TMI Blog1985 (4) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Territory of Delhi cannot be sustained. Appeal allowed. - Civil Appeal No. 2083 of 1974, - - - Dated:- 26-4-1985 - Judge(s): E.S. VENKATARAMAIAH., R. S. PATHAK S.C. Manchanda, Senior Advocate (R.N. Poddar, Advocates, with him), for the respondents. Dr. L.M. Singhvi, Senior Advocate (Mrs. Anjali Verma, R.C. Chawla, N.K. Bhuraria and L.K. Pandey, Advocates, with him), for the appellant. JUDGMENT The judgment of the court was delivered by PATHAK J.- -This appeal by special leave is directed against the judgment and order of the High Court of Delhi dismissing the appellant's writ petition questioning the liability imposed on him in a sales tax assessment. The appellant carries on business as a dealer in the re-sale of cotton yarn. As a dealer, he has been registered under the Bengal Finance (Sales Tax) Act, 1941, as applied to, the 'Union Territory of Delhi (hereinafter referred to as the " State Act "). The appellant says that he purchases cotton yarn and sells it to registered dealers, unregistered dealers and consumers. For the assessment year 1968-69, the appellant submitted his return of turnover under the State Act and claimed exemption in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eof, and such tax shall not be levied at more than one stage." The tax is payable by a dealer under the State Act on taxable turn. over, and sub-s. (2) of S. 5 provides : " (2) In this Act, the expression 'taxable turnover' means that part of a dealer's gross turnover during any period, which remains after deducting therefrom (a) his turnover during that period on (i) the sale of goods declared tax-free under section 6; (ii) sale to a registered dealer of goods of the class or classes specified in the certificate of registration of such dealer, as being intended for resale by him, or for use by him as raw-materials in the manufacture of goods for sale ; and of containers or other materials for the packing of goods of the class or classes so specified for sale : Provided that in the case of such sales a declaration duly filled up and signed by the registered dealer to whom the goods are sold and containing the prescribed particulars on a prescribed form obtainable from the prescribed authority is furnished in the prescribed manner by the dealer who sells the goods : Provided further that where any goods specified in the certificate of registration are purchased by a regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... difficult to say that the levy exists in point of law. Any uncertainty or vaguenesss in the legislative scheme defining any of those components of the levy will be fatal to its validity. The charging provision, s. 4, of the State Act enacts that every dealer whose gross turnover during the year exceeds the taxable quantum shall be liable to pay tax. The ordinary rule under the State Act appears to be that the sale made by every dealer in a series of sales by successive dealers is liable to tax. That is multi-point taxation. In a scheme of single point taxation, the levy is confined to a single point in a series of sales by successive dealers. According to the Revenue, the present levy falls in the latter category, and sub-cl. (ii) of cl. (a) of sub-s. (2) of s. 5 implies the single point at which the turnover of goods may be taxed. That argument found favour with the High Court and it held the single point in a series of sales to be the sale made by the last registered dealer among successive dealers when he sold the goods to an unregistered dealer or a consumer. In this connection, the High Court relied on the construction placed by it on sub-cl. (ii) of cl. (a) of sub-s. (2) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Union Territory of Delhi would be able to recover tax on resale of the goods by the purchasing dealer. The goods must be taxed at least at one point and it could not have been intended that they should not be taxable at all at any point by the Union Territory of Delhi. The revenue urged that it was for the purpose of taxing the goods at least at one point that the second proviso was enacted by the Legislature. We do not think this contention based on the presumed intention of the legislature is well-founded. " And again : " The intention of the Legislature was clearly not that the Union Territory of Delhi should be entitled to tax the goods at least at one point so that if the sale to the purchasing dealer is exempt, the resale by the purchasing dealer should be taxable. We do -not find evidence of such legislative intent in any provision of the Act. " Further on, in the same passage, the court reiterated (p. 426): It will, therefore, be seen that it is not possible to discover any legislative intent to tax the goods at least at one point and to exempt the sale to the purchasing dealer only if the resale by the purchasing dealer is liable to tax. " On the construction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns for the purpose of construing a statutory provision is not permissible. We are of the opinion that there is ample power under s. 5A of the State Act enabling the Chief Commissioner to specify the single point at which tax may be levied in a series of sales. This can, however, be done by him only by a notification in the Official Gazette. No such notification has been placed before us which could relate to the assessment year under consideration. We hold, therefore, that a vital prerequisite of S. 15 of the Central Sales Tax Act, namely, that the tax shall not be levied at more than one stage, has not been satisfied in respect of the turnover of cotton yarn, and accordingly the assessment complained of is liable to be quashed. While concluding, we may point out that a somewhat similar question arose before this court in Bhawani Cotton Mills Ltd. v. State of Punjab [1967] 20 STC 290 (SC), the question being whether the second proviso to sub-s. (1) of S. 5 and sub-cl. (vi) of cl. (a) of sub-s. (2) of s. (5) of the Punjab General Sales Tax Act, 1948, implied the single point at which goods were taxable. The contention was negatived by this court. That is how that decision was unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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