K. Bhaskaran, C.J.
1. The sole question that falls for decision is whether imported sugar is exigible to tax under the provisions of the Kerala General Sales Tax Act, 1963 ('the Sales Tax Act'). Section 5, which is the charging section, lays down that every dealer whose total turnover for a year is not less than seventy-five thousand rupees and every casual trader or agent of a non-resident dealer, whatever be his total turnover for that year, shall pay tax on his taxable turnover for that year. Schedules I and II fix the point of time at which the taxes are leviable, and Schedule III enumerates the goods exempted from tax under Section 9. Entry 5 in the Third Schedule reads as follows:
'Sugar as defined in Item No. 1 of the First Schedule to the Central Excises and Salt Act, 1944.'
Sugar is defined in the First Schedule to the Central Excises and Salt Act, 1944 (the Excise Act), under Entry No. 1 as follows :
'Sugar, produced in a factory ordinarily using power in the course of production of sugar -
'Sugar' means any form of sugar in which the sucrose content, if expressed as a percentage of the material dried to constant weight at 105 Centigrade, would be more than ninety.'
2. The thrust of the argument advanced by the Senior Government Pleader on behalf of the State was that this description of sugar in Entry 1 to Schedule I to the Excise Act is applicable only to sugar produced in India in contradistinction to sugar imported. It being a fiscal statute, we are of the definite view that in the absence of legislative intendment to the contrary, we would not be justified in giving a strained interpretation to the definition of 'sugar' as contained in Entry 1 in Schedule I to the Excise Act, by adding the words 'in India' after the word 'factory'. After all, the purpose of the incorporation of the description of sugar in the First Schedule to the Excise Act is only to define what sugar is, for the purpose of Entry 5 in Schedule III to the Sales Tax Act. The object of this definition by incorporation was not to apply the provisions of the Excise Act to the Sales Tax Act with particular reference to Entry 5 in Schedule III thereto. On behalf of the State, it was submitted that the power of levy of excise duty should be traced to Entry No. 84 in List I of the Seventh Schedule to the Constitution, which provides 'duties of excise on tobacco and other goods manufactured or produced in India'. The Government Pleader strongly contended that the power of legislation under Entry 84 being restricted to the levying of excise duty on goods produced or manufactured in India, it could not be presumed that what the legislature had in mind when the expression 'sugar' was used in Entry 1 of Schedule I to the Excise Act, was sugar produced or manufactured in a factory other than what was produced or manufactured in India. He also pointed out that in Section 3 of the Excise Act, the emphasis again is on the goods manufactured in India; and that fact lent support to the contention that sugar defined or described in Entry No. 1 in Schedule I to the Excise Act could only be the sugar produced or manufactured in a factory in India. It appears to us that the Government Pleader's argument proceeds on a wrong assumption that the definition of the term 'sugar' in Entry 1 of Schedule I to the Excise Act has been borrowed for the purpose of Entry 5 in Schedule III to the Salt Tax Act, for the purpose of giving effect to certain provisions or the legislative scheme of the Excise Act, whereas the truth is that it was only as a legislative device for the limited purpose of economy of words that expression has been borrowed in the Sales Tax Act. It is a well settled principle that the provisions in a fiscal statute have to be construed strictly; and it is not for the court to plug the loopholes even where such loopholes do exist.
3. The counsel for the petitioner submitted, apart from the fact that the provisions contained in the Sales Tax Act, with particular reference to Sections 5 and 9 thereof and the Schedules thereunder, did not warrant the levy of sales tax on imported sugar, there is yet another factor to be reckoned; and that is, the petitioner had, as evidenced by exhibit P4, bill of entry, paid duty as provided under Section 3 of the Customs Tariff Act (Act 51 of 1975), and the Additional Duties of Excise (Goods of Special Importance) Act, 1957. It is reasonable to conclude that it could not have been the intention of the legislature to levy sales tax on imported goods on which customs tariff and additional excise duties had already been levied. The objects and reasons of Section 3 of the Tariff Act is stated to be :
'Clause 3 provides for the levy of additional duty on an imported article to counterbalance the excise duty leviable on the like article made indigenously, or on the indigenous raw materials, components or ingredients which go into the making of the like indigenous article. The provision corresponds to Section 2A of the existing Act, and is necessary to safeguard the interests of the manufacturers in India.'
4. The counsel for the petitioner drew our attention to the decision of the Supreme Court reported in Khandelwal Metal & Engineering Works v. Union of India - AIR 1985 SC 1211. On a close reading of the relevant pages, particularly paragraph 42 in page 1223 of the decision, we are of the opinion that the decision could not in any way advance the case of the revenue. The importance of the decision cited lies in the fact that the Supreme Court held that additional duty mentioned in Section 3(1) of the Customs Tariff Act (Act 51 of 1975), was not in the nature of countervailing duty, inasmuch as it was not the charging section. That question has no relevance to the points contested in this writ petition.
5. The result, therefore, is that the writ.petition is allowed, quashing Exhibit P3, order of the first respondent. There will be no order as to costs.
6. Immediately after the judgment was pronounced, on behalf of the State an oral request was made for leave to appeal to the Supreme Court. We do not find any substantial question of law of general importance which requires to be decided by the Supreme Court is involved in this case. Hence leave declined.
7. Issue carbon copy of this judgment to the counsel on both sides, on usual terms, if applied for in that behalf.