1991 (4) TMI 382 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of entry No. 27 and entry No. 29 of the notifications dated 21st October, 1975 under the Delhi Sales Tax Act, 1975.

Detailed Analysis:
The case involved a reference under section 45 of the Delhi Sales Tax Act, 1975, where the respondent-dealer contended that suction hose pipes were chargeable at 5% under entry No. 27 of a specific notification. However, the assessing authority believed it was chargeable at 7% under entry No. 29 of another notification issued on the same date. The Commissioner of Sales Tax determined that the item was taxable at 7% under entry No. 29, leading to an appeal by the dealer before the Sales Tax Tribunal. The Tribunal concluded that the item was taxable at 5% under entry No. 27, prompting the Commissioner to refer the case to the High Court with two questions for determination (i) the independence of entry No. 27 from entry No. 29, and (ii) the correct tax rate for suction hose pipes under the relevant notification.

The High Court emphasized the need to interpret the entries in a manner that reflects the legislative intent clearly. The Tribunal's decision was supported, stating that entry No. 27 did not specify that the tax rate of 5% applied only to items made of stainless steel. The Court agreed with the Tribunal's view that the entry should be construed as it stands without adding any words that are not present, as the intention of the Legislature should be derived from the actual wording of the statute.

The department argued that entry No. 27 was inserted to include items made only from stainless steel, which were excluded from entry No. 29. However, the Court rejected this argument, stating that the absence of any ambiguity in entry No. 27 meant that no additional words or limitations should be imposed. The Court held that all types of safety razor blades, surgical instruments, and parts of industrial machinery and plant were taxable at 5% under entry No. 27, regardless of the material they were made from.

Ultimately, the High Court answered both questions in favor of the dealer, affirming that entry No. 27 should be interpreted without any added limitations or qualifications, and all the specified items were liable to be taxed at 5%. The references were answered in the affirmative, and no costs were awarded in the matter.