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TMI Blog1983 (2) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... Act in the hands of any dealer by reason of section 8 of the principal Act is not liable to the payment of additional sales tax under the Act. The turnover in respect of sales and purchases of declared goods is not taxable under the Act by reason of the first proviso to section 3(1) of the Act. Any other turnover which is exempted by the State Government under the second proviso to section 3(1) of the Act is also not taxable under the Act. The levy of the additional tax on the gross turnover of a dealer under section 3 of the Act is subject to these conclusions. X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of the principal Act on every dealer whose gross turnover during a fiscal year exceeds Rs. 50,000. According to section 2(dd) of the principal Act, "gross turnover" means the total of "turnover of sales" and "turnover of purchases". "Turnover of sales" is defined in section 2(1) of the principal Act as the aggregate of the amounts of sale prices and tax, if any, received and receivable by a dealer in respect of sale or supply of goods other than those declared under section 3-B of the principal Act and "turnover of purchases" is defined in section 2(j) of the principal Act as the aggregate of the amounts of purchase prices paid and payable by a dealer in respect of the purchase or supply of goods or classes of goods declared under section 3-B of the principal Act. Sub-sections (2) to (5) of section 4 of the principal Act deal with the point of time at which such dealer would become liable to pay tax, the period during which he would remain liable to pay the tax and the time at which he would cease to be liable to pay tax after his annual gross turnover has failed to exceed Rs. 50,000. Unless he is a casual dealer as defined in section 2(bb) of the principal Act who is liabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Power of the State Government to Prescribe points at which goods may be taxed or exempted.-Notwithstanding anything to the contrary, in this Act, the State Government may prescribe the points in the series of sales or purchases by successive dealers at which any goods or classes or descriptions of goods may be taxed or exempted from taxation and in doing so may direct that sales to or purchases by a person other than a registered dealer shall be exempted from taxation: Provided that the same goods shall not be taxed at more than one point in the same series of sales or purchases by successive dealers. Explanation.-Where in a series of sales, tax is prescribed to be levied at the first point, such point, in respect of goods despatched from outside the State of Orissa shall mean and shall always be deemed to have meant the first of such sales effected by a dealer liable under the Act after the goods are actually taken delivery of by him inside the State of Orissa." The proviso to section 8 of the principal Act which is of considerable significance in these cases clearly lays down that the same goods cannot be taxed under the principal Act at more than one point in the same series ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lared goods the tax payable by such dealer under the said Act together with the additional tax payable under this sub-section exceeds the maximum percentage of the sale or purchase price thereof specified, from time to time, under clause (a) of section 15 of the Central Sales Tax Act, 1956, the rate of additional tax in respect of such goods shall be reduced to such an extent that the tax and the additional tax together shall not exceed such maximum percentage of the sale or purchase price of such goods. Explanation.-'Declared goods' shall have reference to declared goods as defined in the Central Sales Tax Act, 1956. (2) The provisions of the said Act shall, mutatis mutandis apply in relation to the said additional tax as they apply in relation to the tax payable under the said Act. (3) Notwithstanding anything contained in the said Act, no dealer referred to in sub-section (1) shall be entitled to collect the additional tax payable under this Act. 3.. (1) Any dealer who collects the additional tax payable under this Act, in contravention of the provisions of sub-section (3) of section 2 shall be punishable with fine which may extend to one thousand rupees. (2) No court inferi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of additional sales tax as there is statutory price control in respect of certain goods and where there is no statutory price control, there is keen competition between dealers for sale of goods. Moreover, the rate of the additional sales tax on big dealers will be more than that in the case of small dealers. To meet the competition from the small dealers, the big dealers cannot increase the price of goods so as to recoup themselves of the amount of additional sales tax paid by them. Moreover, if dealers increase the price of goods so as to recoup themselves, they will be liable to pay more sales tax under the general sales tax law of the State and their turnover will also increase as a result of which the rate of additional sales tax may be more. Besides, if they increase the price exceeding the amount of additional sales tax, their profit will increase as a result of which they will be 'liable to pay more income-tax. It may not, therefore, be a pragmatic step to pass on the incidence of this new tax to consumers. 3.. The Bill seeks to achieve the above objective." The contents of the above Statement of Objects and Reasons show the concern of the mover of the Bill regardi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption. (2) The provisions of the said Act shall, mutatis mutandis apply in relation to the said additional tax as they apply in relation to the tax payable under the said Act." Sections 1 and 4 of the Act however remained as before. After the above amendment, section 2 took the form of the interpretation clause of the Act. Clause (a) of section 2 defined the expression "declared goods" and clause (b) provided that the words and expressions used but not defined shall have the same meanings as are respectively assigned to them in the principal Act. Section 3, however, altered the pattern of levy of additional sales tax from what' it was when the Act was passed in 1975. The object of the alteration is set out in the Statement of Objects and Reasons attached to the Bill which later became the amending Act. It reads thus: "STATEMENT OF OBJECTS AND REASONS With a view to rationalising the scheme of additional sales tax it is proposed to amend the Orissa Additional Sales Tax Act, 1975, to facilitate wider application of first point levy and introduction of flexibility in the implementation of the Act. 2.. The Bill seeks to achieve the above objectives." Section 3 of the Act after th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in 1979. The High Court negatived the said contention on the ground that since both the principal Act and the Act as amended in 1979 had been passed by a competent legislature providing for a different base and for a different scheme and because they happened to be two independent Acts, it was not open to the assessees to rely upon any of the provisions of the principal Act relating to incidence and levy of tax in support of their contention. The High Court observed in para 8 of the judgment thus: "8. On an analysis of section 3(1) of the 1975 Act it is also clear that the legislative intention is to raise a tax in addition to the liability under the 1947 Act. If the liability under the 1947 Act in respect of a dealer is taken as 'X', section 3(1) of the 1975 Act creates an additional liability which has to be within one per cent of the gross turnover for that year (the State Government at present has prescribed half per cent which may be taken as 'Y'). 'Y' is an additional liability, and therefore, has been nomenclatured as additional tax. Under the 1947 Act, the dealer's liability to sales tax is on the basis of his taxable turnover which is determined in the manner prescribed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4(1) of the principal Act, then irrespective of his annual gross turnover every person who carries on the business of purchasing, selling, supplying or distributing goods directly or otherwise would become liable to pay additional tax even though he may not be liable to pay any tax under the principal Act. If he is not registered as a dealer on account of his annual gross turnover being less than the prescribed minimum, he would not be able to collect the additional tax in view of section 9-B of the principal Act which says that no person other than a registered dealer shall realise any amount by way of tax under the provisions of the principal Act. That could never have been the intention of the State Legislature. The "dealer" referred to in section 3(1) of the Act should be understood as a "dealer" who is liable to pay tax under the principal Act as provided in section 4(1) of the principal Act. Next, "gross turnover" means the total of "turnover of sales" and "turnover of purchases". If under section 3(1) of the Act, the liability to pay additional tax is just on the "gross turnover", a dealer has to pay additional tax on the aggregate of the purchases of goods declared under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ales tax in addition to what had been levied by the principal Act. The nature of the taxes levied under the Act and under the principal Act was the same and the legislature expressly made the provisions of the principal Act mutatis mutandis applicable to the levy under the Act. The additional sales tax was in the nature of a surcharge over and above what was due and payable by an assessee under the principal Act. The Act, though it had a long title, a short title and other usual features of every statute, could not be considered as an independent statute. It had to be read together with the principal Act to be effective. In the circumstances the conclusion reached by the High Court that the two Acts were independent of each other was wrong. We are of the view that it is necessary to read and to construe the two Acts together as if the two Acts are one, and while doing so to give effect to the provisions of the Act which is a later one in preference to the provisions of the principal Act wherever the Act has manifested an intention to modify the principal Act. The following observations of Lord Simonds in Fendoch Investment Trust Co. v. Inland Revenue Commissioners [1945] 2 All ER 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e words in the Act by excluding the application of section 8 of the principal Act expressly in section 3(2) of the Act. In the absence of any such words in the Act, by reason of section 3(2) of the Act, we have to construe that section 8 of the principal Act which is given an overriding effect by the use of the non obstante clause is applicable to the levy of additional tax also. This construction receives support from the use of the word "additional" in section 3(1) which involves the idea of joining or uniting one thing to another so as thereby to form one aggregate (see Black's Law Dictionary). The gross turnover referred to therein should, therefore, be understood as that part of the gross turnover which is taxable under the principal Act. The definition of the expression "gross turnover" in section 2(dd) of the principal Act does not present any insurmountable difficulty as the words defined in section 2 of the principal Act have to be given the meaning as indicated in that section unless there is anything repugnant in the subject or context. In view of the forgoing, section 3(1) of the Act has to be read as: "Every dealer (who is liable to pay tax under the principal Act) s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act as section 13 also uses the words "tax payable under this Act". Likewise many other provisions of the principal Act which are necessary for making the levy under the Act effective will become inapplicable. The above contention has therefore to be rejected. Lastly it was contended on behalf of the State Government that section 3(1) of the Act should be construed as a complete and self-contained code on the charge created by the Act in view of the second proviso contained in it which conferred powers of exemption on the State Government. That proviso only empowers the State Government to exempt certain dealers or transactions pertaining to certain goods from the levy of additional tax. It does not in any way curtail the effect of sub-section (2) of section 3 of the Act which forms an integral part of the charging section. Consequently any exemption granted under section 6 and section 7 of the principal Act will also be applicable in the case of levy of additional tax under the Act. In view of the foregoing, we hold that any dealer who is not liable to pay tax under the principal Act either by reason of his not having sufficient gross turnover or by reason of exemption given ..... X X X X Extracts X X X X X X X X Extracts X X X X
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