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TMI Blog1963 (4) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee and he issued a permit to it authorising it to sell sugar. He sent sugar from Bombay to Lucknow; the railway receipt was prepared in his name and was sent to the State Bank at Lucknow. The. State Bank received the price from the assessee and delivered the railway receipt to it after making the necessary endorsement and the assessee took delivery at Lucknow. Later it sold it in the course of its business and the question arises whether it was liable to pay sales tax on the turnover of the sale. Under section 3 of the Act every dealer has to pay sales tax at a certain rate on his turnover in each assessment year. This provision is subject to section 3-A laying down that the State Government may declare that the turnover in respect of any goods shall not be liable to tax except at such single point in the series of sales by successive dealers as it may specify. In exercise of this power the State Government issued a notification No. ST-822/X dated 1st April, 1953, declaring that the turnover in respect of sugar shall not be taxed except "in the case of sugar imported from outside Uttar Pradesh, at the point of sale by the importer". Sugar was undoubtedly imported from outsi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im held that clause (c) applied. He stated as a finding of fact that the sugar had not been imported into Uttar Pradesh as the direct result of a sale and this finding excluded (a) and (b) from application. He further found that the sugar had been imported into Uttar Pradesh by the Regional Director and not by the assessee. Though according to the ordinary meaning the Regional Director could be the importer, according to the artificial meaning given through rule 2(d-1) the assessee was the importer, because it was the first dealer who made the first sale after the import. In fact the first sale, after the import, was made by the Regional Director, but he was not a dealer and, therefore, it was not a sale by a dealer. The Judge (Revisions) rejected the assessee's contention that the rule should be interpreted in such a way that the assessee, who had not imported the sugar, could not be brought within the definition of "importer"; he saw no justification for considering the dictionary meaning of importer when interpreting rule 2(d-1). The assessee then contended that the definition in rule 2(d-1) was ultra vires inasmuch as it was inconsistent with the provisions of the Act. The Judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the transaction of sale takes place between them in consequence of which goods are sent by the vendor to the vendee into Uttar Pradesh. This is the case of goods being imported into Uttar Pradesh as the direct result of a sale. It has recently been held by the Supreme Court in State Trading Corporation of India Ltd. v. State of Mysore[1963] 14 S.T.C. 188; A.I.R. 1963 S.C. 548. , that "a sale occasions the movement of goods from one State to another within section 3(a) of the Central Sales Tax Act, when the movement is the result of a covenant or incident of the contract of sale". Under a permit system in operation in Mysore State a purchaser of cement was given a permit under which cement was to be supplied to him by a cement manufacturer outside Mysore State. The manufacturer had to send cement to the Marketing Company in Mysore State and the purchaser had to place an order for cement with the Marketing Company and it was held that the sale of cement to the purchaser was an inter-State sale as defined in section 3(a) of the Central Sales Tax Act, because the contract for sale must be deemed to contain a covenant that cement would be supplied to the purchaser in Mysore from a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion issued under section 3-A. Here the definition is contained not in the Act, but in the rules made in exercise of the powers conferred by section 24 of it. Sub-section (4) of section 24 lays down that "all rules made under this section shall be published in the Gazette, and upon such publication shall have effect immediately as if enacted in this Act". This creates a legal fiction; by virtue of it rule 2 (d-1) shall have effect as if it were enacted in the Act and, therefore, by virtue of section 20 of the General Clauses Act it will apply to the notification. In any case question No. (1) assumes that the definition is applicable to the word used in the notification. Applying rule 2(d-1) to the facts of this case, we come to the conclusion that the assessee was the importer of sugar under clause (c) or under clause (b). If it be said that sugar was imported into Uttar Pradesh as a direct result of a sale, namely the sale made by the Regional Director to the assessee, the sugar was intended to be resold in the same condition and clause (b) would apply. The person importing it was the assessee who was a dealer and, when it sold it, it became the importer. If it be said that sug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r interpreting the notification by virtue of section 20 of the General Clauses Act. No question of vires arises when it is used in this manner; the State Government cannot be responsible for the law's putting a rule made by it in the exercise of its powers to another use. If any question of ultra vires can arise it is only in respect of the application of the definition to define the word used in the rules. The argument that rule 2(d-1) cannot be used to interpret a word used in the notification in an argument different from the one that it is ultra vires the State Government and is not to be considered by us when answering question No. (2). Since the State Government has not made rule 2(d-1) to interpret the word used in a notification it would be wrong to contend that it cannot define a word used in a notification through a rule. Since it is not the State Government that wants the word used in the notification to be interpreted in an artificial sense, there is no scope for contending that it has no power to require that the word used in the notification should be understood not according to its popular meaning but according to an artificial meaning. The notification does not beco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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