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TMI Blog1998 (4) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... ctively for the year 1990-91. The assessment was determined fixing the total turnover at Rs. 35,79,588.13 and the taxable turnover at Rs. 14,25,173.86 and amongst other things held that beer purchased within the State from the breweries during the accounting year 1989-90 and held in closing stock on March 31, 1990 which is the pending stock for the year 1990-91 at Rs. 1,93,330 have to suffer KST under section 5(3) and not section 5(1-A) and so it is exigible to tax under section 5(1-A) at 45 per cent without any set-off and accordingly assessed the sales turnover of beer of Rs. 1,19,613.11 to tax at 45 per cent which was claimed as exemption by the appellant. Against that order, the appellant filed an appeal. The appellate authority confirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 5(1-A) was incorporated in the KST Act by the Karnataka Sales Tax (Amendment) Act 15 of 1988 with effect from April 1, 1988 a provision was made not to subject the subsequent sales of alcoholic liquors which have suffered KST under section 5(3)(a) up to July 31, 1988. In the amendment of section 5(1-A) with effect from April 1, 1990 beer has been made exigible to multi-point (value added tax) at 45 per cent. Therefore, the question is whether section 5(1-A) exempt the dealers from payment of tax on the sale of liquor who paid the tax at the time of purchase earlier to April 1, 1990. 7.. To appreciate the above contention it is relevant to extract section 5(1-A). The said provision reads as under: Notwithstanding anything conta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which tax has been levied under this sub-section at the immediately preceding point of sale. The Legislature was very much conscious and provided exemption only on the turnover on which tax is paid under this sub-section, i.e., where tax is paid after section 5(1-A) came into force, i.e., after April 1, 1990 and it cannot be inferred that the exemption for payment of tax on the turnover on which tax is paid earlier to April 1, 1990 is also provided by reading this proviso. By reading proviso (i) and (ii) together, it is evident that under proviso (i) exemption is granted to those dealers who paid the tax at the earlier point or preceding point of sale under this sub-section. Whereas under the second proviso, exemption is provided for a per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to section 5(1-A) of the Act, every sale, within the State, of the article in question would be exigible to tax from the date of the amending Act came into force, and negatived the contention of the appellant. Therefore, the same is not applicable to the facts of this case. 10.. The learned counsel for the appellant contended that the proviso of section 5(1-A) has to be harmoniously construed to give benefit to the appellant of the exemption of tax on the sales turnover and relied upon the judgment of the Supreme Court reported in C.W.S. (India) Ltd. v. Commissioner of Incometax [1994] 208 ITR 649. It is a case dealing with the provisions of the Incometax Act. In that case the Supreme Court while dealing the above provision, held as f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts of that case are quite different. In that case, the exemption notification issued by the Commissioner was challenged. Therefore, it is not helpful to the appellant. 12.. The learned counsel for the appellant also relied upon the judgment of the Supreme Court in the case of M.V. Javali v. Mahajan Borewell and Co. [1998] 230 ITR 1; AIR 1997 SC 3964 for the purpose of principle of interpretation of statutes. In that case the Supreme Court while considering the scope of ambit of construction of section 276-B of the Income-tax Act has held as follows: 8. Keeping in view the recommendations of the Law Commission and the above principles of Interpretation of Statutes we are of the opinion that the only harmonious construction that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Eisher (1918) 245 US 418 425]. Learned Hand, J. was equally emphatic when he said: Statutes should be construed, not as theorems of Euclid, but with some imagination of the purposes which lie behind them . (Lenigh Valley Coal Co. v. Yensavage 218 FR 547 at 553). It further observed as under (para 17): ...............If there is obvious anomaly in the application of law the court could shape the law to remove the anomaly. If the strict grammatical interpretation gives rise to absurdity or inconsistency, the court could discard such interpretation and adopt an interpretation which will give effect to the purpose of the Legislature. That could be done, if necessary even by modification of the language use. (See Mahadeolal Kanodia v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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