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Commissioner of Sales Tax Vs. Chhogalal and Sons - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtMadhya Pradesh High Court
Decided On
Case Number M.C.C. No. 190 of 1981
Judge
Reported in[1984]55STC200(MP)
AppellantCommissioner of Sales Tax
RespondentChhogalal and Sons
Advocates: S.R. Joshi, Government Adv.
Cases ReferredState of Punjab v. Mohar Singh
Excerpt:
- indian penal code, 1890.section 306 :[dalveer bhandari & harjit singh bedi,jj] abetment of suicide deceased, a married woman, committed suicide - allegation of abetment of suicide against appellant husband and in-laws - ocular evidence was sketchy - dying declaration recorded by tahsildar completely exonerated all accused in-laws of any misconduct dispelling any suspicion as to their involvement - letter of threat allegedly written by appellant to father of victim was concocted piece of evidence held, though presumption against appellant can be raised, it cannot be said that onus shifts exclusively and heavily on him to prove his innocence. conviction of appellant is liable to be set aside. .....of this court :(1) whether in the facts and circumstances of the case, the sale of the stock of motor spirit which has suffered tax under the m. p. sales of motor spirit and lubricants taxation act, 1957 (act no. 4 of 1958), will be exempt from levy of tax under the m. p. general sales tax act, 1958, on and after 1st august, 1972 (i. e., the date from which the motor spirit act was repealed), taking support from the provisions of section 8(1) of the m. p. vitta adhiniyam, 1972, and section 10 of the m. p. general clauses act, 1957 ?(2) whether provisions of section 54 of the m. p. general sales tax act, 1958, will be applicable for claiming exemption on sales of the stock of motor spirit on and after 1st august, 1972 ?3. the facts giving rise to these references briefly stated are as.....
Judgment:

R.K. Vijayvargiya, J.

1. This order shall also dispose of M.C.C. No. 191 of 1981 (Commissioner of Sales Tax v. Raja Auto Service), M.C.C. No. 193 of 1981 (Commissioner of Sales Tax v. Active Transport Co.) and M.C.C. No. 196 of 1981 (Commissioner of Sales Tax v. Kashyap & Co.), because the facts giving rise to these references and questions referred to therein are common.

2. By these references under Section 44(1) of the M. P. General Sales Tax Act, 1958 (for short 'the Act'), the Board of Revenue, M. P., Gwalior, has referred the following questions of law for the opinion of this Court :

(1) Whether in the facts and circumstances of the case, the sale of the stock of motor spirit which has suffered tax under the M. P. Sales of Motor Spirit and Lubricants Taxation Act, 1957 (Act No. 4 of 1958), will be exempt from levy of tax under the M. P. General Sales Tax Act, 1958, on and after 1st August, 1972 (i. e., the date from which the Motor Spirit Act was repealed), taking support from the provisions of Section 8(1) of the M. P. Vitta Adhiniyam, 1972, and Section 10 of the M. P. General Clauses Act, 1957 ?

(2) Whether provisions of Section 54 of the M. P. General Sales Tax Act, 1958, will be applicable for claiming exemption on sales of the stock of motor spirit on and after 1st August, 1972 ?

3. The facts giving rise to these references briefly stated are as follows :

The assessees are retail dealers in motor spirit and lubricants. They had purchased certain quantities of motor spirit from wholesale dealers before 1st August, 1972. Tax on motor spirit and lubricants was charged under Section 3 of the M. P. Sales of Motor Spirit and Lubricants Taxation Act, 1957 (for short 'the Motor Spirit Act'). Tax was levied at the point of first sale of motor spirit in the State. It was payable by a dealer effecting such sale. Under item No. 34 of Schedule I to the Act sales of motor spirit as defined in the Motor Spirit Act were exempt from tax. By the M. P. Vitta Adhiniyam, 1972 (Act No. 20 of 1972) (for short 'the Finance Act'), the Motor Spirit Act was repealed. Section 5 of the Finance Act inserted a new entry 38-A in Part II of Schedule II to the Act. This entry prescribed the rates of tax on sales of petrol, light diesel oil, high speed diesel oil, aviation spirit and aviation turbine fuel and other motor spirits. Entry No. 34 relating to motor spirit in Schedule I was omitted. The Finance Act came into force on 1st August, 1972. Thus, with effect from 1st August, 1972, motor spirit ceased to be taxable under the Motor Spirit Act and was made taxable under the Act. The assessees, as stated above, had purchased certain quantities of motor spirit from wholesellers before 1st August, 1972. Tax on the sale of such motor spirit was payable under the Motor Spirit Act by the wholeseller and the assessees had in stock with them certain quantities of motor spirit on 1st August, 1972, on which tax had already been paid under the provisions of the Motor Spirit Act. This balance stock of motor spirit was sold by the assessees after 1st August, 1972. The assessees claimed deductions from their turnover of the sales made by them from out of their stock of the said motor spirit after 1st August, 1972, on the ground that the tax had already been paid on the same under the provisions of the Motor Spirit Act and therefore the same were not liable to be taxed under the provisions of the Act.

4. The assessing authority did not accept the claim for deductions. The appeals preferred by the assessees were also dismissed by the first appellate authority. In second appeals preferred by the assessees the Tribunal accepted their contention and held that as tax had already been paid on the stock of spirits held by the assessees on 1st August, 1972, under the provisions of the Motor Spirit Act, sales thereof were not liable to tax under the provisions of the Act. Aggrieved by the order of the Tribunal the department sought a reference to this Court and that is how at the instance of the department the aforesaid questions of law have been referred for the opinion of this Court.

5. We have heard the learned counsel for the parties.

6. Re : Question No. (1) : Now the sales of motor spirit were taxable under the Motor Spirit Act and were exempt from tax under the Act. By the Finance Act, the Motor Spirit Act was repealed and entry No. 34 in Schedule I appended to the Act under which motor spirit was exempt from tax under the Act, was omitted and entry No. 38-A was inserted in Schedule II to the Act making motor spirit taxable under the Act. There was no saving clause in the Finance Act by which the Motor Spirit Act was repealed. The provisions of the M. P. General Clauses Act are, therefore, attracted. Section 10(c) of the M. P. General Clauses Act which corresponds to Section 6(c) of the Indian General Clauses Acts, reads as follows:

10. Effect of repeal.-Where any Madhya Pradesh Act repeals any enactment then, unless a different intention appears, the repeal shall not-

(c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or....

7. Under the Motor Spirit Act tax was leviable at the first point, that is, the wholesale dealer selling motor spirit in the State was liable to pay tax. The wholesellers had thus incurred a liability to pay sales tax on the sales of motor spirit by them to the assessees under the Motor Spirit Act. That liability has not been affected by the repeal of the Motor Spirit Act by the Finance Act. There was a corresponding right in the assessees that the sales by them of motor spirit so purchased by them from the wholesellers were not liable to tax under the Act. This right is also not affected by the repeal of the Motor Spirit Act because of Section 10(c) of the M. P. General Clauses Act. The point came up for consideration before the Supreme Court in State of Kerala v. N. Sami Iyer [1966] 17 STC 338 (SC) In that case the turnover of the assessee was taxed at the purchase point under the provisions of the Madras General Sales Tax Act which was repealed by the Travancore-Cochin General Sales Tax Act. The question arose whether the turnover of the assessee which had already been taxed under the Madras Act was liable to be taxed under the Travancore-Cochin Act. It was contended before the Supreme Court that there was no right vested in the assessee not to be taxed except under the Madras Act and therefore, the turnover was liable to be taxed under the Travancore-Cochin Act. Their Lordships of the Supreme Court negatived the contention and held as follows :

The learned Advocate-General, who appeared on behalf of the appellant, has raised two points before us : first, that in this case there was no right, much less a vested right, not to be taxed except under the Madras General Sales Tax Act; the right if at all was to take advantage of the provisions of the repealed Act, namely, the proviso to Section 3(5) of the Madras Act. Secondly, he says that even if there was such a right, Act 12 of 1957 manifests a contrary and different intention within the meaning of Section 4(c) of the General Clauses Act, 1125, and the disputed turnover is liable to taxation under Act 12 of 1957. We may mention that Section 4(c) of the General Clauses Act, 1125, corresponds to Section 6(c) of the Indian General Clauses Act. It appears to us that by virtue of Section 4(c) the dealer continued to be liable to taxation under the Madras General Sales Tax Act in respect of the disputed turnover at the purchase point. For example, if for some reason he had not been assessed before Act 12 of 1957 came into force, he would have been assessed under the Madras Act at the purchase point because a liability within the meaning of Section 4(c) would have been incurred by him. To this liability would be attached a right; the right being that he would not be liable to be taxed in respect of any sale of goods which had been the subject-matter of a purchase and taxation under the Madras Act. In other words, he was liable to be assessed under the Madras Act in respect of the purchase of goods but he had also a right not to be taxed again in respect of any sale of the same goods effected by him. Therefore, we repel the first argument of the learned Advocate-General..

8. In the present case also if for some reasons the wholesellers had not been assessed before the Motor Spirit Act was repealed, they would have been assessed under the Motor Spirit Act because a liability within the meaning of Section 10(c) of the M. P. General Glauses Act would have been incurred by them. To this liability would be attached a right in the assessees; the right being that they would not be liable to be taxed in respect of any sale of motor spirit by them which had already been the subject-matter of tax under the Motor Spirit Act. This liability of the wholesellers and the corresponding right of the assessees was not affected by the repeal of the Motor Spirit Act by virtue of Section 10(c) of the M. P. General Clauses Act.

9. It was next contended that as sale of motor spirit has been made taxable by insertion of entry No. 38-A in Schedule II appended to the Act, and that as the sales in question have not been excluded from the definition of 'taxable turnover' under the Act, the provisions of the Act manifest a contrary and different intention within the meaning of Section 10(c) of the M. P. General Clauses Act and therefore, the sales in question are liable to be taxed under the Act. This contention has also no force. In the aforesaid decision of the Supreme Court, a similar contention raised on behalf of the department was negatived by their Lordships of the Supreme Court in the following words :

The next question that arises is whether Act 12 of 1957 manifests a different intention. As observed by this court in State of Punjab v. Mohar Singh [1955] 1 SCR 893,

'when the repeal is followed by fresh legislation on the same subject we would undoubtedly have to look to the provisions of the new Act, but only for the purpose of determining whether they indicate a different intention. The line of enquiry would be not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them.'

We cannot discern any intention in Act 12 of 1957 to destroy the rights and liabilities acquired or incurred under the Madras General Sales Tax Act. The Second Schedule reproduced above shows that the intention was to preserve old rights such as registration and licences issued under the old Act. In our opinion, if the legislature had the intention to override the right attached to the liability under Section 3(5) of the Madras General Sales Tax Act, it would have used more clear and precise words..

10. In the present case also no clear or precise words are used in the Act from which it can be said that the old rights and liabilities were destroyed. We are, therefore, of the opinion that the sales of the stock of motor spirit by the assessees after 1st August, 1972, i.e., the date from which the Motor Spirit Act was repealed were not taxable under the Act because the sales thereof had already suffered tax under the provisions of the Motor Spirit Act. Our answer to question No. (1) referred to us, therefore, is in the affirmative and against the department.

11. Re. Question No. (2): Section 54(2) of the Act reads as follows :

Where any goods which were taxable at the point of first sale under repealed enactment applicable thereto have already been subjected to tax before the commencement of this Act, and the tax in respect of such goods is under the provisions of this Act payable at the point of last sale, then no tax under this Act, shall again be leviable on the sale or purchase of such goods after the commencement of this Act..

On a plain reading of the said provision, it is clear that as the sales of motor spirit which were taxable at the point of first sale under the repealed Motor Spirit Act had already been subjected to tax before the commencement of the Act and as tax under the provisions of the Act on motor spirit is payable on the point of last sale no tax under the Act is leviable on the sales of such motor spirit after the commencement of this Act. The learned Government Advocate appearing for the department frankly conceded before us that under the provisions of Section 54(2) of the Act also the sales made by the assessee of the stock of motor spirit on which tax had already been paid under the Motor Spirit Act were not liable to tax under the Act. Our answer to question No. (2) referred to us, therefore, is in the affirmative and against the department.

12. The reference is answered accordingly. In the circumstances the parties shall bear their own costs of this reference.


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