Prathiba Distributors vs State Of Karnataka And Ors. on 11 July, 1996

Karnataka High Court
Prathiba Distributors vs State Of Karnataka And Ors. on 11 July, 1996
Equivalent citations: ILR 1996 KAR 3025
Author: G Bharuka
Bench: G Bharuka

ORDER

G.C. Bharuka, J.

1. The petitioner is a manufacturer and dealer in Non-pressure Kerosene Wick Stoves. It is registered under the provisions of the Karnataka Sales Tax Act, 1957. He has come up before this Court for quashing of the notice dated 29.9.95 issued under Section 12A of the Act proposing to reassess the petitioner’s turnover tax liability for the year 1992-93. The original assessment for this period was concluded on 25.3.1994. The only reason for initiating the reassessment proceedings is that, according to the respondent-Assistant Commissioner of Commercial Taxes, keeping in view the notification No. FD.107/CSL 89 XI] dated 31.3.89 (Annexure ‘B’) the petitioner was not entitled to exemption from turnover tax as contemplated under Section 6B of the Act and exemption in the regular assessment was wrongly granted by relying upon the earlier notification No. FD.107 CSL.89(XII), Karnataka Gazette dated 31.3.89(Annexure-C).

2. Both the aforesaid notifications had been issued under Section 8A of the Act. The notification dated 31st of July 1985(Annexure-C) reads as under:-

“In exercise of the powers conferred by Section 8A of the Karnataka Sales Tax Act, 1957, (Karnataka Act No. 25 of 1957), the Government of Karnataka, hereby exempts with effect from the first day of August, 1985, the tax payable by a dealer under the said Act on ‘Glass Chimneys, hurricane lanterns, oil lamp wares and non-pressure kerosene wick stoves and their parts.”

Whereas the subsequent notification dated 31.3.1989 (Annexure-B) reads as under:-

“In exercise of the powers conferred by Section 8A of the Karnataka Sales Tax Act, 1957 (Karnataka Act No. 25 of 1957), the Government of Karnataka hereby exempts with effect from the first day of April 1989, the tax payable by a dealer under Section 5 of the said Act, on the following goods namely;-

1…

2…

3…

4. All kinds of Kerosene stoves (Including kerosene pressure stoves).

xx xx xx”

3. The Learned Counsel for the petitioner submits that since in the first notification, the non-pressure kerosene wick stoves and their parts had been completely exempted from the tax payable under the Act and that having not been specifically cancelled by a subsequent notification as required under Sub-section (3) of Section 8A read with Sub-section (6) thereof the petitioner was entitled to exemption from turnover tax as well.

4. It is not in dispute that the first notification has not been specifically cancelled by any subsequent notification issued under Section 8A(3) of the Act. A similar issue had been considered by me in the case of MANJUNATHA ROLLER FLOUR MILLS PVT. LTD., v. ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, . In the said case, on the consideration of the said provision, I had held that:-

“In the present case, admittedly subsequent to the issue of the aforesaid Government Order and the Corrigendum Notification no further Notification cancelling or varying the same as required under Section 8-A(3) has been issued by the State Government. Therefore, since the Legislature has in express terms provided that unless such cancellation Notification is issued, the Exempting Notification will remain valid, by mere implication the exemption so granted cannot be deemed to have been taken away.

In a case before the House of Lords viz., in LONDON INVESTMENT & MORTGAGE CO Ltd., v. WORTHINGTON (H.M.INSPECTOR OF TAXES) AND ORS.,(38 TC 86 – 115: (1959) 37 ITR 56 – 62), it has been held by Viscount Simonds that:

“I hesitate in any case to introduce by way of implication in a taxing Statute a provision which cries aloud for express statement if it is intended.”

In that view of the matter, since neither the aforesaid Government Order which is referable to Section 8-A{1) of the Act nor the Corrigendum Notification which is justifiable under Section 8-A(2-A) of the Act have been cancelled by issuance of any Notification under Sub-section (3) to Section 8A of the Act, those have to
be held as operative, notwithstanding any modification by an amendment of the Act or issuance of Notification like No. S.O.473 dated 31.3.1993 providing for exemption of Wheat Bran from levy of tax under Section 5 only.”

5. In that said view of the matter, in my opinion, the petitioner could not have been deprived of the benefit of exemption as granted under the first notification. Accordingly, the impugned notice (Annexure-A) is quashed. Any Circular of the Commissioner taking the contrary view will be of no consequence. The Writ Petition is accordingly allowed. No costs.

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