Case: THE COMMERCIAL TAX OFFICER AND ANR Vs. MOHAN BREWARIES AND DISTRILLERIES LIMITED

Cements Limited, the circular in question was not found to be in conflict with any statutory provision or the applicable schemes and, therefore, the same was held binding on the adjudicating authority in the following words: – 30. In the present case, it is not the case of the Revenue that the Circular dated 1-5-2000 is in conflict with either any statutory provision or the deferral schemes announced under the aforementioned government orders. We, therefore, hold that the said circular is binding in law on the adjudicating authority under the TNGST Act. 60. The aforesaid and other decisions, essentially dealing with exemption notifications, have no application to the present case; and in any event, none of the decisions, as referred on behalf of the assessee or as referred by the High Court, could be read for any principle contrary to that laid down by the Constitution Bench in Ratan Melting & Wire Industries (supra). 61. For what has been discussed hereinabove, we need not examine as to whether the Clarifications/Circulars in question could be said to be such clarification as envisaged by Section 28-A of the Act because even if the Clarifications/Circulars in question are treated to be those authorised by Section 28-A, they cannot have any effect over and above the interpretation of Section 7-A of the Act by the Courts. In other words, applicability of Section 7-A to the turnover in question could only be decided on the interpretation of the provision and its application to the given fact situation and not on the basis of Clarifications/Circulars in question. Put differently, the so-called Clarifications dated 09.11.1989 and 27.12.2000 had not been of explaining the meaning of any doubtful term or expression in the statutory provision nor they were explaining the object and purport of the provision concerned. The said Clarifications/Circulars had merely been the expression of the understanding of the concerned officer, be it SCCT or PCCT, about operation of Section 7-A of the Act vis-à-vis the purchase turnover of the empty bottles purchased by the assessee. However, such understanding of the officer concerned turns out to be a pure misunderstanding, when it stands at contradiction or incongruous to the declaration of law by the Courts; and could only be ignored. The latest Circular of the year 2002, issued after decision of the jurisdictional Tribunal in the case of Appollo Saline Pharmaceuticals (supra) could also be read only to the extent it is in conformity with the decision of the Tribunal (that came to be approved by the High Court) and in any case, even this circular cannot be decisive of the interpretation of Section 7-A of the Act. The decisive interpretation shall only be the one which is rendered in the binding decision/s of the Court. In continuity, we may also observe that various other decisions referred on behalf of the assessee, that modification of any particular circular or guideline or policy decision could only be made effective prospectively, have no application whatsoever to the present case. 62. In the aforesaid view of matter, we have no hesitation in concluding that the High Court, after having found that purchase tax was leviable on the turnover in question under Section 7-A of the Act, could not have issued directions for any benefit to the assessee with reference to the Clarifications/Circulars dated 09.11.1989 and 27.12.2000, particularly when such Clarifications/Circulars do not stand in conformity with the statutory provision and its interpretation by the Courts. 63. Hence, the impugned order of the High Court, on the second question as regards the operation and effect of Clarifications/Circulars dated 09.11.1989 and 27.12.2000, cannot be approved. 64. The net result of the discussion foregoing is that the purchase turnover of the empty bottles purchased by the assessee from the unregistered dealers under bought note is exigible to purchase tax under Section 7-A of the Tamil Nadu Act; and the assessee cannot escape such liability on the strength of the Clarifications/Circulars dated 09.11.1989 and 27.12.2000 which do not stand in conformity with the statutory provision as also declaration of law by the Courts. Other Question 65. So far as the other question regarding taxability of cash discount on the price offered by the assessee to the Tamil Nadu State Marketing Corporation Limited is concerned, the High Court has ruled in favour of the assessee with reference to the decision in the case of Neyvli Lignite Corporation Ltd. and the clear expressions in Explanation 2(iii) to Section 2(r) of the Act. 65.1. The relevant provision reads as under:- Section 2(r).- turnover means the aggregate amount for which goods are bought or sold, or delivered or supplied or otherwise disposed of in any of the ways referred to in clause (n), by a dealer either directly or through another, on his own account or on account of others whether for cash or for deferred payment or other valuable consideration, provided that the proceeds of the sale by a person of agricultural or horticultural produce, other than tea, and rubber (natural rubber, latex and all varieties and grades of raw rubber) grown within the State by himself or on any land in which he has an interest whether as owner, usufructuary mortgagee, tenant or otherwise, shall be excluded from his turnover. *** *** *** Explanation (2) Subject to such conditions and restrictions, if any, as may be prescribed in this behalf- *** *** *** (iii) any cash or other discount on the price allowed in respect of any sale and any amount refunded in respect of articles returned by customers shall not be included in the turnover; *** *** *** 65.2. In view of the clear phraseology of the above extracted Explanation, not much of discussion appears requisite as regards this issue that has rightly been decided by the High Court in favour of the assessee and not much of serious contentions have been put forward by the revenue in this regard. The impugned order of the High Court, to this extent, calls for no interference. CONCLUSION

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]17.2. As noticed, Section 7-A was inserted in the Tamil Nadu Act with effect from 27.11.1969. This provision has undergone several amendments from time to time but, for the present purpose, its sub-section (1), as examined by this Court in the judgment dated 15.07.1975 in the case of M.K. Kandaswami (supra) and then, as applicable to the present case pertaining to the assessment year 1996-97, may be noticed.18. For dealing with the rival contentions, we may also take note of various facets of interpretation of Section 7-A (1) of the Act in the relevant cited decisions. It may, however, be observed that so far as the text of Section 7-A (1) applicable to the case at hand is concerned, there has not been any direct interpretation by this Court or the jurisdictional High Court (except the order impugned). In two of the cited decisions, one by this Court in the case of M.K. Kandaswami (supra) (Decided on 15.07.1975) and another by the High Court in the case of Associated Pharmaceutical Industries (supra) (Decided on 18.01.1984) , Section 7-A (1) of the Tamil Nadu Act, as existing before its amendment by Tamil Nadu Act No. 78 of 1986 w.e.f. 01.01.1987, came up for consideration. The other cited decision in relation to Section 7-A (1) of the Tamil Nadu Act had been by the jurisdictional High Court in the case of Appollo Saline Pharmaceuticals (supra) (Decided on 14.09.2001) but that was rendered after further amendments to Section 7-A including that by Tamil Nadu Act No. 60 of 1997 w.e.f. 06.11.1997. Thus, the specific phraseology of Section 7-A (1) of the Tamil Nadu Act as applicable to the present case has not been dealt with by any of these decisions. Nevertheless, each of these decisions had come under reference in this case at every stage and, having regard to the questions involved, appropriate it would be to take note of the relevant ratio decidendi from these decisions.19. As regards the decisions of jurisdictional High Court dealing with Section 7-A (1) of the Act, in the case of Associated Pharmaceutical Industries (supra), the assessee had purchased and used the bottles for manufacture and sale of medicines, drugs or syrups. It was held by the High Court that though without bottling, the drugs and syrups manufactured could not be sold but, that could not be a reason for holding that the process of manufacture of drugs and syrups was not complete unless they were bottled or put in suitable containers and hence, it cannot be said that the bottles had been used up in the process of manufacture; and consequently, the purchase turnover of empty bottles could not be brought to charge under Section 7-A (1) (a) of the Act.20. The other decision concerning the provision contained in Section 7-A (1) of the Act but after yet another amendment to clause (a) had been by the Madras High Court in the case of Appollo Saline Pharmaceuticals (supra). Therein, the assessee was engaged in manufacturing and marketing of I.V. fluid and the turnover of the bottles containing I.V. fluid was included in the turnover relating to the fluid by reason of Section 3 (7) of the Act. The assessee was confronted with a demand for payment of purchase tax for the reason that the bottles in which I.V. fluid was packed and sold were those bottles which the assessee had purchased from unregistered dealers and therefore, those bottles had not been subjected to tax at the time of purchase. It was essentially contended before the Madras High Court on behalf of the assessee that if the goods in respect of which purchase tax was sought to be levied continued to be available for sale or purchase and were in fact sold, such goods cannot be brought to tax under Section 7-A of the Act.20.1. The High Court referred to the expansion of ambit and coverage of Section 7-A (1) of the Act and observed that after the amendments, recovery of purchase tax was permissible even in cases where goods which had not suffered tax at the time of purchase and are subsequently disposed of by the dealer in circumstances where value of turnover relating to those goods is also subject to tax by deeming the same as forming part of turnover of other taxable goods. The High Court observed that the inclusion of turnover relating to bottles in the total turnover of dealer and thereby, such turnover relating to bottles being also subjected to tax, did not enable the assessee to get out of the net of Section 7-A because the bottles were not sold as bottles but were sold as part of a composite unit namely, I.V. fluid packed in bottles. The High Court also observed that the amended Section 7-A of the Act referred to the consumption or use of goods in or for the manufacture of other goods; and having regard to the nature of goods and the need for a container to make those goods marketable, it was required to be held that the bottles were used in or for the manufacture of I.V. fluid.20.2. The High Court also found that it was not the case of assessee that the fluids manufactured by it could be sold in the market without the aid of bottles. Thus, while reiterating that the bottling of I.V. fluid was necessary to make it marketable, the High Court held that the bottles were clearly the goods which were used in or for the manufacture of fluid.21. Turning over to the cited decisions of this Court, it may be observed that the 3-Judge Bench decision of this Court in the case of M.K. Kandaswami (supra) has a material bearing and is of utmost significance because the root purpose as also the sweep of this provision for levy of purchase tax have been succinctly explained by this Court while illuminating several of its basic and essential ingredients.21.1. In the case of M. K. Kandaswami (supra), the respondent dealers had purchased a variety of goods, namely, arecanuts, gingelly seeds, turmeric, grams, castor seeds and butter in such circumstances where their sales were not liable to tax in the hands of the respective sellers although the goods were such, whose sale or purchase was generally liable to tax under the Act. Against the respondent dealers, either pre-assessment proceedings had been initiated or assessments had been made under Section 7-A of the Act on the purchase turnover of these goods on the assertions by revenue that the gingelly seeds and castor seeds were crushed into oil and the butter was converted into ghee by the respective dealers and by such action, the goods in question were consumed in the manufacture of other goods for sale; and hence, this action was covered under clause (a) of Section 7-A (1). It was also asserted that the other goods namely, arecanuts, turmeric and gram, were transported by the respective dealers outside the State for sale on consignment basis and thereby, those cases were covered by clause (b) or clause (c) of Section 7-A (1). In the backdrop of these facts, when Section 7-A came up for interpretation in the writ petitions under Article 226 of the Constitution of India, the High Court found the phraseology of Section 7-A to be rather carrying contradiction in terms and the language being far from clear as to its intention.27. Keeping the aforementioned principles in view and having regard to the questions of construction involved in the present case, it appears appropriate to recapitulate the texts of the relevant provisions concerning purchase tax as occurring in different State enactments which have come in reference in the present case; and for proper appreciation, it would be useful to put the relevant texts in juxtaposition to notice their similarities and akin features as also the dissimilarities and distinctive features.28. As noticed, so far as the text of Section 7-A (1) applicable to the case at hand is concerned, there has not been any direct interpretation by this Court or the jurisdictional High Court (except the order impugned). We may also usefully reiterate that so far decision of Madras High Court in the case of Associated Pharmaceuticals Industries (supra) is concerned, the same was rendered before the relevant amendments to Section 7-A of the Act and particularly when the expression or uses was not there in clause (a) of Section 7-A (1). Only the expression consumes was considered therein and the High Court held that the bottles were not consumed in manufacture of drugs or syrups. So far the decision of Madras High Court in the case of Appollo Saline Pharmaceuticals (supra) is concerned, as noticed, the same was rendered after further amendment to Section 7-A whereby, the expression or for was added to clause (a), which expression was not there in the provision applicable to the present case. This apart, the activity examined in the case of Appollo Saline Pharmaceuticals had been of the sale of I.V. fluid packed in bottles.29.1. It needs hardly any re-emphasis that the scope and ambit of the provisions of purchase tax in different State enactments had been different on material particulars; and it is apparent that for difference in phraseology, interpretation of one particular State Sales Tax Act cannot be ipso facto imported for interpreting another enactment. Learned senior counsel for the assessee has endeavoured to persuade us that the observations made in Hotel Balaji (supra) in relation to Haryana Act may apply to the present case too but, we are afraid, the submissions cannot be accepted because of a fundamental difference in the ambit and scope of the Haryana Act compared to the ambit and scope of Tamil Nadu Act with which we are concerned in these appeals. We may, therefore move on to the other decisions of this Court for the purpose of interpretation of Section 7-A of the Act and for finding out the principles to be applied to the present case.30. As noticed, the 3-Judge Bench decision of this Court in the case of M. K. Kandaswami (supra) was rendered in relation to the provision of Section 7-A of the Tamil Nadu Act, as existing at the relevant time. The later amendment of this provision (w.e.f. 01.01.1987), with which we are concerned in this case, has only enlarged its width by insertion of the expression or uses after the expression consumes and thereby, not only consumption but even use in the manner envisaged by the provision would provide coverage thereunder. Therefore, when the later amendment has not altered the basics of Section 7-A of the Act and had only enlarged its scope, the principles applicable to the present case could be culled out from the enunciation in M. K. Kandaswami, with necessary variation, rather enlargement.31. As held in M. K. Kandaswami (supra), Section 7-A of the Act is a charging as well as a remedial provision, its main object being to plug leakage and prevent evasion of tax; and in interpreting such a provision, a construction which would defeat its purpose or render it otiose should be eschewed. As regards workability of Section 7-A of the Act, this Court catalogued its ingredients in a point-wise break up and pointed out that it would apply only if all such ingredients are cumulatively satisfied. We have extracted the analysis so made by this Court hereinbefore (Vide paragraph 19.2. ibid.) . The same analysis shall apply to the provision of Section 7-A with which we are concerned in the present case with necessary variation and with major difference that in point No. 6(a), the expression or uses shall also get added because of the amendment above- noted. Therefore, applying the analysis in M.K. Kandaswami with necessary modification, Section 7-A (1), as existing in the statute during the period relevant for the present case, would become applicable if the following basic ingredients are cumulatively satisfied: -(1) The person who purchases the goods is a dealer and is covered under Section 3(1) of the Act;(2) the purchase is made by him in the course of his business;(3) such purchase is either from a registered dealer or from any other person;(4) the goods purchased are those goods whose sale or purchase is liable to tax under the Act;(5) such purchase is in circumstances in which no tax is payable under Section 3 or 4, as the case may be (but not being the excepted circumstance with reference to the point of purchase); and(6) the dealer either-(a) consumes or uses such goods in the manufacture of other goods for sale or otherwise, or(b) disposes of such goods in any manner other than by way of sale in the State, or(c) despatches or carries them to a place outside the State except as a direct result of sale or purchase in the course of inter-State trade or commerce.32. The analysis as above fairly gives insight as to the ambit and scope of Section 7-A (1) of the Act but it is the expression or otherwise, as occurring in clause (a) of this provision [point No. 6(a) ibid.] that, perforce, calls for yet deeper exploration to understand the range of coverage of this provision. However, this exploration does not require any lengthy discussion for the directly applicable dictum of the Constitution Bench in the case of Nandanam Construction Co. (supra).33. As noticed, the relevant clauses in Section 6-A of the Andhra Pradesh Act had been more or less similar to those contained in Section 7-A of the Tamil Nadu Act and while construing the same in Nandanam Construction Co. (supra), the Constitution Bench specifically held that the object of the said provision was to levy purchase tax on goods consumed either for the purpose of manufacture of other goods for sale or consumed otherwise. (vide paragraph 23.3.3 ibid) Be it noted that the additional expression or uses was not there in the said Section 6-A of the Andhra Pradesh Act either. In other words, the phraseology examined by the Constitution Bench in Nandanam Construction Co. was akin to that of Section 7-A of the Tamil Nadu Act as existing earlier and as examined in M.K. Kandaswami. Further, noticeably, in M.K. Kandaswami, the 3-Judge Bench held that the decision in Ganesh Prasad Dixit, wherein the provision contained in Section 7 of the Madhya Pradesh Act had been interpreted by this Court, was apposite guide for construing Section 7-A of the Tamil Nadu Act; and then, in Nandanam Construction Co., the Constitution Bench approved the enunciation in Ganesh Prasad Dixit as regards the interpretation of the expression or otherwise while making it absolutely clear that this expression or otherwise provided alternative to the expression manufacture and not to the expression sale; and the converse interpretation as regards this expression or otherwise in Pio Food Packers was overruled. The provision in Section 7 of the Madhya Pradesh Act had also been similar to the original Section 7-A of the Tamil Nadu Act.33.1. As noticed, by the amendment with effect from 01.01.1987, the scope of Section 7-A (1) has only been enlarged with addition of the expression or uses. Looking to the expressions of Section 7-A (1) of the Tamil Nadu Act, as existing earlier and as existing after the amendment, we are clearly of the view that the enunciation by the Constitution Bench in Nandanam Construction Co., read with the approved interpretation in Ganesh Prasad Dixit, would equally apply to the amended provision with necessary modulation after its expansion.34. When the principles laid down by the Constitution Bench in Nandanam Construction Co. coupled with the approved interpretation in Ganesh Prasad Dixit are read with the analysis in M.K. Kandaswami and are applied to the amended Section 7-A of the Tamil Nadu Act with which we are concerned in this case, the end-product of synthesis is that the expression or otherwise qualifies, and provides alternative to, the action of manufacture; and therefore, consumption of the goods in question for manufacture or otherwise as also use of the goods in question for manufacture or otherwise are the acts/actions covered under clause ( a ) of sub-section (1) of Section 7-A of the Tamil Nadu Act.34.1. In other words, when we apply the principles laid down by the Constitution Bench in Nandanam Construction Co. to the phraseology of clause (a) of sub-section (1) of Section 7-A of the Tamil Nadu Act, four eventualities are covered thereunder, with reference to the treatment of the goods in question (which had been purchased by the dealer in the circumstances where sales tax had not been paid at the time of their purchase), viz.,(i) when they are consumed in manufacture of other goods for sale; or(ii) when they are consumed otherwise; or(iii) when they are used in manufacture of other goods for sale; or(iv) when they are used otherwise.Application of the relevant principles to the case at hand35. Put in a nutshell, with the discussion foregoing, we have found that for applicability of Section 7-A (1) of the Act, as existing in the statute during the period relevant for the present case, basic ingredients (compiled in paragraph 31 hereinbefore) ought to be cumulatively satisfied; and for coverage of any case under clause (a) of sub-section (1) of Section 7-A of the Act, one or more of the eventualities envisaged therein (catalogued in paragraph 34.1. hereinabove) ought to exist. Having thus deduced the necessary ingredients/elements and relevant principles, we may now embark upon the enquiry as to whether purchase tax under Section 7-A of the Act is leviable over the turnover in question.36. As noticed, for the purpose of its business of manufacture and sale of Beer and IMFL, the assessee had purchased empty bottles from unregistered dealers situated outside the State as well as from non-dealers for the bottling of Beer and IMFL. The assessee would assert that purchase tax on the turnover in question is not leviable for the reason the said empty bottles were recycled after use by the consumers and were re-filled with Beer/IMFL; and that the said bottles had not been consumed or used in the manufacture of liquor and they were only used as containers in which already manufactured liquor was bottled for carrying and sale. The counter stand of revenue is that use of the said bottles is imperative in the manufacture of Beer/IMFL and packaging of Beer/IMFL in glass bottles has to be seen as an inseparable composite unit; and therefore, purchase tax on the turnover of purchase of such empty bottles is leviable, for being covered by Section 7-A (1) (a) of the Act.37. Taking up the first limb of submissions with reference to the activity in question, when we examine the ingredients for applicability of Section 7-A (1) of the Act, it is not in dispute that: (1) the assessee, who has purchased the goods in question (the empty bottles), is a dealer and is covered under Section 3 (1) of the Act; (2) the said purchase has been made by the assessee in the course of its business; (3) such purchase has been from unregistered dealers situated outside the State as well as from non-dealers; (4) sale or purchase of the goods purchased (the empty bottles) is liable to tax under the Act; and (5) such purchase has been in circumstances in which no tax is payable under Section 3 or 4 and has not been in any excepted circumstance with reference to the point of purchase. These indisputable features unfailingly lead to the position that ingredients (1) to (5) of Section 7-A (1) of the Act, as mentioned in paragraph 31 hereinbefore, are satisfied.37.1. However, as noticed, for applicability of Section 7-A (1) of the Act, all the six ingredients need to be cumulatively satisfied. The ingredient (6) has three alternatives viz., the dealer has either (a) consumed or used the goods in question in the manufacture of other goods for sale or otherwise, or (b) has disposed of such goods in any manner other than by way of sale in the State, or (c) has despatched or carried them to a place outside the State except as a direct result of sale or purchase in the course of inter-State trade or commerce. It is not in dispute that clauses (b) or (c) of this ingredient are not attracted in this case, for the entire manufactured Beer/IMFL, after bottling, having been sold by the assessee only to the Tamil Nadu State Marketing Corporation Limited (TASMAC) within the State of Tamil Nadu.As already noticed, as per the language used, this provision comes in operation when the dealer consumes or uses such goods in the manufacture of other goods for sale or otherwise. Hence, the activity in question would be so covered if any one of the four elements of clause (a) exists, i.e., (i) if the goods in question are consumed in manufacture of other goods for sale; or (ii) if they are consumed otherwise; or (iii) if they are used in manufacture of other goods for sale; or (iv) if they are used otherwise.39.4.2. We need not enter deeply into the nitty-gritty of semantics but this much is clear that with the said later amendment and modification of prepositions to in or for, coverage is provided in the provision not only to the activity of use of the particular goods in the manufacture but also to the activity when the particular goods are merely used for the manufacture. However, as noticed, this amendment with insertion of the expressions or for is not applicable to the present case. Therefore, for the present purpose, it shall have to be examined if the goods in question (empty bottles) have either been consumed or been used as an integral part of the activity of manufacture of other goods for sale.40. As noticed, several of the meanings of the expressions consume and consumption denote using up a particular thing in a way that results in complete exhaustion of that thing. On the other hand, the expression use denotes the application or deployment of a particular thing as a means of achieving something or for accomplishment of a purpose. Undoubtedly, the word use is of wider import than consumption (vide Kathiawar Industries Ltd. (supra)) .42. We need not multiply on the citations as the fundamental principles remain clear that, on the question as to whether manufacture has taken place or not, the relevant enquiry would be to find if a new substance has come into existence which is a different commercial commodity or whereby identity of the original commodity has ceased to exist.The decision of this Court in the case of Mohan Meakin Breweries Ltd. (supra) is sufficient to be noticed in this regard wherein it was clearly held that bottling takes place after brewing of Beer is complete. This Court said as under :-. What has been observed in relation to brewing and bottling of Beer would equally apply to distillation and bottling of IMFL.44. Applying the relevant tests concerning the expressions consumes, uses and in the manufacture to the present case, it remains hardly a matter of doubt that so far the empty bottles are concerned, even after being filled with liquor, they remain bottles only, retaining their original elements including shape, size and character. They are not consumed at all; and there arise no question of they being consumed in the manufacture. Therefore, we have no hesitation in accepting the submissions of assessee that the bottles in question have not been consumed in manufacture of other goods for sale.44.1. In continuity with the above, we are also inclined to accept the submission of the assessee that the empty bottles have not even been used in manufacture. This is for the reason that for operation and application of the phrase uses in manufacture, it has to be shown that the bottles in question have been deployed as a means of achieving the purpose of manufacture. As noticed, the phrase manufacture of other goods for sale, in the present case, refers to the goods manufactured by the assessee, i.e., Beer/IMFL; and, in fact, use of the bottles in question comes up in the activity of the assessee only after manufacture of liquor (Beer/IMFL) has already been accomplished by brewing or distillation. Needless to reiterate that in relation to the activity of assessee, the action of bottling is a separate process and is undertaken only after the process of manufacture by way of brewing or distillation is complete. Thus understood, we are clearly of the view that the goods in question (empty bottles) cannot be said to have been used in manufacture.45. For what has been discussed hereinabove, we have no hesitation in concluding that the bottles in question have neither been consumed in manufacture of Beer/IMFL nor they could be said to have been used in such manufacture of Beer/IMFL. Hence, elements (i) and (iii) pertaining to clause (a) of sub-section (1) of Section 7-A of the Act do not exist in this case.This area of examination takes us to the words or otherwise used in clause (a) of sub-section (1) of Section 7-A of the Act. In this regard, we need again to look at etymology related with the expression in question.47. The variety of meanings assigned to the expression otherwise makes one aspect absolutely clear that this expression is intended to denote something different than the thing/s to which it is employed; and that this expression is essentially general in nature. In the phraseology of clause (a) of sub-section (1) of Section 7-A of the Act, the words or otherwise have been placed after the particular words consumes, uses and manufacture. Obviously, these words or otherwise are intended to convey that not only the activities envisaged by the particular words preceding but, even the other activities would also be covered thereunder.48. The aforesaid general principles are also not decisive of the matter because when an expression generally of wide amplitude like otherwise is used, the question still arises about its construction, particularly when it is placed after particular/specific words. In this process of construction, one may feel inclined to rely upon and apply the rule of ejusdem generis whereby and whereunder when a particular word pertaining to a class, category or genus are followed by general words, the general words are construed as limited to the things of the same kind as those specified. Even as regards the words or otherwise, in some of the interpretations, they have been treated as limited in their scope with reference to the context (Like in the cases of S. Prakasha Rao and Anr v. Commissioner of Commercial Taxes and Ors.: (1990) 2 SCC 259 and George Da Costa v. Controller of Estate Duty Mysore : AIR 1967 SC 849 ) but the Constitution Bench of this Court in the case of Smt. Lila Vati Bai v. State of Bombay: AIR 1957 SC 521 , while construing the words or otherwise occurring in Explanation (a) to Section 6 of the Bombay Land Requisition Act, held that these words were intended to cover all possible cases of vacancy occurring due to any reason whatsoever. The Constitution Bench observed that far from using these words ejusdem generis with the preceding clauses, the Legislature had used them in an all-inclusive sense; and, in the given context and looking to the object and the mischief sought to be dealt with by the enactment, there was no room for application of the rule of ejusdem generis.48.2. The principles enunciated in the aforesaid cases make it clear that even the rule of ejusdem generis cannot be picked up and applied as an abstract proposition whenever general words are used after particular words and expressions. As regards the words or otherwise, though, ordinarily, the class or category to be covered thereby may have to be kindred to the particular class or category preceding them but, such kinship could be even of general relatedness to the particular words and need not be that of cognates or agnates or analogues.48.3. In our view, looking to the context as also the object of the provision in question, as regards the words or otherwise, the rule of ejusdem generis would apply in a very limited sense and only to the extent that the class or category to be covered thereunder may not be dissimilar or incongruent to the particular class or category of the expressions preceding it. As already noticed, in the case of Nandanam Construction Co. (supra), the Constitution Bench has construed these words or otherwise in relation to the pari materia provisions of the Andhra Pradesh Act and held that the expression otherwise qualifies the word manufacture and, therefore, consumption of the goods in question, even if not in manufacture, would lead to coverage for levy of purchase tax. We may usefully reiterate that in Nandanam Construction Co. (supra), the assessee was engaged in the business of building houses/flats and had consumed the goods like bricks and sand in such construction. The Constitution Bench found that such consumption was clearly a consumption otherwise than manufacture but was covered under the provisions for levy of purchase tax. The Constitution Bench also stated the reason for such construction that the goods in question were consumed and ceased to exist in their original form so as to be sold in that original form.49. Keeping the principle aforesaid in view, we may now take up elements (ii) and (iv) of clause (a) of sub-section (1) of Section 7-A of the Act.49.1. As already noticed, consumption requires the thing in question being exhausted or ceasing to exist for being used up. The bottles in question, even when used as containers of the liquor manufactured by the assessee, had neither been exhausted nor had ceased to exist; they have rather continued to exist while retaining their basic identity and character as bottles. Of course, they (empty bottles) had been filled up with liquor but such filling up has not resulted in the bottles themselves being used up. Hence, the activity in question does not fall within the ambit of element (ii). However, the very same logic does not apply to element (iv) because it cannot be said that the bottles in question have not been used otherwise.49.2. As noticed, the expression use is of wide amplitude and it refers to the usage or engagement of an article for the accomplishment of a purpose irrespective of whether the article itself undergoes a visible change or not. The fact that the bottles in question have indeed been used by the assessee in its overall activity of manufacture and sale of liquor is clear from the fact that the manufacture of liquor by the process of brewing or distillation did not conclude the activity of the assessee. Undoubtedly, for the sale of such manufactured liquor to TASMAC, the assessee was required to put the same into the bottles; and the sale by assessee could have taken place only after such bottling of the liquor. The assessee has, indisputably, undertaken this process of bottling by the use of the goods in question, i.e., the empty bottles purchased from unregistered dealers. Hence, it is but apparent that the goods in question (empty bottles) have been used by the assessee, and for that matter, have been used for an activity closely connected and co-related with the main activity of manufacture of liquor as also as necessary ingredient of the end-purpose of sale of liquor. Significantly, after such use for bottling, the goods in question (empty bottles) did not remain available for sale in the form in which they were purchased by the assessee.49.3. In other words, the process of bottling with the use of bottles in question has been an unalienable part of the complete chain of processes that the assessee was obliged to undertake for its business, i.e., manufacturing and selling the liquor. By this process, the bottles in question were used by the assessee in such a manner that they were no longer available for sale in the form they were purchased from unregistered dealers. That being the position, the bottles in question have indeed been used otherwise by the assessee. The assessee cannot avoid operation of the words or otherwise so far use of the bottles is concerned by merely establishing that they have not been consumed in manufacture or otherwise and further that they have not been used in manufacture. Even when these three elements viz., consumed in manufacture; consumed otherwise; and used in manufacture do not exist as regards the bottles in question in the business activity of the assessee, it is but apparent the activity of the assessee clearly entails the use of bottles for the purpose of bottling and sale of liquor manufactured by it. This activity clearly takes the bottles in question within the fourth element i.e., used otherwise.49.4. Hence, though the bottles in question have not been consumed otherwise, they have indeed been used otherwise; and therefore, the activity of assessee in relation to the bottles in question is clearly covered by element (iv) of clause (a) of sub-section (1) of Section 7-A of the Act.50. To summarise the discussion aforesaid and to put our views in a nutshell, the goods in question (empty bottles) have not been consumed in the manufacture of other goods for sale nor they have been consumed otherwise because of having retained their identity. They have also not been used in the manufacture of other goods for sale because manufacture of Beer/IMFL was complete without their use. However, they have been used for bottling and when bottling remains an integral part of the business activity of the assessee, i.e., of manufacturing the liquor by the process of brewing/distillation and then, selling the manufactured liquor by putting the same in bottles, they have been used otherwise. That being the position, use of the goods in question for bottling takes the turnover of their purchase within the net of Section 7-A of the Act.50.1. To put it more simply, if we read clause (a) of sub-section (1) of Section 7-A of the Act sliced down to the elements uses in manufacture or otherwise, it is clear that the goods in question (empty bottles) have been used for bottling, which use, even if not for manufacture, had been a use otherwise which has been closely connected with the business of the assessee and whereby the bottles in question did not remain available for sale in the form in which they were purchased. This is the plain and clear operation of the dictum of Constitution Bench in the case of Nandanam Construction Co. (supra). Hence, applicability of Section 7-A of the Act is complete and remains beyond the realm of doubt.51. Having thus arrived at the conclusion that ingredients (1) to (5) and (6)(a) for applicability of Section 7-A (1) are cumulatively satisfied, the inescapable result is that the turnover in question is exigible to purchase tax. However, there remains another limb of submissions on the part of assessee that when the bottles have not been disposed of in any manner other than by way of sale in the State and had been disposed of only by way of sale to TASMAC within the State of Tamil Nadu itself; and they had been subjected to sales tax at the same rate as that of the contents, purchase tax would not be leviable. This line of submissions on the part of assessee, in our view, remains entirely baseless.52. As already noticed, the goods in question (empty bottles) have been used to complete the process of making the manufactured goods (Beer/IMFL) marketable. It is also clear that the bottles have not been sold by the assessee simply as bottles. They have been sold as an essential component of the marketable commodity. That being the position, charging of sales tax on these bottles comes into operation by virtue of Section 3 (1) read with Section 3 (7) of the Tamil Nadu Act. As noticed, the assessee is indisputably a dealer covered under sub-section (1) of Section 3 of the Act. By virtue of sub-section (7) of Section 3, when the assessee has sold the goods (Beer/IMFL) together with the bottles as containers or packing material, turnover of Beer/IMFL was bound to include the price, cost or value of such bottles whether such price, cost or value had been charged separately or not; and sales tax was bound to be levied thereupon at the rate applicable to the goods contained, i.e., Beer/IMFL. The Explanation to Section 3 of the Act puts it beyond doubt that the expression containers includes bottles.52.1 Another relevant feature of the provisions in question is that applicability of Section 7-A of the Act has not been made dependent on the event of levy of sales tax on the goods for which purchase tax is to be levied. As noticed, levy of purchase tax is dependent on cumulative existence of the necessary ingredients of Section 7-A of the Act; and no exception or exclusion is provided with reference to the factum of levy of sales tax on the goods in question at the time of their sale. In fact, not much of elaborate discussion in this regard appears requisite, for a direct answer being available in a 3-Judge Bench decision of this Court in the case of Premier Breweries (supra) wherein, pari materia provisions of the Kerala Act as regards levy of sales tax were considered. In the said case of Premier Breweries, the appellant had sold liquor packed in cardboard cartons. It was contended that such cardboard cartons had already borne tax under the entry paper other than the newsprint cardboard and their products and hence, such cartons could not have been taxed again when sold along with Beer. This Court examined sub-sections (5) and (6) of Section 5 of the Kerala Act, which had been more or less akin to sub-sections (7) and (8) of Section 3 of the Tamil Nadu Act, and negatived the contention of the dealer. The relevant paragraphs of the said decision, taking note of sub-sections (5) and (6) of Section 5 of the Kerala Act and rejecting this part of the contentions of assessee, could be usefully noticed as follows (at pp.602 and 607-608 of STC):-5. Before examining the decisions, it will be useful to refer to the relevant provisions of the Kerala General Sales Tax Act. Tax on sale or purchase of goods has been imposed by section 5 of the Act. Sub-sections (5) and (6) of section 5 of the Act provide:5. (5) Notwithstanding anything contained in sub-section (1) or sub-section (2), but subject to sub-section (6), where goods sold are contained in containers or are packed in any packing materials, the rate of tax and the point of levy applicable to the containers or packing materials, as the case may be, shall, whether the price of the containers or packing materials is charged separately or not, be the same as those applicable to goods contained or packed, and in determining turnover of the goods, the turnover in respect of the containers or packing materials shall be included therein.(6) Where the sale or purchase of goods contained in any containers or packed in any packing materials is exempt from tax, then the sale or purchase of such containers or packing materials shall also be exempt from tax.*** *** ***22. We shall now deal with another point urged on behalf of the appellant. It has been contended that the cardboard cartons have already borne tax under the entry paper, other than the newsprint, cardboard and their products in the First Schedule of the Act. It is a single-point tax. The cardboard cartons cannot be taxed once again when sold along with the beer.23. There are two answers to this contention. Sub-section (5) of section 5 specifically provides that the rate of tax and point of levy applicable to the containers shall be the same as those applicable to the goods sold. Therefore, even if the cartons have already been subjected to tax by virtue of specific provision of section 5(5) they will be liable to tax at the same point and at the same rate as the goods contained therein.24. Moreover, the packing materials as such are not being taxed under sub-section (5) of section 5 of the Act. The subject-matter of tax are the goods packed in the containers. In calculating the turnover of the goods, packing materials will have to be taken into account. The packing materials will be taxed at the same rate and at the same point as the goods contained in the packing material. This is because the goods are sold packed in containers and are charged accordingly. This is a rule of computation of the turnover of the goods. If no tax is ultimately found leviable on the goods then no tax can be levied on the containers in which the goods are contained.52.2 As already noticed, this question was also examined by the High Court in the case of Appollo Saline Pharmaceuticals (supra) although the said decision was rendered in relation to the bottles used for packing of I.V. fluid and the provision examined therein was that as existing after amendment of clause (a) of sub-section (1) of Section 7-A with insertion of the words or for but, such amendment is of no effect so far as this limb of contentions is concerned. In the said decision, the High Court repelled such a contention against levy of purchase tax on bottles because of the bottles being subjected to sales tax when being sold with I.V. fluid while observing that such sales tax was nevertheless leviable even in relation to the bottles which were purchased from a registered dealer after payment of sales tax. The relevant portion in paragraph 11 of the said decision of the High Court in Appollo Saline Pharmaceuticals (extracted in paragraph 20.2 hereinbefore) obviously conforms to the ratio of Premier Breweries (supra), which, in our view, is a direct and complete answer to the contention of the assessee. As noticed, in the entire scheme of Section 7-A of the Act, nowhere any exception is provided that if a particular commodity or goods would be subjected to sales tax in the event of their sale, they may not be liable to purchase tax. On the contrary, as rightly observed by the High Court, even if the bottles had been purchased after payment of sales tax, the turnover of such purchase was nevertheless required to be included in the total turnover at the time of sale of the contents with the containers.52.3 In other words, the fact that the bottles in question were subjected to sales tax at the same rate as applicable to their contents is entirely irrelevant and has no bearing on the exigibility of the turnover in question to purchase tax. In this regard, we may also observe that even though the provision relating to the purchase tax was initially inserted to plug the loss of revenue in relation to the goods that were consumed in manufacture or were consumed otherwise, its scope and amplitude has been widened with insertion of the expression or uses and thereby, not only consumption but even use in manufacture or use otherwise of the goods has been made subject to the levy of purchase tax. We need not expand more on these aspects of the matter. Suffice it to observe for the present purpose that merely because the bottles in question were to be subjected to sales tax, when being sold as containers of the liquor, liability of purchase tax cannot be obviated.52.4. To put it differently, it is apparent that so far as sales tax on the bottles in question at the time of their sale is concerned, the same is leviable by virtue of Section 3 (7) of the Act and there is nothing in Section 7-A to even suggest that levy of sales tax at the time of sale of the goods in question would exclude them from the net of purchase tax. That being the position, the second limb of submissions on the part of assessee turns out to be hollow and baseless, and cannot be accepted.53. Therefore, the final result of the discussion aforesaid is that purchase tax under Section 7-A of the Act is leviable on the purchase turnover of empty bottles purchased by the assessee in the course of its business of manufacture and sale of Beer and IMFL.OPERATION AND EFFECT OF DEPARTMENTS CLARIFICATIONS/CIRCULARS54. As noticed, the High Court in its impugned order dated 10.09.2004 did reach to the conclusion that purchase tax was leviable on the purchase turnover of the empty bottles but found the assessee entitled to the benefit of Clarifications/Circulars issued by the revenue on 09.11.1989 and 27.12.2000. The revenue has questioned this part of the order of the High Court on the grounds and contentions as noticed hereinabove. In order to examine the rival contentions in this regard and the correctness of proposition adopted by the High Court, we may take note of the statutory provision in the Tamil Nadu Act on the power of the Commissioner of Commercial Taxes to issue clarification as also the particular Clarifications/Circulars relevant to the present case.56. As noticed, in support of its conclusion that the revenue cannot refuse the benefit of Clarifications dated 09.11.1989 and 27.12.2000 to the assessee, the High Court has relied upon various decisions including that of the Constitution Bench of this Court in the case of Dhiren Chemical Industries (supra).57. Having regard to the reasoning of High Court and the contentions of rival parties as also for dealing with the operation and effect of the Clarifications/Circulars aforesaid, we need to imbibe the principles enunciated in the binding decisions of this Court, particularly the dictum in two Constitution Bench decisions in Dhiren Chemical Industries (Rendered on 12.12.2001) and Ratan Melting & Wire Industries (Rendered on 14.10.2008) .57.1. In Dhiren Chemical Industries (supra), the questions referred to the Constitution Bench were relating to the interpretation of the phrase on which the appropriate amount of duty of excise has already been paid ; and operation of the exemption notification issued by the Central Government, exempting iron or steel products made out of fresh unused re-rollable scrap if appropriate amount of duty had already been paid. In the context of such questions and the exemption notification calling for interpretation, though the Constitution Bench placed the interpretation in favour of the revenue but also observed as follows (at p. 125 of STC):. The aforesaid observations in Dhiren Chemical Industries led to certain misunderstanding as regards operation and effect of the circulars and as to whether effect can be given to the circular of the Government in preference to the binding precedents of High Court and of this Court. This led to the other reference to the Constitution Bench and the issue came to be resolved in the case of Ratan Melting & Wire Industries (supra).57.3. In Ratan Melting & Wire Industries (supra), the Constitution Bench referred to the above-quoted observations in Dhiren Chemical Industries and also noted that those observations had been explained in another decision in the case of Kalyani Packaging Industries v. Union of India: (2004) 6 SCC 719 . The Constitution Bench observed and noted as follows:-3. …… In Kalyani Packaging Industry v. Union of India it was noted as follows: (SCC p. 721, para 6)6. We have noticed that para 11 of Dhiren Chemical case is being misunderstood. It, therefore, becomes necessary to clarify para 11 of Dhiren Chemical case. One of us (Variava, J.) was a party to the judgment of Dhiren Chemical case and knows what was the intention in incorporating para 11. It must be remembered that law laid down by this Court is law of the land. The law so laid down is binding on all courts/tribunals and bodies. It is clear that circulars of the Board cannot prevail over the law laid down by this Court. However, it was pointed out that during hearing of Dhiren Chemical case because of the circulars of the Board in many cases the Department had granted benefits of exemption notifications. It was submitted that on the interpretation now given by this Court in Dhiren Chemical case the Revenue was likely to reopen cases. Thus para 11 was incorporated to ensure that in cases where benefits of exemption notification had already been granted, the Revenue would remain bound. The purpose was to see that such cases were not reopened. However, this did not mean that even in cases where the Revenue/Department had already contended that the benefit of an exemption notification was not available, and the matter was sub judice before a court or a tribunal, the court or tribunal would also give effect to circulars of the Board in preference to a decision of the Constitution Bench of this Court. Where as a result of dispute the matter is sub judice, a court/tribunal is, after Dhiren Chemical case, bound to interpret as set out in that judgment. To hold otherwise and to interpret in the manner suggested would mean that courts/tribunals have to ignore a judgment of this Court and follow circulars of the Board. That was not what was meant by para 11 of Dhiren Chemical case.57.4. Taking note of the above and clarifying the law on the subject, the Constitution Bench of this Court in Ratan Melting & Wire Industries (supra) laid down the principles in no uncertain terms as follows :7. Circulars and instructions issued by the Board are no doubt binding in law on the authorities under the respective statutes, but when the Supreme Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for the court to direct that the circular should be given effect to and not the view expressed in a decision of this Court or the High Court. So far as the clarifications/circulars issued by the Central Government and of the State Government are concerned they represent merely their understanding of the statutory provisions. They are not binding upon the court. It is for the court to declare what the particular provision of statute says and it is not for the executive. Looked at from another angle, a circular which is contrary to the statutory provisions has really no existence in law.(emphasis in bold supplied)58. In view of the aforesaid pronouncement by the Constitution Bench of this Court in Ratan Melting & Wire Industries (supra), there remains hardly any doubt on the principles that Clarifications/Circulars/Instructions issued by the competent authority are binding on the authorities under the respective statutes but so far as declaration of law in regard to any particular statutory provision is concerned, the view expressed in the binding decision of this Court or the High Court is to be given effect to; and no direction can be issued to enforce a clarification or circular contrary to the declaration of law by the Courts.59. In view of the above, the decisions relied upon by the learned senior counsel for the assessee do not require much dilation. However, we may refer to a few representative decisions as infra.60. The aforesaid and other decisions, essentially dealing with exemption notifications, have no application to the present case; and in any event, none of the decisions, as referred on behalf of the assessee or as referred by the High Court, could be read for any principle contrary to that laid down by the Constitution Bench in Ratan Melting & Wire Industries (supra).61. For what has been discussed hereinabove, we need not examine as to whether the Clarifications/Circulars in question could be said to be such clarification as envisaged by Section 28-A of the Act because even if the Clarifications/Circulars in question are treated to be those authorised by Section 28-A, they cannot have any effect over and above the interpretation of Section 7-A of the Act by the Courts. In other words, applicability of Section 7-A to the turnover in question could only be decided on the interpretation of the provision and its application to the given fact situation and not on the basis of Clarifications/Circulars in question. Put differently, the so-called Clarifications dated 09.11.1989 and 27.12.2000 had not been of explaining the meaning of any doubtful term or expression in the statutory provision nor they were explaining the object and purport of the provision concerned. The said Clarifications/Circulars had merely been the expression of the understanding of the concerned officer, be it SCCT or PCCT, about operation of Section 7-A of the Act vis-à-vis the purchase turnover of the empty bottles purchased by the assessee. However, such understanding of the officer concerned turns out to be a pure misunderstanding, when it stands at contradiction or incongruous to the declaration of law by the Courts; and could only be ignored. The latest Circular of the year 2002, issued after decision of the jurisdictional Tribunal in the case of Appollo Saline Pharmaceuticals (supra) could also be read only to the extent it is in conformity with the decision of the Tribunal (that came to be approved by the High Court) and in any case, even this circular cannot be decisive of the interpretation of Section 7-A of the Act. The decisive interpretation shall only be the one which is rendered in the binding decision/s of the Court. In continuity, we may also observe that various other decisions referred on behalf of the assessee, that modification of any particular circular or guideline or policy decision could only be made effective prospectively, have no application whatsoever to the present case.62. In the aforesaid view of matter, we have no hesitation in concluding that the High Court, after having found that purchase tax was leviable on the turnover in question under Section 7-A of the Act, could not have issued directions for any benefit to the assessee with reference to the Clarifications/Circulars dated 09.11.1989 and 27.12.2000, particularly when such Clarifications/Circulars do not stand in conformity with the statutory provision and its interpretation by the Courts.63. Hence, the impugned order of the High Court, on the second question as regards the operation and effect of Clarifications/Circulars dated 09.11.1989 and 27.12.2000, cannot be approved.64. The net result of the discussion foregoing is that the purchase turnover of the empty bottles purchased by the assessee from the unregistered dealers under bought note is exigible to purchase tax under Section 7-A of the Tamil Nadu Act; and the assessee cannot escape such liability on the strength of the Clarifications/Circulars dated 09.11.1989 and 27.12.2000 which do not stand in conformity with the statutory provision as also declaration of law by the Courts.65. So far as the other question regarding taxability of cash discount on the price offered by the assessee to the Tamil Nadu State Marketing Corporation Limited is concerned, the High Court has ruled in favour of the assessee with reference to the decision in the case of Neyvli Lignite Corporation Ltd. and the clear expressions in Explanation 2(iii) to Section 2(r) of the Act.65.2. In view of the clear phraseology of the above extracted Explanation, not much of discussion appears requisite as regards this issue that has rightly been decided by the High Court in favour of the assessee and not much of serious contentions have been put forward by the revenue in this regard. The impugned order of the High Court, to this extent, calls for no interference.