TMI Blog2019 (6) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... oods of foreign origin irrespective of the manner in which the said goods entered Tamil Nadu? - HELD THAT:- The words of the relevant provision of the tax statute should be construed literally so as to discern the correct meaning and scope thereof. In the instant case, as is evident from the language of Entry 9 of the XI Schedule, the expression used is imported items falling in Parts-D and E of the I Schedule. Therefore, the meaning of the word imported items should be examined. The word imported is not defined in the TNGST Act. However, it is evident from provisions such as Section 9 that the TNGST Act envisages import of goods from other parts of India into Tamil Nadu and also import of goods from outside India into India. In the case of aircraft, it is the admitted position that it would be taxable at 12% if it is treated as a non-imported item, whereas it would be taxable at 20%, if it is treated as an imported item. The meaning of words in a statute, in general, and, in particular, in a tax statute, should be gathered from the language used therein and the expression goods of foreign origin or aircraft of foreign origin cannot be substituted for or read into the words ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mumbai to M/s.Pressman, Kolkatta, and, in turn, M/s.Pressman, Kolkatta, sold it to M/s.RPG Enterprises, Kotkatta from whom the Petitioner ultimately purchased the aircraft. The Petitioner further states that the said aircraft was, thereafter, sold by the Petitioner to the Orient Flying School, Chennai, on 08.03.2004. In respect of the said transaction of sale, the Petitioner obtained registration as a Casual Dealer on the file of the Respondent under the provisions of the TNGST Act. Subsequently, the Petitioner filed the monthly return in respect of the sale of aircraft and remitted the applicable 12% sales tax thereon. It is further stated that the Respondent completed the original assessment by accepting the return filed by the Petitioner. 4.The Petitioner states that it, thereafter, received a prerevision notice from the Respondent seeking to revise the original assessment of the Petitioner by proposing to levy a higher rate of tax, i.e. at 20%, on the basis that it is an imported aircraft. The Respondent further proposed to levy tax on the turnover relating to sale of old and discarded materials and on the miscellaneous income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Petitioner should not be treated as a casual dealer because the Petitioner has a place of business within Tamil Nadu. He further submitted that Section 3(2-C) was introduced by an amendment made in the year 2002 with effect from 01.07.2002 and the said Section 3(2-C) reads as under:- Sec.3(2-C) Subject to the provisions of sub-section(1), in the case of goods mentioned in the Eleventh Schedule, the tax under this Act shall be payable by a dealer at the rate and at the point specified therein on the turnover or quantity in each year relating to such goods. 6.The learned Senior Counsel, thereafter, referred to the Impugned Order at Page 30 of the typed set of papers to point out that the Petitioner was treated as an unregistered dealer for the purposes of the revised assessment order and that the revised assessment order at page 35 shows that the claim is in respect of differential tax. He further submitted that the procedure for re-opening the assessment of a casual dealer as per Rule 14 of the TNGST Act was not followed in the instant case. 7.In response, Mr.Mohammed Shaffiq, the learned Special Government Pleader(Taxes), appear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereafter, referred to Section 9 of the TNGST Act, which deals with the stage of levy of taxes and, in relevant part, states as under: Section 9. Stage of levy of taxes in respect of imported and exported goods: Where in the case of any goods tax is leviable at one point in a series of sales or purchases, such series shall__ (a)in the case of goods imported into the State either from outside the territory of India or from any other State in India, be deemed to commence at the stage of the sale or purchase effected immediately after the import of such goods. 10.Thereafter, the learned counsel referred to the Full Bench Judgment of the Allahabad High Court in COMMISSIONER, SALES TAX, U.P. Vs. ALLIED CHEMICALS, KANPUR in [1969] 23 STC 1659(All). In specific, the learned counsel referred to paragraphs 1,5,6 and 7 wherein it was held that in view of the prohibition under Article 286 of the Constitution, turnover arising out of sales outside the State of Uttar Pradesh should not be taken into consideration. By relying on the said judgment, the learned counsel for the Respondent pointed out that the Sales Tax Department is, theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the power to levy customs duty on imported goods cannot curtail the power of the State Government to levy sales tax. He further pointed out that, in the said case, sales tax was levied at 20% by applying the XI Schedule because the goods were treated as imported goods. He also referred to the judgment of the Hon'ble Supreme Court in the Civil Appeal arising out of the above mentioned SONY INDIA LTD Case wherein the matter was remanded to the First Appellate Authority and the judgment of the Division Bench of this Court was set aside. He also appended the judgment of the Hon'ble Supreme Court in POLESTAR ELECTRONIC (Pvt.) LTD. Vs. ADDITIONAL COMMISSIONER, SALES TAX (1978) 1 SCC 636 , to his notes on submissions, and relied upon paragraphs 6,7,8 and 11 of the said judgment wherein it was held that when the word used in the relevant provision is 're-sale', without specifying a geographical limitation, the words in Delhi cannot be read into it. Likewise, according to the learned counsel, the words into Tamil Nadu should not and cannot be read into Entry 9 of the XI Schedule after the word imported . 11.By way of rejoinde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration and notes on submissions of both sides were carefully considered. 13.The issues that arise for consideration in this case are whether the sale of the aircraft in Tamil Nadu on 08.03.2004 should be considered as the first sale for purposes of the TNGST Act and whether the said sale in Tamil Nadu is to be considered as the sale of an imported item notwithstanding the fact that the said aircraft was imported into India in July 1992 and, thereafter, changed hands on a couple of occasions by way of domestic sales before being brought into the State of Tamil Nadu on payment of CST. 14.As regards the first question, namely, whether the sale is to be regarded as the first sale for purposes of the TNGST Act, the contentions of the learned counsel for the Respondent are well founded. In specific, the learned counsel for the Respondent referred to various Articles of the Constitution so as to establish that legislative powers have been clearly demarcated as between Parliament and state legislatures and that, consequently, no state can impose a tax on transactions that take place outside the state concerned. He further referred to Section 4 of the CS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t submitted that the geographical origin of the goods should be reckoned for the purposes of ascertaining whether the goods are imported and, therefore, taxable under the XI Schedule. He further submitted that the word 'imported' qualifies the goods and not the activity of bringing the goods into India or Tamil Nadu. 16.In a nutshell, the relevant question is whether Entry 9 of Schedule XI deals with goods of foreign origin irrespective of the manner in which the said goods entered Tamil Nadu. In this connection, it is relevant to bear in mind that words cannot be read into a taxing statute and intent is not a valid basis to construe a tax statute. In other words, the words of the relevant provision of the tax statute should be construed literally so as to discern the correct meaning and scope thereof. In the instant case, as is evident from the language of Entry 9 of the XI Schedule, the expression used is imported items falling in Parts-D and E of the I Schedule. Therefore, the meaning of the word imported items should be examined. The word imported is not defined in the TNGST Act. However, it is evident from provisions such as Section 9 that the TNGST Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mil Nadu, the said aircraft does not qualify as an item imported into India but was an item imported into Tamil Nadu from another Indian state. In effect, the geographical origin of the goods does not qualify the goods de hors the manner of entry of the goods into the the territory of the state concerned because that would tantamount to substituting the words items of foreign origin instead of imported items . As stated earlier, the meaning of words in a statute, in general, and, in particular, in a tax statute, should be gathered from the language used therein and the expression goods of foreign origin or aircraft of foreign origin cannot be substituted for or read into the words imported items . If the intention of the State Legislature was to tax goods of foreign origin at higher rates notwithstanding the fact that the goods entered Tamil Nadu by way of inter-state sale upon payment of CST, the expression that should have been used is goods of foreign origin. In this connection, the judgment of the Five Judge Bench of the Hon'ble Supreme Court in the COMMISSIONER OF CUSTOMS Vs. DILIP KUMAR, (2018) 9 SCC 1, on the interpretation of tax statutes, is relevant. At pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (ii) If goods are imported into India and sold in Tamil Nadu, sales tax may be imposed at the rate specified in Entry 9 of the XI Schedule of the TNGST Act notwithstanding the fact that the goods were cleared earlier for home consumption under the Customs Act, 1962, provided the goods can reasonably be qualified by the words imported from outside India at the point of sale in Tamil Nadu. (iii) In the instant case, the aircraft was imported into India through Maharashtra in the year 1992 and after two domestic sales outside Tamil Nadu was brought into Tamil Nadu by way of inter-state sale upon payment of CST. (iv) Consequently, at the point of entry into and sale in Tamil Nadu, the aircraft was not an item imported from outside India and, therefore, Section 3(2-C) read with Entry 9 of the XI Schedule of the TNGST Act was not applicable. Instead, the sale of the aircraft was liable to be taxed at 12% as per Section 3(2) read with Entry 2 of Part D of the I Schedule to the TNGST Act. 18.For the foregoing reasons, this Writ Petition is liable to be allowed and the Impugned Re-assessment Order dated 28.11.2006 is liable to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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