STATE Vs. VISHNU ELECTRIC WORKS AJMER

JUDGEMENT

(1.) THE reference was made to the larger Bench of the Board by a member sitting singly while deciding seven revisions under sec. 14 the Sales Tax Act. THE facts leading to the reference, are that the applicant firms sold goods during assessment period between 9-3-61 and 2-3-63. Some of these goods fell in the general category taxable under sec. 5 of the Rajasthan Sales Tax Act. , as it then stood. THE relevant portion of this section reads as under - "the tax payable by a dealer under this Act shall be at such single point in the series of sale by successive dealers as may be prescribed and shall be levied at the rate of 4 per cent on the taxable turnover. " Provided also that where the State Government is of the opinion that it is necessary or expedient in the public interest so to do, it may, by notification in the official gazette, provide that the rate at which the tax payable by a dealer in respect of any goods to be specified in the notification shall be such not exceeding 10%* on the taxable turnover as may be specified in the said notification. " (*the figure 10 was substituted for the figure 7 by Rajasthan Act 14 of 1961 published on 4-5-61 but it became effective from 9-3-61, vide sec. 3 of Rajasthan Act 23 of 1958.) Notification No. F. 5 (23) E & T/61-I, dated 9-3-61 was issued by the State Government which reads as below - Jaipur March 9, 1961. No. 5 (23) E & T/61-I - In exercise of the powers conferred by proviso second to sec. 5 of the Rajasthan Sales Tax Act, 1954 (Rajasthan Act No. 29/1954) the Government of Rajasthan being of the opinion that it is expedient in the public interest to do so, hereby provides that with immediate effect the rate of sales tax payable by a dealer in respect of the goods specified in column 2 of the list annexed hereto shall be as shown against them in column 3 of the said list. LIST S. No. Description of goods Rate of Tax 48. Goods other than the following - 5% (i) Goods specified in Sr. No. 1 to 47, above, (ii) Stationery including paper and newsprint, (iii) Readymade clothes, (iv) Footwear (v) Spectacles, spectacle frames and lenses, (vi) Gur, (vii) Kerosene Oil. This notification came for consideration before the Board of Revenue in the case of State of Rajasthan vs. Man Mohan Soda Water Factory (1964 RRD 297) and it was observed as under - "a plain reading of the above provision shows that the intention of the Legislature was that sales tax shall be levied at the general rate of 4 per cent on the taxable turn over at a single point in the series of sales, the point of levy being prescribed separately. This is subject to the qualification that the State Government may by a notification in the official gazette prescribe rates other than the general rate of 4 per cent which may not exceed 7 per cent in respect of any goods or class of goods to be specified in the notification. THE above said notification which purports to have been issued under sec. 5 of the Act first lists 47 items on which rates different from the general rate of 4 per cent have been specified. THE last and 48th item says that tax will be charged at 5 per cent on goods other than those listed as item 1 to 47 as well as six other items mentioned under item 48. THE effect is that the general rate of 4 per cent envisaged in sec. 5 will be chargeable on six items only viz. stationery including paper and newsprint, readymade clothes, footwear, spectacles, spectacle frames and lenses, gur and kerosene oil. As a result of this notification the general rate of sales tax has been restricted to six items, which is manifestly contrary to the intention of the Legislature as embodied in sec. 5 of the Act. Such a defective notification cannot serve as a legal sanction for levying tax on the opposite party for the sale of aerated water at the rate of 5 per cent which is higher than the general rate of 4 per cent. It is settled law that any rule or notification which is inconsistent with the provision of the statute under which it is issued is void and without effect. This Board has had occasion to strike down defective notifications under various Acts, and the notification referred to above deserves the same fate in so far as it seeks to impose tax at the omnibus rate of 5 % on all items other than those enumerated in item 48 of the notification. " (Our note - *it should have been 10 per cent.)

(2.) THEREUPON Act No. 11 of 1966 was promulgated on 5-5-66 (The date 5-9 66 given in the reference is incorrect ). Sec. 3 of this Act reads as below - (a) in sub clause (a) of clause (ii) of the first proviso for the expression 'two per cent of the sale price thereof the expression 'the limits laid down in cl. (a) of sec. 15 of the Central Sales Act, 1956 (Central Act 74 of 1956)' shall be substituted. (b) after the second proviso the following new proviso shall as from the 9th day of March, 1961 be deemed to have been added namely - "provided also that the rate at which the tax is payable by a dealer in respect of sale of any goods specified in a general way as "goods other than the following "or" all goods except only the goods specified in particular serial numbers etc. " in notifications issued from time to time fixing the rate of tax under the Act during the period commencing on the 9th day of March 1961, and ending on the 1st day of March 1963, for which five per cent rate of tax was fixed therein shall during the period of operation of those notifications, be five per cent on the taxable turnover. "

(3.) IN dealing with the case of West Derby Union vs. Metropolitan Life Assurance Co. Lord Watson clearly observed that it would be adopting a very dangerous and certainly unusual course if one were to import legislation from a proviso wholesale into the body of the statute, although he perfectly admitted that there may be and are many cases in which the terms of an intelligible proviso may throw considerable light on the ambiguous import of the statutory words. Lord Herschall in the same case said 'i decline to read into any enactment words which are not to be found there and which would alter its operative effect because of provisions to be found in any Proviso". Similarly, Moulton L. J. in the case of R. V. Dibdin made similar observations. But Caries in dealing with different kinds of proviso stated that some section though framed as a proviso upon preceding section may exceptionally contain matter which is in the substance of a fresh enactment, adding to and not merely qualifying what goes before. IN this connection he cited in the foot note the case of Rhondda U. D. C. vs. Taff Valery and the case of Local Government Board vs. South Stonehum Union. This one authority cited by the Advocate General and the last observations of Craies on Statute Law I am of the opinion that the natural interpretation of a proviso is to carve out an exception or to qualify the provision of the main enactment; but where a specific enactment is made in the guise of a proviso, then that proviso has to be interpreted independently of this section. This rule can be safely applied to the interpretation of proviso to sec. 5 of the Sales Tax Act and the retrospective operation given to the third proviso by the amendment Act No. XI of 1966. IN sec 5 of the Act as it originally stood provided that a rate of tax payable by dealer shall not exceed a certain percentage on a taxable turn over. This percentage has been amended from time to time as the history of amendment would indicate The effect of the new proviso by the amending Act No. 11 of 1966 was that the legislature intended and in fact validated the levy of 5% rate of tax on all goods in general way with retrospective effect. Thus in doing so, the legislature clearly intended to go beyond the scope of sec. 5 of the Sales Tax Act which restricted the leavy of the rate of tax at a certain percentage.