TMI Blog1992 (3) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of Chapter II. Section 32 of the Act requires every registered dealer to furnish returns as may be prescribed. In exercise of the powers under section 74 of the Act, the State Government has framed the Rules known as the Bombay Sales Tax Rules, 1959. The Schedule to the Rules sets out various forms which are to be filed by the registered dealer and form No. 18A refers to the monthly returns-cum-challan of tax payable by dealer. A perusal of the form indicates that the entries to be filled are: Amount (1) Total amounts paid or payable to/by the dealer for Rs. all sales/purchases made during the period. (2) Net turnover of sales/purchases subject to tax. (3) Total tax payable (sales tax and purchase tax) (4) Less amount of drawback, set-off, etc., admissible. (5) Balance payable/refundable. (6) Additional tax under section 15A-I. (7) Total of (5) and (6). (8) Penalty. (9) Amount paid. Rule 41D, inter alia, provides that in assessing the amount of tax payable in respect of any period by a registered dealer, the Commissioner shall grant him subject to the reduction specified in sub-rule (3) a drawback, setoff, or as the case may be, a refund of aggre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes that the earlier trade circular dated February 10, 1976 stands withdrawn and it is clarified that the additional tax will be calculated as a percentage of the gross tax payable on all sales and purchases before deduction or set-off. The circular then recites that the new method of computation of additional tax will be resorted to from April 1, 1983. This action on the part of the department has given rise to filing of the present petition on August 12, 1983. 5.. Shri Andhyarujina, learned counsel appearing on behalf of the petitioners, submitted that the trade circular dated March 31, 1983, issued by the department proceeds on misconception as to what has been held by the Supreme Court in the case of S. Kodar [1974] 34 STC 73. The learned counsel urged that the question as to how the additional tax should be computed did not arise for consideration of the Supreme Court. The submission is correct and deserves acceptance. In the case before the Supreme Court the appellants had filed writ petitions in the High Court of Madras challenging the validity of the Tamil Nadu Additional Sales Tax Act, 1970, but the challenge was turned down by the High Court. In appeal carried to the Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the Supreme Court in this paragraph suggest that the additional tax has to be calculated with reference to each transaction of sale or purchase. It was contended that additional tax has to be imposed only if turnover of the dealer exceeds Rs. 10 lakhs and as the additional tax is determined with reference to the turnover, it would have no relation to the method of computing the basic tax. It is impossible to find any merit in the contention. The department has clearly misread the decision of the Supreme Court, and proceeded to compute the additional tax as the percentage of the gross tax payable on all sales and purchases before deduction or set-off. In our judgment, the circular dated March 31, 1983, clearly misreads and misinterprets the clear provisions of section 15A-I of the Act. 6. On behalf of the department it was submitted that the provisions of section 15A-I of the principal Act were amended by the Maharashtra Sales Tax (Amendment and Validating Provisions) Act, 1984 and the words "the tax payable by him shall be increased by the levy of additional tax at the rate of 12 per cent of the tax payable by him" are substituted by the words "the tax payable by him on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax payable on all sales and purchases prior to deduction or set-off. 7.. Our attention was invited on behalf of the department to the Statement of Objects and Reasons, which, inter alia, recites that additional tax at the rate of 12 per cent is being levied on the tax payable by dealer having a turnover of more than Rs. 10 lakhs. The objective underlying levy of additional tax is to ensure collection of 12 per cent additional tax on the total tax payable. The statement then claims that judicial pronouncements lend support to the view that additional tax is an enhancement in the rate of tax and that set-off claimed are taxes paid. The statement then claims that with a view to ensuring that the objective is fulfilled, the Commissioner of Sales Tax has issued a clarification on March 31, 1983 and to give statutory effect to the clarification section 15A-I is suitably amended with retrospective effect from April 1, 1983. The department claims that the Statement of Objects and Reasons should be read to determine the correct interpretation of section 15A-I of the Act. Shri Andhyarujina complains, and in our judgment with considerable merit, that the Statement of Objects and Reasons ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d instances where the Legislature, to use the famous language of a law Lord, has misfired and however much we may regret the misfiring it would be our duty to relieve the subject from taxation if the language of the statute does not support the contention of the income-tax department." In our judgment, it is not permissible to read Statement of Objects and Reasons to ascertain the intention of the Legislature for interpreting the unambiguous words of the section. In our judgment, the construction suggested on behalf of the department on section 15A-I would lead to very unusual results and the construction cannot fit in the scheme of the Act. The calculation of the additional tax cannot be as a percentage of the gross tax payable on all sales and purchases before deduction or set-off. The mode suggested by the department in accordance with the circular dated March 31, 1983, is clearly opposed to the method of computation prescribed by section 6 of the Act. The tax payable is to be calculated in accordance with the provisions of the Act and the Rules and in our judgment the additional tax under section 15A-I of the Act will be payable on the net amount of tax payable by the dealer, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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