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TMI Blog2003 (1) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... 1963 (for short, the Act ) had originally understood the above clause as one providing for non-refund of the tax already paid only in the case of tax collected and paid, and accordingly, in the case of the said appellants, whose liability to pay tax on the turnover of purchase of arecanut was at the last purchase point, and whose liability to pay tax does not depend upon collection of tax on that point, the tax paid by them were ordered to be refunded. But instead of making refund, the same was ordered to be adjusted towards the pending demands or future demands. Later, the assessing authority, however, has taken the view that the refund was ordered by mistake, and issued notice under section 43 of the Act for correcting the said mistake. It is at that point of time the association of the appellants took up the matter before the Commissioner of Commercial Taxes, by filing an application, annexure A II to M.F.A. No. 142 of 2002, seeking clarification regarding the scope of the clause, which we have already extracted above. By this time, one of the appellants, viz., appellant in W.A. No. 169 of 2003 filed O.P. No. 17247 of 2001 challenging the notice issued under section 43 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e last point of purchase by a dealer liable to tax under section 5(1) of the Act. Whereas in so far as arecanut, which is imported from outside the State is concerned, it is liable to tax at the point of first sale in the State by a dealer, who is liable to tax under section 5(1) of the Act. According to the appellants, all of them are dealing only with local purchase of arecanut from growers, and therefore, the turnover of arecanut purchased by them is taxable only at the point of last purchase inside the State. It acquires the quality of last purchase as soon as the goods are despatched to outside the State principals, by virtue of section 8 of the Act. As such, as soon as the appellants despatch the goods purchased from the growers inside the State to outside the State principal, the liability to pay tax fastens on them. It is the case of the appellants that they have remitted the tax due on the purchase turnover of arecanut since the said turnover acquired the quality of last purchase before the issuance of the notification S.R.O. No. 127 of 2000 with retrospective effect from January 1, 2000. Here, it must be noted that the rate of tax of arecanut up to December 31, 1999 wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pe of the last paragraph of the notification, S.R.O. No. 127 of 2000, which we have already extracted. This clause gives retrospective effect to the notification dated February 7, 2000, with effect from January 1, 2000. However, as already noted, this is expressly made subject to (i) tax, if any, already collected in the higher rate shall be paid over to the Government and (ii) tax, if any, already paid shall not be refunded. It is the contention of the appellant that these two clauses have to be read conjunctively and not disjunctively. It is stated that the collection of tax is a necessary ingredient for the application of the two clauses mentioned above. In other words, what the notification says is that if the dealer has collected tax at the higher rate, and kept in his possession, it must be paid over to the Government, and if the tax collected has already been paid over to the Government, the same will not be refunded. In short, the contention of the appellants is that the intention of the Government in providing such a condition is that the dealers should not be allowed to enrich themselves by the benefit granted under the notification. The appellants also contend that in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... importing any other meaning to what has been provided in the notification. Counsel also relied on the decision of the Supreme Court in State of Kerala v. Vattukalam Chemicals Industries [2001] 124 STC 233; [2002] 10 KTR 69. We have already narrated the background, both factual and legal, so far as the liability to tax on arecanut is concerned. As already noted, it is not an incident for the liability to tax that the tax should be collected by a dealer. The scheme of the Act, as could be seen from the First Schedule, itself makes the position clear. In respect of goods which are taxable at the point of first sale in the State by a dealer liable to tax under section 5 by virtue of the provision of section 22 of the Act, such dealer can collect tax on his sale. Whether the dealer collects tax or not, he has to pay tax on his taxable turnover as provided in rule 21(7) of the Kerala General Sales Tax Rules, 1963 (for short, the Rules ). In the case of a dealer, whose transaction, as in the present case, is liable to tax only at the last point of purchase, there is no question of collection of tax by that dealer from anybody on that point. In spite of that he has to pay tax on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to that extent. According to us, such assessees can claim the benefit of the full amount of exemption available as per the eligibility certificate for the remaining period notified in the eligibility certificate if they have not collected any tax on the turnover of sale of goods produced by them during the said period . . . The Division Bench did not go into the scope of the rider to the notification considered above. So, nothing turns on the said decision. According to us, the notification is very clear that it clearly provides that if the dealer has already paid tax, it shall not be refunded. Admittedly the appellants have paid tax on their purchase turnover, at the time of issuance of the notification, and therefore, in view of this clause, they are not entitled to get refund of the excess tax paid. It is a well-recognised canon in the interpretation of statutes that the question of interpretation of statute, rule or notification arises only when the statutory provision is ambiguous. As already held by the Supreme Court in Vattukalam Chemicals Industries' case [2001] 124 STC 233; [2002] 10 KTR 69, when the language of the notification is crystal clear, no exte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it thereof must go to the tax-payer. It is settled law that in case of doubt, that interpretation of a taxing statute which is beneficial to the tax-payer must be adopted.' We have scanned through the clarification issued by the Commissioner of Commercial Taxes, Thiruvananthapuram, annexure A III. It is clearly stated in the said clarification that the intention of the notification is very clear that the retrospective operation given to the reduction of the rate of tax shall not result in any outflow of money from the Government exchequer. He had also stated that if the argument of counsel for the appellants that the last paragraph of the notification is applicable only in the case of dealers, who have collected tax and paid to the Government, is accepted, it will lead to discriminating dealers paying tax at the point of sales against dealers who are paying tax at the point of purchase, attracting article 14 of the Constitution of India. We have also perused the judgment of the learned single judge, which is impugned in the writ appeals. The learned single judge had observed that the appellants did not question the validity of the notification. Thereafter the learned sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und of tax already paid, it cannot be assumed unless it is specifically stated in the notification that such tax is the tax collected from the buyers and remitted by the petitioners. Therefore, the latter part of the notification only prohibits refund of tax, if already paid by the petitioners. There is no further condition that the prohibition is only if the tax remitted is collected by the petitioners from the buyers. Therefore, I feel the notification covers two situations namely, (a) Tax collected at higher rate by the dealers from buyers should be recovered, if not paid to Department. (b) Tax paid to Government whether after collection or not should not be refunded. In view of this meaning assigned to the notification, I feel the petitioners are not entitled to refund of tax already paid, and if wrongly refunded, the same can be recovered from the petitioners. We are in full agreement with the conclusion reached by the learned single judge, for according to us, there is no justification for reading the two clauses of the last paragraph of the notification in conjunction. A reading of those clauses itself will show that it contemplates two different situations. One ..... X X X X Extracts X X X X X X X X Extracts X X X X
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