1960 (2) TMI 41 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Interpretation of the term "person" in G.O. No. 402.
2. Eligibility for sales tax exemption under G.O. No. 402.
3. Distinction between separate partnership firms for tax purposes.
4. Applicability of the definition of "person" from the Madras General Clauses Act.

Detailed Analysis:

1. Interpretation of the term "person" in G.O. No. 402:
The primary issue revolves around the interpretation of the term "person" in G.O. No. 402. The Sales Tax Appellate Tribunal relied on the opinion of the Board of Revenue of Madhya Pradesh in Govindram Surajmal v. State of Madhya Pradesh, which suggested that "person" should be understood as a "juristic person" rather than in its popular sense. The Tribunal's view was that the two firms, despite having the same partners, were distinct juristic entities due to their separate registrations and municipal licenses.

2. Eligibility for sales tax exemption under G.O. No. 402:
G.O. No. 402 grants sales tax exemption to "every person owning or having an interest in hand-oil presses, single or multiple, and dealing exclusively in the produce of such presses." The respondent firm, Messrs. Bayya Subbarao & Co., claimed this exemption, arguing that they dealt exclusively in castor oil and castor cake from hand-oil presses after August 1, 1954. The department, however, assessed both firms as a single unit, thereby disallowing the exemption.

3. Distinction between separate partnership firms for tax purposes:
The Tribunal concluded that the two firms should be treated as separate entities for tax purposes, based on their separate registrations and municipal licenses. The Tribunal's decision was challenged by the department, which argued that the firms, having the same partners, should be considered as one entity.

4. Applicability of the definition of "person" from the Madras General Clauses Act:
The definition of "person" in the Madras General Clauses Act includes "any company or association of individuals whether incorporated or not." The court examined whether this definition could be imported into G.O. No. 402. It was determined that the definition in the General Clauses Act should only apply if there is no repugnancy with the subject or context of the enactment. The court noted that the term "person" in G.O. No. 402 was intended to have a narrow significance, referring to an individual rather than a firm or an association.

Conclusion:
The court held that the word "person" in G.O. No. 402 should be understood in its popular sense, referring to an individual, and not as a legal or juristic entity. Consequently, the Sales Tax Appellate Tribunal's view that the two firms were separate entities for the purpose of tax exemption was unsustainable. The revision petition by the Government of Andhra Pradesh was allowed, and the court made no order as to costs.

Petition allowed.