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TMI Blog2015 (10) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... Act are made applicable to the additional sales tax payable under the 1970 Act and once it is seen that even for the purposes of assessment, levy of penalty, appeals and revisions, the assessees as well as the Department may have to take recourse only to the 1959 Act, it follows as a corollary that the Tamil Nadu Additional Sales Tax Act, 1970 does not have independent legs to stand on its own. - in the absence of a definition of the expression 'taxable turnover' in the Tamil Nadu Additional Sales Tax Act, 1970, there is no other alternative except to rely upon the definition of the same expression available in Section 2(p) of the Tamil Nadu General Sales Tax Act, 1959. This is permissible both on account of Section 2(1)(b) of the 1970 Act and also on fundamental principles of statutory interpretation. A comparison between the two notifications would reveal something interesting. While the notification for exemption in respect of tax payable under the Tamil Nadu General Sales Tax Act, 1959 was issued in exercise of the powers conferred by Section 17(1) of the 1959 Act, the notification for exemption in respect of additional sales tax payable under the 1970 Act was also issued in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Additional Sales Tax Act or not. Once it was found that the taxable turnover so arrived at, exceeded the threshold limit, the Assessing Officer imposed additional sales tax by an order dated 26.6.2006. Further, a penalty under Section 12(3)(b) of the Tamil Nadu General Sales Tax Act was also imposed. 5. The petitioner preferred a first appeal before the Appellate Assistant Commissioner in A.P.No.144 of 2006. The First Appellate Authority held, by an order dated 20.11.2007, that for the purpose of computation of additional sales tax liability, the sales effected to Ford India cannot be included within the taxable turnover due to the specific exemption available under the Tamil Nadu Additional Sales Tax Act itself with respect to any sales made to Ford India. The Appellate Authority failed to take note of the availability of a similar exemption in respect of Hyundai Motors and held that if the sales turnover made to Hyundai Motors was included in the taxable turnover, the petitioner crossed the threshold limit for the applicability of the additional sales tax liability. On this basis, the First Appellate Authority confirmed the order of the Assessing Officer. 6. Thereafter, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal Sales Tax Act, 1970. According to the learned counsel for the petitioner, the Tamil Nadu Additional Sales Tax Act, 1970, though an independent statute, is part of the General Sales Tax Law of the State and that therefore, they have to be read together. In support of the above contention, the learned counsel for the petitioner relies upon the decision of the Supreme Court in Ashok Service Centre. 10. However, Dr.Anita Sumanth, learned Special Government Pleader contended that the decision of the Supreme Court in Ashok Service Centre arose out of the Orissa Additional Sales Tax Act, 1975, which contained a provision in Section 2(b), that made the words and expressions used therein, to have the same meaning as assigned to them in the Orissa Sales Tax Act, 1947. However, there is no such provision in the Tamil Nadu Additional Sales Tax Act, 1970, to make the words and expressions contained therein, to have the same meaning as assigned to them in the Tamil Nadu General Sales Tax Act, 1959. Therefore, it is her contention that the expression 'taxable turnover' contained in the Tamil Nadu Additional Sales Tax Act need not have the same meaning as assigned to the expression ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it required a pair of crutches from the 1959 Act to walk. 16. Therefore, it would be better to have a careful look at the 1970 Act in an historical perspective, since the Act underwent a complete metamorphosis from 1970 to 2002. 17. The State of Tamil Nadu enacted the Tamil Nadu Additional Sales Tax Act, 1970, providing for the levy of an additional tax on the sale or purchase of goods. The scheme of Section 2 of the Act, as it stood at the time of enactment in 1970, was to levy an additional tax by the process of increasing the tax payable under the Tamil Nadu General Sales Tax Act, 1959, by 10%, the said increase representing the quantum of the additional tax. The validity of this 1970 Act was upheld by a Constitution Bench of the Supreme Court in Kodar Vs. State of Kerala [(1974) 34 STC 73]. 18. In the year 1971, a further levy in the form of surcharge at the rate of 5% of the tax payable under the 1959 Act, was imposed under the Tamil Nadu Sales Tax (Surcharge) Act, 1971. Thereafter, the Tamil Nadu Act 2 of 1976 was enacted, amending the 1970 Act, with the purported object of rationalisation. By this amendment, the original Section 2(1) was substituted with a new Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hose total turnover for a year exceeded a particular limit. Section 3 imposed the levy of additional tax upon an importer or whole sale dealer under the Tamil Nadu Sales of Motor Spirit Taxation Act, 1939. Section 4 empowered the Government to make rules. 24. By Amendment Act 2 of 1976, Section 2(1) of the 1970 Act was substituted with a new Sub-Section, containing Clauses (a) and (b) and a proviso under Clause (a). Section 2(1) of the Act, as it was originally enacted under the 1970 Act and what it became after the 1976 Amendment, can be best appreciated, if presented in a tabular form as follows : Section 2(1) under the 1970 Act Section 2(1) under the 1976 Amendment Act The tax payable under the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act 1 of 1959) (hereinafter in this section referred to as the said Act) shall, in the case of a dealer, whose total turnover for a year exceeds ten lakhs of rupees, be increased by an additional tax at the rate of five percent of the tax payable by that dealer for that year and the provisions of the said Act shall apply in relation to the said additional tax they apply in relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lated to the quantum of taxable turnover that became the threshold limit and the rate of tax. The other related to the inclusion within the purview of Section 2(1), even a principal, selling or buying goods through agents. 26. In other words, after the Amendment Act 37 of 1999, the scope of Section 2(1) was enlarged to include even a principal, selling or buying goods through agents, within the ambit of the charging section. At this juncture, two explanations namely Explanation I and Explanation II were also inserted under Section 2(1)(aa). Subsequently, three more explanations namely Explanations III, IV and V were inserted under Amendment Act 23 of 2002. 27. After the Amendment Acts 37 of 1999 and 23 of 2002, the charging section namely Section 2(1)(aa), together with five explanations thereto, became as under : Section 2(1)(aa) : The tax payable under the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act 1 of 1959) (hereinafter in this section referred to as the said Act), shall, in the case of a dealer including the principal selling or buying goods through agents whose taxable turnover for a year exceeds ten crores of rupees, be increased by an additional tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 2002, the Legislature did not introduce a section exclusively providing for definitions of words and expressions. It is true that the Tamil Nadu Additional Sales Tax Act, 1970 did not contain a provision that expressly stipulated that the words and expressions contained therein would have the same meaning as assigned to them in the Tamil Nadu General Sales Tax Act, 1959. It must be remembered that the charging Section 2 as it was originally enacted in 1970, spoke only about total turnover. It was only in 1976 that the expression 'total turnover' was changed to 'taxable turnover'. But, neither of these expressions have been defined in the 1970 Act. 29. Until the amendment under Act 37 of 1999, the Tamil Nadu Additional Sales Tax Act, 1970 did not give a clue as to what would constitute a taxable turnover. By the Amendment Act 37 of 1999, Explanations I and II were inserted. By the Amendment Act 23 of 2002, three more Explanations were inserted. 30. The stipulations contained in these five explanations can be summarised as follows : (i) Explanation I dealt with the taxable turnover in respect of a principal selling or buying goods through agents. (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levy of penalty, appeals and revisions, the assessees as well as the Department may have to take recourse only to the 1959 Act, it follows as a corollary that the Tamil Nadu Additional Sales Tax Act, 1970 does not have independent legs to stand on its own. 34. Therefore, we are of the considered view that the Tamil Nadu Additional Sales Tax Act, 1970, is, in a way, a parasitical piece of legislation, that would have to depend upon the provisions of the Tamil Nadu General Sales Tax Act, 1959, (i) for the purposes of definitions of words and expressions (ii) for the purposes of assessment and levy (iii) for the purposes of collection and (iv) for the purposes of statutory remedies such as appeals, revisions, etc. 35. Therefore, in the absence of a definition of the expression 'taxable turnover' in the Tamil Nadu Additional Sales Tax Act, 1970, there is no other alternative except to rely upon the definition of the same expression available in Section 2(p) of the Tamil Nadu General Sales Tax Act, 1959. This is permissible both on account of Section 2(1)(b) of the 1970 Act and also on fundamental principles of statutory interpretation. 36. The expression 'taxable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 1959 Act. The Government was able to invoke Section 17(1) of the 1959 Act, only by virtue of Section 2(1)(b) of the 1970 Act. 39. Therefore, when the Legislature has enacted the 1970 Act in such a manner that it had to depend for its working, only upon the 1959 Act, the expression 'taxable turnover' appearing in the 1970 Act would also have to be understood only in the same sense in which it is used in the 1959 Act, both in view of the fact that the 1970 Act does not define any expression and also in view of the fact that the provisions of the 1959 Act (including the definition part) are made applicable to the 1970 Act by virtue of Section 2(1)(b) of the 1970 Act. This is perhaps the reason why the First Appellate Authority excluded the sales made by the petitioner to Ford, which also enjoyed similar exemption notifications under the 1959 Act as well as the 1970 Act. Though we are making this observation incidentally, we have not gone on the basis of the understanding or perhaps the misunderstanding of the law by the First Appellate Authority, but have independently gone into the question of law. 40. Therefore, on the first question of law, we are of the considered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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