9911796707
TMI Blog1985 (3) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... follows: "Section 4. (1) The tax payable by a dealer under this Act shall be levied(a) in the case of taxable turnover in respect of the goods specified in the First Schedule, at the rate of twelve paise in the rupee; (b) in the case of taxable turnover in respect of the goods specified in the Second Schedule, at such rate not exceeding four paise in the rupee as the Central Government may, from time to time, by notification in the Official Gazette, determine; (c) in the case of taxable turnover in respect of any food or drink served for consumption in a hotel or restaurant or part thereof, with which a cabaret, floor show or similar entertainment is provided therein, at the rate of forty paise in the rupee; (d) in the case of taxable turnover in respect of any other goods, at the rate of seven paise in the rupee: Provided that the Administrator may with the previous approval of the Central Government and by notification in the Official Gazette, add to, or omit from, or otherwise amend, the First Schedule or the Second Schedule, either retrospectively or prospectively, and thereupon the First Schedule or, as the case may be, the Second Schedule, shall be deemed to be am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se (d) of sub-section (1) of section 4] shall be as noted against each. This was notified with the previous approval of the Central Government. The notification enumerates 51 items of goods and the rate of tax is specified against each. The description of the goods and rate of tax in respect of certain items which are relevant for my purpose may be noticed: Name of the goods Rate of tax 14.. Cotton waste Five paise in the rupee. 15. Cotton yarn waste Five paise in the rupee. ............... .................... 22.. Woollen carpet yarn Five paise in the rupee. ............... ............... Knitting wool Five paise in the rupee. ............... ............... 41. Raw wool Two paise in the rupee. ............... ............... By a similar notification dated October 21, 1975 the Administrator directed that the rate of tax in respect of taxable turnover of the specified goods [which are covered by clause (b) of sub-section (1) of section 4] shall be as noted against each; one of the items is in respect of cotton yarn as defined in section 14 of the Central Act and the rate of tax specified is "one paisa in the rupee". The Administrator issued another noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 8(2-A) of the Central Act. The case of the petitioner before the Tax Assessment Officer for the assessment year 1978-79 was that carpet woollen yarn would be covered under the description used in the notification of February 27, 1978, i.e., "all varieties of yarn". The assessment order dated March 19, 1983 made by the Tax Assessment Officer, Ward No. 33, records the nature of business of the petitioner as dealing in raw wool and carpet woollen yarn. It is directed in the assessment order that the sale of raw wool would be taxed at the rate of 2 per cent and the sale of (carpet) woollen yarn would also be taxed at 2 per cent in view of Notification No. F. 4(18)/77-Fin. (G) dated February 27, 1978. The Commissioner of Sales Tax later issued circular No. 4P 1983-84 on April 8, 1983 to all the assessing authorities reading as follows: It has been reported that some assessing authorities are taxing woollen carpet (yarn) at 2 per cent under the belief that it is covered by entry No. 52 of the Notification No. F. 4(73)/74 Fin. (G) dated October 21, 1975 regarding rate of tax on general goods. The matter has been examined and the opinion furnished by the Law and Judicial Br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplained of. The petitioners have the right to prefer an appeal before the prescribed authority under sub-section (1) of section 23 of the Act. If the petitioners are dissatisfied with the decision in the appeal, they can prefer a further appeal to the Tribunal under sub-section (3) of section 23 of the Act, and then ask for a case to be stated upon a question of law for the opinion of the High Court under section 24 of the Act. The Act provides for a complete machinery to challenge an order of assessment, and the impugned orders of assessment can only be challenged by the mode prescribed by the Act and not by a petition under article 226 of the Constitution. It is now well-recognised that where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of." It is well settled that the exercise of power, for other purposes, i.e., purposes other than the enforcement of fundamental rights, is discretionary. The High Court may refuse to entertain the petition upon a consideration of certain circumstances as disentitling to relief even though the petitioner has a legal right which has been infri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissing a writ petition on the preliminary ground of the failure to avail the alternative remedy if the Court once considers the merits of the case. In our view, the merits of the case are considered first when a writ petition is admitted. These writ petitions were admitted and were ordered to be heard together. At first, notice to show cause why the writ petitions be not admitted were issued. The counter-affidavits were filed showing cause why they should not be admitted. After hearing the parties, the Court admitted these writ petitions, apparently after considering the merits of each case. Once this is done it would not be fair according to the observations of the Supreme Court in the above-mentioned decisions to dismiss these cases at this late stage on the preliminary ground that the petitioners have not availed themselves of the alternative remedy. In our view, an order admitting the writ petitions means that the Court will decide the case on merits. If the preliminary objection of law had to be considered, it should have been considered at the time of admitting the writ petitions. In the L. Hirday Narain's case [1970] 78 ITR 26 (SC), the Supreme Court also observed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tems of goods and the rate of tax is specified against each. It is a reduced rate of tax in exercise of the power conferred by the third proviso to subsection (1) of section 4 of the local Act. The tax is to be levied at the modified rate. The rate of tax on the woollen carpet yarn at serial No. 22 as a also knitting wool at serial No. 30 is modified to five paise in a rupee. Subsequently the Administrator issued another notification of the February 27, 1978. The notification dated February 27, 1978 is issued independently of the earlier notification. It does not insert any new entry No. 52 in the notification dated October 21, 1975. It does not amend or modify the notification dated October 21, 1975. There is thus no foundation to build the argument that a residuary entry No. 52 has been inserted in the earlier notification. The notification dated February 27, 1978 specifies the rate of tax in respect of the taxable turnover of all varieties of yarn other than cotton yarn and knitting wool. It is a complete notification in regard to the modification of the rate of tax. The generality of the expression "all varieties of yarn" embraced within its ambit all species of yarn includin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment to, while issuing Notification No. 8224/X dated 31st of August, 1979 affect the rate of tax in respect of knitting yarn provided for by Notification No. 2177/X dated 1st of March, 1979 the Governor of Uttar Pradesh promulgated the U.P. Sales Tax (Amendment and Validation) Ordinance, 1981. Section 21(5) of the Ordinance provided that in Notification No. 8224/X dated 31st of August, 1979 in the list therein, in the entry in column II against serial No. 1, for the words 'except cotton yarn', the words 'except those covered by any other notification' shall be substituted and be deemed to have been substituted." It gave a retrospective operation to the provision by creating a legal fiction. It is only then it was held that nothing in the said notification affected the liability of acrylic yarn sold by the petitioner there. In the case before me the language employed is "all varieties of yarn" which in my opinion would cover woollen carpet yarn. There is no exception that all varieties of yarn will not cover those goods which are already covered by any other notification. The notification dated February 27, 1978 uses the words "all varieties of yarn". There is no reason, in m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel for the petitioner, I may say that a number of authorities have been referred to laying down principles for construing fiscal legislation. Referring to the ratio of the precedents, he urges that the Courts in interpreting a taxing statute will not be justified in adding words thereto so as to make out some presumed object of the legislature. It cannot proceed to make good the deficiencies, if there be any in the statute. It is settled law that in case of doubt, that interpretation of the taxing statute which is beneficial to the taxpayer must be adopted. If two views are possible then the view which is favourable to the assessee must be accepted while construing the provisions of a taxing statute. In considering a taxing Act, the Court is not justified in straining the language. (State of Bombay v. A A Industries Corporation [1961] 12 STC 122 (SC), State of Punjab v. Jullundur Vegetables Syndicate [1966] 17 STC 326 (SC), Alladi Venkateswarlu v. Government of Andhra Pradesh [1978] 41 STC 394 (SC), Commissioner of Income-tax v. Kulu Valley Transport Co. Ltd. [1970] 77 ITR 518 (SC), Kannappa Mudaliar v. State of Madras [1968] 21 STC 41 (Mad), Rajpur Farms Ltd. v. Com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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