1964 (11) TMI 99 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Exemption from sales tax on medicinal preparations under the Central Provinces and Berar Sales Tax Act, 1947, and the Madhya Pradesh General Sales Tax Act, 1958.
2. Interpretation of Section 8 of the General Clauses Act, 1897, in the context of repealed and re-enacted provisions.
3. Applicability of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, in place of the repealed provisions of the C.P. and Berar Prohibition Act, 1938, and the C.P. and Berar Excise Act, 1915.

Detailed Analysis:

1. Exemption from Sales Tax on Medicinal Preparations:
The petitioner sought exemption from sales tax on its turnover of medicinal preparations for the years 1958 to 1960 under the Central Provinces and Berar Sales Tax Act, 1947, and the Madhya Pradesh General Sales Tax Act, 1958. The claim was based on the argument that the turnover was exempt under the respective Acts because the petitioner had paid duty under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955. The petitioner argued that the references in the Sales Tax Acts to the C.P. and Berar Prohibition Act, 1938, and the C.P. and Berar Excise Act, 1915, should be read as references to the 1955 Act due to the rule of construction in Section 8 of the General Clauses Act, 1897.

2. Interpretation of Section 8 of the General Clauses Act, 1897:
The court analyzed whether Section 8 of the General Clauses Act, 1897, could be applied to read references to the repealed Acts as references to the 1955 Act. The court noted that Section 8 applies only when a provision of a former enactment is repealed and re-enacted, with or without modification, in a new Act. Since the C.P. and Berar Prohibition Act, 1938, did not contain any provision imposing a duty on medicinal preparations, no question of repeal and re-enactment of such a non-existent provision could arise. Therefore, the rule of construction in Section 8 could not be applied to substitute the 1955 Act for the 1938 Act in the Sales Tax Acts.

3. Applicability of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955:
The court held that the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, did not re-enact the provisions of the C.P. and Berar Excise Act, 1915, that authorized the State Government to levy duty on medicinal preparations containing alcohol. The 1955 Act imposed duties on medicinal preparations, but these duties were levied by the Central Government, not the State Government. The court emphasized the distinction between excise duties levied by the State and those levied by the Central Government. The exemption in the Sales Tax Acts was based on the assumption that the State had already benefited from the excise duty under the 1915 Act, and therefore, a second tax in the form of sales tax should not be levied. With the repeal of the State's power to levy excise duty under the 1955 Act, this basis for exemption no longer existed.

Conclusion:
The court concluded that the petitioner was not entitled to exemption from sales tax on its turnover of medicinal preparations. The petitions were dismissed with costs, and the outstanding amount of security deposit, after deduction of costs, was ordered to be refunded to the petitioner.