9911796707
TMI Blog1993 (11) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... on is whether the tax, from which silk yarn is excluded, is the tax referred to in the Second Schedule or the term "tax" includes, other taxes also levied under the Act. Petitioners contend that, the term "tax" found in the last part of the explanation is comprehensive and wide to cover every kind of tax levied under the Act (as defined in the Act itself). The Revenue, on the other hand, insists that the word "tax" found in the explanation, can only be, the tax levied by virtue of Second Schedule, read with section 5(3)(a) of the Act. The pre-requisite to attract the explanation is that the silk yarn referred to therein, must have been manufactured out of the raw silk referred to in Sl. No. 7 of the Third Schedule. The Third Schedule enumerates several goods, in respect of which a single point purchase tax only is leviable under section 5(3)(b); the point of levy and the rate of tax are also stated in the said Schedule. As per SI. No. 7, in respect of "raw silk" a single point purchase tax only is leviable at the point of "purchase by the first or the earliest of the successive dealers in the State liable to tax" under the Act. In other words, the liability to pay the tax under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8, no tax shall be payable under the Act on the sale of goods specified in the Fifth Schedule subject to conditions and exceptions. Section 8-A of the Act empowers the State Government to notify exemptions and reduction of tax. "Tax under the Act" certainly would include the tax levied under section 6-B. On this aspect, there is no dispute and in fact, even a notification exempting the tax "leviable under the Act" in respect of any goods, has been held as covering the tax under section 6-B also and therefore, the turnover of tax in respect of such goods has to be excluded, while computing the turnover for the purpose of levy of tax under section 6-B. In Jain Book Manufacturers v. Commercial Tax Officer, IV Circle, Hubli [1989] 75 STC 126, the scope of an exemption notification issued by the State Government under section 8-A of the Act was considered. The notification exempted the tax payable under the Act. It was held that words "tax payable under the Act", covered, the tax levied under section 6-B also. One of the reasons is at page 129 (para 8), which reads thus: "Under section 8-A of the Act the State has power to exempt or reduce rate of tax payable on any item under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by virtue of a notification dated March 27, 1991 read with the notification dated August 28, 1991. In other words, undisputedly, no tax was leviable under the Act (including the tax under section 6-B) in respect of twisted silk prior to April 1, 1990, as well as, after April 1, 1991. Therefore, the problem posed in these cases, is confined to the period from April 1, 1990 to March 31, 1991. With effect from April 1, 1990, entry 22 in Part "S" of the Second Schedule was introduced as follows: "Silk yarn that is to say twisted or thrown silk yarn, spun silk yarn and noil silk yarn." By virtue of this entry, tax was leviable on the first or the earliest of the successive dealer in respect of the silk yarn at 2 per cent. However, explanation VIII, quoted already, states that under the circumstances referred to therein, no tax is levied on the silk yarn. Explanation does not say that "no tax under section 5" shall be levied instead, it says "no tax shall be levied". Therefore, prima facie, the language of the explanation, provides for the non-levy of "tax" (as defined in the Act). In other words, the word "tax" used in the last part of the explanation, shall have to be understoo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perate as 'exception' or 'proviso'. The construction of an explanation, as was held in Collector of Customs v. G. Dass Co. AIR 1966 SC 1577, must depend upon its terms and no theory of its purpose can be entertained unless it is to be inferred from the language used. It was said in Burmah Shell Oil Storage and Distributing Co. of India Ltd. v. Commercial Tax Officer [1960] 11 STC 764 (SC); AIR 1961 SC 315; [1961] 1 SCR 902, that the explanation was meant to explain the article and must be interpreted according to its own tenor and it was an error to explain the explanation with the aid of the article to which it was annexed. We have to remember what was held in Dattatraya Govind Mahajan v. State of Maharashtra AIR 1977 SC 915 (at page 928); [1977] 2 SCR 790 (at page 807), that mere description of a certain provision, such as 'explanation' is not decisive of its true meaning. It is true that the orthodox function of an explanation is to explain the meaning and effect of the main provision to which it is an explanation and to clear up any doubt or ambiguity in it. But ultimately it is the intention of the Legislature which is paramount and mere use of a label cannot control or defl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntend that the levy under section 6-B is independent of the levy under other provisions of the Act and a turnover excluded from consideration under other provisions like section 5(3)(a), is still liable to be included for the levy under section 6-B. It was also contended that section 6-B itself declares that a turnover "whether or not the whole or any portion of such turnover is liable to tax under any other provisions of this Act",-is still liable to the levy under section 6-B. The gist of the above contention and the decisions cited in support of it, is actually the result of the language of section 6-B referred to above, as part of the second contention. In the instant case, the question arises at the threshold of section 6-B, as to its applicability in view of the explanation VIII which said "no tax" shall be leviable. If the word "tax" includes all varieties of taxes under the Act, then section 6-B also cannot be invoked. The above quoted words of section 6-B, makes it clear that exemption from the levy under another provision of the Act, by itself, is no ground to exclude it from the levy under section 6-B, because, section 6-B to that extent is an independent levy. In vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
