1953 (9) TMI 11 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of a government notification exempting certain types of silk from sales tax.
2. Whether artificial silk falls under the exemption provided in the notification.

Analysis:
The case involved a reference by the Deputy Commissioner of Sales Tax regarding the liability to pay sales tax on the sale of artificial silk imported to India after a specific date. The issue revolved around the interpretation of a government notification exempting certain types of silk from taxation under the Mysore Sales Tax Act. The notification specifically mentioned exemption for filature silk, foreign silk, and charka silk twisted by hand. The argument presented was that the term "foreign silk" in the notification should be understood to include artificial silk, as it was contended that all silk falls under the categories of filature silk or charka silk. However, the court disagreed with this interpretation, emphasizing that artificial silk is not genuine silk and should not be considered as falling under the exemption. The court highlighted that the term "artificial" denotes something that is not genuine or real, and therefore, artificial silk cannot be equated with natural silk produced by silk worms. The judgment emphasized the importance of interpreting words in their legal and proper meaning, without distorting their significance. The court concluded that artificial silk should not be considered as falling under the exemption provided in the notification, and the petitioners were held liable to pay the sales tax on artificial silk imports. The court also noted that the notification did not explicitly exempt artificial silk from taxation, further supporting its decision. As a result, the reference was answered in the affirmative, indicating that the petitioners were indeed liable to pay the sales tax on artificial silk imports, despite their claims for exemption.