TMI Blog1957 (2) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessment was to be revised. The petitioner thereupon produced its books for the inspection of the department and on 29th March, 1956, the case was heard. The petitioner averred that for a period of three months it heard nothing in the matter in spite of reminders issued by it. On 5th September, 1956, it purporting to be an order made on 29th order which might have been passed. A copy was issued to the petitioner on 6th September, 1956, purporting to be an order made on 29th March, 1956, and with that was sent a notice of demand for Rs. 259-1-6. The petitioner's case is that the tax on the so-called sale of the tins of kerosene (though kerosene was exempt) is not proper and it asks us to issue a writ or writs to prohibit the taxing authorities from levying the tax. It also asks that the assessment made on it be quashed. 2.. The petitioner avers that the assessment order which is said to have been passed on 29th March, 1956, was not brought to its notice. The department in its reply has said that the shop of the petitioner was found closed and the notice was affixed to the house of the petitioner on 31st March, 1956. Nothing much turns upon this except in one way. The pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in Himmatlal Harilal Mehta v. State of Madhya Pradesh[1954] 5 S.T.C. 115; A.I.R. 1954 S.C. 403. 5.. We, therefore, entertained the petition for consideration and overruled the objection made by the department. The short question in this case is whether the tax is properly levied or not. It must be understood that we are dealing with a fiscal measure, and that in a fiscal measure there is no room for an intendment. The subject must be brought within the letter of the law if he is to be taxed, but if he cannot be, he must go free. There is also a rule that if there be any ambiguity, it is to be resolved in favour of the subject. Cases on the subject are numerous. It is not necessary to encumber this order with citation of them. 6.. On an examination of the Act in question, it is to be noticed that the charging section is a simple one. It lays the tax on the taxable turnover of a dealer. The difficulty in the interpretation of the Act arises because of numerous definitions which have to be inducted into the charging section to find out whether the tax is to be levied. It is here that the difference has arisen between the contending parties and they both claim that clause (q) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... choice between the one or the other of the things mentioned. They are not conjunctively placed so as to be read together. They are to be read as alternatives from which the choice or a selection must be made. 9.. Reading the section in the light of these observations, it is quite clear that the words "either" and "or" are not used in any technical sense. They are used to denote two states of affairs in which a turnover would be found. Referring to the definition, therefore, "turnover" means the aggregate amount for which goods are either sold or supplied. It would be clear from this that there is either to be a sale of the goods or the goods have to be supplied. The short question is whether the phrase "for the payment received in respect of a contract" can legitimately be taken to qualify the word "sold". Now these matters have sometimes to be decided on rules of grammar. Their Lordships of the Privy Council in Irrawaddy Flotilla Company, Ltd. v. Bugwandass18 I.A. 121. indicated that it is a common rule that the qualifying words should be confined to the subject which immediately precedes them. A test here is to try to read into this clause the definitions of such words as one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nition of "turnover", i.e., the nine words following "supplied", are meant to qualify "supplied" only. It would be encumbering this order to try to induct into that definition all the definitions which the words used indicate. Any person can rewrite the clause in an expanded form and will see that it leads to no other conclusion. There being no ambiguity, there is no need to go to extraneous evidence or the consideration of any other text. We accordingly are of the opinion that the words "either" and "or" are indicative of two separate sets of circumstances, namely, (i) the outright sale of goods; and (ii) the supply of goods towards the completion of a contract for work such as the definition of the word "contract" envisages. 10.. It is most remarkable that both the lawyers referred in the course of their arguments to the two cases of Gannon Dunkerley and Co. (Madras) Ltd. v. The State of Madras[1954] 5 S.T.C. 216. , and Pandit Banarsi Das v. State of Madhya Pradesh [1955] 6 S.T.C. 93. Those two cases did not cover this point at all. There the question was whether a contract for building was composed of labour and materials and whether in the case of materials a sales tax could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases in the Courts in India and a brief reference to them at this stage is desirable. 13.. The earliest case on the point is reported in Varasuki and Co. v. The Province of Madras[1951] 2 S.T.C. 1. In that case salt was being packed in bags and the bags were sold, there being an intention to charge a price for the bags as well. It was held that even if salt was exempted form sales tax, the sale of gunny bags was liable to taxation. That case was followed, though not with specific mention, in another Assam case reported in Mohanlal Jogani Rice and Atta Mills v. The State of Assam [1953] 4 S.T.C. 129. There the commodity which was exempted was rice and the gunny bags which were supplied for consideration were held to be liable to tax. Similar are two cases from Andhra-A.S. Krishna Co., Ltd., Guntur v. The State of Andhra[1956] 7 S.T.C. 26. in which packing material was held to be taxable, and B.V. Hanumantha Rao v. The State of Andhra[1956] 7 S.T.C. 486. in which palmyra fibre was packed and the packing material was held liable to tax. A similar view has been taken by the Madhya Pradesh High Court in Jaikishan Gopikishan v. Commissioner of Sales Tax, Madhya Bharat[1957] 8 S.T.C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances the reasoning which we have laid down would be found applicable. Each case will have to be decided on its own facts with advertence to the kind of packing material, the commodity exempted and the customs of the trade. In the present case, the facts are quite plain and the conclusion irresistible. 17.. Learned counsel for the petitioner referred to two cases from the Madras High Court reported in William Jacks and Co., Ltd., Madras v. The State of Madras[1955] 6 S.T.C. 301; A.I.R. 1955 Mad. 656. and William Jacks and Co., Ltd., v. The State of Madras[1956] 7 S.T.C. 327. There an attempt was made to tax electric motors separately from the unit in which they were incorporated on the ground that electric motors were liable to tax at a higher rate. Sometimes the identity of a part which is incorporated or which is utilised is so merged with the rest of the things that it is useless to try to break it into its component parts for the purposes of tax. If motor cars were exempted, the exemption would cover not only the motor cars as such but also all that goes to make a motor car such as tyres, batteries, upholstery etc. What has to be seen in each instance is how far the exemptio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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