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2018 (1) TMI 1434 - HC - VAT and Sales TaxPayment of tax at compounded rates - levy of turnover tax on liquor - Interpretation of statute - Amendment in section 7 of Kerala General Sales Tax Act, 1963 - time of amendment coming into effect - whether effective from the commencement of year or from the date of amendment? - clauses a and b of section 7 - scope of expression 'whichever is higher', whether confined only to clause b or is applicable to both clauses? - Whether Section 7(b) of the Kerala General Sales Tax Act, 1963 introduced on 24.10.2006 with retrospective effect from 01.07.2006, could be applied to those dealers who had contracted for payment of turnover tax at the compounded rate (by way of the alternate method of taxation provided for), under the unamended Section 7 of the 1963 Act for the assessment year 2006-07? - Held that:- The amended provision of S. 7(b) of the KGST Act introduced through the Finance Act with retrospective effect from 01.07.2006 could be applied to those dealers who had opted for payment of compounded tax for the year 2006-07 under the unamended provision as well Whether Section 7(a) and 7(b) of the 1963 Act operate in different spheres and if not, would the said amended provision violate Article 14 and Article 19(1)(g) of the Constitution of India as contended in the Writ Petition? - Held that:- The term 'whichever is higher' used in S. 7(b) is not in respect of the three instances of the tax shown payable in the return, shown in the accounts or the tax paid in respect of the previous three consecutive years, but something else, which has to be dealt with more meticulously. It is in this context that the expression used- 'the highest turnover" in the very same provision requires consideration. Even going by the grammatical peculiarities and interpretations, 'super relative degree' is used in the first limb of the provision, qualifying the same with the word "the". In English language, 'comparative degree' is used only to compare between two instances, whereas super relative degree is to be used when there are more instances than two. For the very same reason, usage of the expression 'the highest Turn Over Tax payable' as conceded by the assessees in the return or the accounts or the turnover tax paid, definitely refers to more than two instances and as such it, evidently, is in respect of the three previous consecutive years, i.e., the amount which is the highest in respect of three different consecutive years has to be reckoned for working out the quantum of 115%. The expression 'whichever is higher'\s only an instance using 'comparative degree'. It cannot be with reference to the three different instances of the tax conceded in the return or accounts or turnover tax paid (as contended by the assessees) and it is definitely in respect of something else. That apart, since the highest figure is stipulated to be taken as contained in the first limb/opening part of the sentence, if the version of the assessees is accepted, the words 'whichever is higher used in the very same provision will become otiose. For this reason also, it has to be held that the expression "whichever is higher" is not confined to S. 7(b), but is in the context of a comparison to be made between the two figures available under S. 7(a) and (b). The amended provision of S. 7(b) of the KGST Act introduced through the Finance Act with retrospective effect from 01.07.2006 could be applied to those dealers who had opted for payment of compounded tax for the year 2006-07 under the unamended provision as well - S. 7(a) and S. 7(b) of the Act do not operate in different spheres and it is in respect of the same sphere facilitating to identify the proper figures, i.e., the higher one of the figures worked out separately under S. 7(a) and under S. 7(b). There is no violation of Article 14 or Article 19(1) (g) of the Constitution of India in any manner.
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