1971 (8) TMI 209 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether newspapers qualify as "goods" under the Central Sales Tax Act, 1956.
2. Entitlement of the petitioner to obtain a certificate of registration under Section 7 of the Central Sales Tax Act, 1956, including newsprint and other materials used in newspaper production.

Issue-wise Detailed Analysis:

1. Whether newspapers qualify as "goods" under the Central Sales Tax Act, 1956:
The primary issue is whether newspapers can be considered "goods" for the purpose of obtaining a certificate of registration under the Central Sales Tax Act, 1956. The court examined the historical context and legislative changes concerning the definition of "goods." Initially, newspapers were included as goods and taxed under the Madras General Sales Tax Act, 1939. However, post-Constitution, the power to tax newspapers was shifted to the Union, and the Central Sales Tax (Amendment) Act, 1958, explicitly excluded newspapers from the definition of "goods" under Section 2(d) of the Central Sales Tax Act, 1956. The court noted that this exclusion was intended to avoid taxing the sale or purchase of newspapers, not to redefine newspapers as non-goods for all purposes. The court emphasized that the same word could be used in different senses within the same statute if the context so required. Therefore, the exclusion of newspapers from the definition of "goods" was solely for tax exemption purposes and did not imply that newspapers ceased to be goods in the general sense.

2. Entitlement of the petitioner to obtain a certificate of registration under Section 7 of the Central Sales Tax Act, 1956, including newsprint and other materials used in newspaper production:
The petitioner, a newspaper publisher, sought registration as a dealer to obtain a concessional rate of tax for purchasing newsprint and other materials used in newspaper production. The revenue authorities had restricted the registration to waste paper, arguing that newspapers were not goods under Section 2(d) of the Act. The court examined Sections 7 and 8 of the Act, which deal with the registration of dealers and the concessional tax rates for inter-State trade. The court highlighted that the purpose of registration is to allow dealers to purchase goods at a concessional rate for resale or for use in manufacturing or processing goods for sale. The court found that newsprint, being an essential ingredient for newspaper production, should be included in the certificate of registration. The court criticized the revenue's stance of including waste paper, a by-product of newspaper production, while excluding newsprint. The court concluded that the petitioner was entitled to the inclusion of newsprint and other ancillary materials in the certificate of registration, as these were necessary for the manufacture and sale of newspapers. The court issued a mandamus directing the respondents to include newsprint and other materials in the petitioner's certificate of registration.

Conclusion:
The court allowed the writ petitions, directing the respondents to issue a certificate of registration to the petitioner, including newsprint and other ancillary materials required for newspaper production. The court emphasized that the exclusion of newspapers from the definition of "goods" for tax purposes did not negate their status as goods for other purposes under the Act. The petitions were allowed without any order as to costs.