STATE OF ORISSA Vs. CHANDRAKANT JAYANTILAL

JUDGEMENT

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

(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,

(3.) 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 Manufacturing Co. Ltd. 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-settle 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.