TMI Blog2012 (8) TMI 863X X X X Extracts X X X X X X X X Extracts X X X X ..... if one or the other view is adopted. It was highlighted that the kind of language used in the provision, the scheme and purpose of the incorporating statute is of substantial consequence. In the facts of the case, we find that the working of the ET Act is not at all impaired on account of our finding that the meaning of the term "dealer" in the ET Act is on account of incorporation of the relevant provisions in the Bihar Finance Act, 1981 by reference. - The revisional order was also passed on June 30, 2010 but even before that as per the facts given in the synopsis of the appeals, an amount of ₹ 26,00,26,812 was realized by the Department through the appellant’s bank, the State Bank of India. Clearly the appellant did not indulge in any dilatory tactics which could show that it was not acting bona fide. Even as per law laid down on the subject, it is not easy to decipher whether legislation such as one under consideration is by way of incorporation by reference or is merely by reference or citation. The orders imposing penalty are set aside. But the orders of assessment imposing entry tax and the appellate and revisional orders upholding that part are confirmed - Decided pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ong with equal amount of penalty. The third case pertains to period 2008-09 wherein the amount of entry tax is ₹ 6,71,98,452 with equal amount of penalty. In the first two cases the assessment order is dated December 23, 2009 and in the third case it is dated January 11, 2010 passed by the assessing authority ACCT, Patna, Special Circle. The appeals preferred by the appellant against the assessment orders were dismissed by a common order dated March 23, 2010 passed by the JCCT (Appeal), Central Division, Patna. Thus, the total entry tax involves in these appeals is ₹ 14,85,86,750 and together with equal amount of penalty the total demand against the EC Railway is of ₹ 29,71,73,500. After the appellate order when notice of demand was issued the appellant filed a writ petition before this court bearing CWJC No. 5587 of 2010 which was disposed of on April 7, 2010 and the appellant was allowed to approach the Commercial Taxes Tribunal, Bihar, Patna. The three revision petitions filed before the Tribunal were dismissed by the common judgment dated June 30, 2010 which is subject-matter of these appeals. 4. It is not in dispute that the EC Railway, during the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds a and which preceding and succeeding the word Government are not only inappropriate but redundant. It is a well accepted rule of interpretation that courts must avoid an interpretation which shall render words used by the Legislature superfluous or otiose. Therefore, it must be held that Explanation II includes any Government, State or Central. 7. For appreciating the main contention noticed above, it would be useful to extract section 2(e) of the Bihar Finance Act, 1981, section 2(1)(b) of the ET Act, 1993 and section 2(i) of the VAT Act, 2005 because these provisions contain definition of the term dealer . Section 2(e) of the Bihar Finance Act, 1981.- dealer means any person who carries on (whether regularly or otherwise) the business of buying, selling, supplying or distributing goods, directly or indirectly, for cash, or for deferred payment, or for commission, remuneration or other valuable consideration and includes- (i) a local authority, a body corporate, a company, any cooperative society or other society, club, firm, Hindu undivided family or other association of persons which carries on such business; (ii) a factor, broker, commission agent, del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... society (including a co-operative society), club, firm or association which buys goods from, or sells, supplies or distributes goods to its members; (E) an industrial, commercial, banking or trading undertaking, whether or not of the Central Government or of any of the State Governments or of a local authority; (F) a casual trader; (G) a commission agent, broker, factor, a del credere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of buying, selling, supplying or distributing goods on behalf of the principal. Explanation.-Every person who acts as an agent on behalf of a dealer residing outside the State of Bihar and buys, sells, supplies or distributes goods in the State or acts on behalf of such dealer as- (a) a commission agent, broker, factor, a del credere agent, an auctioneer or any other mercantile agent, by whatever name called; or (b) an agent for handling goods or documents of title to goods; or (c) an agent for the collection or the payment of the sale price of goods or as a guarantor for such collection or payment; or (d) a local branch of a firm or company situated outside the State, sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be read as if its definition had been bodily transposed into it. Relevant part of paragraph 11 of the judgment reads thus:- 11. The problem here raised is dependent upon the construction which the several provisions which we have set out earlier would bear after the repeal of the Punjab Alienation of Land Act, 1900. One thing is clear and that is that the authority which enacted the repeal of the Punjab Alienation of Land Act did not consider that Punjab Act 1 of 1913 had itself to be repealed. We shall now consider the effect of the repeal of the Punjab Alienation of Land Act with reference to each of the provisions: (1) Definition of agricultural land under section 3(1): Where the provisions of an Act are incorporated by reference in a later Act the repeal of the earlier Act has in general, no effect upon the construction or effect of the Act in which its provisions have been incorporated. The effect of incorporation is stated by Brett. L.J. in Clarke v. Bradlaugh [1881] 8 QBD 63 (CA). Where a statute is incorporated, by reference into a second statute the repeal of the first statute by a third does not affect the second. In the circumstances, therefore, the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned, it has been cited only to highlight that a provision somewhat similar to Explanation II to section 2(e) of the Bihar Finance Act, 1981 was introduced in the Madhya Pradesh General Sales Tax Act and by fiction the Central or State Government even if it did not carry on required business, was deemed to be a dealer if it buys, sells, supplies or distributes goods and such provision was found legal and valid by the Supreme Court. 13. In the present case, there is no challenge to legality or constitutional validity of any statutory provision. For deciding whether the definition of dealer in the ET Act is legislation by mere reference or by incorporation, it is relevant to notice not only the legal precedents noticed above but also the preamble and provisions of the ET Act. Whereas the Bihar Finance Act, 1981 was legislated to consolidate and amend the law relating to the levy of tax on the sale and purchase of goods in Bihar, the ET Act is to provide for levy and collections of tax on entry of goods into local areas for consumption, use or sale therein. The Finance Act imposes tax on the transaction of sale or deemed sale of goods within the State of Bihar chargeable from a d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndments whereby reference has been made to the VAT Act clearly show that the Legislature has at places retained and relied upon the provisions of the Bihar Finance Act, 1981 even while introducing amendments containing reference to the VAT Act, 2005. Section 7(4) relating to offences and penalties provides that subject to other provisions of the Act all the provisions relating to offences and penalties of the Bihar Finance Act, 1981 relating to assessment, reassessment, calculation and enforcement of payment of tax required to be collected shall apply mutatis mutandis in relation to any process connected with such assessment, reassessment, collection or enforcement of payment of tax under this Act as if the tax under the Act is payable under this Act. Section 8 provides that the provisions of the Bihar Finance Act, 1981 and Rules made thereunder shall be applicable subject to other provisions of this Act and the Rules framed thereunder, in respect of the authority empowered to assess, reassess, collect and enforce payment of tax and penalty payable by a dealer under the Bihar Finance Act, 1981. They shall perform the aforesaid tasks under this Act and for that purpose they may exer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shtra [2011] 3 SCC 1 and in the case of Bharat Coop. Bank (Mumbai) Ltd. v. Coop. Bank Employees Union [2007] 4 SCC 685, it should be held that since the ET Act is not a complete code in itself but relies upon other Acts such as Bihar Finance Act and the VAT Act, the proper course would be to interpret even the definition clauses in a manner so as to allow the definition of the term dealer to be replaced by definition given in the VAT Act 2005 because it repeals the Bihar Finance Act, 1981. We find no substance in the aforesaid contention. The case of Girnar Traders [2011] 3 SCC 1 did not relate to a taxing statute which has to be strictly construed. Further in that case exceptions were pointed out to legislation by incorporation or by reference on account of doctrine of pith and substance and harmonious application of two statutes. The submission that the ET Act is supplemental to Bihar Finance Act, 1981 and, therefore, all provisions of the VAT Act, 2005 whereby the Bihar Finance Act, 1981 was repealed must be read into ET Act, does not have merit. Learned counsel for the State has rightly pointed out that source of power for entry tax is available in entry 52 of List II of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It was highlighted that the kind of language used in the provision, the scheme and purpose of the incorporating statute is of substantial consequence. In the facts of the case, we find that the working of the ET Act is not at all impaired on account of our finding that the meaning of the term dealer in the ET Act is on account of incorporation of the relevant provisions in the Bihar Finance Act, 1981 by reference. 17. In view of the aforesaid finding and discussion, the two substantial questions of law noticed above in respect of definition of the term dealer are answered in favour of the State and against the appellant. 18. So far as the imposition of penalty is concerned, learned counsel for the appellant has placed reliance upon a Division Bench judgment of this court in the case of Indian Oil Corporation Ltd. v. State of Bihar [2004] 138 STC 29 (Patna); [2003] 3 PLJR 561. Paragraphs 18 to 20 of that judgment deal with the issue whether a penalty should have been imposed under provisions of the Finance Act, 1981. Reliance was placed upon judgment of the Supreme Court in the case of Hindustan Steel Ltd. v. State of Orissa [1970] 25 STC 211 (SC), and in the case of E.I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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