T.C. Raghavan, C.J.
1. The appellants in all these appeals are millers of groundnut oil; and they impugn the Notification S.R.O. No. 211/67 passed by the Government of Kerala under Section 10(1) of the Kerala General Sales Tax Act of 1963. The learned Judge who heard the writ petitions dismissed the petitions and hence the appeals.
2. The impugned notification reads :
S.R.O. No. 211/67.-In exercise of the powers conferred by Sub-section (1) of Section 10 of the Kerala General Sales Tax Act, 1963 (Act 15 of 1963), the Government of Kerala, having considered it necessary in the public interest so to do, hereby reduce the rate of tax payable by an oil-miller under the said Act in respect of his sales of groundnut oil and its cake from 3 per cent, to one per cent subject to the condition that the turnover of groundnut, from which the said oil and cake are produced by him in his mill within the State, is assessed to tax or is liable to tax at his hands.
3. The appellants claim to be oil-millers who purchase groundnut from outside Kerala State, for instance, from Tamil Nadu and Andhra Pradesh and bring it into Kerala, crush it and produce groundnut oil. The notification gives a reduction in respect of the sales of groundnut oil and cake from 3 per cent to one per cent. Now, the controversy centres round the expression 'the turnover of groundnut, from which the said oil and cake are produced by him in his mill within the State, is assessed to tax or is liable to tax at his hands'. The contention of the appellants is that the expression 'assessed to tax or is liable to tax at his hands' means assessed to tax under any sales tax law, not necessarily under the Kerala General Sales Tax Act of 1963.
4. At first blush, it might probably appear that this interpretation is plausible. But, on a little closer scrutiny, it will emerge that this interpretation cannot be accepted. It is only common sense that, if a notification is issued under a particular Act, expressions which are found in the notification have only the meaning they have in the Act under which the notification is issued, unless, of course, the context requires otherwise. This is the law too. For instance, see Section 19 of the Kerala Interpretation and General Clauses Act of 1125, which provides that, where, by an Act, a power to issue any notification, order, scheme, rule, form or by-law is conferred, then expressions used in the notification, order, scheme, rule, form or by-law shall, unless there is anything repugnant in the subject or context, have the same respective meanings as in the Act conferring the power. Obviously, in the notification before us, if we give the meaning to the word 'tax' as the word is defined in the Kerala General Sales Tax Act of 1963, there will not be any repugnancy. The word 'tax' is defined in Section 2(xxiv) to mean the tax payable under the Act. With this in mind, if the expression 'assessed to tax or is liable to tax at his hands' is considered, it emerges clearly- without any shadow of doubt-that the assessment to tax contemplated is an assessment to tax under the Act and the liability to tax contemplated is a liability to tax under the Act. It must necessarily follow that the assessment to tax or the liability to tax cannot be under any Sales Tax Act other than the Kerala General Sales Tax Act of 1963.
5. The attempt of the counsel of the appellants is to contrast this notification with another notification issued under Section 8(5) of the Central Sales Tax Act of 1956, viz., S.R.O. No. 212/67. That notification (leaving the earlier portion of the notification) concludes with the expression 'shall be calculated at one par cent on the sale price of the goods so sold subject to the condition that the turnover of groundnut, from which the said goods were produced by him in his mill within the State, is assessed to tax or is liable to tax at his hands under the Kerala General Sales Tax Act, 1963 (Act 15 of 1963)'. It is argued that the Government, if they wanted that the assessment to tax or the liability to tax should be under the Kerala General Sales Tax Act of 1963, would have mentioned so and the absence of such mention in the impugned notification indicates the intention of the Government that, in the case of the impugned notification, the assessment to tax or the liability to tax need not necessarily be under the Kerala General Sales Tax Act. This argument loses sight of one fact, namely, that the assessment to tax or the liability to tax, if the matter was left without specifying the Act under which they should be, would only be under the Central Sales Tax Act under which the notification was issued, unlike the notification under the Kerala General Sales Tax Act, where, if the expression was used without specifying the Act under which they should be, they would only be under the Kerala Act. Therefore, the expression 'under the Kerala General Sales Tax Act, 1963' was necessary in S.R.O. No. 212/67 and that was why it was deliberately put in there. Thus, a comparison of the impugned notification with S.R.O. No. 212/67 is not helpful to the appellants ; if at all, it may only be against them.
6. The next attempt of the counsel of the appellants has been to draw our attention to two other notifications relating to coconut oil. (We may point out that all the cases before us relate to groundnut oil.) The first notification, S.R.O. No. 702/63, was issued in 1963 under the same Section 10 of the Kerala General Sales Tax Act; and that notification concluded with the expression 'subject to the condition that the turnover of such sale is assessed to tax or is liable to tax under the said Act in that year'. Later, in 1966, another notification, S.R.0. No. 116/66, was issued to replace the earlier notification ; and that notification concluded with the expression 'that the turnover of coconut or copra, from which the said oil and oil-cake are produced by him in his mill within the State, is assessed to tax or is liable to tax at his hands'. In other words, the expression 'under the said Act' was dropped. From this the counsel of the appellants have argued that the Government, when they issued the earlier notification, wanted to have the assessment nto tax or the liability to tax fixed under the Kerala General Sales Tax Act, but, when they replaced the said notification with the later notification, the intention of the Government, which emerges from the dropping of the expression 'under the said Act', was that the assessment to tax or the liability to tax need not necessarily be confined to the Kerala General Sales Tax Act of 1963. At first blush, this contention might appear to have some force. But, as it will presently appear, the contention has no force, if we scrutinise it a little more closely. The notifications were both under the General Sales Tax Act of 1963 ; there was no need for stating in the notifications that the tax assessed and the liability to tax should be 'under the said Act' ; such statement in the earlier notification was thus a surplusage; and when this was noted the expression 'under the said Act' was dropped in the later notification merely by way of pruning, by way of removing unnecessary words. Thus, a comparison of these two notifications with the impugned notification cannot also help the appellants.
7. The counsel of the appellants have then argued that a taxing statute should be interpreted in a strict manner in other words, in the case of ambiguity, the interpretation of a taxing statute should be in favour of the assessee. Firstly, that question can arise only if there is an ambiguity and two interpretations are possible ; we have already indicated that the impugned notification does not give rise to any ambiguity. Secondly, this principle applies only in interpreting a taxing statute ; it does not apply to a case where an assessee is claiming exemption from tax. Therefore, this contention is also of no avail.
8. Mr. C.K. Viswanatha Iyer, who appeared in two of these cases, has advanced another argument, viz., that the notification offends Article 301 of the Constitution since the notification has the effect of retarding or interfering with inter-State movement of trade. In our opinion, this contention is the result of a slight misconception or of loose thinking. Article 301 reads :
Subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free.
9. Article 304 confers power on a State Legislature to impose on goods imported from other States or the Union territories any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced. There are several decisions on the interpretation of Articles 301 to 305. Recently, a Division Bench of our High Court had occasion to consider this question in Abdul Kadir v. State of Kerala 1971 K.L.J. 4. Mathew, J., who spoke for the court, has considered all the relevant decisions. (Several of them are decisions of the Supreme Court.) One of the decisions considered by the learned Judge was the decision in Atiabari Tea Co. Ltd. v. State of Assam A.I.R. 1961 S.C. 232 and Anr., the decision in Andhra Sugars Ltd. v. State of Andhra Pradesh A.I.R. 1968 S.C. 599. The Supreme Court has observed in the later decision :
Normally, a tax on sale of goods does not directly impede the free movement or transport of goods.
10. Mathew, J., has considered several other decisions as well; and the learned Judge has observed, relying on the decisions of the Supreme Court, that it would be reasonable and proper to hold that the restrictions upon freedom which are prohibited by Article 301 are such restrictions as directly and immediately restrict the free flow or movement of trade. The learned Judge has also referred to the observation of the Supreme Court in the Atiabari Tea Co. case A.I.R. 1961 S.C. 232, that Article 301 is mainly concerned with the 'movement part of the trade'.
11. With this in mind, if we consider the situation here, the hollowness of the contention of Mr. Viswanatha Iyer will clearly emerge. There is no question of any direct and immediate impediment to the movement of inter-State trade brought about by the impugned notification.
12. We may now consider a hypothetical case. Suppose a person purchases groundnut either from Tamil Nadu or from Andhra Pradesh and imports it into Kerala State; and he sells it to a miller like the appellants in the cases before us. Naturally, the purchaser has to pay sales tax at 2 per cent. on his purchase, the purchase being the last purchase in the State, under Schedule II, item 7, of the General Sales Tax Act. And, after paying such sales tax, he crushes the groundnut and produces oil; then he will be eligible for the concession contemplated by the impugned notification, i. e., instead of paying 3 per cent. he need pay only one per cent. on his sales of groundnut oil and cake. The purpose of the notification is to relieve such a miller and enable him to pay only 3 per cent. on the whole and not more. And the acceptance of the contention of the appellants will enable them to escape with a lesser levy, e. g., one per cent. If a miller goes out and purchases groundnut either in Tamil Nadu or in Andhra Pradesh and brings the same into Kerala and crushes it and converts it into oil and if he does not get the benefit of the impugned notification, he cannot complain; the purpose of the notification is to give relief to a miller who purchases groundnut in the State paying 2 per cent, thereon and also pays tax on his sales of the oil and cake produced at 3 per cent.; the purpose is not to give any relief to a miller who has not paid sales tax in the State under the State Sales Tax Act.
13. The result is we dismiss all these appeals, however, without costs.