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TMI Blog2019 (6) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... anding the clearance for home consumption upon payment of customs duty. Whether Entry 9 of Schedule XI deals with goods of foreign origin irrespective of the manner in which the said goods entered Tamil Nadu? - HELD THAT:- The words of the relevant provision of the tax statute should be construed literally so as to discern the correct meaning and scope thereof. In the instant case, as is evident from the language of Entry 9 of the XI Schedule, the expression used is imported items falling in Parts-D and E of the I Schedule. Therefore, the meaning of the word imported items should be examined. The word imported is not defined in the TNGST Act. However, it is evident from provisions such as Section 9 that the TNGST Act envisages import of goods from other parts of India into Tamil Nadu and also import of goods from outside India into India. In the case of aircraft, it is the admitted position that it would be taxable at 12% if it is treated as a non-imported item, whereas it would be taxable at 20%, if it is treated as an imported item. The meaning of words in a statute, in general, and, in particular, in a tax statute, should be gathered from the language used therein and the expres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, Kolkatta, sold it to M/s.RPG Enterprises, Kotkatta from whom the Petitioner ultimately purchased the aircraft. The Petitioner further states that the said aircraft was, thereafter, sold by the Petitioner to the Orient Flying School, Chennai, on 08.03.2004. In respect of the said transaction of sale, the Petitioner obtained registration as a Casual Dealer on the file of the Respondent under the provisions of the TNGST Act. Subsequently, the Petitioner filed the monthly return in respect of the sale of aircraft and remitted the applicable 12% sales tax thereon. It is further stated that the Respondent completed the original assessment by accepting the return filed by the Petitioner. 4.The Petitioner states that it, thereafter, received a prerevision notice from the Respondent seeking to revise the original assessment of the Petitioner by proposing to levy a higher rate of tax, i.e. at 20%, on the basis that it is an imported aircraft. The Respondent further proposed to levy tax on the turnover relating to sale of old and discarded materials and on the miscellaneous income. In response to the said notice, the Petitioner filed its detailed objections and contended that it is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that Section 3(2-C) was introduced by an amendment made in the year 2002 with effect from 01.07.2002 and the said Section 3(2-C) reads as under:- "Sec.3(2-C) Subject to the provisions of sub-section(1), in the case of goods mentioned in the Eleventh Schedule, the tax under this Act shall be payable by a dealer at the rate and at the point specified therein on the turnover or quantity in each year relating to such goods." 6.The learned Senior Counsel, thereafter, referred to the Impugned Order at Page 30 of the typed set of papers to point out that the Petitioner was treated as an unregistered dealer for the purposes of the revised assessment order and that the revised assessment order at page 35 shows that the claim is in respect of differential tax. He further submitted that the procedure for re-opening the assessment of a casual dealer as per Rule 14 of the TNGST Act was not followed in the instant case. 7.In response, Mr.Mohammed Shaffiq, the learned Special Government Pleader(Taxes), appearing for the Respondent submitted that the Sales Tax Department is only concerned with sales and purchases that take place within Tamil Nadu. Accordingly, he submitted that the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eviable at one point in a series of sales or purchases, such series shall__ (a)in the case of goods imported into the State either from outside the territory of India or from any other State in India, be deemed to commence at the stage of the sale or purchase effected immediately after the import of such goods." 10.Thereafter, the learned counsel referred to the Full Bench Judgment of the Allahabad High Court in COMMISSIONER, SALES TAX, U.P. Vs. ALLIED CHEMICALS, KANPUR in [1969] 23 STC 1659(All). In specific, the learned counsel referred to paragraphs 1,5,6 and 7 wherein it was held that in view of the prohibition under Article 286 of the Constitution, turnover arising out of sales outside the State of Uttar Pradesh should not be taken into consideration. By relying on the said judgment, the learned counsel for the Respondent pointed out that the Sales Tax Department is, therefore, not concerned with previous transactions relating to the aircraft that took place out side Tamil Nadu. He, thereafter, referred to the judgment of the Hon'ble Supreme Court in STATE OF KERALA AND OTHERS Vs. Fr.WILLIAM FERNANDEZ in 2017 SCC Online SC 1291, which is a judgment dealing with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Supreme Court in the Civil Appeal arising out of the above mentioned SONY INDIA LTD Case wherein the matter was remanded to the First Appellate Authority and the judgment of the Division Bench of this Court was set aside. He also appended the judgment of the Hon'ble Supreme Court in POLESTAR ELECTRONIC (Pvt.) LTD. Vs. ADDITIONAL COMMISSIONER, SALES TAX (1978) 1 SCC 636, to his notes on submissions, and relied upon paragraphs 6,7,8 and 11 of the said judgment wherein it was held that when the word used in the relevant provision is 're-sale', without specifying a geographical limitation, the words "in Delhi" cannot be read into it. Likewise, according to the learned counsel, the words "into Tamil Nadu" should not and cannot be read into Entry 9 of the XI Schedule after the word " imported". 11.By way of rejoinder submissions, the learned Senior Counsel appearing for the Petitioner pointed out that taxes were levied at 12% as per Entry-2, Part - D of the I Schedule and that this amount was remitted to the Sales Tax Department after the sale in Tamil Nadu. He further pointed out that 10% CST was paid when the aircraft was brought into Tamil Nadu by way of inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was imported into India in July 1992 and, thereafter, changed hands on a couple of occasions by way of domestic sales before being brought into the State of Tamil Nadu on payment of CST. 14.As regards the first question, namely, whether the sale is to be regarded as the first sale for purposes of the TNGST Act, the contentions of the learned counsel for the Respondent are well founded. In specific, the learned counsel for the Respondent referred to various Articles of the Constitution so as to establish that legislative powers have been clearly demarcated as between Parliament and state legislatures and that, consequently, no state can impose a tax on transactions that take place outside the state concerned. He further referred to Section 4 of the CST Act and Section 2(n) of the TNGST Act to contend that once a sale takes place within a State, it is deemed that it has taken place outside all other states in India. Accordingly, he submitted that the sales that took place within India but outside Tamil Nadu are liable to be disregarded for purposes of deciding as to whether it is the first sale. As stated earlier, this contention is liable to be accepted. The ancillary submission, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mil Nadu. In this connection, it is relevant to bear in mind that words cannot be read into a taxing statute and intent is not a valid basis to construe a tax statute. In other words, the words of the relevant provision of the tax statute should be construed literally so as to discern the correct meaning and scope thereof. In the instant case, as is evident from the language of Entry 9 of the XI Schedule, the expression used is imported items falling in Parts-D and E of the I Schedule. Therefore, the meaning of the word imported items should be examined. The word imported is not defined in the TNGST Act. However, it is evident from provisions such as Section 9 that the TNGST Act envisages import of goods from other parts of India into Tamil Nadu and also import of goods from outside India into India. In the case of aircraft, it is the admitted position that it would be taxable at 12% if it is treated as a non-imported item, whereas it would be taxable at 20%, if it is treated as an imported item. The learned counsel for the Respondent also fairly states that Entry 9 of Schedule XI only deals with goods that are imported from outside India. In the absence of a definition of the word ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be gathered from the language used therein and the expression "goods of foreign origin" or "aircraft of foreign origin" cannot be substituted for or read into the words "imported items". If the intention of the State Legislature was to tax goods of foreign origin at higher rates notwithstanding the fact that the goods entered Tamil Nadu by way of inter-state sale upon payment of CST, the expression that should have been used is goods of foreign origin. In this connection, the judgment of the Five Judge Bench of the Hon'ble Supreme Court in the COMMISSIONER OF CUSTOMS Vs. DILIP KUMAR, (2018) 9 SCC 1, on the interpretation of tax statutes, is relevant. At paragraph 55 of the said judgment, it was held as under: "There is abundant jurisprudential justification for this. In the governance of rule of law by a written Constitution, there is no implied power of taxation. The tax power must be specifically conferred and it should be strictly in accordance with the power so endowed by the Constitution itself. It is for this reason that the courts insist upon strict compliance before a State demands and extracts money from its citizens towards various taxes. Any ambiguity in a taxati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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