TMI Blog1978 (12) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... vered from the assessee by way of Central sales tax. The assessee was, however, granted refund of the sales tax paid by the assessee to the registered dealers from whom he purchased cotton yarn under rule 47 of the Bombay Sales Tax Rules, 1959. The assessee had gone in appeal before the Assistant Commissioner of Sales Tax from the order of the Sales Tax Officer levying Central sales tax at the rate of 2 per cent on the aforesaid inter-State sales. His contention in the course of appeal that no Central sales tax could be levied, found favour with the Assistant Commissioner, who directed the refund of the Central sales tax of Rs. 947.20 levied on inter-State sales of the yarn. The Assistant Commissioner, however, in exercise of his suo motu revisional powers, called upon the assessee to show cause why refund of the amount of the sales tax of Rs. 924.50 should not be withdrawn, since, in his opinion, the assessee was not entitled thereto as no Central sales tax was paid on inter-State sales by him. After hearing the assessee, the Assistant Commissioner withdrew the refund of the amount of sales tax of Rs. 924.50. The assessee, being aggrieved with this order of the Assistant Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would read as under: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in upholding the refund of the sales tax of Rs. 924.50 paid by the assessee on purchase of cotton yarn from registered dealers, particularly the said goods when sold in inter-State trade or commerce, did not bear the Central sales tax under the Central Sales Tax Act, 1956?" It would be profitable to advert to the material parts of the relevant provisions of law which have a bearing on the point involved in the said question. They are section 15 of the Central Act, section 46B of the Bombay Sales Tax Act, 1953, section 44 of the Bombay Sales Tax Act, 1959, and rule 47 of the Bombay Sales Tax Rules, 1959. Section 15 of the Central Act has a chequered history. We need not go into the different vicissitudes from which the said section passed from time to time but we are concerned with the altered section as it emerged and placed on the statute book with effect from 1st October, 1958. Section 46B of the Bombay Sales Tax Act, 1953, was also simultaneously inserted in the Bombay Act by the Bombay Amending Act 71 of 1958 with effect from the same day as section 15 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealer shows to the satisfaction of the Commissioner that a tax under this Act or any earlier law has been levied in respect of any earlier sale or purchase of such goods made in the State after the date of the coming into force of section 15 of the Central Sales Tax Act, 1956, then an amount equal to the tax so levied shall be refunded to such dealer in such manner and subject to such conditions, as may be prescribed." (emphasis* supplied by us.) Rule 47 of the Bombay Sales Tax Rules, 1959, prescribed the manner and the conditions of the refund. It reads as under: "47. Refund in respect of declared goods.-In assessing the amount of tax payable in respect of any period by any dealer (hereinafter referred to in this rule as the claimant dealer'), the Commissioner shall grant to him in respect of declared goods resold by him in the course of inter-State trade or commerce, a refund of the following amounts, that is to say,(i) the amount of sales tax or as the case may be general sales tax recovered from him by a registered dealer on the purchase of declared goods made otherwise than against a certificate under section 12: Provided that, no refund under this rule shall be granted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 of the Bombay Sales Tax Act, 1959, read with rule 47 of the Bombay Rules would operate. In other words, the retrospective insertion of the condition precedent in clause (b) of section 15 would override the provision contained in the substantive sections in the Act and the manner prescribed for the refund in the Rules. In the opinion of the Tribunal, section 44, as it stood at all the relevant times, merely referred to the date of the coming into force of section 15 of the Central Act for purposes of allowing refund paid under the earlier State Act if the same goods were sold in inter-State trade or commerce subsequently. The Tribunal was of the opinion that since neither in the State Act nor in the Rules any corresponding provision has been made so as to bring it in conformity with the amended provision contained in clause (b) of section 15 of the Central Act, the assessee would be entitled to refund provided he satisfies the conditions prescribed in the State Act and the Rules made thereunder. It is this view of the Tribunal which has been challenged by the revenue. Avowedly, section 15 of the Central Act is designed to override and control the State power to tax transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d object of section 15 was to override and control the State power to tax the sales and purchases of declared goods. The Tribunal clearly overlooked the objects of inserting section 15 on the statute book and, therefore, fell in error that till the prescription of the condition precedent of payment of Central sales tax in order to earn the refund of the State tax paid on the same goods at an earlier stage is correspondingly inserted in section 44 and rule 47, the assessee cannot be deprived of the refund of the sales tax or purchase tax entitled to when the condition precedent was not there actually at the inception of the Central Sales Tax Act. It cannot be the intent of the Parliament when it placed section 15 on the statute book on 1st October, 1958, that even though the goods sold in inter-State trade or commerce did not bear the Central sales tax, even then an assessee would be entitled to claim the refund of the State tax merely because the declared goods have been sold in the course of inter-State trade or commerce. The legislative intent, as observed above, was to restrict the State power of taxing sales and purchases of the declared goods at more than one stage and beyond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use (b), namely, "shall be refunded to such person ......as may be provided in any law in force in that State", were substituted by the words, "shall be reimbursed to the person making such sale in the course of inter-State trade or commerce". The exact question before the Supreme Court was, whether the appellant-firm, a dealer in cotton yarn under the Tamil Nadu General Sales Tax Act (1 of 1959), who purchased yarn from local dealers and manufacturers and sold it by way of inter-State sale, was entitled to refund of the tax paid under the State Act on the yarn purchased by him when the dealer was assessed under the Central Sales Tax Act for the sale of yarn in the course of inter-State trade or commerce in accordance with section 15(b) of the Central Act and proviso to section 4 of the State Act read with rule 23 thereunder. The sales tax authorities upheld partially the claim of refund. The Appellate Tribunal, following the decision of the Madras High Court in M.A. Khader Co. v. Deputy Commercial Tax Officer[1970] 25 S.T.C. 104., rejected the balance claimed by the dealer. The Madras High Court also confirmed the order of the Appellate Tribunal. In appeal before the Supreme Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , would not materially affect the position. As already mentioned above, the legislature as a result of the amendment, clarified what was implicit in the provisions as they existed earlier. An amendment which is by way of clarification of an earlier ambiguous provision can be useful aid in construing the earlier provision, even though such amendment is not given retrospective effect. We may refer in this context to the observations on page 147 of Craies on Statute Law (Sixth Edition), which read as under: '...In Cape Brandy Syndicate v. Inland Revenue Commissioners[1921] 2 K.B. 403 at 414., Lord Sterndale, M.R., said: "I think it is clearly established in Attorney-General v. Clarkson[1900] 1 Q.B. 156. that subsequent legislation may be looked at in order to see the proper construction to be put upon an earlier Act where that earlier Act is ambiguous. I quite agree that subsequent legislation if it proceeded on an erroneous construction of previous legislation cannot alter that previous legislation; but if there be any ambiguity in the earlier legislation, then the subsequent legislation may fix the proper interpretation which is to be put upon the earlier. "' Looking to all the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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