General words must stick to genus in specific contexts

EXPERT EYE

Etc" in general conversation often has a very omnibus meaning, but, in fiscal law it has a very special connotation. In other laws too, the same may well be true, but judging from the Supreme Court judgments alone on this sort of general expressions such as etc, one can imagine how controversial these expressions can be.

Importers, manufacturers, and taxpayers have often tried to take an interpretation favouring their action. I particularly remember one import years ago when the licence was for three resins and then there was "etc" after that.

The importer brought a particular resin and claimed that it was covered under the expression "etc". His explanation was that it was a resin and so it was permissible under the general expression, etc.

At that I got the chemical laboratory attached to our custom house to analyse the nature of the resins mentioned in the license and it transpired that all of them were oleic resin. So I realised that the three imported resins have a genus namely that they are all oleic resin. On that basis I pointed out to the importer that "etc" would refer to other resins but they should be oleic resin, which the imported resin was not.

The imported resin must fall under the genus of the items mentioned. So the conclusion was obvious that the imported resin is not covered by licence.

At that time I did not know (and I came to know much later when I read the judgments) that this whole idea is covered under a principle called Ejusdem Generis meaning "of the same kind and nature". The rule is that when general words follow particular and specific words of the same nature, the general words must be confined to the meaning as in the genus created by the specific words.

There are many interesting judgments on the subject in relation to goods of daily use. There are cases on hairpin and comb. In the Sales Tax Acts in different states there are entries namely, " Scents and perfumes, powder, snows, scented hair oils, scented sticks, cosmetics and toilet requisites."

The question was if hairpin and comb would be categorised as toilet requisites. The Madras High Court delivered a judgment in the case of hairpin in the case of CCT vs Ambica Stores, 1963 (14) STC 688 and the Kerala High Court in the case of Dy Commissioner of Agricultural Income Tax vs P.J.Zachariah, 1965 (16) STC 799 (Ker) both holding that they are not toilet requisites.

The reason was that the enumerated items were intended to be rubbed, poured, sprinkled or sprayed on human body and after use they are fully consumed. But hairpin and comb are not of that genus. They are in the nature of toilet instruments and not requisites applying the principle of ejusdem generis.

Wherever, there are many processes in an industry and some processes are exempted, such controversies arise. That is why in the textile industry such controversies have gone more often to the highest court.

When the definition of manufacture was expanded by providing that bleaching, mercerising, dyeing, printing, water-proofing, rubberising, shrink-proofing, organdie processing or any other process, the matter went to the Supreme Court on the issue if calendaring could be treated as manufacture.

The Supreme Court decided in the case of Siddheswari Cotton Mills vs UOI, 1989 (39) ELT (SC) that the genus in all these processes was that the processes were irreversible while calendaring was not such a process. So, calendaring cannot be called manufacture on the basis of the principle of ejusdem generis.

So the attempt of the Revenue to charge duty on calendaring calling the process as manufacture met with well-deserved defeat. It is in fact extremely surprising that Revenue took such a case to the Supreme Court.

There are some more recent cases also notably in the case of CC Bombay vs Maharastra Fur Fabric Ltd, 2002 (145) ELT 287 (SC), where also the Supreme Court has applied the same principle to hold that the process for fabric through hot stenter is to be classified as "any other process" since this process of the same genus as the specified processes.

E-mail: smukher2000@yahoo.com

(The author is a former member of the Central Board of Excise&Customs)