एति संज्ञायामगात्

Operational rule vidhi

ष् is substituted for the स् when followed by ए and preceded by इण् or कु , when the word is a name and when the स् is not preceded by ग्.

Word by word (padaccheda)

Right context एति saptamī · ekavacanaRight context संज्ञायाम् saptamī · ekavacanaLeft context अगात् pañcamī · ekavacana

Right context Saptamī (7th case): "when X follows", the operation applies to what precedes (1.1.66 तस्मिन्निति निर्दिष्टे पूर्वस्य). Also a condition or domain ("in the sense of").
Left context Pañcamī (5th case): "after X", the operation applies to what follows (1.1.67 तस्मादित्युत्तरस्य). Also used for limits and sources.

Full reading

एति संज्ञायाम् अगात्

Pāṇini leaves out words that carry over from earlier sūtras. Expand to see the rule as a reader actually understands it.

Commentary

ष् is substituted for the स् when followed by ए and preceded by इण् or कु , when the word is a name and when the स् is not preceded by ग्।
Thus हरयः सेना अस्य = हरिषेणः, परितः सेना अस्य = परिषेणः, so also वारिषेणः, जानुषेणी ॥ Why do we say 'followed by ए'? Observe हरिसक्थम् ॥ Why do we say 'when a Name'? Observe पृथ्वी सेना यस्य स = पृथुसेनो राजा 6.3.34. Why do we say 'when the स is not preceded by ग्'? Observe विष्वक् सेनः ॥ The phrase इण्कोः is understood here also, so the rule does not apply to सर्वसेनः ॥

Śrīśa Chandra Vasu, The Ashtadhyayi of Panini (1897), via ashtadhyayi.com.