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P. Subramanian and anr. Vs. Sales Tax Officer, Special Circle, Palghat and anr. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtKerala High Court
Decided On
Case NumberO.P. Nos. 2708 and 2712 of 1962
Judge
Reported inAIR1965Ker57
ActsCentral Sales Tax Act, 1956 - Sections 7(2); State Law
AppellantP. Subramanian and anr.
RespondentSales Tax Officer, Special Circle, Palghat and anr.
Appellant Advocate K.V. Surianarayana Iyer, and; S. Subramania Iyer, Advs. in O.P. No. 2708 of 62,;
Respondent AdvocateGovernment Pleader
DispositionPetition dismissed
Excerpt:
.....would preclude the petitioners from claiming the benefit of section 8(i)(b). (5) i must mention that the persons to whom the petitioners sold green ginger were not only those in bombay, madras and mysore, but those in andhra pradesh as well. the position is, therefore, the same in regard to these sales as..........(2) of section 7. those sub-sections are in these terms:'7. registration of dealers-- (i) every dealer liable to tat tax under this act, shall, within such tune as may be prescribed for the purpose, such an application for registration under this act to such authority in the appropriate state as the central government may, by general or special order specify, and every such application shall contain such particulars as may be prescribed. (2) any dealer liable to pay tax under the sales-tax law of the appropriate state, or where there is no such law in force in the appropriate; state or any part thereof, any dealer having a place of business in that state or part, as the case may be, may, notwithstanding that he is not liable to pay tax under this act, apply for registration under this.....
Judgment:

P. Govindan Nair, J.

1. The petitioners in these two writ applications are dealers and assessees to sales-tax under the Central Sales Tax Act, 1956 (hereinafter referred to as the Act). The turnover relating to which it was contended by the petitioners that a tax of only 1% should be imposed relates to the sale of 'green ginger' by the petitioners to purchasers in Bombay and other places. This claim that tax can be imposed only at 1% is made because of the provision in Section 8(1)(b) of the 'Act reading:

'8. Rates of tax on sales in the course of Inter State trade or commerce:

(1) Every dealer, who in the course of inter-State trade or commerce:

(a) ...........................

(b) sells to a registered dealer other than the 'Government goods of the description referred to in Sub-section (3);

shall be liable to pay tax under this Act, which; shall bo one per cent of his turnover.'

(2) It is admitted that the goods are of the description referred to in Sub-section (3) of Section 8, But there has been no compliance with clause (a) of Sub-section (4) of Section 8 which enacts:

'(4) The provisions of Sub-section (1) shall not apply to any sale in the course of inter-State trade or commerce unless the dealer selling the goods Surnishes to the prescribed authority in the pre scribed manner: (a) a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority;'

(3) This non-compliance with clause (a) of Sub-section (4) of Section 8, it is urged, was due to the fact that it was impossible, or at least impracticable, to obtain the declaration from the dealers to whom the goods were sold. Those dealers, it is admitted, had not been registered under the Act. They did not so register because, it is said, that at was impossible for them to get themselves registered. The section that deals with registration is Section 7 of the Act and we are concerned in this case only with Sub-sections (i) and (2) of Section 7. Those Sub-sections are in these terms:

'7. Registration of dealers-- (i) Every dealer liable to tat tax under this Act, shall, within such tune as may be prescribed for the purpose, Such an application for registration under this Act to such authority in the appropriate State as the Central Government may, by general or special order specify, and every such application shall contain such particulars as may be prescribed.

(2) Any dealer liable to pay tax under the sales-tax law of the appropriate State, or where there is no such law in force in the appropriate; State or any part thereof, any dealer having a place of business in that State or part, as the case may be, may, notwithstanding that he is not liable to pay tax under this Act, apply for registration under this Act to the authority referred to in Sub-section (i), and every such application, shall contain such particular as may be prescribed.

Explanation:- For the purposes of this subsection, a dealer shall be deemed to be liable to pay tax under the sales-tax law of the appropriate State notwithstanding that under such law a sale or purchase made by him is exempt from tax or a refund on rebate of tax is admissible in respect thereof;'

(4) Counsel has contended that Sub-section (1) is not applicable because the purchasers in Bombay and other places were not dealers liable to pay tax under the Act. I will assume it is so. It is further contended that Sub-section (2) is also inapplicable because the dealers (the purchaser in Bombay and other places) were also not liable to pay tax under the sales-tax law of the appropriate State in relation to this commodity. This too is clear because 'green ginger' has been exempted from tax by Section 7 of the Bombay Sales Tax Act and by the Madras and Mysore Acts. But, prima facie, it appears to me, that the explanation to Sub-section (2) would enable them to get registered. Counsel for the petitioners contended that a limited meaning must be given to the explanation because otherwise the explanation would have the effect of wiping out Sub-section (2). The argument is that Sub-section (2) has only enabled dealers liable to pay tax under the sales-tax law of the appropriate State to get themselves registered and if the explanation is given a wide meaning, dealers who are not liable to pay tax under the appropriate law of the sale, will also become entitled to get themselves registered under the Act. Such a reading of the Sub-section and the explanation, it is submitted, will be against the well known rule of interpretation of statutes that a proviso or an explanation, which engrafts an exception, should, not be read so as to wipe out the effect of the section or the sub-section to which it is a proviso or an exception. This is so. But I do not think that the explanation to Sub-section (2) is an exception. It is a deeming provision by which dealers exempted from payment of tax under the law are deemed to be liable to pay tax. Those exempted from the local Act are those who would otherwise have been liable under that Act. So read, I do not find any difficulty in reconciling the explanation with the Sub-section. It necessarily follows that there was no impediment in the dealers getting themselves registered. They had not admittedly done so and, therefore, were unable to produce the declaration in the manner prescribed as enjoined by clause (a) of Sub-section (4) of Section 8. This failure would preclude the petitioners from claiming the benefit of Section 8(i)(b).

(5) I must mention that the persons to whom the petitioners sold green ginger were not only those in Bombay, Madras and Mysore, but those in Andhra Pradesh as well. The sales-tax laws of these States excepting Andhra Pradesh have exempted the sales or purchases relating to 'green ginger' from the liability of tax. The position is, therefore, the same in regard to these sales as well. As far as the dealers in Andhra Pradesh are concerned since there is no exemption regarding the sales or purchases of 'Green ginger' under the Andhra Pradesh Sales Tax Act, the question does not arise.

(6) I dismiss these writ applications with costs.


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