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TMI Blog1996 (4) TMI 467X X X X Extracts X X X X X X X X Extracts X X X X ..... Planning Area, such dealer shall pay the cess on the sale of,- (i) petrol at the rate of twenty-five paise per litre; and (ii) diesel at the rate of ten paise per litre." 3.. It appears that subsequent to the insertion of the said provision, the Commissioner of Commercial Taxes, pursuant to certain queries, issued a Circular No. 3/949-95 dated 21st April, 1995 giving his own interpretation of the said provision, the relevant part whereof is to the following effect: "The cess is payable by all the assessees having their places of business within the Bangalore City Planning Area and who are registered with the assessing authorities having jurisdiction over such area and paying taxes to such authorities in respect of all sales/purchases made by them in the State. Where the principal place of business of a corporate body is within the limits of Bangalore City Planning Area and is having branches in other places in the State and where such corporate body has obtained separate registration under section 12E for the purpose of assessment, such branches shall also be liable to pay cess in addition to the tax payable by them in respect of sales or purchases as the case may be effe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han one interpretation; and keeping in view the object with which the impugned section 6D was inserted, the sales or purchases effected by a dealer within the Bangalore area can only be subjected to levy of cess and not the transactions which have been effected by such dealers outside that area; and the circular issued by the Commissioner expressing a contrary view should be held to be unauthorised, illegal or unenforceable. 9.. According to the petitioners, on a fair and rational construction arrived at by employing internal and external aids as judicially evolved for the purpose, the irresistable conclusion could only be the one which has been placed on their behalf, since, according to them, any contrary construction will not only be opposed to the object of the impugned legislative exercise but will also be violative of article 14 of the Constitution of India as it may lead to uncertainties and ambiguities and above all irrational application of law under the executive fiat, which again is impermissible under the mandate of article 265 of the Constitution. 10.. To fortify the said submissions, it has been illustrated that if a person, like the petitioners herein, has three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erate/ build own and transfer basis. 96.. It will be a huge project with an estimated cost of Rs. 4,000 crores at current prices. While most of the funds will be brought by the private sector, the Government will have to provide some financial support either as a one time support or as a recurring support. The honourable members will agree that the other commitments of the State Government will not leave resources for supporting this massive project. It will be in order if the potential users of the system are asked to contribute. The Government proposes to set up mass rapid transit system fund. The receipts for this fund will be generated out of cess to be levied on various taxes collected in the city of Bangalore alone. During 1995-96, it is proposed to raise Rs. 55 crores through this cess......" 13.. Accordingly, in paragraphs 155 and 156 of the said speech, it was proposed to make provisions for levy of cess for the said purpose. The proposals were to the following effect"155. In order to meet the cost of Bangalore Mass Rapid Transit System, I propose to impose a cess which would be limited to the activities in Bangalore Planning Area Limits. The details of levy furnished ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar to the impugned section 6D of the Act in other two State taxing statutes. Those are as follows: (i) 3A(1) of the Karnataka Tax on Professions, Trades, Callings and Employment Act, 1976 (Karnataka Act 35 of 1976): "In addition to the profession tax payable under the Act, there shall be levied and collected by way of a cess for the purpose of Bangalore Mass Rapid Transit System a tax from every person engaged in profession, trade, calling or employment within the limits of Bangalore City Planning Area, at the rate of five per cent of the profession tax: Provided that the profession tax together with the cess payable under this sub-section shall not exceed two thousand five hundred rupees." (ii) Section 3A(1) of the Karnataka Tax on Luxuries (Hotels and Lodging Houses) Act, 1979 (Karnataka Act 22 of 1979): "3A. Levy of cess.-(1) In addition to the tax payable under section 3 there shall be levied and collected by way of cess for the purpose of Bangalore Mass Rapid Transit System a tax at the rate of five per cent of the tax payable under the said section on the luxury provided in a hotel within the limits of the Bangalore City Planning Area, where the charges for lodgi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et speech made by the Minister. At page 252 of the Report, it has been held by their Lordships of the Supreme Court that: "It is true that it is dangerous and may be misleading to gather the meaning of the words used in an enactment merely from what was said by any speaker in the course of a debate in Parliament on the subject. Such a speech cannot be used to defeat or detract from a meaning which clearly emerges from a consideration of the enacting words actually used. But, in the case before us, the real meaning and purpose of the words used cannot be understood at all satisfactorily without referring to the past history of legislation on the subject and the speech of the mover of the amendment who was, undoubtedly, in the best position to explain what defect in the law the amendment had sought to remove. It was not just the speech of any member in Parliament. It was the considered statement of the Finance Minister who was proposing the amendment for a particular reason which he clearly indicated. If the reason given by him only elucidates what is also deducible from the words used in the amended provision, we do not see why we should refuse to take it into consideration as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case, the two Budget speeches referred to above, are clearly indicative of the fact that the intention of incorporating the impugned section 6D in the Act was to levy cess only on the sales and purchases effected by a dealer in the Bangalore area. 21.. The said intention is amply fortified by the amendments subsequently made by the Karnataka Act 5 of 1996 which was apparently done to remedy the ambiguity and to make the provisions consistent with the intention with which it was incorporated. Learned Government Advocate submits that since the said amendment has not been made retrospective in nature, it cannot affect the liabilities already accrued if the impugned provision before its amendment could have read as imposing such liability. In this connection, it is suffice to state that the presumption against the retrospective operation is not applicable to declaratory statutes, provided there is an intrinsic evidence to hold the statute to be declaratory in nature, and for determining its nature regard must be had to the substance rather than to the form. "A declaratory Act" as observed in Craies on Statute Law "is an Act to remove doubts existing as to the common law, or the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the proviso since any other construction may lead to discrimination without any rational basis thus offending article 14 of the Constitution of India. On the other hand, on behalf of the Revenue it has been contended that in respect of petrol and diesel the intention of the Legislature was to levy the cess only on the sales effected within the Bangalore area, whereas it has not been so specified in respect of sale of other goods; and, therefore, in respect of such other goods the global sales of the dealer has to bear the burden of cess. 25.. In my opinion, there being over-weighing evidence about the intention of the Legislature to levy cess only in respect of sales and purchases effected by a dealer within the Bangalore area. The main part of section 6D(1) has to be read in the light of the provisions made under the proviso. 26.. If the contentions raised on behalf of the respondents as are precisely contained in the impugned circular of the Commissioner of Commercial Taxes are accepted, then the expression "sale or purchase effected by any dealer who is carrying on business within the limits of Bangalore City Planning Area" as used in section 6D of the Act should be co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplying the aforesaid cannons of interpretation in the present settings, it can well be said that the Legislature could have conveniently made its intention beyond the pale of any controversy by using the comprehensive expression "total turnover" in the impugned provision if it at all intended to levy cess on the aggregate transactions of the dealer concerned effected through all its branches in the State. But it has not done so. Therefore, it has to be inferred that the Legislature had no intention to levy cess on sales and purchases effected by a dealer through its branches lying outside the Bangalore area. 31.. For the aforesaid reasons, it is declared that the dealers carrying on business within the limits of Bangalore City Planning Area are liable to pay cess on sales or purchases effected by them in the said area only. The circular of the Commissioner of Commercial Taxes dated April 21, 1995 in No. 3/949-95 is accordingly quashed as having misread the impugned provisions. Accordingly, it is held that the petitioners will be entitled to all such reliefs which logically flows from the said declaration. 32.. Consequently, the writ petitions are allowed but without awarding a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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