TMI Blog1984 (8) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... company was permitted to purchase certain goods under C forms at a concessional rate of tax at 4 per cent as prescribed under section 8(1)(b). But for the C forms, the company has to pay 10 per cent tax on the sale of those goods. The company has been making use of those goods in the manufacture of newspapers. 3.. By a notice dated October 15, 1975 the Assistant Commercial Tax Officer, VII Circle, Bangalore, informed the company that the definition of "goods" under the "Act" excludes "newspapers". He asked the company not to use C forms for purchasing the articles used in the manufacture of newspapers. He directed the company to produce its registration certificate to delete the articles like ink, metal, maplitho paper, machinery parts, craft paper and jute twine which are used in the manufacture and packing of newspapers. 4.. The company resisted the action proposed. It contended that the newspaper has always been regarded as goods. But it was removed from the definition of the word "goods" in the Act with the primary intention of avoiding tax on sale or purchase of newspapers. That does not necessarily mean that the newspaper ceases to be goods for all purposes and even in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate must conform to these constitutional parameters. So the necessary amendments were made to the provisions of the Act by excluding "newspapers" from the definition of goods ". Section 2(d) of the Act provides: "'goods' includes all materials, articles, commodities and all other kinds of movable property, but does not include newspapers, actionable claims, stocks, shares and securities." (emphasis supplied) The definition of the word "goods" under the Karnataka Sales Tax Act, 1957 was also brought in line with the definition of that word under section 2(d) of the Act. Section 2(l)(m) of the K.S.T. Act, 1957, reads: "'goods' means all kinds of movable property (other than newspapers, actionable claims, stocks and shares and securities) and includes livestock, all materials, commodities, and articles (including those to be used in the fitting out, improvement or repair of movable property) and all growing crops, grass or things attached to, or forming part of, the land which are agreed to be severed before sale or under the contract of sale." 9.. It is now necessary to refer to some of the provisions of the Act which are relevant to the question raised in this case. Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on July 16, 1964) has held that newspapers are outside the reach of the Act and the goods used in the manufacture of newspapers therefore cannot be purchased under C forms at concessional rate of tax. 10.. Mr. S.G. Sundaraswamy, learned counsel for the petitioners, urged that this Court in the above decision has not correctly laid down the law and the question, therefore, must go to a larger Bench. He contended that the word "goods" used in section 8(3)(b) must be understood in the commercial sense and not with the narrow meaning assigned to it by the definition under section 2(d) of the Act. According to him if the sale of materials which are used in the manufacture of newspapers is not given the benefit of concessional rate of tax, then the newspapers cannot be made available to the general public at a reasonable price and that would be detrimental to the public interest. The counsel placed some reliance on the decision of a single judge of the Madras High Court in Indian Express (Madurai) Ltd. v. Deputy Commercial Tax Officer, Mount Road Division II, Madras-2 [1972] 29 STC 88. 11.. It is no doubt a proper suggestion that the newspapers should be within the reach of every pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 8(3)(b) clearly is that when goods are purchased by a registered dealer for being used by him in the manufacture or processing of goods which are intended for sale, the goods which are ultimately sold should not become unduly expensive to the consumer by addition of a high rate of sales tax on the purchase of goods which are used in the manufacture or processing of the goods ultimately sold." The Statement of Objects and Reasons appended to the Constitution (Tenth Amendment) Bill, 1956 (Bill No. 35 of 1956), also lends support to this view: "...........Broadly, therefore, inter-State sales should be the concern of the Union, but the responsibilities pertaining to the Union could be exercised through the State Governments, and in any case, the revenue should appropriately devolve on them. Intra-State sales, on the other hand, should be left to the States, but with one important exception. Where, for instance, raw material produced in a State is important from the point of view of the consumer or the industry of another State, certain restrictions have to be placed on the taxing power of the State Government, as otherwise it can effect an increase in the cost of the manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut this is not inflexible and there may be sections in the Act where the meaning may have to be departed from on account of the subject or context in which the word has been used and that will be giving effect to the opening sentence in the definition section, namely, unless there is anything repugnant in the subject or context. In view of this qualification, the Court has not only to look at the words but also to look at the context, the collocation and the object of such words relating to such matter and interpret the meaning intended to be conveyed by the use of the words under the circumstances....." 15.. We have examined carefully the provisions of section 8(1)(b) and section 8(3)(b). There is nothing in the context in which the word "goods" occurs in section 8(3)(b) which justifies the denial of the meaning given to it in the interpretation clause. Section 8(3)(b) appears to be exhaustive. It covers even the materials used in the manufacture of goods which are not chargeable to tax under the Act. For example, section 6 excludes levy of tax on electrical energy. However, the concessional rate of tax has been extended in respect of sale of goods which are used in the generati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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