RAMESHWAR LAL PRAHLAD RAI Vs. STATE OF BIHAR

JUDGEMENT

(1.) The short point which falls for decision in this application under articles 226 and 227 of the Constitution of India is whether palm oil is included within the expression "palm products", so as to entitle the petitioner to claim the benefit of exemption from Bihar Sales Tax Ordinance No. 209 of 1976. The petitioner with that end in view has prayed for quashing annexures 3, 4 and 5 to this application.

(2.) The facts about which there is no controversy are firstly that the petitioner sold palm oil during the period 22nd August, 1977, to 12th February, 1978, worth Rs. 6,90,364.55; secondly, the palm oil sold by the petitioner had been imported from outside this country; thirdly, the petitioner had not charged special or general sales tax from buyers of palm oil and, lastly, in the return for the relevant period, the petitioner had not deposited sales tax according to law on account of sale of palm oil during the aforementioned period. On 15th December, 1976, the State Government issued a notification (the English version of which is annexure 1), which was to the effect that in exercise of the powers conferred upon the Governor by Section 6(3a) of the Bihar Sales Tax Ordinance (Bihar Ordinance No. 209 of 1976), he was pleased to exempt articles mentioned in that notification from the levy of general as well as special sales tax. Item 12 of the notification was "palm-gur and palm products". The authoritative version of the notification was in Hindi, item 12 of which reads as tar-gur aur tar ke saman. Subsequently, the Bihar Sales Tax Fifth Ordinance, 1977 (Bihar Ordinance No. 257 of 1977) (annexure 2), was also issued in supersession of all the previous notifications. In terms of Section 6(3a) of that Ordinance also, the State Government issued a notification dated 26th December, 1977, which was in terms identical to the earlier notification. Item 12 of this notification also exempted "palm-gur and palm products" from the levy of sales tax. The petitioner has averred that, relying upon the two notifications (annexures 1 and 2), the petitioner considering palm oil to be palm product did not realise sales tax from its customers and for the very same reason did not deposit the necessary sales tax due upon the sale of palm oil along with the return of sales tax. By notice dated 9th February, 1978 (annexure 3), the petitioner was directed to show cause before the Assistant Commissioner of Commercial Taxes, Jamshedpur, why penalty should not be imposed for failure to file correct return and payment of full admitted tax. The petitioner showed cause contending therein that palm oil being a palm product was exempted from the levy of sales tax, special or general. The cause shown by the petitioner was rejected by the Assistant Commissioner by order dated 27th February, 1978 (annexure 4). According to this order, palm oil fell in the category of vegetable oil and was exigible to tax at the rate of 7 per cent and that it was not included within the expression "palm products". Aunexure 5 is a circular from the Commissioner of Sales Tax to all the Sales Tax Officers in regard to levy of tax on refined palm oil. It was clarified by this letter that palm oil was not a palm product, but was a specie of vegetable oil. The petitioner has, therefore, moved this Court for issuance of an appropriate writ by quashing annexures 3, 4 and 5.

(3.) The learned counsel for the petitioner has contended that fiscal statutes should be strictly construed and if there is any ambiguity the benefit of the doubt must be extended to the assessee. The proposition is unexceptionable. It goes without saying that the interpretation which cast the least burden upon the assessee must be preferred to that of consideration of income to the exchequer. The above proposition, however, cannot be a ruse for the assessee to evade payment of taxes. I am conscious of the fact that, in the instant case, the petitioner has not realised sales tax from the purchasers. Even so, if the State is entitled to realise sales tax on any item, the fact that the assessee has failed to realise it is a matter absolutely and entirely irrelevant for deciding the question in issue.