1973 (2) TMI 123 - HC - VAT and Sales Tax

Summary

Issues:
- Interpretation of a notification under the Kerala General Sales Tax Act of 1963 regarding the reduction of tax rate for oil-millers.
- Whether the expression "assessed to tax or is liable to tax at his hands" refers only to assessment under the Kerala General Sales Tax Act of 1963.
- Comparison of the impugned notification with other notifications under different Acts.
- Application of the principle of strict interpretation in taxing statutes.
- Alleged violation of Article 301 of the Constitution due to the notification's impact on inter-State trade.

Analysis:
The judgment concerns the challenge by oil-millers against a notification issued under the Kerala General Sales Tax Act of 1963, reducing the tax rate on sales of groundnut oil and cake. The key issue revolves around the interpretation of the expression "assessed to tax or is liable to tax at his hands." The appellants argue that this refers to assessment under any sales tax law, not specifically the Kerala General Sales Tax Act of 1963. However, the court rejects this argument, emphasizing that the notification's terms must align with the Act under which it is issued, unless context dictates otherwise. The court cites legal provisions to support this position, clarifying that the assessment and liability to tax mentioned in the notification must be under the Kerala General Sales Tax Act of 1963.

The appellants attempt to draw comparisons with other notifications under the same Act and notifications related to coconut oil. However, the court dismisses these comparisons, explaining that the absence of specific references in those notifications does not alter the requirement for assessment and liability under the relevant Act. The court also addresses the principle of strict interpretation in taxing statutes, noting that ambiguity is absent in the impugned notification, hence the principle does not apply. Furthermore, the court rejects the argument of Article 301 violation, highlighting that the notification does not directly impede inter-State trade and aims to provide relief to millers who comply with State sales tax requirements.

In conclusion, the court dismisses all appeals without costs, upholding the validity of the notification and emphasizing the necessity for assessment and liability under the Kerala General Sales Tax Act of 1963. The judgment clarifies the specific legal interpretations and principles applied in determining the scope and applicability of the notification in question, ensuring consistency with the relevant statutory provisions and constitutional provisions related to trade and commerce.