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TMI Blog1983 (1) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... s. In the year 1974-75, the assessee came by a quantity of confiscated smuggled foreign woollen and artificial silk fabrics. It sold them to its customers for Rs. 32,063.81. In its assessment to sales tax, the assessee claimed exemption for this turnover under section 8 of the Act read with entry 4 of the Third Schedule. The exemption was refused right through from the assessing authority onwards upto and including the Sales Tax Appellate Tribunal. The view of the Tribunal and the other authorities was that only cotton, woollen and artificial silk fabrics which were excisable under the Central Excises Act are eligible for exemption from sales tax under entry 4 of the Third Schedule to the Sales Tax Act. Since the assessee in this case dealt in foreign fabrics, which were not manufactured in India and hence not excisable under the Central Excises Act, it was held that the assessee's sales turnover was not entitled to exemption. This decision is challenged by the assessee in this revision. Mr. Natarajan, for the assessee, urges that the view of the Tribunal is based on a misconstruction of entry 4 of the Third Schedule to the Sales Tax Act. He said that it is not a condition for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Schedule. For that is the place where the exempted items are specified. Section 8 says that the exemption attaches to sales or purchases of goods "specified in the Third Schedule". The thing which we have to do in terms of these words of section 8, is to scan the Third Schedule and find out which are the goods which are specified therein. We must also note that the exemption from tax contemplated by section 8 is not, in all cases, an absolute exemption. For the section itself says that the exemption is "subject to" "restrictions and conditions". All the same, the restrictions and conditions are those which have got to be prescribed by the rule-making authority. Mark the words "subject to such restrictions and conditions as may be prescribed". "Prescribed" means prescribed by the rules. Section 8 itself does not lay down any conditions and restrictions for the exemption. Nor does the section contemplates that any conditions or restrictions for exemption should be specified even in the Third Schedule. On the contrary, according to the scheme of section 8, there is to be a neat division of labour; the Third Schedule specifying what the exempted items are, the rules specifying what ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pure silk cloth) made wholly or partly of cotton, staple fibre, rayon, artificial silk or wool including handkerchiefs, towels, napkins, dusters, cotton velvets and velveteen, tapes, niwars and laces and hosiery cloth in lengths." The entry, no doubt, does not refer to any definition in the Central Excises and Salt Act, 1944. But the pertinent question to ask is not whether entry 4 has undergone any material change. The question, rather, is whether the structure of the exemption provision has been altered to any extent by recent legislation. The answer is no. The amending Act 37 of 1974 leaves untouched the crucial provision in section 8. The section retains the same calibre both before and after the amendment of entry 4 of the Third Schedule on 1st April, 1972. It follows that, both before and after the changes introduced in entry 4 of the Third Schedule, we are forbidden to read any conditions or restrictions into that entry. For the law has always been that it is for the State Government, as the rule-making authority, to prescribe and lay down any conditions and restrictions, if they so want, as respects the exemption from tax of any purchase or sale transaction of the goods s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the simple reason that the rules do not subject the exemption to any conditions or restrictions. In this state of the statute of the statutory rules, the Tribunal and the other authorities in this case were in error in bringing to tax the society's sales turnover of Rs. 32,063.81 in artificial silk fabrics. The learned Government Pleader bewailed that the views adumbrated above of the statutory provisions and rules would grant to the foreign fabrics in question a double exemption; an exemption from excise duty which they enjoy, being foreign-make goods, plus the exemption from sales tax on the basis of this Court's present interpretation of section 8 and entry 4 of the Third Schedule. The learned counsel said that this could not possibly be the intention of the legislature. He said that the object behind the 1972 amendment of entry 4 of the Third Schedule was clear. According to him, the express reference in the Amended Act to the Central Excises Act was to ensure that only excisable fabrics which bear the burden of Central excise must be eligible for sales tax exemption. In this connection, the learned Government Pleader invited us to look into the statement of objects ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quite a wrong approach to the task of interpreting legislative Acts. The courts will have to apply to the statute to given situations which arise before them, and in that connection, the courts are obliged to understand and construe the statute aright, before proceeding to apply it to the facts. This can only be done by putting a reasonable meaning on the words of the statute, for words are but the outward expression of the intention of the legislature. Neither the objects and reasons, nor the notes on clauses, are authored by the legislature. They are the handiwork of the sponsors of the Bill, usually the Government. Notes on clauses and objects and reasons are put into circulation at the Bill stage on the theory that they truly explain the object and meaning of the relevant clauses in the Bill. But this cannot be assumed, because the difficulties in language and communication are as such present in the words of the notes on clauses and objects and reasons, as they are in the words in the text of the Bill itself. In any case, the object of the sponsors of the Bill is not the same as the object of the legislature, even where the clauses in the Bill are passed without the slightest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x shall be payable on the sales or purchases of any goods specified in that schedule. The difference between the format of exemption in section 5 of the Gujarat Sales Tax Act, 1969, and that provided by section 8 of the Tamil Nadu General Sales Tax, 1959, is this: Under section 5 of the Gujarat Sales Tax Act, the conditions and restrictions to be imposed on the statutory exemption are not left to the rule-making authority; on the contrary, if there are any conditions or restrictions in contemplation, those conditions and restrictions ought to be set out in the third column of Schedule I to the statute itself. Entry 40 in Schedule I to the Gujarat Act which was the subject of consideration in Mehta Brothers v. State of Gujarat [1979] 43 STC 208 specified the following goods: "Rayon or artificial silk fabrics as defined in item No. 22 of the First Schedule to the Central Excises and Salt Act, 1944." This entry 40 only carries the description of the exempted goods. Just that and nothing else besides. The entry does not lay down any conditions or restrictions in column 3. The effect of non-mention of any conditions or restrictions against this entry is that, as a matter of construc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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