9911796707
TMI Blog2006 (7) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... 1991 Rules ). The petitioner further claims that in calculating his taxable turnover, in terms of rule 29(xii) of the Punjab General Sales Tax Rules, 1949 (for short, the 1949 Rules ), deduction thereof is not being allowed by the authorities below on the ground that though the goods purchased by the petitioner are leviable to tax at the first stage of sale and since no tax on the purchase of goods from exempted units has been paid, which is totally contrary to the provisions of law. The petitioner has further stated that assessment for the year 2001-02 was initially framed by the Assessing Authority vide order dated March 18, 2004 and rebate of the goods leviable to tax at the first stage of sale purchased by the petitioner from the exempted unit was granted under rule 29(xii) of the 1949 Rules. Thereafter, the petitioner was initially issued notice for reassessment; then a suo motu notice under section 21(1) of the Act and finally for reassessment on statutory form ST-XIX on October 14, 2005 on the ground that turnover on that account has escaped levy of tax. Vide reassessment order dated November 7, 2005, the deduction already allowed under rule 29(xii) of the 1949 Rules wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. The petitioner has impugned notice dated May 16, 2005 whereby while issuing entitlement certificate under the Punjab Value Added Tax Act, 2005, the respondents, without even framing the assessment, had in fact disallowed the claim of deduction on account of purchases made from the exempted units. A further prayer has been made seeking refund of the amount deposited by the petitioner for the quarter ending June 30, 2005 and for the months of July and August, 2005 paid under the Punjab Value Added Tax Act, 2005. C. W. P. No. 301 of 2006: The petitioner is a limited company engaged in the business of acrylic yarn. It is duly registered under the provisions of the Act. The petitioner, in the process, had also purchased raw material from exempted units. The petitioner claims that in calculating his taxable turnover, in terms of rule 29(xii) of the Rules, deduction of purchase value thereof is not being allowed by the authorities. The petitioner has further stated that assessment for the year 2000-01 was initially framed by the Assessing Authority, vide order dated March 4, 2005, and rebate of the goods leviable to tax at the first stage of sale purchased by the petitioner from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The petitioner herein is a private limited company engaged in the manufacture of synthetic yarn from acrylic yarn, which is purchased from the exempted unit. The assessment of the petitioner for the assessment years 2000-01, 2001-02 and 2002-03 was finalised by the department vide orders dated August 22, 2002, March 28, 2005 and March 28, 2005 respectively. In the assessment, the turnover on account of purchase of raw material from the exempted unit was allowed as deduction under rule 29(xii) of the 1949 Rules. Thereafter, the petitioner was issued a show cause notice for all the three years, referred to above, under section 21(1) of the Act on the ground that deduction under rule 29(xii) of the 1949 Rules has been wrongly allowed. In the petition, the petitioner has impugned the show cause notice for the assessment year 2001-02. C. W. P. No. 3771 of 2006: The petitioner herein is a private limited company engaged in the manufacture of synthetic yarn from acrylic fibre, which is purchased from the exempted unit. The assessment of the petitioner for the assessment years 2001-02 and 2002-03 was finalised by the department. In the assessment, the turnover on account of purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of sale thereof, and on the issue of such notification the tax on such goods shall be levied accordingly: Provided that no sale of such goods at a subsequent stage shall be exempted from tax under this Act unless the dealer effecting the sale at such subsequent stage furnishes to the Assessing Authority in the prescribed form and manner a certificate duly filled in and signed by the registered dealer, from whom the goods were purchased: Provided further that in the case of a dealer whose gross turnover does not exceed ten lac rupees in a year or a sum as may be notified by the State Government from time to time in this behalf, and whose amount of tax is assessed under sub-section (1) of section 11 of this Act, the certificate referred to in the preceding proviso shall not be required. Explanation. For the purpose of this sub-section, the first stage of sale in respect of any goods in relation to any class of dealers shall be such as may be specified by the State Government in the notification. 5(2). In this Act, the expression, 'taxable turnover' means that part of a dealer's gross turnover during any period which remains after deducting therefrom, (a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld by a dealer who has been allowed the benefit of deferment of or exemption from the liability to pay tax under the Punjab General Sales Tax (Deferment and Exemption) Rules, 1991 and which stage in his case shall be the stage of sale when such dealer sells the goods from the premises of his manufacturing industrial unit for the first time in the State of Punjab. Rule 9 of the 1991 Rules: Rule 9(1). The unit holding deferment or exemption certificate shall continue to file the return in the manner specified under the Act and the rules made thereunder. (2) Notwithstanding anything contained in these rules, the unit holding deferment or exemption certificate issued under these rules, shall attach an attested copy of deferment or exemption certificate, as the case may be, in lieu of proof of payment of tax along with the return till the deferred or exempted amount of tax is fully availed of or the period of deferment or exemption expires under these rules, whichever is earlier. (3) The assessment of an eligible unit in respect of which deferment or exemption certificate has been granted shall be made in accordance with the provisions of the Act and the Rules made there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... industrial development of the State. Section 30A of the Act enables the State Government to exempt any class of industries from payment of tax, subject to such conditions as may be prescribed. In exercise of powers conferred under sections 10A and 30A of the Act, the State Government framed the 1991 Rules, providing for various benefits of exemption from or deferment of payment of tax and the conditions therefor. Rule 29 of the 1949 Rules prescribes as to how the taxable turnover of a dealer is to be calculated and turnover on what accounts are to be reduced therefrom. Clause (xi) of rule 29 provides for deduction from gross turnover, inter alia, on account of sale or purchase of goods, which have already been subjected to tax at first stage of sale under section 5(1A) of the Act, subject to the condition of production of copies of cash memos or bills, as prescribed under rule 55A of the Rules. Clause (xii) thereof provides for deduction of purchase value of the goods which have already been subjected to tax at the stage of first sale under section 5(1A) of the Act, in case those goods are used or consumed by the dealer in the manufacture by him in the State, of good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration of the point in issue in present case, provides that the unit holding deferment or exemption certificate shall continue to file the return in the manner specified under the Act. It further provides that the unit holder is to attach an attested copy of the deferment or exemption certificate along with the return in lieu of proof of payment of tax along with the return till the deferred or exempted amount of tax is fully availed of or the period of deferment or exemption expires under the 1991 Rules, whichever is earlier. It also provides that assessment of the eligible unit availing benefits under the 1991 Rules is to be framed in accordance with the provisions of the Act and the Rules. Common question which arises for consideration in all the writ petitions is as to whether a dealer is entitled to deduct from his gross turnover, purchase value of goods, purchased from an exempted dealer, under rule 29(xii) on the plea that the said goods had been subjected to tax under section 5(1A), even though, on account of exemption, tax has not been actually paid but deemed to have been paid. Submissions: Learned counsel for the petitioner-dealers submit that goods purchased by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Second is the provision in the form of execution, which authorises an authority to calculate the tax due under the Act, that means assessment of tax on a particular transaction. Third being in the category of provisions, which provide for payment or collection of the tax, so levied by the authority or calculated as payable by the assessee-dealer on self-assessment. In the present case, it is not disputed between the parties that the goods, being manufactured by the exempted units, from whom the present petitioners have purchased, belong to the category, which otherwise are taxable under the provisions of the Act and do not fall in the category of goods specified in Schedule B , i.e., tax-free goods and further that in terms of notification dated July 25, 1990, these goods are taxable at first stage of sale by the exempted unit. A plain reading of sub-rules (xi) or (xii) of rule 29 of the 1949 Rules shows that deductions from gross turnover for the purpose of arriving at taxable turnover is available on account of sale or purchase of goods which have already been subjected to tax , inter alia, under section 5(1A) of the Act. The words subjected to tax are synonymous with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibutable income' as defined in section 109(i). We are, hence, of the view that the appellant must succeed on its first contention that the entire amount of capital gains which accrued as a result of acquisition (and hence compulsory transfer) of the agricultural land could not have been subjected to tax under section 104 of the Act as it was wholly exempted from capital gains and not part of the 'gross income' or the distributable income for the purpose of section 104 of the Act. D. P. Sandu Bros. Chembur P. Ltd.'s case [2005] 273 ITR 1 (SC); [2005] 2 SCC 584 (paras 7 and 16): 7. That the tenancy right is a capital asset, the surrender of the tenancy right is a 'transfer' and the consideration received therefor is a capital receipt within the meaning of section 45 has not been questioned before us and must in any event be taken to be concluded by the decision of this court in A. Gasper v. Commissioner of Income-tax [1991] 192 ITR 382 (SC); [1993] Supp 1 SCC 52 . 16.. There is no dispute that a tenancy right is a capital asset the surrender of which would attract section 45 so that the value received would be a capital receipt and assessable if at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;s meaning is clear and explicit, words cannot be interpolated. In the first place, in such a case they are not needed. If they should be interpolated, the statute would more than likely fail to express the legislative intent, as the thought intended to be conveyed might be altered by the addition of new words. They should not be interpolated even though the remedy of the statute would thereby be advanced, or a more desirable or just result would occur. Even where the meaning of the statute is clear and sensible, either with or without the omitted word, interpolation is improper, since the primary source of the legislative intent is in the language of the statute. Lord Parker applied the rule in R. v. Oakes [1959] 2 QB 350; [1959] 2 All ER 92 to construe and , as or in section 7 of the Official Secrets Act, 1920 and stated: it seems to this court that where the literal reading of a statute, and a penal statute, produces an intelligible result, clearly there is no ground for reading in words or changing words according to what may be the supposed intention of Parliament. Here, however, we venture to think that the result is unintelligible. In J. P.Bansal v. State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must be taxed, however great the hardship may appear to the judicial mind to be. On the other hand, if the Crown seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of law the case might otherwise appear to be. In other words, if there is admissible in any statute, what is called an equitable construction, certainly, such a construction is not admissible in a taxing statute where you can simply adhere to the words of the statute. Viscount Simon quoted with approval a passage from Rowlatt, J. expressing the principle in the following words: In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at th language used'. (at page 635) 111.. The judicial opinion of binding authority flowing from several pronouncements of this court has settled these principles: (i) In interpreting a taxing statute, equitable considerations are entirely out of place. Taxing statutes cannot be interpreted on any presumption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods which is taxable at first stage of sale is subjected to tax. However, the payment thereof is set-off against the quantum of benefit available to the unit against actual payment as per the scheme of the 1991 Rules. We have perused the judgment, referred to by the State counsel, in the case of Panam Packers (P) Ltd.'s case [2002] 128 STC 517 (MP); [2002] 35 VKN 9 (MP). It will be suffice to add here that firstly the provisions under consideration in the above-referred judgment were different as in that case, deduction was available on account of tax paid-goods, whereas in the present case, the only requirement is that the goods are subjected to tax. Therefore, this judgment does not, in any way, support the case of the Revenue. In view of our above discussion, we are of the view that the petitioners herein are entitled to deduction under rule 29(xi) or 29(xii) of the 1949 Rules on account of purchase of goods manufactured by a dealer, who has been allowed the benefit of deferment of or exemption from liability to pay tax under the 1991 Rules. The actual payment of tax by the dealer effecting first sale in the State of such goods will not be a condition for deduction o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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