TMI Blog1965 (12) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... - - - Dated:- 14-12-1965 - SUBBA RAO K., SIKRI S.M. AND SHAH J.C. JJ. A. Ranganatham Chetty, Senior Advocate (A.V. Rangam, with him), for the appellant. T.A. Ramachandran and O.C. Mathur of J.B. Dadachanji and Co., for the respondent. -------------------------------------------------- The judgment of the Court was delivered by SUBBA RAO, J.- These appeals, by special leave, raise the question of the true construction of the provisions of rule 5(1)(i) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, hereinafter referred to as the Rules. The facts are not in dispute and they may be briefly stated. The respondent, Messrs. Swasthik Tobacco Factory, is a dealer in tobacco. It purchased raw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as rejected. On appeal, the order of the said officer was confirmed by the Appellate Assistant Commissioner of Commercial Taxes. On a further appeal to the Sales Tax Appellate Tribunal, the assessee, in addition to the question of deduction, raised an additional ground that the entire turnover of the sales of chewing tobacco was not liable to be assessed. The Tribunal rejected both the contentions and confirmed the order of the Appellate Assistant Commissioner. The State carried the matter in two revisions to the High Court of Madras. A Division Bench of the said High Court agreed with the view expressed by the Tribunal and dismissed the revisions. Hence the present appeals. Mr. A.V. Rangam, learned counsel for the State, argued that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent relied upon the expression "in respect of" preceding the said words. If, instead of the expression "in respect of", the word "on" were there, the intention of the rule would be manifest and the answer to the question raised would be obvious. The excise duty paid by the respondent was only on the raw tobacco and not on the goods sold by it and, therefore, the said duty was not deductible thereunder. So far there is no dispute. But it was said that the expression "in respect of" made all the difference. The words "in respect of", it was said, meant "attributable" and, therefore, the argument proceeded, the excise duty paid on the tobacco, though it was not paid on the goods sold by the respondent, was attributable to the said goods sol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vict. c. 30) and observed that the phrase denoted some imprecise kind of nexus between the property and the estate duty. The House of Lords in Asher v. Seaford Court Estates Ltd. L.R. [1950] A.C. 608., in construing the provisions of section 2, sub-section (3) of Increase of Rent and Mortgage Interest (Restrictions) Act, 1920 (10 11 Geo. 5, c. 17), held that the expression "in respect of" must be read as equivalent to "attributable". The Privy Council in Bicher, Ltd. v. Commissioners of Income Tax [1962] 3 All E.R. 294. observed that the said words could mean no more than "consisting of" or "namely". It is not necessary to refer to other decisions. It may be accepted that the said expression received a wide interpretation, having rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eans only "on the goods". Even if the word "attributable" is substituted for the words "in respect of", the result will not be different, for the duty paid shall be attributable to the goods. If it was paid on the raw material it can be attributable only to the raw material and not to the goods. We, therefore, hold that only excise duty paid on the goods sold by the assessee is deductible from the gross turnover under rule 5(1)(i) of the Rules. We cannot, therefore, agree with the construction of rule 5(1)(i) of the Rules accepted by the High Court. No other question was raised before us. In the result, we modify the order of the High Court accordingly. In the circumstances, we direct the parties to bear their respective costs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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