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PRINCIPLES OF “EJUSDEM GENERIS”- “NOSCITUR A SOCIIS” IN TAXATION LAWS

Introduction:

“Ejusdem generis” is a latin maxim which means that where there is a list of words in a statute followed by some general words, the general words are limited to the same sort of items as are mentioned in the specific things set out in the list. The doctrine of “ejusdem generis” arises if a catchall phrase ends a list. The catchall phrase would refer to things similar in character to the other items in the list.  For e.g, if in a list included, dogs, cats, parakeets and similar animals, the catchall phrase, “similar animals” would mean other types of pets since the other animals in the list are common pets.

The maxim “Noscitur a sociis” means that a word is determined by the words that surround it, i.e., within the context.  This principle is applied to either enlarge or restrict the meaning of a word within the confines of a document.  Hence, when a word is ambiguous the appellate authority or a judge looks at the rest of the document to determine the meaning.  And another one is “Expressio unius exclusio alterius”.

There are many case laws decided based on these principles in different context.  In the indirect taxation laws also, these three rules play an important role in deciding the classification of a particular commodity or a service in specific cases.

There are three rules of language applied by the courts to assist them in interpreting statutes. The rules of language are referred to as intrinsic aids or internal aids. The three rules of languages are:

· Ejusdem generis (of the same kind)

· Expressio unius exclusio alterius, (the express mention of one thing excludes all others),

·  And Noscitur a sociis (a word is known by the company it keeps and words must be read in context)

Case laws:

In Commissioner of Central Excise, Meerut  Vs M/S. Sundstrand Forms P.Ltd. on 30 August, 2011 (2011 TIOL 87 SC CX), the Commissioner has given cogent reasons as to why the carbonless paper emerging at intermediate stage would be classifiable under heading 48.16. According to him goods covered under Headings 48.09 and 48.16 are of same kind except that in latter heading the goods, other than in roll form or in rectangular sheet with at least one side exceeding 36 cm fall and that applying the principle of “ejusdem generis”, the carbonless paper whether printed or not which is not in roll form or in the sheet form with one side exceeding 36 cm would be covered under sub heading No. 4816.00.

In G. Radhakrishna Murthy And ... Vs Commercial Tax Officer-Ivb, ... on 20 February, 1997, (1999 113 STC 161 SC) it was held “An inclusive definition has been given clarifying, that cosmetic and toilet preparations would include scents, perfumes, face powders, talcum powders, hair tonics, hair oils, hair lotions, face creams and snows, pomades, depilatories, tooth powder, toothpaste, toothbrushes and shaving creams. The things specially mentioned in the entry "cosmetic and toilet preparations" are all of the nature of personal application. Incense sticks or agarbathis are goods of a different character altogether. These may emit a pleasant odour when burnt. That, however, will not bring agarbathis within the class of articles mentioned in Item 36 of the First Schedule. All these goods are articles of personal application. "Perfume" in this context has to be construed ejusdem generis”.

In Sales Tax Commissioner vs Ram Kumar Agarwal 19 STC 400 All it was held “The term "cash" is narrower than "money". The words "deferred payment or other valuable consideration" used in Section 2(h) of the Act, merely enlarge the ambit of the consideration beyond "cash", but they do not, in my opinion, carry it outside the scope of the term "money". The words "other valuable consideration" are general as compared with the two preceding more specific terms "cash" and "deferred payment". "Cash" and "deferred payment" are also considerations. Hence, all the conditions for the applicability of the "ejusdem generis" rule are satisfied and the expression "other valuable consideration" can and must be interpreted restrictively here. It seems intended to cover cheques and promissory notes or negotiable instruments which serve the purpose of "money" in modern commercial practice and usage and which can be included in the concept of "money".

Siddeshwari Cotton Mills Ltd. And ... Vs Collector of Central Excise on 16 March, 1984 (1984 (18) ELT 297 Tri Del)

Applying the Rule of Ejusdum Generis, "any other process" should partake of the colour and nature of the specified processes and viewed in this light, calendering could not be said to be a "process".

But like all other linguistic canons of construction, the ejusdem generis principle applies only when a contrary intention does not appear.

International cases in different context:

Noscitur a sociis, (We know a man by the company he keeps, meaning that the court interprets words from the context in which they are used). In Inland Revenue v Frere [1964] 3 All ER 796 it was held that “ The respondent sought to deduct the interest paid on a short term loan from his income for the purposes of assessing his liability to pay tax. The Income Tax Act of 1952 allowed "the amount of interest, annuities or other annual interest" to be deducted from the income”.

Under the noscitur a sociis rule, the mention of amount of interest related only to annual interest as the other items related to annual payments. The respondent's interest payment was not an annual interest payment and therefore he could not deduct it from his income and he was required to pay tax on it.

In Pengelly v. Bell Punch Co. Ltd [1964] 1 WLR 1055 the court had to decide whether a floor used for storage came under the Factories Act 1961, whereby 'floors, steps, stairs, passageways and gangways' had to be kept free from obstruction. The court held that as all the other words were used to indicate passage, a floor used exclusively for storage did not fall within the Act by applying the principles of Noscitur a sociis.

R Vs Inhabitants of Sedgely (1831) 2 B & Ad 65

A statute raised taxes on 'lands, houses and coalmines'. The court held that it did not apply to limestone mines as these were not specifically mentioned nor did the statute suggest that it would apply to other types of mines.

In  Powell v Kempton Park [1899] 2 QB 242. When a statutory provision stated that betting was illegal in a 'house, office, room, or other place  an outdoor betting ring in a race course could not be considered included because the statutory list referred only to indoor places. The question arose as to whether Tattersall's ring fell within the meaning of 'other place'. Applying the principles of “ejusdem generis”, the court decided that the general words had to mean an indoor place as all the other places on the list were indoor places.

Conclusion :

It was stated by Lord Campbell in R. v. Edmundson (1859) 28 L.J.M.C. 213 at p. 215: "Where there were general words following particular and specific words, the general words must be confined to things of the same kind as those specified." By applying this rule the presumed intention of the Legislature is used to restrict the ambit of wide and general expressions. And therefore the ejusdem generis rule is applied when

(a) the statute contains an enumeration of specific words

(b) the general term follows the enumeration

(c) there is no indication of a different legislative intent.

(d) the subjects of the enumeration constitute a class or category

(e) that class or category is not exhausted by the enumeration.

R.K RENGARAJ

M.Com., MBA., LL.B

The author can be reached at renga42002@yahoo.co.in


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