1962 (1) TMI 42 - HC - VAT and Sales Tax

Issues Involved:

1. Liability to pay tax on the purchase of raw wool under the Mysore Sales Tax Act, 1957.
2. Interpretation of the term "sales" to include "purchases."
3. Harmonious construction of Section 5(3)(b) and Section 7 of the Mysore Sales Tax Act, 1957.
4. Legislative intent and the role of the court in supplying omissions in statutes.

Issue-wise Detailed Analysis:

1. Liability to Pay Tax on the Purchase of Raw Wool:
The petitioner, a dealer in raw wool, contested the liability to pay tax for purchases made between 25th October 1957 and 11th November 1958 under the Mysore Sales Tax Act, 1957. The petitioner argued that, according to Section 7 of the Act before its amendment in 1959, he was not liable for tax on these purchases. The authorities below had rejected this contention, leading to the revision petition before the High Court.

2. Interpretation of the Term "Sales" to Include "Purchases":
The Government Pleader argued that the term "sales" in the Act should be interpreted to include "purchases," citing the Madras High Court decision in V. M. Syed Mohamed & Co. v. The State of Madras and its affirmation by the Supreme Court. However, the Court noted that these cases dealt with interpreting an entry in a constitutional statute, which should be construed liberally. The Court emphasized that the Act itself made a clear distinction between "sales" and "purchases," and throughout the Act, these terms were treated separately. Therefore, the Court concluded that the Legislature did not intend for the term "sales" to include "purchases."

3. Harmonious Construction of Section 5(3)(b) and Section 7:
The Government Pleader contended that to harmoniously construe Section 5(3)(b) and Section 7, the term "sales" in Section 7 should be read to include "purchases." The Court examined the amendments made to Section 7 by Act 32 of 1958, which substituted the words "apply only to the sales inside the State" with "apply to sales or purchases inside the State." The Court observed that if the Legislature had intended to correct an oversight, it could have made the amendment retrospective. The Court found no legislative declaration indicating an unintentional omission in the principal Act.

4. Legislative Intent and the Role of the Court in Supplying Omissions:
The Court referred to established principles of statutory interpretation, emphasizing that omissions in a statute should not be lightly inferred. The Court cited authoritative texts and precedents, including Maxwell on Interpretation of Statutes and Crawford on Statutory Construction, which caution against courts supplying omissions in statutes unless absolutely necessary to give effect to legislative intention. The Court noted that in fiscal statutes, express and unambiguous language is indispensable for imposing a tax or charge. The Court concluded that it could not supply the omission of the term "purchase" in Section 7, as doing so would constitute an encroachment upon the legislative field.

The Court also referred to the Supreme Court's decision in The Central India Spinning and Weaving and Manufacturing Co. Ltd. v. Municipal Committee, Wardha, which held that in cases of ambiguity in taxing statutes, the interpretation favoring the citizen should be adopted. The Court found that the Legislature's use of different language in different parts of Section 7 indicated a deliberate distinction, and it was not clear that the omission nullified the effect of Section 5(3)(b). Therefore, the Court declined to read the term "purchase" into Section 7.

Conclusion:
The Court allowed the revision petition, set aside the orders of the authorities below, and held that the petitioner was not liable to be taxed for the impugned transactions. The respondent was ordered to pay the costs of the petitioner, with an advocate's fee of Rs. 100. The petition was allowed.

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