IN THE HIGH COURT OF KERALA AT ERNAKULAM
WA.No. 1844 of 2008()
1. J.K.TYRE INDUSTRIES LIMITED,
... Petitioner
Vs
1. STATE OF KERALA, REPRESENTED BY
... Respondent
2. THE ASSISTANT COMMISSIONER (ASSESSMENT)
3. THE SPECIAL TAHSILDAR,
For Petitioner :SRI.M.PATHROSE MATTHAI (SR.)
For Respondent : No Appearance
The Hon'ble the Chief Justice MR.H.L.DATTU
The Hon'ble MR. Justice A.K.BASHEER
Dated :17/09/2008
O R D E R
H.L.DATTU, C.J. & A.K.BASHEER, J.
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W.A. No. 1844 of 2008
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Dated, this the 17th day of September, 2008
JUDGMENT
H.L.Dattu, C.J.
This writ appeal is directed against the orders passed by the
learned Single Judge in O.P. No.30509 of 1999 dated 19th December,
2007.
(2) The appellant is a Company. It is incorporated under the
provisions of the Companies Act.
(3) In the original petition filed, the Company had called in
question the vires of a part of Section 23A(1) of the Kerala General Sales
Tax Act, 1963 (hereinafter for the sake of brevity referred to as ‘the Act’)
on the ground that the said provision is unconstitutional, arbitrary,
discriminatory, and violative of Article 14 of the Constitution of India.
(4) Before the learned Single Judge, the learned senior
counsel for the petitioner had referred to various case laws rendered by the
apex Court as well as this Court and had submitted that the denial of
benefit of reduced rate of interest to public limited companies is arbitrary,
discriminatory and violative of Article 14 of the Constitution.
(5) The learned Judge being of the opinion that the
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impugned provision is neither arbitrary nor violative of Article 14 of the
Constitution of India, has rejected the original petition. Correctness or
otherwise of the said order passed by the learned Single Judge is the
subject matter of this writ appeal.
(6) Sri.M.Pathros Mathai, learned senior counsel
appearing for the appellant, would submit, that, the impugned provision
clearly discriminates the Public Limited Companies incorporated under
the provisions of the Companies Act and the other dealers, including small
scale industrial units and the works contractors. According to him, the
State Legislature while introducing Section 23A of the Act ought to have
treated all the dealers under the Act as one group and should have
extended the same benefit to the Public Limited Companies incorporated
under the provisions of the Companies Act as has been granted to small
scale industrial units including the works contractors.
(7) Omitting what is not necessary for the purpose of this
case, the relevant portion of Section 23A(1) of the Act is extracted. It
reads as under:-
“23A. Reduction of interest in certain cases.-
(1) Notwithstanding anything contained in this Act or in
any judgment, decree or order of any Court or Tribunal,
a dealer other than a company not being a small scale
industrial unit or a works contractor referred to in
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sub-section (7AAAA) of Section 7, who is in arrears to
pay tax or other amount due under this Act for the
period ending on the 31st day of March, 1997 shall be
entitled to a reduction of sixty per cent of the amount of
interest accrued on such tax or other amount under
sub-section (3) of Section 23.”
(8) Sub-section (1) of Section 23A provides for payment of
interest levied under Section 23(3) of the Act at the reduced rate to a
dealer registered under KGST Act other than a company. The said benefit
is also extended to small scale industrial unit and works contractor referred
to in sub-section (7AAAA) of Section 7, who are in arrears of tax or any
other amount due under the Act for the period ending on the 31st day of
March, 1997.
(9) In C.S.T. vs. Modi Sugar Mills Ltd., AIR 1961 SC 1047,
the Supreme Court has observed:
“In interpreting a taxing statute, equitable
considerations are entirely out of place. Nor can the
taxing statutes be interpreted on any presumptions or
assumptions. The court must look squarely at the words
of the Statute and interpret them. It must interpret the
taxing statute in the light of what is clearly expressed; it
cannot imply anything which is not expressed, it cannot
import provisions in the statute so as to supply any
assumed deficiency”.
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(10). In CST, Uttar Pradesh vs. Parson Tools and Plants,
Kanpur, AIR 1975 SC 1039, the Apex Court has observed:
“Where the legislature clearly declares its intent in
the scheme and language of a Statute, it is the duty of the
court to give full effect to the same without scanning its
wisdom or policy, and without engrafting, adding or
implying anything which is not congenial to or consistent
with such expressed intent of the law given; more so if the
statute is a taxing statute”.
(11). It is now well settled law, that, there is always a
presumption in favour of the Constitutionality of a Statute and the burden
is upon who attacks it, to show that there has been clear transgression of
the constitutional principles. The presumption of constitutionality is so
strong that in order to sustain it, the court may take into consideration
matters of common knowledge, matters of common report, the history of
the time and may assume every state of facts which can be conceived
existing at the time of legislation.
(12). Taxation laws are generally challenged under Part III
of the Constitution invoking Article 14 as offending the rule of equality
before law, arbitrary, discriminatory etc. Keeping this in view,
Sri.Pathros Mathai, learned senior counsel would contend, that, the
legislature while granting benefit of payment of reduced interest levied
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under Section 23 (3) of the Act to certain class of dealers has denied that
benefit to public limited companies, and therefore, the classification is not
based on any intelligible differentia and therefore, violative of Article 14
of the Constitution.
(13). The tests adopted to determine whether a classification
is reasonable or not, are, that the classification must be founded on an
intelligible differentia which distinguishes persons or things that are
grouped together from others left out of the the group; and that the
differentia must have a rational relation to the object sought to be achieved
by statute in question. In the impugned legislation, the legislature has
kept out the public limited companies, while giving benefit of payment of
reduced interest to dealers under the KGST Act including small scale
industrial units and works contractors. The public limited companies are
separate class, though they are also dealers under the Act. Merely because
the provisions provides for payment of reduced interest only to one set of
dealers and not others who do not fall within that range of dealers, the
provision cannot be dubbed as either arbitrary or discriminatory.
(14) As we have already noticed, the petitioner is a
Company and it has the assistance of its legal experts and the chartered
accountants. It is expected of them to pay the tax under the Act well
within the time prescribed under the provisions of the Act. The same
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facility may not be available to the other small scale industrial units.
Therefore, the Legislature has thought it fit to give them an opportunity to
pay the interest at the reduced rate. Since, in our view, equals are treated
equally and unequals are treated unequally, and since there is intelligible
differentia while making the classification, it may not be possible for us to
direct the State Government to extend the same benefit as has been given
to the other dealers including the small scale industrial units or the work
contractors.
(15) In that view of the matter, we do not see any error in
the orders passed by the learned Single Judge which would call for our
interference in appeal. Therefore, the writ appeal requires to be rejected
and it is rejected.
Ordered accordingly.
(H.L.DATTU)
CHIEF JUSTICE
(A.K.BASHEER),
JUDGE
vns/dk