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TMI Blog2006 (1) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... issued by the Director of Tourism in No. DTR/HTLS/11/94/ 05/210, dated April 9, 1997, since the sale of drinks not only included sale of beverages like coffee, tea, but also sale of IML and beer. The assessing authority while concluding the assessments for the relevant assessment years had disallowed the claim of exemption on the sales turnover of IML and beer and brought the same to tax under section 5(1A) of the Act. In the appeal filed against the said order by the assessee, the first appellate authority had allowed the appeal and had directed the assessing authority to grant the claim of exemption on the sales turnover of IML and beer for the relevant assessment years. This order was taken exception to by the revisional authority, on the ground that the order passed by the first appellate authority is erroneous and prejudicial to the interest of the Revenue. After following the formalities required, the revisional authority has cancelled the order passed by the first appellate authority and has restored the orders passed by the assessing authority for the assessment years 1998-99 and 1999-2000 by invoking his suo motu revisional powers under section 22-A(1) of the Act by h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor in the new tourism units and after receiving various representations from the new tourism units on various provisions of the tourism policy, has revised its earlier policy by issuing guidelines for implementation of new tourism policy with effect from June 1, 1997 to remain in force till May 31, 2002. The redefined new tourism policy provides for reclassification of tourist places in the State of Karnataka under categories A, B, C, D and E , investment subsidy, exemption from sales tax, luxury tax, etc., in the annexures appended to the revised policy. Under this policy, the new tourism units will be exempted from payment of 100 per cent sales tax wherever applicable only on eatables served in the hotel and restaurant attached to the hotel or project. Here again, categorisation of new tourism units is made for the period of exemption depending upon their location in the State. If a unit falls under B category location, the period of exemption will only be for a period of three (3) years from the date of commencement of tourism services and if the unit falls under the categories of C to E , for a period of seven (7) years from the date of commencement of tourism services. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hundred per cent tax exemption without any monetary limit. Seven years from the date of commencement of tourism services or from the date of this notification whichever is later. of the assessments relating to each succeeding accounting year of theperiod of exemption. Now we advert to the entries relied upon by the revising authority to form an opinion that the drinks envisaged in the notification is only nonalcoholic beverages and not alcoholic beverages. There are two entries in the Second Schedule to the Act, which provides for levy of tax on sales of IML and beer and food and drinks. Entry 6 of Part L of the Second Schedule to the Act provides for liquor imported from outside the country and also liquors other than those imported and, with effect from April 1, 1996 apart from what is mentioned above, the Legislature has included within the definition of liquor , fenny, wine and liqueur. Entry 8 of Part F of the Second Schedule to the Act provides for food and non-alcoholic drinks . This is an inclusive definition providing for various types of foods and non-alcoholic drinks, which are exigible for payment of sales tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , has stated that, in considering a taxing Act, the court is not justified in straining the language in order to hold a subject liable to tax . The Supreme Court in the case of Union of India v. Wood Papers Ltd. [1991] 83 STC 251, has observed(1), that the choice between a strict and liberal construction arises only in case of doubt in regard to the intention of the Legislature manifest on the statutory language. Indeed, the need to resort to any interpretative process arises only where the meaning is not manifest on the plain words of the statute. If the words are plain and clear and directly convey the meaning, there is no need for any interpretation . A division Bench of this court in the case of Mangalore Chemicals Fertilizers Ltd. v. Deputy Commissioner of Commercial Taxes, Mangalore [1991] 83 STC 228, has observed(2), that truly speaking, liberal and strict construction of an exemption are to be invoked at different stages of interpreting it. When the question is whether a subject falls in the notification or in the exemption clause then, it being in nature of exception, is to be construed strictly and against the subject but once ambiguity or doubt about applicabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature or a rulemaking authority speaks, we must gather its meaning and what was intended primarily and in the first instance from the words used. There are several refinements to this aspect and one of those is that words used in a taxing statute must be understood in their natural sense and not, according to any technical sense, a principle too wellestablished to need quoting of authority. We do not see why the same principle must not be applied to an exemption notification, for, a taxing statute itself has to be construed according to its words and before the Revenue can tax a person, the Revenue has to establish that the tax falls within the four corners of the statute; in other words, within the import of the statute as stated by the words used in the statute. We do not intend to overburden this judgment with many more case law on the point. Therefore, we revert back to the issues raised in this appeal. The State Government with the main objective of encouraging tourism industry/units has issued Government Order dated May 30, 1992. Apart from other incentives and concessions, the Government policy also provides for exemption from payment of sales tax to new tourism units ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, the earlier Government order while sanctioning the exemption from payment of sales tax, only said that new tourism units shall be exempted from payment of sales tax wherever it is applicable and it did not restrict the exemption only on sale of eatables as has been done in the revised policy which has come into effect from June 1, 1997. Therefore, the subsequent or the revised tourism policy would not throw any light in understanding or interpreting the earlier Government order dated May 30, 1992. In this appeal, the controversy is only with regard to the expression drinks . The question is whether the expression drinks would include only non-alcoholic beverages or does it include alcoholic beverages? The view of the assessing authority and the revising authority is, the word drink that is exempted under the implementation notification should be understood only as non-alcoholic beverages, since the Second Schedule to the Act provides separate entries to liquor and food and non-alcoholic beverages and therefore, the words food and drinks appearing in the implementation notification should be understood as items categorised under entry 8 of Part F of the Second Sched ..... X X X X Extracts X X X X X X X X Extracts X X X X
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