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TMI Blog1975 (8) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 10A of the Central Sales Tax Act, 1956, for all these various defaults. So far as the goods which were used for processing the goods belonging to Messrs. Gaekwar Mills Ltd., Bulsar, are concerned, the contention of the applicant-company is that these goods have, in fact, been used by it for the purpose of manufacturing the goods for sale. It is the contention of the applicant-company, that the goods which have been manufactured by it on jobwork done for and on behalf of M/s. Gaekwar Mills Ltd., Bulsar, have been actually sold by the said mills and since neither section 8(3)(b) of the Act nor the undertaking given by it in C form contemplates that the processed goods should be sold by the assessee himself, it would be sufficient if it is shown that the goods, which have been processed on job-work, have actually gone for sale in the market. According to the applicant-company, therefore, these goods having been actually sold in the market by M/s. Gaekwar Mills Ltd., Bulsar, no penalty as contemplated by clause (d) of section 10 read with section 10A of the Act has been incurred. Another contention of the applicant-company is that even if it is believed that it has incurred th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the very same dealer or not. This controversy arises out of the language of clause (b) of sub-section (3) of section 8 of the Act. In Gaekwar Mills v. State of Gujarat[1976] 37 S.T.C. 129. (Sales Tax Reference No. 7 of 1974), we have considered the scheme of sections 8, 10 and 10A of the Act, at length, and, therefore, we do not find it necessary to repeat the same. However, since clause (b) of section 8(3) of the Act is the bone of the contentions between the parties, it would be necessary to quote the same. It is in the following terms: "(3) The goods referred to in clause (b) of sub-section (1) ............ (b) ..... are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for resale by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture or processing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power..." (Emphasis* supplied by us). The contention of the assessee is that it had purchased the goods against form C, by giving an undertaking that these goods were purchased for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to accept this contention of Shri Modi. On close scrutiny of the grammatical structure of the language used by the legislature in clause (b), we find that the words, "for use by him", which precede the words, "in the manufacture or processing of the goods for sale", govern the whole of the later clause, with the result that a dealer who purchases the goods against C forms by making the necessary declaration as regards the manufacture and processing, is required not only to use the goods so purchased in the manufacture or processing of the other goods, but is also required to sell for himself the goods so manufactured and processed. This would be further evident if the whole scheme of section 8 of the Act is taken into account. Reference to sub-section (1) of section 8 shows that a dealer who sells goods in the course of inter-State trade or commerce, to a registered dealer, other than the Government, is required to pay the tax at the concessional rate of three per cent, provided the goods fall within the description referred to in sub-section (3). One of the descriptions referred to in sub-section (3) requires the use of these goods in the manufacture or processing of the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale". He pointed out that the legally established position is that a taxing statute has to be read as it is without making any addition to the language used by the legislature with a view to carry out the supposed intention of the legislature. He further contended that even if it is found that the language employed by the legislature in a taxing statute is capable of double meaning, only that meaning should be accepted which is beneficial to the taxpayer. We find ourselves unable to accept any of these contentions, because we find that on a plain grammatical reading of the above-referred disputed phrase, the only conclusion which can be reached is that the goods, which are purchased against C forms, are to be used in manufacture or processing, and the materials so obtained by manufacture and processing, should be sold by the dealer himself. It is true that as held by Rowlatt, J., in Cape Brandy v. Commissioners of Inland Revenue[1921] 1 K.B. 64., in a taxing statute, one has to look at what is clearly stated and there is no room for any intendment. In the words of Rowlatt, J., "There is no equity about a tax. There is no presumption about a tax. Nothing is to be read in, nothing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... each of the undertaking given by him in C form declaration. In our opinion, the above interpretation of the disputed phrase does not result in reading anything more in the language of the statute. What we are actually doing is to read the disputed phrase closely so as to bring about its plain and obvious meaning. In our opinion, it was not at all necessary for the legislature to use the words "by him" at the end of the disputed phrase, as is done with reference to the word, "resale", because, that would have been a mere repetition, in view of the fact that the words connoting the same idea have been already employed by using the words, "for use by him", at the beginning of the phrase. There is, therefore, no question of reading anything more in the language. On the contrary, our effort amounts to nothing more than looking "fairly at the language used"-to employ the words of Rowlatt, J., in Cape Brandy Syndicate case[1921] 1 K.B. 64. As for the contention of Shri Modi that out of the two alternative interpretations, only that interpretation should be accepted which is favourable to the taxpayer, we find ourselves unable to accept the same, because the principle propounded does n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no application to the facts of the present case. The matter can be viewed from another angle. If the contention canvassed by Shri Modi on behalf of the assessee is accepted, it would result in a large scale evasion of tax and the frustration of the very object for which concessional rates contemplated by sub-section (1) of section 8 are provided by the legislature. It is evident that if it is left to a particular dealer to decide whether the articles manufactured out of the goods purchased by him against C forms are or are not intended to be put to sale by an outside dealer, the whole question of rate concession contemplated by sub-section (1) of section 8 of the Act will depend upon the judgment of the dealer who makes purchases against C forms. The question is how the dealer who manufactures goods out of the raw materials purchased against C forms, is going to enter into an inquiry as to whether the purchaser of the manufactured goods from him is really going to put these goods in the market for sale. It is an admitted position that the Rules framed under the Act, nowhere prescribe any form containing an undertaking from such purchasers that the manufactured or processed goods ..... X X X X Extracts X X X X X X X X Extracts X X X X
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