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State of Orissa Vs. Chandrakant Jayantilal - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtOrissa High Court
Decided On
Case Number S.J.C. No. 180 of 1973
Judge
Reported in40(1974)CLT1285; [1975]36STC237(Orissa)
AppellantState of Orissa
RespondentChandrakant Jayantilal
Appellant Advocate The Standing Counsel (Sales Tax)
Respondent Advocate N.N. Bhattacharya, Adv.
Cases ReferredState of Orissa v. Bhagwcm Das Vithaldas
Excerpt:
.....new india assurance co. ltd. v smt rita devi, 1997(2) glt 406, approved. new india assurance co. ltd. v birendra mohan de, 1995 (2) gau lt 218 (db) and union of india v smt gita banik, 1996 (2) glt 246, are not good law]. - would he, when goes for purchasing ornaments, accept the ornament decorated with filigree work as a filigree work simpliciter or basically as an ornament ? as is well-known, ornaments are manufactured in various designs principally intended to be worn by the ladies. it is also a well-settled principle that where a statute contains both general as well as specific provision, the latter must prevail......certificate no. cu. i (w) 143 under the orissa sales tax act. he carries on business in silver and gold ornaments, weights and measures and filigrees. the controversy relates to the assessment year 1969-70 during which the assessing officer found that the assessee had effected sales of ornaments decorated with filigree works and had paid tax at the rate of 2 per cent in terms of serial no. 1 of the finance department, notification no. 33927-c.t.a. 130/57-f dated 30th december, 1957. the assessee claimed that his goods were liable to be taxed under this serial whereas the sales tax department claimed that he was liable to be taxed under serial no. 32 of the notification. section 5 of the act provides that the tax payable by a dealer under the act shall be levied at the rate of 5 per cent.....
Judgment:

S.K. Ray, Ag. C.J.

1. The following question has been referred under Section 24(1) of the Orissa Sales Tax Act (hereinafter referred to as the Act) :

Whether, in the facts and circumstances of the case, the ornaments decorated with filigree works are taxable at 2 per cent as per serial No. 1 or at the rate of 7 per cent as per serial No. 32 of the schedule of taxable goods

This reference was made at the instance of the State of Orissa represented by the Commissioner of Sales Tax, Orissa.

2. The assessee, M/s. Chandrakant Jayantilal, is a registered dealer under Cuttack-1 (West) Circle with the Registration Certificate No. CU. I (W) 143 under the Orissa Sales Tax Act. He carries on business in silver and gold ornaments, weights and measures and filigrees. The controversy relates to the assessment year 1969-70 during which the assessing officer found that the assessee had effected sales of ornaments decorated with filigree works and had paid tax at the rate of 2 per cent in terms of serial No. 1 of the Finance Department, Notification No. 33927-C.T.A. 130/57-F dated 30th December, 1957. The assessee claimed that his goods were liable to be taxed under this serial whereas the sales tax department claimed that he was liable to be taxed under serial No. 32 of the notification. Section 5 of the Act provides that the tax payable by a dealer under the Act shall be levied at the rate of 5 per cent on his taxable turnover. But under the first proviso to this section it was laid down that.

The State Government may, from time to time by notification and subject to such conditions as they may impose, fix a higher rate of tax not exceeding 7 per cent or any lower rate of tax payable under this Act on account of the sale or purchase of any goods or class of goods specified in such notification.

The Government of Orissa has issued notifications under the first proviso to Sub-section (1) of Section 5 of the Act from time to time fixing rates of taxes payable by a dealer under the said Act on account of sales of goods specified in the schedule to the notification. In order to answer the question referred, we are to construe serial Nos. 1 and 32 of the schedule to the notification issued in pursuance of the first proviso to Section 5 of the Act. For the purpose of such construction- it is necessary to trace the legislative history of the relevant notifications. Notification No. 33927-C.T.A. 130/57-F dated 30th December, 1957, runs as follows :

In exercise of the powers conferred by the first proviso to Sub-section (1) of Section 5 of the Orissa Sales Tax Act, 1947 (Orissa Act 14 of 1947), as amended by the Orissa Sales Tax (Amendment) Act, 1957 (Orissa Act 20 of 1957), and in supersession of all previous notifications on the subject, the State Government do hereby fix, with effect from the 1st January, 1958, the rate of tax payable by a dealer under the said Act on account of the sale of the goods specified in column (2) of the schedule appended hereto at the rates specified against them in column (3) thereof.

Schedule -------------------------------------------------------------------------------Sl. No. Description of goods. Rate of tax.-------------------------------------------------------------------------------'1. Bullion and specie One per cent.27. All articles and wares made of gold and silver or of Seven per cent.species.32. Ornamental metal-ware with enamelled or carved Seven per cent.' designs and gold and silver filigree.-------------------------------------------------------------------------------

The aforesaid schedule was amended by Government Notification No. 35550-C.T.A. 27/58-F. dated 15th November, 1958, by which serial No. 3-F was introduced and serial Nos. 27 and 32 also were amended. The words 'other than those falling under serial No. 3-F' were added to the description of goods in column (2) against serial No. 27. The same words were added to the description of goods in column (2) against serial No. 32 after the words 'silver filigrees'. The schedule thus amended runs as follows:

3-F. Ornaments of personal wear made of gold or silver or Two per cent,with mixture of gold and silver without any addition of precious stones, namely, diamonds, emeralds, rubies, real pearls and sapphires. 27. All articles and wares made of gold and silver or of Seven per cent.species (other than those falling under serial No. 3-F).32. Ornamental metal-ware with enamelled or carved designs, Seven per cent.and gold and silver filigrees (other than those falling under serial No. 3-F).

The schedule was further amended by Notification No. 6839-C.T.A. 47 65-F. dated 4th March, 1966, and serial No. 1 as amended runs as follows :

1. Bullion and specie ornaments and other articles made Two per cent, thereof.

By this amendment the entries in columns (2) and (3) against serial No. 3-F were omitted, but the amendments of column (2) of serial Nos. 27 and 32, which had a reference to this serial No. 3-F were left untouched. This notification took effect from the 1st day of April, 1966.

3. It is apparent that ornaments decorated with filigree works would be exigible to tax either under serial No. 27 or under serial No. 32 of the schedule under the first notification dated 30th December, 1957, extracted above. Ornaments would not be obviously covered under serial No. 1 which refers to 'bullion and specie' only. Under the second notification dated 15th November, 1958, the schedule was amended and serial No. 3-F was introduced which specifically referred to ornaments of personal wear made of gold and correspondingly serial Nos. 27 and 32 were also amended by adding the expression 'other than those falling under serial No, 3-F' at the end of those respective entries. Thus ornaments of personal wear made of gold or silver were made a special category for purposes of taxation and it was made clear thereby that serial Nos. 1 and 32 would not include such ornaments. The schedule was further amended by the third notification extracted above by which columns (2) and (3) against serial No. 3-F were omitted and columns (2) and (3) against serial No. 1 were amended by adding 'ornaments and other articles made thereof' in column (2) against serial No. 1 and enhancing the rate of tax from 1 per cent to 2 per cent in column (3) The last notification came into effect from 1st April, 1966. Since the present assessment relates to the assessment year 1969-70, we have to construe the schedule as it stood after all amendments on 1st April, 1966. The relevant serials are serial Nos. 1 and 32. According to serial No. 1, bullion and specie ornaments and other articles made thereof were exigible to tax at 2 per cent, while under serial No. 32 ornamental metal-ware with enamelled or carved designs and gold and silver filigrees other than those falling under serial No. 3-F were exigible to tax at 7 per cent. Though by that time serial No. 3-F had been deleted from the schedule, nevertheless reference thereto in serial No. 32 was maintained. Serial No. 32 would read thus :

Ornamental metal-ware with enamelled or carved designs and gold and silver filigrees other than ornaments of personal wear made of gold or silver or with mixture of gold and silver without any addition of precious stones, namely, diamonds, emeralds, rubies, real pearls and sapphires.

Since serial No. 32 continued as such by the time of the relevant assessment year, it is obvious that ornaments of personal wear made of gold were excluded from its purview and were included in serial No. 1 as would be indicated by simultaneous deletion of serial No. 3-F, amendment of serial No. 1 and retention of the words 'other than those falling under serial No. 3-F' in serial Nos. 27 and 32. The learned standing counsel for the department contended that the notification by which serial No. 3-F was deleted, inadvertently omitted to carry out consequential amendment in serial No. 32. In fact, subsequent to the year of assessment in question, by Notification No. 19930 dated 27th April, 1970, serial No. 32 was amended by excluding the expression 'other than those falling under seria No, 3-F' from column (2) thereof and had expressly stated that such amendment will take effect from 15th May, 1970. This declaration makes it clear that despite previous deletion of serial No. 3-F, serial No. 32, as it stood then, was intended to be left untouched. Thus the contention of the learned standing counsel that omission to delete this expression from column (2) against serial No. 32 by Notification No. 6839 dated 4th March, 1966, was inadvertent or accidental cannot be accepted. In fact, this is the exact view held by another Division Bench of this Court in the case of State of Orissa v. Bhagwcm Das Vithaldas [1975] 36 S.T.C 228 (S. J. C. Nos. 153 to 156 of 1972 disposed of on 1st June, 1973), where their Lordships said :

In view of the fact that the language of serial No. 32 continued to be with reference to serial No. 3-F until deletion thereof in 1970, we are not prepared to give full effect to the contention of the learned standing counsel. Ordinarily with the deletion of serial No. 3-F from the schedule, reference thereto in serial No. 32 should have been omitted. In law while serial No. 3-F was deleted as an independent entry, its terms could continue in serial No. 32 and effect could yet be given to the entry. We would accordingly hold that notwithstanding the deletion of serial No. 3-F as an independent entry in the schedule reference thereto in serial No. 32 has got to be given effect to.

The ultimate position, therefore, during the year of assessment was that ornaments of personal wear made of gold and silver were excluded from the purview of serial No. 32.

4. The learned standing counsel for the department contends that since the ornaments were decorated with filigree works, it satisfies the description in column (2) against serial No. 32, which speaks of ornamental metal-ware with enamelled or carved designs and gold and silver filigrees. Serial No. 1 as amended during the relevant assessment year referred to bullion and specie ornaments and other articles made thereof. The question is whether the ornaments decorated with filigree works would come within the purview of serial No. 1 or serial No. 32. The principle in construing taxing statutes is that it must be strictly construed and, in case of doubt, must be construed against the taxing authorities and the doubt would be resolved in favour of the taxpayer. Such taxing statutes should not be extended by implication beyond the clear import of the language used, nor will their operation be amplified or enlarged so as to bring within its sweep matters not expressly pointed out although they may stand upon a close analogy thereto : vide the case of Central India Spinning and Weaving and . v. Municipal Committee (1958) S.C.J. 604. The second principle in construction which should be brought in aid is that if there are two separate and distinct entries in a taxing statute, then both the entries must be construed harmoniously and attempt should be made to preserve both the entries, rather than to treat them as repugnant to each other. In this case, if serial No. 32 is construed as to cover ornaments decorated with filigree works as filigree works, pure and simple, then the assessee would be liable to a higher rate of tax than if it came within the purview of serial No. 1. In comparing the language of column (2) of both the serials it would be seen that serial No. 1 refers to ornaments as such, while serial No. 32 refers to ornamental metal-ware, and serial No. 32, as it stood during the year of assessment, expressly excluded ornaments of personal wear made of gold. Therefore, ornaments must necessarily be excluded from its purview. When serial No. 3-F, which included gold ornaments of personal wear, was deleted, serial No. 1 was correspondingly amended so as to include bullion ornaments. The description was large enough to include ornaments of all types and designs. Whether the ornaments are decorated with filigree works or not, the basic character of such articles is an ornament for personal wear. The test to apply in such cases is what the common man conversant with the expression 'ornament' would attribute to an ornament which is decorated with filigree work. Would he, when goes for purchasing ornaments, accept the ornament decorated with filigree work as a filigree work simpliciter or basically as an ornament As is well-known, ornaments are manufactured in various designs principally intended to be worn by the ladies. Embedding of filigree works on an ornament intended for personal wear would not, from a common man's point of view, alter its basic nature and utility as an ornament primarily made for personal wear and would not be treated as a mere filigree work essentially intended for decorating a drawing room or for some such use. It is also a well-settled principle that where a statute contains both general as well as specific provision, the latter must prevail. Here, serial No. 1 is a specific provision covering ornaments of gold, whereas serial No. 32 refers to ornamental metal-ware, not ornaments as such, specifically excluding ornaments of personal wear made of gold. In our view, there can be no manner of doubt that applying the common parlance test and also upon a true construction of serial Nos. 1 and 32 the sale of ornaments decorated with filigree works would come within the sweep of serial No. 1 and would be exigible to 2 per cent tax thereunder.

5. We would, for the aforesaid reasons, answer the question referred to us in the following manner, namely, that, in the facts and circumstances of the case, the ornaments decorated with filigree works are taxable at 2 per cent as per serial No. 1 of the schedule of taxable goods. The reference is accordingly answered. The State shall pay the costs of the reference to the assessee which is assessed at Rs. 100.

Reference answered accordingly.

K.B. Panda, J.

4. I agree.


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