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K.A. Karim Vs. the Sales Tax Appellate Tribunal and ors. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtKerala High Court
Decided On
Case NumberTax Revision Cases Nos. 60 and 69 of 1961
Judge
Reported in[1963]14STC36(Ker)
AppellantK.A. Karim
RespondentThe Sales Tax Appellate Tribunal and ors.
Appellant Advocate Kalathil Velayudhan Nair,; V.S. Moothathu,; K.J. Joseph
Respondent AdvocateGovernment Pleader
DispositionPetition allowed
Cases ReferredThomson v. Lord Clanmorris
Excerpt:
- - 9. perhaps the most interesting discussion of the word 'including' is to be found in a decision of the supreme court of the united states, 221 u. 578), it is only when the terms of the statute are ambiguous or vague that resort may be had to them for the purpose of arriving at the true intention of the legislature'.it is equally well-settled that in the absence of ambiguity the legislative history also is not an external aid to the interpretation which can be pressed into service. at the mischief which had to be cured as well as at the cure that has been provided. the reason for it is best stated in the words of landis:.....act, 1958.8. the word 'and' as already pointed out was omitted by the legislature and the word 'including' substituted. the word 'and' is normally employed to express the relation of addition, the adding of something to that which preceded. the word 'including' denotes a different meaning; an additive power is not its necessary attribute.9. perhaps the most interesting discussion of the word 'including' is to be found in a decision of the supreme court of the united states, 221 u.s. 452. in that decision the court emphasised the fact that the word 'including' being a participle is in the nature of an adjective and is a modifier.10. one of the definitions of the word 'include' as given in webster is: to confine within ; to hold ; to contain ; to shut up, as, the shell of a nut.....
Judgment:

M. S. Menon, C.J.

1. 'Cashewnut including its kernel' is item 37 of Schedule I to the General Sales Tax Act, 1125. The rate of tax specified in column (3) of the said Schedule is 4 nP. for every rupee in the turnover relating to such goods.

2. By virtue of a notification under Section 5(vii) of the Act dated the 1st April, 1958, 'cashewnut including its kernel'-item 44 of the notification-is taxable only at a single point, the last purchase in the State by a dealer who is not exempt from taxation under Section 3(3) of the Act. According to Section 5(vii), where the taxable point specified is a point of purchase, the buyer-and not the seller-is the person liable for the tax.

3. The item as it originally occurred in Schedule I to the Act was 'cashew and its kernels'. The same was the wording in the earlier notification under Section 5(vii) of the Act dated the 28th September, 1957, which was superseded by the notification of the 1st April, 1958.

4. The expression 'cashewnut including its kernel' was a substitution effected by Section 3(v) of the General Sales Tax (Second Amendment) Act, 1958. The relevant portion of Section 3 reads as follows :-

In the schedule to the principal Act-

(v) in column (2) of item 37, for the words 'cashew and its kernels' the words 'cashewnut including its kernel' shall be substituted.

The translation published in the Kerala Gazette No. 18 dated the 6th May, 1958, is :

5. The Statement of Objects and Reasons appended to L.A. Bill No. 18 of 1958, which became the General Sales Tax (Second Amendment) Act, 1958, in so far as it is relevant to this case, said :

Cashew and its kernel are liable to tax at 4 nP. in the rupee at the last point of purchase within the State. Doubts have been raised as to whether the purchase of cashew kernel produced out of raw nuts on which tax has already been paid is liable to be taxed again. It is not the intention to tax the cashew kernel again in such cases. It is proposed to make this position clear by amending item 37 of the Schedule.

6. The contention of the assessee is that the intention has been effectuated by the amendment that has been made and that as a result, his purchases of kernel-it is not disputed that they were the last purchases in the State--will not attract the purchase tax for which he has been made liable. It is common ground that the last purchases in the State of the cashewnut from which the kernel was shelled will attract the tax and that they have borne the same.

7. The contention of the learned Government Pleader is that the intention embodied in the Statement of Objects and Reasons has not been effectuated by the wording of the amendment and as the statute must prevail over the intention, both the last purchase of the whole nut and the last purchase of the kernel extracted therefrom will attract the purchase tax and not the former alone as contended by the assessee. We are inclined to accept the contention of the assessee and hold that the intention embodied in the Statement of Objects and Reasons has been effectuated by the amendment made by the General Sales Tax (Second Amendment) Act, 1958.

8. The word 'and' as already pointed out was omitted by the Legislature and the word 'including' substituted. The word 'and' is normally employed to express the relation of addition, the adding of something to that which preceded. The word 'including' denotes a different meaning; an additive power is not its necessary attribute.

9. Perhaps the most interesting discussion of the word 'including' is to be found in a decision of the Supreme Court of the United States, 221 U.S. 452. In that decision the Court emphasised the fact that the word 'including' being a participle is in the nature of an adjective and is a modifier.

10. One of the definitions of the word 'include' as given in Webster is:

To confine within ; to hold ; to contain ; to shut up, as, the shell of a nut includes the kernel; a pearl is included in a shell.

We entertain no doubt that 'cashewnut including its kernel' as used in item 37 of Scdedule I to the General Sales Tax Act, 1125, and in the notification under Section 5(vii) of that Act dated the 1st April, 1958, means cashewnut inclusive of its kernel, that is, the whole or unshelled nut with the kernel inside. It is only such a nut-and not the kernel after shelling-that attracts the purchase tax.

11. It may be that a seller of kernel will be liable to sales tax at the rate of 2 nP. for every rupee in the relevant turnover under the latter portion of Section 3(b) of the Act. But that is not a matter with which we are concerned in this case.

12. There is of course a consensus of opinion that the Statement of Objects and Reasons is no aid to the construction of the clear terms of a statute, and that as pointed out by the Supreme Court in Express Newspaper (Private) Ltd. v. Union of India (A.I.R. 1958 S.C. 578), 'it is only when the terms of the statute are ambiguous or vague that resort may be had to them for the purpose of arriving at the true intention of the Legislature'. It is equally well-settled that in the absence of ambiguity the legislative history also is not an external aid to the interpretation which can be pressed into service. But if there is ambiguity, we are entitled-in the the words of Lindley, M.R., in Thomson v. Lord Clanmorris [1900] 1 Ch. 718 - to look at not only the words used, but the history of the Act, and the reasons which led to its being passed; at the mischief which had to be cured as well as at the cure that has been provided.

13. Such extraneous aids to interpretation are easily invoked in other jurisdictions than ours. The reason for it is best stated in the words of Landis:

A statute rarely stands alone. Back of Minerva was the brain of Jove, and behind Venus the spume of the ocean. So of the statute, it is the culmination often of long legislative processes, too rarely understood by the mere lawyers, and too rarely studied to have been lifted from the contempt bred of ignorance. Such material frequently affords a guide to the intent of the Legislature conceived of in terms of purpose.

14. We do not think there is any ambiguity in the expression 'cashewnut including its kernel'. In our opinion, it can only mean the whole or unshelled nut with the kernel inside it. The reference to the legislative history and the objects and reasons has been made in this judgment only because of the emphasis placed on them during the course of the hearing.

15. In the light of what is stated above we must accept the contention of the assessee that the purchases of kernel made by him even though they were the last purchases in the State do not attract the purchase tax, that the position is not as contended by the department and held by the Appellate Tribunal, and allow these two revision cases before us. We do so.

16. The department will pay the costs of the assessee, Advocate's fee Rs. 150 in both the cases together.


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