9911796707
TMI Blog1973 (8) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... les tax under the Andhra Pradesh General Sales Tax Act. He exported the same to a place outside the State. Shorn of others which are not necessary for the disposal of this appeal, what happened was that the Commercial Tax Officer, by his order dated 4th January, 1967, levied tax under the Central Act on the rice sold in the course of inter-State trade. That was affirmed by the Assistant Commissioner of Commercial Taxes by his order dated 16th May, 1967. The plaintiff paid Rs. 12,776.91 as per these orders on the sale of rice in question. He has filed the suit to recover the said amount with interest. He rested this claim on the contention that since he had paid the amount under a mistake of law he was entitled to recover it. The second defendant, viz., the State of Andhra Pradesh, maintained in its written statement that the imposition of the tax was in accordance with the law. The Union of India, which was the first defendant, adopted that written statement. It, however, has not chosen to appear before us and contest this Letters Patent appeal. The trial court held that by virtue of sub section (1A) Introduced in section 6 of the Central Act, by the Ordinance of 1969, the clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ysore v. Lakshminarasimhiah Setty[1965] 16 S.T.C. 231 (S.C.). That was why, that sub-section was deemed always to have been inserted, with the result, that it must be deemed as being in force from 5th January, 1957, when the Central Act was brought into effect. Consequently, section 6(1A) applies to the transactions in question and declares the liability of the plaintiff to pay tax under the Central Act, though no tax was leviable on the sale of this variety of rice under the State Act of Andhra Pradesh, if the sale had taken place inside the State. But, this merely declares the liability to tax; and one should travel to section 8 to find out the actual rates of tax leviable on the sales in the course of inter-State trade or commerce. The amendments that were made to section 8 were made effective only from 1st October, 1958, i.e., after the occurrence of transactions in question. So, in order to know the rates of tax leviable on these transactions, section 8, as it stood before 1st October, 1958, should be looked into. Sub-section (1) has no application. Subsection (2) governs the case. It, however, says that the tax payable thereunder shall be calculated at the same rates and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be unacceptable. The contention of the learned counsel, if accepted, would defeat the purpose and intendment of section 6(1A) of the Central Act. It declares in unequivocal terms that a dealer shall be liable to pay tax under the Act on the sales of any goods effected by him in the course of inter-State trade or commerce, notwithstanding that no tax would have been leviable (whether on the seller or the purchaser) under the sales tax law of the appropriate State, if that sale had taken place inside the State. Sale of any goods in the course of inter-State trade or commerce is thus made liable to Central tax. Such liability exists, even if no tax either on the sale or on the purchase of the goods is leviable under the State law if the sale has taken place inside the State. The non obstante clause, which follows the declaration of the liability under the Central law on sales of any goods makes the intendment of the Parliament very clear. In so far as the liability to the Central tax is concerned, it is immaterial whether the State law levies any tax on the sale or purchase of the goods or not. In addition to the non obstante clause, the expression "sale of any goods" is of very w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 958. He conceded that the original sub-section (1) has no application to these transactions and, consequently, only subsection (2) governs them. That sub-section provided that the tax payable on any goods sold in the course of inter-State trade or commerce shall be calculated at the same rate and in the same manner as would have been done if the sale had, in fact, taken place inside the appropriate State. Therefore, in the submission of the learned counsel, the State Act, as it then obtained, should be invoked to fix the liability to tax and to fix the rate thereunder. Schedule III to the State Act, which was in force from 15th June, 1957, to 31st March, 1958, made rice, as per item 6, liable to tax at the rate of 3 naye paise in the rupee at the point of first purchase in the State. The explanation to the schedule said that where a tax has been levied in respect of purchase of paddy under item 5, any subsequent purchase of rice converted from such paddy is not liable to tax under item 6. While fairly conceding that, in the light of the language of section 6(1A) of the Central Act, it is immaterial whether the tax is leviable under the State law at the purchase point or the sale po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reading section 8(2) as It originally stood as a whole, we are of the opinion that it would be unreasonable to import this explanation into the implementation and enforcement of the Central Act. If that is done, manifestly the very purpose of section 6(1A) will be defeated and nullified. Rules of interpretation of statutes are well-defined. Harmonious construction will have to be laid on the different provisions of a statute. Once the intention of the Parliament is clear and known, a construction which is consistent with that intention must be laid on the provisions of the Act. To do otherwise would be contravening the well-known rules of construction of statutes. There is another aspect which should be borne in mind. If the contention put forward by the learned counsel is to be accepted it would lead to a very anomalous result. Rice, which has been extracted from paddy, which had not suffered tax under item 5 of Schedule III of the State law, is subjected to tax of three naye paise in the rupee at the point of first purchase in the State. When the same rice is sold in the course of interState trade or commerce, it will be liable to Central tax at the same rate. But, rice, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and with respect to each category, tax could be said to be generally at that rate. But, the case was decided before sub-section (1A) was introduced in section 6 of the Central Act. Further, what was being considered was the scope of section 8(2A) of the Central Act read with item 66(b) of Schedule I of the Andhra Pradesh Act. The question of applying section 6(1A) read with section 8(2) of the Act did not arise in that case. In fact, the Division Bench relied on State of Mysore v. Lakshminarasimhiah[1965] 16 S.T.C. 231 (S.C.). while deciding the case before them. Therefore, this decision is not of any avail to the appellant in this case. At the same time, the observation made by the Division Bench that where two interpretations are possible, one against the constitutionality of a provision and the other in favour of sustaining It, the latter interpretation should be preferred is a well-established rule of Interpretation and should be borne in mind. We may here refer to a few cases which were decided after the advent of section 6(1A) in the Central Act. The Supreme Court itself had an occasion to consider the effect of the Central Sales Tax (Amendment) Ordinance, 1969, which f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not taxable under the State law except at the last point of purchase. The same result should follow in the case before us also. Item 6 of Schedule III to the State Act makes rice generally liable to tax at a particular rate. And that rate should be adopted for fixing the rate of tax under the Central Act, though some kinds of rice are made non-available to tax for the purpose of levying State tax. It should be noted that item 6 in Schedule III refers to "rice" as such and, therefore, all kinds of rice come within that genus, though for the purposes of levying State tax a particular kind is made non-liable. In Basappa Bros. v. Deputy Commissioner of Commercial Taxes[1971] 27 S.T.C. 241., a Bench of the Mysore High Court repelled the argument that the aforesaid decision of the Supreme Court, i.e., State of Kerala v. Joseph and Co.[1970] 26 S.T.C. 483 (S.C.). made no reference to sub-section (2A) of section 8 and, therefore, that decision does not apply to matters which arose under that sub-section and held that though the said decision made no reference to sub-section (2A) of section 8, the High Court was bound by the law as laid down by the Supreme Court. On this basis, the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
