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TMI Blog1973 (11) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... notice of demand dated 22nd May, 1973, issued by the Income-tax Officer, Lucknow, requiring the petitioner to pay a sum of Rs. 30,12,669 as advance tax for the assessment year 1974-75 be quashed and the respondents be directed not to recover any advance tax from the petitioner. The petitioner alleges that in its assessments for the last several years it had been claiming exemption from income-tax in respect of its income from letting its warehouses, but this claim has been consistently rejected by the Income-tax Officer as well as the Appellate Assistant Commissioner and the matter is now pending in appeal before the Tribunal. It is hence futile to raise the same objection before the Income-tax Officer who has issued the impugned notice of demand. The petitioner prays that the question of law whether the petitioner is entitled to exemption under section 10(29) of the Income-tax Act, 1961, be decided this court. Section 10(29) of the Act of 1961 provides : "10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included ....... (29) in the case of an authority constituted under any law for the tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efines the term "authority" to mean, inter alia, a body having jurisdiction in certain matters of public nature. This meaning does not import that the corporation should have governmental powers. If the submission raised on behalf of the revenue that possession of quasi-governmental power is an essntialal ingredient of an "authority" be accepted, so as to exclude purely business enterprises, even though they may have been constituted by a statute, section 10(29) would become redundant and mere surplusage. section 10(29)applies to an authority constituted for the marketing of commodities. Evidently, such, authority will specifically be a business enterprise. Ex hypothesi, the term "authority" as occurring in section 10(29) cannot possibly be construed as referring to an authority having quasi-governmental powers. It is trite that a term used by the legislature must be understood in the sense which the context indicates. Here we find that section 10(29) specifically indicates the kind of authority, it refers to the authority as one which is constituted for the marketing of commodities. If an entity is created by statute primarily or specifically for the purpose of marketing of comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commodities for himself cannot be said to engage in marketing of commodities even though he may be carrying on other activities or functions which are ancillary or incidental to buying or selling, like transportation, storage or distribution of commodities. This is the narrow or the strict sense of the term " marketing ". Section 10(29) consists of one single sentence. In it the term "marketing of commodities" has been used at two places. In the beginning it has been used to indicate the purpose for which the authority should have been constituted. In the last clause this term has been used to indicate the purposes for which godowns or warehouses are to be let in order to gain exemption. The last clause is : "any income derived from the letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities". The expression "for facilitating the marketing of commodities" cannot possibly refer to the functions of buying and selling on one's own behalf because when a person buys or sell she, according to the definition propounded by the revenue, indulges in marketing. He cannot be said to facilitate marketing. The use of the word "facilitating" seems t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion constituted for, inter alia, warehousing of commodities is excluded, the purpose of exempting income from letting of warehouses, inter alia, for facilitating the marketing of commodities would be defeated. This is another reason for not construing the term "marketing" in its narrow sense. A slight shift in view-point also leads in the same direction. In Bengal Immunity Co. Ltd. v. State of Bihar and in several subsequent decisions of the Supreme Court, the 'Supreme Court has reiterated that for the sure and true interpretation of all statutes in general (be they penal or beneficial, restrictive or enlarging of the common law) four things are to be discerned and considered : 1st. What was the common law before the making of the Act ; 2nd. What was the mischief and defect for which the common law did not provide ; 3rd. What remedy Parliament has resolved and appointed to cure the disease of the Commonwealth ; and 4th. The true reason and the remedy ; and then the office of judges is always to make such construction as shall suppress the mischief and advance the remedy, and to suppress subtle inventions and evasions for continuance of the mischief and to add force and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gricultural produce, etc. They could also act as an agent of the Central Warehousing Corporation or of the Government for the purpose of purchase, sale and distribution of agricultural produce, etc. It was provided that the Central Warehouusing Corporation will confine its activities to terminal markets, marketing centres of all-India importance and specialised storage techniques, like cold storage. The State Warehousing Corporations function at marketing centres of regional and State importance requiring storage facilities from 2,000 to 4,000 tonnes. The rest of the areas needing storage facilities below 2,000 tonnes were left to the co-operative societies. Coinciding with the enactment of the 1956 Act, Parliament amended the Indian Income-tax Act, 1922, by the Finance Act of 1955. It introduced subsections (3), (4) and (5) to section 14 of that Act. By these provisions exemptions were granted from income-tax. These provisions provided (3) The tax shall not be payable by a co-operative society .... (iii) in respect of any income derived from the letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities ..... (5) The tax shall not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remedy is to be avoided. The submission made on behalf of the petitioner that the term "marketing" has a wider significance is substantiated by various dictionaries and authorities. In Corpus Juris Secutdum, volume 55 page 785, the term "marketing" has been defined as follows : " 'Marketing' signifies a bringing or, sending to market, and includes buying as well as selling." This would show that buying and selling is an activity which is included in the term "marketing". Obviously, it cannot be its whole content. In Principle and Practice of Marketing in India by Dr. C. B. Mamoria and B. L. Joshi, it has been stated : " Marketing includes all activities involved in the creation of place, time and possession utilities. Place utility is created when goods and services are available at the places they are needed, time utility when they are needed, and possession utility when they are transferred to those who need them. The process of marketing makes goods and services much more valuable when they are wanted and transferred to the people and place who want them. These authors have made the following classification of the marketing functions : (1) Activities involving tran ..... X X X X Extracts X X X X X X X X Extracts X X X X
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