Case: Rohit Pulp and Paper Mills Limited Vs. Collector of Central Excise, Baroda

with the words "business and trade" as understood in the popular and conventional sense, and it is the colour of these attributes which is taken by the other words used in the definition though their normal import may be much wider. We are not impressed by this argument. It must be borne in mind that noscitur a sociis is merely a rule of construction and it cannot prevail in cases 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 worded of narrower significance is doubtful, or otherwise not clear that the present rule of construction can be usefully applied. It can also be applied where the meaning of the words of wider import is doubtful; but, where the object of the legislature in using wider words is clear and free of ambiguity, the rule of construction in question cannot be pressed into service." * This principle has been applied in a number of contexts in judicial decisions where the Court in clear in its mind that the larger meaning of the word in question could not have been intended in the context in which it has been used. The cases are too numerous to need discussion here. It should be sufficient to refer to one of them by way of illustration. In Rainbow Steels Ltd. v. CST ( 1981 (2) SCC 141 this Court had to understand the meaning of the word old in the context of an entry in a taxing tariff which read thus "Old, discarded, unserviceable or absolute machinery, stores or vehicles including waste products ......." Though the tariff item started with the use of the wide word old, the Court came to the conclusion that "in order to fall within the expression old machinery occurring in the entry, the machinery must be old machinery in the sense that it has become non-functional or non-usable". In other words, not the mere age of the machinery, which would be relevant in the wider sense, but he condition of the machinery analogous to that indicated by the words following it, was considered relevant for the purposes of the statute. 13. The maxim of noscitur a sociis has been described by Diplock, C.J. as a "treacherous one unless one knows the societas to which the socii belong" (vide : Letang v. Cooper ((1965) 1 QB 232 : 1964 (2) ALLER 929 The learned Solicitor General also warns that one should not be carried away by labels and Latin maxims when the word to be interpreted is clear and has a wide meaning. We entirely agree that these maxims and precedents are not to be mechanically applied; they are of assistance only insofar as they furnish guidance by compendiously summing up principles based on rules of common sense and logic. As explained in Collector of Central Excise v. Parle Exports (P) Ltd. ( 1989 (1) SCC 345 in interpreting the scope of any notification, the court has first to keep in mind the object and purpose of the notification. All parts of it should be read harmoniously in aid of, and not in derogation of, that purpose. In this case, the aim and object of the notification is to grant a concession to small scale factories which manufacture paper with unconventional raw materials. The question naturally arises : Could there have been any particular object intended to be achieved by introducing the exceptions set out in the proviso ? Instead of proceeding on the premise that it is not necessary to look for any reason in a taxing statute, it is necessary to have a closer look at the wording of the proviso. If the proviso had referred only to coated paper, no special object or purpose would have been discernible and perhaps there would have been no justification to look beyond it and enter into a speculation as to why the notification should have thought of exemption only coated paper manufactured by these factories from the purview of the exemption. But the notification excepts not one but a group of items. If the items mentioned in the group were totally dissimilar and it were impossible to see any common thread running through them again, it may be permissible to give the exceptions their widest latitude. But when four of them - undoubtedly, at least three of them - can be brought under an intelligible classification and it is also conceivable that the government might well have thought that these small scale factories should not be eligible for the concession contemplated by the notification where they manufacture paper catering to industrial purposes, there is a purpose in the limitation prescribed and there is no reason why the rationally logical restriction should not be placed on the proviso based on this classification. In our view, the only reasonable way of interpreting the proviso is by understanding the words coated paper in a narrower sense consistent with the other expressions used therein. 14. In the view we have taken it is unnecessary to consider the other contentions urged before us : (i) whether the words "(including waxed paper)" are words indicative of the limitation sought to be placed on the words "coated paper" or they are only intended to make it clear that even paper impregnated with wax will not be entitled to exemption; and (ii) whether, if the notification is capable of two equally plausible interpretations, the one in favour of the subject should be upheld or the one taken by the Tribunal should be confirmed. 15. For the reasons discussed above, we accept the appellants submission that coated paper in the second proviso refers only to coated paper used for industrial purposes and not to coated varieties of printing and writing paper. The Tribunals order is set aside and the appellant held entitled to the concessional rates specified in Notification No. 25/84.

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

Explanation:
1[ds]12. The principle of statutory interpretation by which a generic word receives a limited interpretation by reason of its context is well established. In the context with which we are concerned, we can legitimately draw upon the "noscitur a sociis" principle. This expression simply means that "the meaningrd is to be judged by the company it keeps." Gajendragadkar, J. explained the scope of the rule in State of Bombay v. Hospital Mazdoor Sabha ( 1960 (2) SCR 866  in the following words : (SCR pp.rule, according to Maxwell, means that, when two or more words which are susceptibles meaning are coupled together they are understood to be used in their cognate sense. They take as it were their colour from each other, that is, the more general is restricted to a sense analogous to a less general. The same rule is thus interpreted in "Words and Phrases" (Vol. XIV, p. 207) : "Associated words take their meaninger under the doctrine of noscitur a sociis, the philosophy of which is that the meaningul word may be ascertained by reference to the meaning of words associated with it; such doctrine isthe maxim ejusdem generis". In fact the latter maxim "is only an illustration or specific application of the broader maxim noscitur a sociis". The argument is that certain essential features or attributes are invariably associated with the words "business and trade" as understood in the popular and conventional sense, and it is the colour of these attributes which is taken by the other words used in the definition though their normal import may be much wider. We are not impressed by this argument. It must be borne in mind that noscitur a sociis is merely a rule of construction and it cannot prevail in cases 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 worded of narrower significance is doubtful, or otherwise not clear that the present rule of construction can be usefully applied. It can also be applied where the meaning of theer import is doubtful; but, where the object of the legislature in using wider words is clear and free, the rule of construction in question cannot be pressed into service."principle has been applied in a number of contexts in judicial decisions where the Court in clear in its mind that the larger meaning of the word in question could not have been intended in the context in which it has been used. The cases are too numerous to need discussion here. It should be sufficient to refer to one of them by way of illustration. In Rainbow Steels Ltd. v. CST ( 1981 (2) SCC 141  this Court had to understand the meaning of the word old in the contextn entry in a taxing tariff which readdiscarded, unserviceable or absolute machinery, stores or vehicles including waste productsthe tariff item started with the use of the wide word old, the Court came to the conclusion that "in order to fall within the expression old machinery occurring in the entry, the machinery must be old machinery in the sense that it has become non-functional or non-usable". In other words, not the mere age of the machinery, which would be relevant in the wider sense, but he condition of the machinery analogous to that indicated by the words following it, was considered relevant for the purposes of thed of proceeding on the premise that it is not necessary to look for any reason in a taxing statute, it is necessary to have a closer look at the wording of the proviso. If the proviso had referred only to coated paper, no special object or purpose would have been discernible and perhaps there would have been no justification to look beyond it and enter into a speculation as to why the notification should have thought of exemption only coated paper manufactured by these factories from the purview of the exemption. But the notification excepts not one but a group of items. If the items mentioned in the group were totally dissimilar and it were impossible to see any common thread running through them again, it may be permissible to give the exceptions their widest latitude. But when four of them - undoubtedly, at least three of them - can be brought under an intelligible classification and it is also conceivable that the government might well have thought that these small scale factories should not be eligible for the concession contemplated by the notification where they manufacture paper catering to industrial purposes, there is a purpose in the limitation prescribed and there is no reason why the rationally logical restriction should not be placed on the proviso based on this classification. In our view, the only reasonable way of interpreting the proviso is by understanding the words coated paper in a narrower sense consistent with the other expressions usedIn the view we have taken it is unnecessary to consider the other contentions urged before us : (i) whether the words "(including waxed paper)" aree of the limitation sought to be placed on the words "coated paper" or they are only intended to make it clear that even paper impregnated with wax will not be entitled to exemption; and (ii) whether, if the notification is capable of two equally plausible interpretations, the one in favour of the subject should be upheld or the one taken by the Tribunal should be confirmed