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

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

The expression 'old' in Entry No. 15 must be given a restricted meaning akin to 'discarded, unserviceable or obsolete.' The sale of machinery in perfect running condition does not fall under this entry for the purposes of sales tax.

Parties
Appellant No. 1: Rainbow Steels Ltd.; Appellant No. 2: Rainbow Steels Ltd. (second party); Respondent No. 1: Commissioner of Sales Tax, Uttar Pradesh; Respondent No. 2: State of Uttar Pradesh
Jurisdiction
India
Judgment Date
30 January 1981
Procedural Posture
Civil Appeal / Supreme Court Appeal by Special Leave From Order Dated 18 4 1979 of Allahabad High Court (lucknow Bench)
Outcome
Appeal allowed
Legal Topics
Sales Tax, Interpretation of Statutes, Noscitur a Sociis
Tax Law Sales Tax Interpretation of Statutes Noscitur a Sociis

Case Brief

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Parties

Rainbow Steels Ltd.

Appellant No. 1

Rainbow Steels Ltd. (second party)

Appellant No. 2

Commissioner of Sales Tax, Uttar Pradesh

Respondent No. 1

State of Uttar Pradesh

Respondent No. 2

Procedural Posture

Civil Appeal / Supreme Court Appeal by Special Leave From Order Dated 18 4 1979 of Allahabad High Court (lucknow Bench)

Legal Issues

  1. 1 Whether the sale of a thermal power plant in running condition is exigible to sales tax under Entry No. 15 of Notification dated May 30, 1975, issued under section 3A of the U.P. Sales Tax Act, 1948.

Ratio Decidendi

The expression 'old' in Entry No. 15 must be given a restricted meaning akin to 'discarded, unserviceable or obsolete.' The sale of machinery in perfect running condition does not fall under this entry for the purposes of sales tax.

Court Disposition

Appeal allowed

Orders

  • The views of the lower authorities are set aside.
  • The sale in question is declared not exigible to tax under Entry No. 15 of Notification dated May 30, 1975.