Rule 10C prohibits sale or storage of insecticides in certain places and, thereunder, no person shall manufacture, store or expose for sale or permit the sale or storage of any insecticide in the same building where any articles, consumable by human beings or animals, are manufactured, stored or exposed for sale. In terms of the Explanation thereto, nothing contained in Rule 10C shall apply to retail sales of household insecticides from the building wherefrom other articles, consumable by human beings or animals, are usually sold provided such household insecticides have been registered as such, and are packed and labelled in accordance with the Insecticide Rules. Section 13(5) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd. v. State of Maharashtra (2004) 136 STC 196 ). IV. DO THE SUBJECT PRODUCTS LOSE THEIR IDENTITY AS AN INSECTICIDE ON ITS MIXTURE WITH OTHER SUBSTANCES? Aerosol (HIT CK), a household insecticide used against crawling insects like cockroaches, contains as an active ingredient imiprothrin (a.i.) at 0.07% and Cypermethrin (a.i.) at 0.20%, as against 50% LPG as the propellant. Insecticides constitute a miniscule component of these products. The subject products, manufactured and sold by the petitioner, contain a very small percentage of Insecticide , which is used as a formulation not exceeding the percentage prescribed by the Government in terms of Section 36(z-b) of Act, and are registered and packed for sale as household insecticides. The subject products cater to the specific requirement of urban households, and are not used either for plant protection or for agricultural operations. The goods marketed and sold by the petitioner contain a negligible quantity of d-trans Allethrin, an insecticide mixed by a process with other ingredients like deodorized Kerosene, perfume, pipnoil bentoxide, and propellant Gas; and it loses its original identity and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Drugs and Cosmetics Act, 1940, the word medicament was not; a medicament is used to treat some medical condition, and a cosmetic is used to improve the appearance of a person; the quantity of medicament, used in a particular product, is not relevant; and, normally, the extent of its use as a medicinal ingredients is very low, because a larger use may be harmful for the human body. As noted hereinabove, the word insecticide is defined, for the purpose of the Insecticides Act, 1968, to include all kinds of insecticides irrespective of the quantity of insecticides used in the particular product. The question, in the present case, is not whether the quantity of insecticides used is high or low, but whether Entry 20 includes all kinds of insecticides or only those insecticides used for plant protection. Reliance placed by the petitioners on Puma Ayurvedic Herbal (P) Ltd (2006) 145 STC 200 (SC) is, therefore, misplaced. In Wockhardt Life Sciences Ltd 2012 (277) E.L.T. 299 (S.C) , the question which arose for consideration before the Supreme Court was whether the subject products were to be classified as a medicament or as a detergent . The Supreme Court held th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt protection equipment follows the terms insecticides and pesticides , the scope of these words cannot be so restricted as to exclude therefrom insecticides and pesticides used for household purposes; the term insecticides and pesticides are words of wide import; the legislature has deliberately used these words, as its intent was to include all types of insecticides and pesticides , including those used for house-hold purposes, within the ambit of the Entry; each term in Entry 20 must be given meaning, and construed independently, as they are distinct classes of goods; pesticides, insecticides, fungicides, herbicides weedicides are not equipment; the words plant protection do not qualify the earlier words pesticides, insecticides, fungicides, herbicides or weedicides , but only qualify the word equipment ; in Ashok Agencies v. State of Karnataka [2008] 16 VST 570 (Karn. it has been held that all kinds of insecticides, whether used in agricultural operations for killing insects that attack agricultural crops or used for killing domestic insects, fall within Entry 23 of the Schedule annexed to the KVAT Act; from the dictionary meaning and technical literature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e taxed at the concessional rate of 4% tax. Light is thrown on the ambit of the words by the context in which they appear. An object of general concern, other than those mentioned, to come within the Section, must have a degree of similarity to those mentioned. ( Director of Public Prosecutions v. Jordan (1976) 3 All ER 775 ). While the subject goods no doubt contain as small element of insecticide, it has no similarity with the insecticides mentioned in Entry 20 which brings within its ambit only insecticides used for plant protection. It is not in dispute that the subject products are household insecticides used to kill insects in households, and are not used for plant protection. Where the words of a Statute are plain and unambiguous, effect must be given to them. The legislature may be safely presumed to have intended what the words plainly say. The plain words can be departed from when reading them as they are leads to patent injustice, anomaly or absurdity or invalidation of a law. ( Bhaiji v. SDO (2003) 1 SCC 692 ; Girdhari Lal Sons v. Balbir Nath Mathur (1986) 2 SCC 237 ). The use of general words in a statute does not preclude inquiry into the object of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Entry 20 deals with equipment used for plant protection, it is evident that the chemicals referred to in the first limb are those which are to be applied for plant protection through the equipment referred to in the second limb of the said Entry. Entry 20 must be read restrictively so as to exclude pesticides, insecticides etc which are not used for plant protection, and are used for other purposes, including as household insecticides. As a plain reading of Entry 20 shows that it was intended to be read in a restricted sense, and as being limited only to those goods used for plant protection, there is no justification in bringing such goods within the ambit of Entry 20 which, on a plain reading, are excluded from its ambit. It is no doubt true that the words plant protection qualify the word equipment in the second limb of Entry 20 and not the chemicals referred to in its first limb as the words and other are used between them. The very fact that plant protection equipment are placed in Entry 20 along with the chemicals referred to in the first limb which are mainly used for plant protection, makes it clears that the chemicals, referred to in the first limb of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decisis cannot be so stretched as to give the judgments of one High Court the status of a binding precedent so far as other High Courts are concerned. ( Geoffrey Manners Co. Ltd. v. CIT Vol.89 1996 Taxman. 287 (Bom. HC DB) ; CIT v. Thana Electricity Supply Co. Ltd. [1994] 206 ITR 727 (Bom) ; Consolidated Pneumatic Tool Co. v. CIT [1994] 209 ITR 277 (Bom) ). This doctrine is applicable only to different benches of the same High Court. The ratio of the decisions of other High Courts cannot be exalted to the status of a binding precedent nor can the ratio decidendi of those decisions be perpetuated by invoking the doctrine of stare decisis. ( Valliama Champaka Pillai v. Sivathanu Pillai [1979] 4 SCC 429 ; Thana Electricity Supply Co. Ltd. [1994] 206 ITR 727 (Bom) . Reliance placed by the petitioners on Ashok Agencies [2008] 16 VST 570 (Karn.) is therefore misplaced. Insecticides and pesticides which kill insects and pests which cause damage to plants are chemicals used for plant protection. As shall be elaborated hereinafter, if the legislative intent was to include all forms of insecticides and pesticides within the ambit of Entry 20, it was wholly unnecessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 1976, when the words fungicides and weedicides were inserted, there was no Statement of Objects and Reasons to clarify that the items were intended only for agricultural production; it is evident that the legislature sought to expand rather than restrict the scope of the Entry; it is not open to the department to rely upon extraneous material such as the White Paper, to interpret the words insecticides etc when the language used by the Legislature is plain, clear and unambiguous; the White Paper does not even remotely indicate any such exclusion; the discussion paper, on road map for national and sub-national VATs in India, was appended by a list of floor rates of 4% categories, as finalized by the Empowered Committee of State Finance Ministers; Entry 17 in the said list makes no mention of plant protection equipment , unlike the present Entry 20 under the VAT Act; both the Entries are at variance; there are many entries such as Entry 2, Entry 20, Entry 39, Entry 123, etc of Schedule IV which neither relate to agricultural nor to basic necessities; and reliance placed on the White Paper, in order to contend that the scope of the Entry is restrictive in nature and is only f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eral flexibility in the VAT structure. ( Sony India Pvt. Ltd. v. The Commissioner of Trade Taxes (2015) 85 VST 90 (Delhi) ). In para 1.4 of the White Paper the methodology adopted by the Empowered Committee, in preparing the White Paper, has been explained. One of the tasks was to harmonise the tax structure through implementation of uniform floor rates of sales tax and discontinuation of sales tax related incentive schemes . With a view to simplify the tax structure, the Empowered Committee recommended that there should basically be only two rates of VAT i.e. 4% and 12.5%, plus a specific category of tax exempted goods and a special VAT rate of 1% only for gold and silver ornaments etc. It was suggested that under 4% VAT rate category, there should be the largest number of goods (about 270), common for all the States, comprising of items of basic necessities such as medicines and drugs, all agricultural and industrial inputs, capital goods and declared goods . The list of goods with 4% floor rate, as finalized by the Empowered Committee of State Finance Ministers, contained about 41 items under the table Goods with 4% Floor Rate . The basic entries in the list finalised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the IV Schedule to the A.P.VAT Act relates to goods of intangible or incorporeal nature as may be notified, from time to time, by the State Government, and includes the goods mentioned under the said head. Entry 39 are I.T products. Entry 123 are mosquito nets, insect screens, perimeter screens, meshes for insect protection, meshes for gardening and agro meshes, made up of plastic (polymer) and articles thereof. While all the goods referred to in Schedule IV may not relate only to agriculture, the very fact that they have been included in the said Schedule would show that the legislature intended to provide for a concessional rate of tax on these goods. The word insecticide , used by the legislature in Entry 20, when read with the preceding and succeeding terms, shows that the legislature intended to group items of the same kind under one entry. The legislative intent, in the present case, can be gathered from the Statement of Objects and Reasons when the entry was inserted, and also on a reference to the White Paper on VAT, wherein a broad consensus as to the rate of tax on goods of basic necessities, and agriculture and industrial inputs, was agreed upon. Both the White P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kill any form of pest, e.g., insects, rodents and bacteria ; the Commercial Tax Department, the traders marketing the goods, and the consumers using the goods have all understood the subject goods as insecticides and pesticides; in the absence of a precise definition in the Statute, the common parlance test should form the basis for interpreting the nature of the subject goods, in the context of levy of VAT; many Entries in the Schedules are a description of the category of the goods; a person, intending to procure or purchase the goods, may either go by the description or the alternative name or the trade name; it is necessary, while determining whether a class of commodities fall within a particular entry, to understand the meaning of the said commodity as understood in common parlance; the popular sense meaning would be 'that sense which people conversant with the subjectmatter, with which the statute deals, would attribute to it; in the instant case, the subject goods were manufactured under a license issued under the Insecticides Act, 1968, and the goods are meant for the purpose of killing insects viz., mosquitos, cockroaches and flies; the subject goods are sold and boug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to be construed as they are understood in common language. ( Commissioner, Sales Tax, Uttar Pradesh v. Prayag Chemical Works (1970) 25 STC 85 ). While interpreting the words in the Schedule, its language should not be strained; and it is only the meaning, which is attributed to the disputed word in commercial parlance, which should be given to it. ( Scientific and Glass Laboratories v. The State of Gujarat (1974) 34 STC 418 ; Sales Tax Commissioner v. S. N. Bros. (1973] 31 STC 302 (SC) = AIR 1973 SC 78 ). There is no fixed test for classification of a taxable commodity. ( Wockhardt Life Sciences Ltd. 1; A. Nagaraju Bros. v. State of A.P., 1994 Supp (3) SCC 122 ). Whether a particular article will fall within a particular Entry or not has to be decided on the basis of tangible material or evidence to determine how such an article is understood in `common parlance' or in the commercial world' or in the trade circle' or in its popular sense meaning. It is they who are concerned with it, and it is the sense in which they understand it, that constitutes the definitive index of the legislative intention, when the statute was enacted. The combined factors that ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing covered in either of the expression, then it is entitled to exemption. The broad and basic characteristic for exemption under the notification is that the goods must have the property of killing germs and bacteria insects or pest and it should be understood in the common parlance as well as being covered in one of the broad categories mentioned in the notification. Since the goods produced by the appellant are capable of killing bacteria and fungi which too, is covered in the expressions `pesticide and `fungicide there appears no reason to exclude the goods from the aforesaid notification. Fiscal or tax statutes are to be understood in the manner in which the common man would understand it, and not in its botanical or technical sense. The common parlance test requires Entry 20 of Schedule IV to be understood in the manner in which people dealing with it understand it (ie, not only the sellers but also the users understand it). Even the petitioners, while selling the product, have declared/specified the product as Household Insecticide or Insecticide for Household Use which clearly establishes that the product is intended to cater to a different class or segment, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... department, it has necessarily to depend on technical opinion in such matters. The case on hand does not, however, present any such difficulty. The certificate issued to the petitioners is by the Central Insecticides Board, a body constituted under the Insecticides Act to regulate the manufacture, sale, distribution and use of insecticides. As noted hereinabove, the Insecticides Act brings all kinds of insecticides within its ambit with a view to ensure the safety of human beings and animals from the use of such insecticides. As a person who manufactures products, using any of the insecticides enumerated in the Schedule to the Insecticides Act, is required to be registered under the 1968 Act, the subject products were certified by the Board as household insecticides . The Insecticides Act has itself made an exception of household insecticides, and has exempted it from the rigors of the Insecticides Act. The mere fact that it contains a very small portion of insecticides, would not make the subject products pesticides and insecticides falling within the ambit of Entry 20. IX. WOULD THE INTERPRETATION PLACED ON ENTRY 78, OF SCHEDULE I OF THE A.P.G.S.T. ACT, BE APPLICABLE T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) , the question which arose for consideration before the Sales Tax Appellate Tribunal was whether Jet Mats , used in electric mosquito repellers, should be treated as Insecticides or as an unclassified item? The assessing authority had treated Jet Mats as an unclassified item. The appellate authority had held that Jet Mat was an insecticide, but only insecticides intended for plant protection fell under Item 78 of Schedule I of the APGST Act. The Tribunal held that the words other plant protection equipment and accessories thereof started with the word and ; this clearly indicated that the words plant protection therein did not qualify the earlier words pesticides, insecticides, fungicides, herbicides or weedicides , but only qualified the word equipment ; weedicides are not plant protection equipment, but are chemicals used as suppressors of weeds and killers of weeds; the word insecticides is normally used to denote chemicals used in buildings for eradication of insects like cockroaches, flies, mosquitoes, ants, white-ants etc; plant protection insecticides are generally known by the word pesticides ; the Ministry of Agriculture, Directorate of Plant Protection, had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellents fell within the Entry dealing with insecticides; insecticides may be sold in the form of powder, liquid to be spread or sprayed or they may be manufactured in the shape of coils and mats, the use of which has the effect of repelling or killing insects like mosquitos; in the absence of a specific entry dealing with mosquito repellents, the articles dealt with by the assessees should be considered as nothing but insecticides falling under Entry 78 of Schedule I, and not as unclassified goods; in Transelektra Domestic Products P Ltd. (1993) 90 STC 436, the Kerala High Court was dealing with mosquito repellents manufactured by the dealer in the name of Good Knight and Banish ; in support of its decision that, in the absence of a specific entry, mosquito repellent should be classified as insecticides, the Kerala High Court referred to the relevant observations made by the Supreme Court in Sonic Electrochem Ltd . (1998) 111 STC 181 that Jet Mat had, as one of its constituents, d-Allathrin 4% , and the qualities of an insecticide; it not only repelled mosquitos but was also capable of killing them, but in view of the most specific entry mosquito repellent in the Sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e scope of Entry 20 and 100 (140) of Schedule IV of the VAT Act. Further the scope of Entry 20 has been considered by the VAT Appellate Tribunal in the orders under revision, and it is the assessee which has questioned it by way of a revision before this Court. As the view taken by the Tribunal in the present case is at variance with the earlier decisions of the Tribunal in Kumar Agencies 1990 (11) APSTJ 28 (STAT) and Amitha Agencies (2002) 34 APSTJ 17 (STAT) , it is also necessary for this Court to decide this issue in the light of the conflicting opinions of the Tribunal. While Entry 78 of Schedule I of the APGST Act (which is similar to the earlier part of Entry 20 of Schedule IV of the A.P. VAT Act) was considered by the Tribunal in Kumar Agencies 74 and Amitha Agencies ( 2002) 34 APSTJ 17 (STAT), the scope of Entry 78-A of the I Schedule, (similar to Entry 100 (140) of the IV Schedule to the A.P. VAT Act) and its inter-play with Entry 78 was not examined. Entry 78 of the 1st Schedule to the APGST Act related to:- pesticides, insecticides, fungicides, herbicides, weedicides and other plant protection equipment and accessories thereof ; Entry 78A rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eral words employed in it were not intended to be applied without some limitation. ( Cox v. Hakes (1890) 15 App. Cas. 506; Jordan (1976) 3 All ER 775). X. ENTRY 100(140) OF THE IV SCHEDULE ITS SCOPE: It is contended, on behalf of the petitioners, that reliance placed on Entry 100(140) of the IV Schedule is misplaced; the items covered under Entry 100(140) of the IV Schedule are technical grade insecticides, fungicides, herbicides, weedicides, and pesticides which are used as industrial inputs / chemicals for manufacture of pesticides, insecticides, etc; the STAT- Hyderabad, in Revathi Pulvarisers, Kurnool v. The State of Andhra Pradesh (1988) 7 APSTJ 21 (STAT) , has held that technical grade Methyl Parathion 80% solution is not a pesticide falling under item 78 of the First Schedule to the APGST Act; it is a chemical and cannot be used as a pesticide, and the ratio laid down in Anil Pesticides Ltd. (2003) 132 STC 29 , is attracted; technical grade items, mentioned under Entry 100(140) of IV Schedule, cannot be used for agricultural purposes without undergoing a manufacturing process; and the items, covered under Entry 100(140), are only meant for industrial us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise 1991 (51) E.L.T. 165 (S.C) ; Bharat Forge Press Industries (P) Ltd. v. Collector of Central Excise 1990 (45) E.L.T. 525 (SC) ). Only such goods, as cannot be brought under the various specific entries, should be attempted to be brought under the residuary entry. In other words, unless the department can establish that the goods in question can, by no conceivable process of reasoning, be brought under any of the Entries, resort cannot be had to the residuary item. ( Bharat Forge Press Industries (P) Ltd. 1990 (45) E.L.T. 525 (SC) ). A residuary entry can be taken refuge of only in the absence of a specific entry; that is to say, the latter will always prevail over the former. ( Wockhardt Life Sciences Ltd. 1; CCE v. Jayant Oil Mills (P) Ltd (1989) 3 SCC 343 ; HPL Chemicals v. CCE (2006) 5 SCC 208 ; Western India Plywoods v. Collector of Customs (2005) 12 SCC 731 ; Carrier Aircon (2006) 5 SCC 596) . A commodity cannot be classified in a residuary entry, in the presence of a specific entry, even if such specific entry requires the product to be understood in the technical sense. ( Wockhardt Life Sciences Ltd. 2012 (277) E.L.T. 299 (S.C) ; Akbar Badrud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chnical sense. A residuary entry can be taken refuge of only in the absence of a specific entry; that is to say, the latter will always prevails over the former . The Supreme Court, in Dunlop India Ltd. Madras Rubber Factory Ltd. v. Union of India 1983 (13) ELT 1566 (SC) , held that when an article has, by all standards, a reasonable claim to be classified under an enumerated item in the Tariff Schedule, it will be against the very principle of classification to deny it the parentage and consign it to an orphanage of the residuary clause. The question of competition between two rival classification will, however, stand on a different footing . It is no doubt true that in case of competing entries, one falling under the specified items mentioned in the Schedules and the other a residuary entry, the burden is on the revenue to show that the goods can, by no conceivable process of reasoning, be brought within the specific Entry. As noted hereinabove, it is only if all kinds of pesticides and insecticides are held to fall within the ambit of Entry 20, can the subject goods, which are household insecticides, be said to fall within the said Entry. Such a construction would th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing knapsack/backpack power sprayers (powered upto 35 cc engines developing 0.8 to 1.4 HP), dusters and parts thereof. Entry 1 of Schedule IV of the AP VAT Act relates to agricultural implements not operated manually or not driven by animals. Entry 20 of Schedule IV of the AP VAT Act relates to Pesticides, Insecticides, fungicides, herbicides, weedicides and other plant protection equipment and accessories thereof including drip and sprinkle irrigation systems, but excluding mosquito repellants in any form. It is evident from Entry 1 of the First Schedule and Entry 1 of the IV Schedule to the VAT Act, that Entry 20 covers only such physical equipment which are not covered by either of the aforesaid Entries. While the first part of Entry 20 relates to products i.e., goods used for plant protection, the second part deals with equipment accessories meant for plant protection through which the goods, covered by the first part, are applied/used. Entry 20 brings within its ambit two different categories i.e., goods equipment of the same genus . The Entry has to be read in its entirety, and each word used therein has to be given meaning. No part of the Entry can be considered s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e given its own meaning and construed independently; the maxim noscitur a sociis is not applicable as the terms pesticides and insecticides are terms of wide import that have been deliberately used to include insecticides and pesticides of all forms including those used for household purposes; this maxim is not applicable in cases where wider words are deliberately used to broaden the scope of the word/phrase; if the genus of Plant Associates is applied to the former three items then, because of Herbicide and Weedicide , they would include plant killers and plant protection products; such an interpretation would also not have a common genus amongst all the items; accepting the contention of the department would mean that the suggested common genus of Plant Associates would cover both plant protectors and plant killers , for it is only then can the common genus of Plant Associates be attributed to all the five items in the Entry; it would then mean that herbicide and weedicide would cover both plant protectors and plant killers; the preceding three items i.e pesticides, insecticides and fungicides would only cover plant protectors; even to apply the rule of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing interest is very widely worded. It uses the words any amount due to the contractor by the employer . In our opinion, these words cannot be read as ejusdem generis along with the earlier words earnest money or security deposit . Accordingly, the Supreme Court held that no interest is payable for pre-award period. Entries, which are descriptive of the category of goods, have certain characteristics. Therefore, when a question arises whether a particular good is covered in any category or not, it has to be examined if it satisfies the characteristic which go to make it a good of that category, whether in trade circle it is understood as such, and if it is a good of a technical nature then whether technically it falls in the one or the other category. Once it is found that a particular good satisfies the test, then the issue which would arise for consideration is whether it should be construed broadly or narrowly. ( Bombay Chemical Pvt. Ltd. 1995 Supp (2) SCC 646) . It is while examining the question whether the Entry should be read broadly or narrowly that the rules of Noscitur a sociis and ejusdem generic should be borne in mind. The Rule Noscitur a sociis , accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und in immediate connection with them. The rule is explained differently: that meaning of doubtful words may be ascertained by reference to the meaning of words associated with it . ( Ahmedabad (P) Primary Teachers Assn. v. Administrative Officer (2004) 1 SCC 755 = AIR 2004 SC 1426 ; Principles of Statutory Interpretation by Justice G.P. Singh, 8th Edn. ). It is a legitimate rule of construction to construe words in an Act with reference to words found in immediate connection with them. ( M.K. Ranganathan (1955) 2 SCR 374 = AIR 1955 SC 604; Angus Robertson v. George Day (1879) 5 AC 63 ). When two or more words, which are susceptible of analogous meaning, are coupled together noscuntur a sociis , they are understood to be used in their cognate sense. They take, as it were, their colour from each other, i.e the more general is restricted to a sense analogous to the less general . ( M.K. Ranganathan (1955) 2 SCR 374 = AIR 1955 SC 604 ; Maxwell on Interpretation of Statutes, Tenth Edition, p 332 ). The rule of nositur a sociis cannot, however, prevail where it is clear that the wider words have been deliberately used in order to make the scope of the defined wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent a class. ( GMR Energy Limited 28; Statutory Interpretation Rupert Cross (p.116); Amar Chandra Chakraborty v. The Collector of Excise, Tripura AIR 1972 SC 1863 ; UPSEB v. Hari Shankar (1978) 4 SCC 16 : AIR 1979 SC 65 ) For the ejusdem generis principle to apply there must be sufficient indication of a category that can properly be described as a class or genus, even though not specified as such in the enactment. ( Francis Bennion : Statutory Construction [pgs 830- 831). Unless you can find a category' 'there is no room for the application of the ejusdem generis doctrine'. The only test is whether the specified things which precede the general words can be placed under some common category. This means that the specified things must possess some common and dominant feature. ( S.S. Magnhild v. Mclntyre Bros. Co. , (1920) 3 KB 321 ). To invoke the application of the ejusdem generis rule, there must be a distinct genus or category running through the bodies already named. The specific words must apply not to different objects of a widely differing character but to something which can be called a class or kind of objects. Unless there is a genus or catego ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs and plant killers necessitates rejection, as the goods referred to in sales tax enactments must be understood in its commercial sense, as those involved in the trade understand it, and not as understood by agricultural scientists in its technical sense. Applying the common parlance test it is evident that the subject goods, which are household insecticides and pesticides, are not covered under Entry 20 of the IV Schedule to the VAT Act. The words pesticides , insecticides , fungicides , herbicides and weedicides , in the first limb of Entry 20, are susceptible of analogous meaning, and are compiled together so that they are understood as being used in their cognate sense. Pesticides and insecticides are used to control pests and insects, herbicides and weedicides to kill unwanted plants especially weeds, and fungicides are used to inhibit or kill the growth of fungi. These chemicals prevent destruction or damage to crops/plants, and are mainly used for plant protection . While they may have other uses also, the meaning of the words pesticides , insecticides and fungicides is to be restricted to a sense analogous to herbicides and weedicides which are l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redundant, which as held hereinabove is impermissible. The object of placing the words plant protection equipment in Entry 20 is only because the preceding items in the said Entry, including pesticides and insecticides relate only to those used for plant protection, and none else. Although the doctrine of ejusdem generis is to be applied with caution, where in a legislative enactment there are strong reasons (a) from the history and circumstances connected with its passing, (b) from the structure of the Act itself, to indicate the real meaning of the Legislature, the doctrine of ejusdem generis is one which not only can, but ought to, be applied. ( Attorney-General v. Brown (1920) 1 K.B. 773) . The statement of objects and reasons of Act 9 of 1970 in so far as it related to Entry 78 of Schedule I of the APGST Act, the white paper on VAT, and the very structure of Entry 20 of Schedule IV of the VAT Act require application of the ejusdem genus rule, and when so applied it is evident that the insecticides and pesticides used in Entry 20 of Schedule IV relate only to those used for plant protection. XIV. IS ENTRY 20 A COMBINED ENTRY : It is contended, on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is the genus in Entry 20, and covers not only equipment and its accessories which are physical goods meant for plant protection, but also the goods, referred to in the first part of Entry 20, which are consumables used for plant protection. XV. SHOULD THE MEANING OF WORDS, USED IN AN ENTRY IN A SCHEDULE TO A TAX STATUTE, BE ASCERTAINED IN THE LIGHT OF DEVELOPMENT OF SCIENCE TECHNOLOGY? It is contended, on behalf of the petitioners, that once the goods, manufactured by the assessee, are held to be insecticides , there is no justification in excluding them from the term pesticides ; with development of science and technology, a continually expanding content and a new kind of pesticide/insecticide may be found; a Statute is to be understood as a dynamic document which contemplates changes in technological and socio-economic conditions; the House of Lords, in Comdel Commodities Ltd. MANU/UKHL/0038/1990, has held that when a change in the social conditions produces a novel situation, which was not in contemplation at the time when the statute was first enacted, there can be no apriori assumption that the enactment does not apply to the new circumstances; and if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be applied if they run counter to how the product is understood in popular parlance. ( Shree Baidyanath Ayurved Bhavan Ltd. v. Collector of Central Excise, Nagpur (1996) 9 SCC 402 ). The usual method would be to provide the popular meaning or the meaning attached to the products by those who deal in them i.e in their commercial sense. Functional utility, and predominant use, play an important role in determining the classification of taxable goods. The dictionary meaning, the technical meaning and the meaning from users' point of view or popular meaning would all furnish a clue to understand the classification of a product. ( Reckitt Benckiser (India) Ltd v. State of A.P. (2012) 56 VST 1 ; Scientific and Glass Laboratories (1974) 34 STC 418; Commissioner of Sales Tax, Madhya Pradesh, Indore v. Jaswant Singh Charan Singh ([1967] 19 STC. 469 (SC) ; Prayag Chemical Works (1970) 25 STC 85). The words, used in Entries in sales tax legislations, must be construed as understood in common parlance. The words used by the legislature must be given their popular sense meaning that sense which people conversant with the subject-matter with which the statute is dealing would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le passage of time has no doubt resulted in new found uses of pesticides, insecticides, weedicides, fungicides and herbicides, what we are called upon to examine is whether the subject products fall within the ambit of an Entry in a Schedule to a Sales Tax enactment. As a Sales Tax enactment relates to levy of tax on commercial goods, the words used in an Entry in a Schedule to a Sales Tax Act must be given the meaning attributed to it in the market by persons dealing with them daily, and not in their technical or scientific sense. When construed in its popular sense, it is evident that the words pesticides and insecticides used in Entry 20 relate to chemicals used as inputs for agriculture or plant protection, and not to household insecticides used to kill household insects and pests. XVI. REASONS FOR EXCLUSION OF MOSQUITO REPELLENTS FROM THE AMBIT OF ENTRY 20 : It is contended, on behalf of the petitioners, that the subject goods cannot be construed as mosquito repellants; HIT CIK, HIT Rat and HIT Chalk pertain to rats and cockroaches, and other crawling insects; they are not used in relation to mosquitoes; HIT FIK is an insecticide as it is used as a flyin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preting the erstwhile Entry 78 of the First Schedule to the APGST Act, in Kumar Agencies 1990 (11) APSTJ 28 (STAT) , held that Jet Mat falls within the expression insecticides as they are used for repelling or killing mosquitos from residential and non-residential buildings, and the chemical is classified as an insecticide even by the Directorate of Plant Protection; the Sales Tax Appellate Tribunal, Hyderabad, in Amitha Agencies (2002) 34 APSTJ 17 (STAT) following the decision in Kumar Agencies 1990 (11) APSTJ 28 (STAT) held that Mosquito Repellent is an insecticide falling under Entry 78 of the First Schedule to the APGST Act; and a similar view was taken in Transelectra Domestic Products Pvt. Ltd. (1993) 90 STC 436. Learned Counsel for the petitioners would submit that the judgment in Sonic Electrochem (1998) 111 STC 181 is not applicable to the facts of the present case, as it dealt with the interpretation of a specific Entry which deals with mosquito repellants under the Gujarat Sales Tax Act, and the Entry therein specifically dealt with jet mats i.e. mosquito repellant mats, whereas undisputedly the subject goods were different; in any event, the Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e before insertion of Entry 129 in the Gujarat Sales Tax Act with effect from 1-8-1990. A notification was issued, under Section 49(2) of the said Act, granting partial exemption to the sale or purchase of pesticides and insecticides under Entry 98. The Supreme Court held that, in view of the specific Entry 129 dealing with mosquito repellents, it was difficult to accept the contention that the product in question would not come within the ambit of Entry 129 since one of its constituents d-Allethrin 4% happened to be an insecticide; the product Jet Mat, which was the trade name, contained d-Allethrin 4% ; it was commercially known as Mosquito Repellent Mat , and was a mosquito repellent notwithstanding the fact that it not only repelled mosquitoes but was also capable of killing mosquitoes; it was difficult to hold that it was an insecticide entitled for partial exemption under Entry 98 of the Act; and when Entry 129 clearly stipulated that mosquito repellent was taxable, the rate of tax had been provided therein, and as the product in question was also a mosquito repellent, there was no infirmity in the judgment of the High Court. In Godrej Hicare Limited (2007) 6 VST 63 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntained the chemical Allethrin as one of its constituents; since Allethrin is a constituent chemical in Mosquito repellants, it comes within the definition of insecticide which also finds place in Entry 23 of the III Schedule annexed to KVAT Act without any further qualification as to its kind; whether an insecticide is used in agricultural operations for the purpose of killing insects that attack agricultural crops, or it is used for killing domestic insects, the fact remains that all kinds of insecticides fall within Entry 23 of the III Schedule annexed to the Karnataka VAT Act; and therefore mosquito repellant, being insecticide, fell within Entry 23 of the said Schedule. In M/s.Godrej Consumer Products Ltd. (2014 (80) KarLJ 328 , it was held that mosquito repellants, including devices, parts and accessories, were not treated as part of the Entry relating to Insecticides; it had an independent entry; when the Karnataka Sales Tax Act came into force, it had only one entry; it was subsequently substituted by the Entry at Sl.No.23; the understanding of the Legislature was that, as the words used in the said entry were clear and unambiguous, it did not include mosquito repel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Municipality AIR 1970 SC 192 ). A competent legislature can always validate a law which has been declared by courts to be invalid, provided the infirmities and vitiating factors noticed in the declaratory judgment are removed or cured. If in the light of such validating and curative exercise made by the legislature-granting legislative competence-the earlier judgment becomes irrelevant and unenforceable, that cannot be called an impermissible legislative overruling of the judicial decision. All that the legislature does is to usher in a valid law in the light of which the earlier judgment becomes irrelevant. ( Ujagar Prints v. Union of India AIR 1989 SC 516 ; State of Karnataka v. Pro Lab (2015) 8 SCC 557 ). Once the circumstances are altered by legislation, it may neutralise the effect of the earlier decision of the Court which becomes ineffective after the change of the law. ( Ujagar Prints 132; Pro Lab (2015) 8 SCC 557 ). The object of such an enactment is to remove and rectify the defect in phraseology or lacuna of other nature, which has been found by the Court to be vitiated by an infirmity. Its aim is to effectuate and carry out the object for which the earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two is that a repellent does not kill insects but keeps them away by exuding pungent vapours or exhibiting slightly toxic effects. As noted hereinabove, exclusion of mosquito repellants from Entry 20 can be traced to the fact that the Sales Tax Appellate Tribunal had treated mosquito repellants as Insecticides . The legislature, in its wisdom, has excluded mosquito repellants in any form from its ambit. Thereby the Entry has been confined to agriculture/plant protection products only. It is not applicable to the assessee s products. The contention that the words following (excluding mosquito repellents in any form) reflect the intention of the legislature to include all other forms (house hold or agriculture) of insecticides which may have the propensity to kill, immaterial of its mixture with the other ingredients (kerosene, propellant gas to name a few) which goes into the manufacture of such goods, is not tenable. It is wholly unnecessary for us to dwell on the distinction, if any, between insect killers and insect repellents as the pesticides/insecticides referred to in Entry 20 are those used for plant protection, and not household insecticides . XVII. EFFECT OF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... horities is to attenuate the application of the ejusdem generis rule .. (emphasis supplied) The Supreme Court in Indian Aluminium Company Ltd., v. Asst. Commissioner of Commercial Taxes (Appeals) (2001) 121 STC 510 (SC) , while interpreting Entries No.11 and 67 which deals with petroleum products , held that the very fact that there is an exclusion clause, means that, but for the said exclusion, aviation fuel, LPG., etc., would be included in the said entries. It is no doubt true that an exclusion clause is used in an Entry to exclude the goods referred to in the exclusion clause from the ambit of the Entry and, but for the exclusion, the goods mentioned in the exclusion clause would have fallen within the ambit of the Entry. As noted hereinabove, the exclusion clause in Entry 20 was necessitated as the Tribunal had earlier held that mosquito repellents were insecticides/pesticides falling within the ambit of Entry 78 of Schedule I to the APGST Act (similar to Entry 20 of Schedule IV of the VAT Act). It is to remove the basis of the judgments of the Tribunal was the exclusion clause inserted. The words in any form refer to all kinds of mosquito repellents be it in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eckitt Benckiser India Pvt. Ltd. (2012) 56 VST 1 , with respect to the same goods sold by the same assessee, that Lizol and Harpic were disinfectant fluids that had the capacity to kill bacteria and germs, and were duly classifiable as pesticides; the Karnataka High Court, in Godrej Consumer Products Ltd. (2014 (80) KarLJ 328 , examined a similar issue on the classification of pest killing products under a similar Entry under the Karnataka Value Added Tax Act, 2003 which excluded mosquito repellents from coverage; the Karnataka High Court answered the substantial question of law in favour of the Petitioner holding that what is excluded from the ambit of insecticide is mosquito repellants, and not mosquito killers, and Hit Rat are for killing rodents and Hit Chalk are meant for killing crawling insects ; the first part of Entry 20 of the IV Schedule to VAT Act, is identical to Entry 18 which was construed by the Supreme Court in Bombay Chemicals Pvt. Ltd. 1995 Supp (2) SCC 646; the suggested restrictive interpretation is contrary to the ratio laid down by the Supreme Court; and applying the said ratio, to the facts of the present case, the subject goods, capable of kil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s may be of two types; one to disinfect and other to destroy the germs; the former may not be covered in the expression pesticide , but those products which are used for killing insects by use of substances such as high boiling tar acid have the same characteristic as a pesticide ; where the entries are descriptive of the category of goods, they have certain characteristics; therefore, when a question arises whether particular goods are covered in any category or not, it has to be examined whether it satisfies the characteristic which go to make it a good of that category, and whether in trade circle it is understood as such; if they are goods of technical nature, then whether it technically falls in the one or the other category; and once it is found that the particular goods satisfy the test, then the issue which arises for consideration is whether it should be construed broadly or narrowly. While Item 18, the scope of which fell for consideration in Bombay Chemical Pvt Ltd 1995 Supp (2) SCC 646 , is no doubt similar to the first limb of Entry 20 of Schedule IV of the VAT Act, when the first limb of Entry 20 is read along with the second limb applying the common parlance tes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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