TMI Blog1982 (8) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... uly, 1977, the assessing authority proposed to revise the assessment in exercise of its power under section 16 for bringing the sales turnover of sugar candy to tax at 3 per cent single point under item 9 of the Second Schedule to the Tamil Nadu General Sales Tax Act with effect from 7th July, 1975, on the ground that the said turnover had erroneouly been exempted from tax in the original assessment. The assessee was served with a notice to show cause why the revised assessment as proposed should not be made and the assessee filed his objections to the proposed revision of assessment. He submitted that according to the decision of this Court in Vasantha Co. v. State of Madras [1963] 14 STC 696, "sugar" should be taken to include "sugar candy" and therefore the sugar candy which has been sold by the assessee should be taken as nothing but sugar and that as sugar has been exempted from the levy of sales tax under the provisions of the Act, sugar candy also should be exempted from the levy of tax. The assessing authority did not accept this contention put forward by the assessee and revised the assessment and brought the turnover of Rs. 4,49,777.12 relating to sales of sugar candy f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had been subjected to levy of excise duty or the additional excise duty it cannot disable the State Legislature from bringing that item within the net of taxation. In that view the learned Judge has dismissed the writ petition as being devoid of any merit. The correctness of the order of Mohan, J., has been questioned in the writ appeal. As already pointed out the only ground on which the amendment to item 9 of the Second Schedule has been challenged is that since the additional excise duty is levied on sugar candy, no sales tax could be levied thereon by the State Government. According to the appellant, since the additional excise duty is levied on sugar candy in pursuance of the recommendations of the Second Finance Commission that in case where additional excise duty is levied by the Central Government, the State Government will not levy sales tax on the same goods as they will be entitled to get the proportionate share in the excise duties, and therefore the levy of sales tax by the State Legislature on sugar candy or other items referred to in item 9 of the Second Schedule will be contrary to the recommendations of the Finance Commission and if such double taxation is allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if any State Government levies sales tax it will lose the benefit which it would otherwise get under section 4 of the Act read with the Second Schedule to the Act. Therefore, it is clear that Act 58 of 1957 instead of taking away the power of the State Legislature to impose sales tax on the items of goods covered by that Act, merely disables the State Government from getting its share of the Central excise revenue realised under the provisions of the said Act. We are, therefore, of the view that the provisions of Central Act 58 of 1957 do not affect the power of the State to levy sales tax on the goods which are covered by the said Act. It is not possible to agree with the contention advanced by the learned counsel for the appellant that the State Legislature has no power to amend item 9 of the Second Schedule to the Tamil Nadu General Sales Tax Act in the manner it did, in view of the provisions of Central Act 58 of 1957. The learned council for the appellant then relies on the decision of this Court in Kishinchand Chellaram v. Joint Commercial Tax Officer [1968] 21 STC 367 and contends that since additional excise duty has been levied on sugar which includes sugar candy, the St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levy on the products under consideration ever since the passing of the Madras General Sales Tax Act, 1959, to take up a view contrary to that practice and understanding and arbitrarily decide to levy sales tax on the goods in question on the foot that they are not artificial silk." Here there is no dispute as to the interpretation of any expression as was the case in the decision in Kishinchand Chellaram v. Joint Commercial Tax Officer [1968] 21 STC 367. It is not the State Government's contention that "sugar" as defined in the Central Excises and Salt Act will not take in sugar candy. But what they contend is that, though sugar is exempted from the levy of tax under the Tamil Nadu General Sales Tax Act, sugar candy has been taken as a separate article of commerce, and therefore, they have chosen to levy sales tax on sugar candy. In the said decision (Kishinchand Chellaram v. Joint Commercial Tax Officer [1968] 21 STC 367) the power of the State Legislature to impose sales tax on artificial silk has not been questioned. But the principle laid down in that case was, a certain expression appearing in a statute should get the same interpretation either at the hands of the Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the assessee has been under a wrong impression that the diamond sugar was sugar candy while in fact it is only sugar and nothing but sugar. Therefore, the question which we have to consider in these tax case petitions is as to whether the diamond sugar dealt with by the assessee is sugar candy or it is merely sugar. The learned counsel refers to the decision of this Court in Vasantha Co. v. State of Madras [1963] 14 STC 696. In that case the question was whether sugar candy was sugar which was exempted from the levy of sales tax by the notifications issued by the State Government. The Sales Tax Appellate Tribunal had taken the view that sugar candy will not come within the description of sugar. This Court after referring to the definition of "sugar" under section 2(c) of Central Act 58 of 1957 and the notifications issued by the State Government exempting sugar from the levy of sales tax from 1957, held that sugar, which was exempted by the notification of the State Government, did in the context in which the exemption was granted took in sugar candy also. The said decision was rendered at a time when sugar candy and other articles made of sugar, such as bura sugar, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of "sugar" in Central Act 58 of 1957 and considering the fact that the same definition has been given in item 6, the court held that the State has excluded sugar candy from "sugar" and that it is entitled to levy sales tax on sugar candy while exempting "sugar" as such from the levy of sales tax. In Annapurna Biscuit Manufacturing Co. v. Commissioner of Sales Tax [1981] 48 STC 254 (SC), the Supreme Court has observed as follows while dealing with the question as to how an entry given in a schedule to the sales tax legislation has to be understood: "It is a well-settled rule of construction that the words used in a law imposing a tax should be construed in the same way in which they are understood in ordinary parlance in the area in which the law is in force. If an expression is capable of a wider meaning as well as narrower meaning the question whether the wider or the narrower meaning should be given depends on the context and the background of the case." In this case, having regard to item 5 of the Third Schedule, it is not possible for us to say that the expression "sugar" will include either sugar candy or the diamond sugar which is dealt with by the assessee in this cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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