1961 (11) TMI 58 - SC - VAT and Sales Tax

Whether sugar-cane falls within the term green vegetables and is therefore exempt from sales tax under the exemption given by the notification dated August 28 1947 issued under section 6 of the Bihar Sales Tax Act (Act XIX of 1947)? Held that - The preamble cannot limit or change the meaning of the plain words of section 2(c) of the Act which apply to the case of the appellant and therefore the amended section is applicable to the present case. It is an erroneous approach to the question to say that because of the words for the financial year beginning on the first of April 1950 in the particular context in the preamble the definition of the word dealer was amended only for one year. Nothing has been shown indicating that section 2(i) of the Bihar Annual Finance Act intended to effect a temporary amendment in the previous definition of the word dealer in clause (c) of section 2 of the Act. The contention is therefore repelled. It was also submitted that the assent of the President was not given to the Bihar Annual Finance Act 1950. In our opinion that submission is equally without force because tax on sale of goods is a matter entirely within entry 54 of the State List and the amendment made in the definition of the word dealer in the Act did not require the assent of the President. In our opinion the appeals and the petitions under Article 32 are without merit and are therefore dismissed

Summary

Issues:
1. Whether sugar-cane falls within the term "green vegetables" exempt from sales tax.
2. Whether the appellant company qualifies as a "dealer" under the Bihar Sales Tax Act.

Detailed Analysis:
1. The principal issue in this case is whether sugar-cane is considered a "green vegetable" and thus exempt from sales tax under a notification issued by the State Government. The High Court ruled against the appellant, stating that sugar-cane does not fall under the category of "green vegetables." The appellant argued that sugar-cane should be classified as a green vegetable based on a judgment from the Bombay High Court. However, the Supreme Court disagreed, citing a different interpretation of the term "vegetables" in taxing statutes. The Court held that sugar-cane does not meet the definition of "green vegetables" as commonly understood and defined in dictionaries. Therefore, the exemption from sales tax does not apply to sugar-cane.

2. The second issue pertains to whether the appellant company qualifies as a "dealer" under the Bihar Sales Tax Act. The definition of a "dealer" includes any person involved in selling or supplying goods. The appellant contested this classification, arguing that it was not a dealer as defined in the Act. The appellant relied on an amendment to the definition of "dealer" introduced by the Bihar Annual Finance Act, 1950. However, the Court rejected this argument, stating that the amended definition applied to the appellant's case. The Court emphasized that the preamble of the Bihar Annual Finance Act did not intend to make a temporary change to the definition of "dealer." Additionally, the Court clarified that the assent of the President was not required for the amendment related to the definition of "dealer." Consequently, the Court concluded that the appellant company met the criteria to be classified as a "dealer" under the Act.

In conclusion, the Supreme Court dismissed the appeals and petitions under Article 32, ruling against the appellant on both issues. The Court held that sugar-cane does not qualify as a "green vegetable" for sales tax exemption and affirmed that the appellant company falls under the definition of a "dealer" as per the Bihar Sales Tax Act. The appeals and petitions were deemed without merit and were dismissed with costs awarded to the respondents.