Full Judgment Text
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CASE NO.:
Appeal (civil) 4491 of 2002
PETITIONER:
Orient Traders
RESPONDENT:
Commercial Tax Officer, Tirupati
DATE OF JUDGMENT: 12/03/2008
BENCH:
ASHOK BHAN & DALVEER BHANDARI
JUDGMENT:
U D G M E N T
CIVIL APPEAL NO. 4491 of 2002
With
Civil Appeal Nos. 4492 of 2002, 4493 of 2002 and 4494 of 2002
BHAN, J.
1. This judgment shall dispose of Civil Appeal No. 4491
of 2002 filed against a detailed order by which the High
Court has dismissed the Writ Petition filed by the
appellant and the three connected appeals which have been
filed by the Assessees against the dismissal of their
writ petitions by the High Court following the impugned
Order in Civil Appeal No. 4491 of 2002.
2. Facts are taken from Civil Appeal No. 4491 of 2002,
which is the main appeal.
3. The relevant period is from November, 1994 to March,
1995 which falls in the Assessment Year 1994-95. The
appellant deals in the sale of silver bars. It filed its
return showing a turnover of Rs.14,33,01,470/- and paid
sales tax at the rate of =%. The Assessing Authority
accepted the said return and completed the assessment on
27.11.1995. Later, the Assessing Officer issued notice
on 17.8.1996 proposing to reopen the assessment under
Section 14(4)(c) of the Andhra Pradesh General Sales Tax
Act, 1957 (for short "the Act") and bring the above
turnover to tax at the rate of 2%, apart from additional
tax and surcharge, on the premise that G.O. Ms No. 1092
and G.O. Ms No. 252 reducing the rate of sales tax to =%
were applicable only to gold bullion and the same were
not applicable to silver bullion and specie. Questioning
the said show cause notice, the appellant filed W.P. No.
21503 of 1996. The High Court dismissed the writ
petition on the ground of alternate remedy of filing the
objection and getting a decision from the authorities
under the Act on merits. The appellant thereafter filed
objections claiming that the reduced rate of sales tax
under the G.O. was applicable not only to gold bullion
but also to silver bullion. That the bracketed words
"gold" used in the above G.O. applies only to specie and
not to bullion. The Assessing Officer rejected the
contention of the assessee and framed the re-assessment.
Questioning the said re-assessment, the appellant filed
Writ Petition No. 1727 of 1997 which has been dismissed
by the impugned order.
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4. It was stated in the writ petition that though a
remedy of appeal was available, but the said remedy by
way of appeal would not be effective in the light of the
clarification issued by the Commissioner of Commercial
Tax by his order dated 22.3.1995, clarifying that the
G.O.Ms No. 1092 is applicable only to the gold bullion
and not to silver bullion. It was also contended that
the issue relates only to the interpretation of G.Os.,
therefore, to have effective and binding decision the
appellant has approached the High Court by filing the
writ petition. The said writ petition was entertained.
It has been dismissed on merits.
5. It is not in dispute that the appellant is a dealer
in silver bullion. Under Item-20 of the First Schedule to
the Act the original rate prescribed is 2%. However, the
State Government issued Notification under Section 9(1)
of the Act in G.O.Ms. No. 1092 dated 31.10.1994 reducing
the rate of sales tax to =% in respect of ’bullion and
specie (gold)’ from the date of the said Notification. In
order to appreciate the controversy in issue, it would be
necessary to refer to the Entry in the First Schedule to
the Act as well as the Notification issued on 31.10.1994.
Entry 20 in First Schedule to the Act reads :-
FIRST SCHEDULE
SI.
No.
Description
of goods
Point of levy
Rate of
tax
Effective from
20
Bullion and
specie (1020)
At the point
of first sale
in the State
2
4
8-7-1983
1-4-1995
6. The expression ’bullion’ in Entries 20 and 21 has
been defined in Explanation I to the First Schedule which
reads:-
"Explanation-1:--The expression
’bullion’ in items 20 and 21 means pure
gold or silver and includes gold or
silver mixed with copper, lead or any
other kind of base metal."
7. The relevant portion of G.O.Ms. No. 1092 Rev. (CT-II)
dated 31-10-1994 is extracted hereunder:-
"Notification-I
In exercise of the powers conferred by
the sub-section (1) of Section 9 of the
Andhra Pradesh General Sales Tax Act,
1957 (Act-VI of 1957), the Governor of
Andhra Pradesh hereby directs:
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(a) that the tax leviable under the
said Act on the said Act on the sale of
bullion and specie (gold) be reduced
from 2% to 1/2 %, all included (net
1/2%);
(b) that the tax leviable under the
said Act on the sale of jewellery,
including those set with precious
stones be reduced to 2%;
(c) that the tax leviable under the
said Act on the sale of precious stones
loose, other than pearls, be reduced to
2%.
This notification shall come into force
with immediate effect."
(Emphasis supplied)
8. The subsequent Notification issued u/s. 9(1) dated
19.5.1995 which came into force with effect from 1.4.1995
and the Notification subsequent thereto in G.O.Ms No. 625
dated 31.7.1996 superseding the earlier Notification
omitting the expression ’gold’ (G.O.Ms. Nos. 1092 and 252
of 1995) occurring in the bracket, are not reproduced as
the same are not relevant for the purposes of disposing
of the present appeals.
9. Learned counsel for the appellant contends that the
perusal of G.Os. issued by the State of Andhra Pradesh
clearly shows that the bracketed word ’gold’ occurs only
after ’specie’ and not either before or after ’bullion’.
Therefore, the said bracketed word ’gold’ is relevant for
the word ’specie’ only and not for the word ’bullion’. If
the G.O. is so interpreted, the reduced rate of sales tax
would be available to the appellant at =% as provided
therein, which was accepted by the Assessing Officer at
the first instance. That there was no reason for the
Assessing Officer to change his opinion to revise the
assessment levying the sales tax at higher rate. Relying
upon the G.O. Ms. No. 625, dated 31.7.1996 which omitted
the expression ’gold’ from the bracket immediately after
the term ’specie’, it was contended that the Government
did not intend to give the benefit of lower rate of tax
only to gold but also to silver bullion. The action of
the respondent-authorities in re-opening the assessment
as well as framing the reassessment is not in accordance
with law and is only a change of opinion with reference
to the Notification issued by the Government under
Section 9(1) of the Act. It was also contended that the
Notification was clear and unambiguous and the benefit
granted in the Notification would be available to the
dealers dealing in silver bullion as well. If the G.Os.
are interpreted in this manner, then no case was made out
to revise the assessment to levy the higher rate of tax.
Reliance was placed on a decision of this Court in
Commissioner of Sales Tax V. Industrial Coal Enterprises,
1999 (2) SCC 607.
10. As against this, the learned counsel appearing for
the Revenue submits that there is no justification to
contend that the term ’gold’ is applicable only to specie
and not to bullion. According to him, the interpretation
sought to be put by the appellant to the G.O. is not
proper and correct. It is submitted that ’bullion and
specie’ is one single phrase and they cannot be
bifurcated. The intention of the Government in the said
G.O. was to apply the reduced rate of tax to gold bullion
and specie only. As these two words constitute one single
phrase the word ’gold’ was bracketed at the end to
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indicate that it is meant to be applicable to gold only.
It was also submitted that Commissioner of Commercial Tax,
Government of Andhra Pradesh by its order dated 22.3.1995
passed on a request made by the Twin Cities Jewelers
Association clarified that the reduced rate of tax is
applicable only to gold bullion and specie. As such the
contention of the appellant that it is also applicable to
silver bullion is unjustified and untenable.
11. Learned counsel for the parties have been heard at
length.
12. Bullion and specie are taxable at the rate of 2%
with effect from 8.7.1983 under item 20 of the First
Schedule of the Act. Same rate is applicable to the
articles and jewellery mentioned under Entry 21 made out
of bullion and/or specie or both, excluding precious
stones. Explanation I to the said Schedule defines
bullion as pure gold or silver and includes gold or
silver mixed with copper, lead or any other kind of base
metal. The Government of Andhra Pradesh by issuing G.O.
Ms. No. 1092 dated 31st October, 1994 under Section 9(1)
of the Act reduced the net rate of sales tax to =% on
sale of bullion and specie (gold). Andhra Pradesh General
Sales Tax Act was amended by Act 22 of 1995 with effect
from 1st April, 1995 prescribing the sales tax in the
case of bullion and specie at the rate of 4%. Again the
Government issued a Notification under Section 9(1) of
the Act in G.O.Ms. No. 252, dated 19.5.1995 reducing the
rate of sales tax in the case of bullion and specie (gold)
to =% with effect from 1.4.1995. Subsequent G.O.Ms No.
625 dated 31.7.1996 was issued by the State of Andhra
Pradesh omitting the expression ’gold’ in the bracket
immediately after the term ’gold and specie’ occurring in
G.O.Ms Nos. 1092 of 1994 and 252 of 1995.
13. This Court in the case of Deputy Commissioner of
Sales Tax v. M/s. G.S. Pai and Co., 1980 (1) SCC 142,
considered the terms ’bullion and specie’, in a different
context i.e., whether ornaments and other articles of
gold could be regarded as bullion and specie as specified
in Entry 56 of the First Schedule of the Kerala General
Sales Tax Act, 1963. This Court held in para 3 as under:-
"We will first consider the
question whether the ornaments and
other articles of gold purchased by the
assessee fall within the description of
"Bullion and specie" given in Entry 56.
There are two expressions in this Entry
which require consideration; one is
"bullion" and the other is "specie".
Now there is one cardinal rule of
interpretation which has always to be
borne in mind while interpreting
entries in sales tax legislation and it
is that the words used in the entries
must be construed not in any technical
sense nor from the scientific point of
view but as understood in common
parlance. We must give the words used
by the Legislature their popular sense
meaning "that sense which people
conversant with the subject-matter with
which the statute is dealing would
attribute to it". The word "bullion"
must, therefore, be interpreted
according to ordinary parlance and must
be given a meaning which people
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conversant with this commodity would
ascribe to it. Now it is obvious that
"bullion" in its popular sense cannot
include ornaments or other articles of
gold. "Bullion" according to its plain
ordinary meaning means gold or silver
in the mass. It connotes gold or silver
regarded as raw material and it may be
either in the form of raw gold or
silver or ingots or bars of gold or
silver. The Shorter Oxford Dictionary
gives the meaning of "bullion" as "gold
or silver in the lump; also applied to
coined or manufactured gold or silver
considered as raw material." So also in
Jowitt’s Dictionary of English Law and
Wharton’s Law Lexicon we find that the
following meaning is given for the word
"bullion": "uncoined gold and silver in
the mass. These metals are called so,
either when melted from the native ore
and not perfectly refined, or where
they are perfectly refined, but melted
down into bars or ingots, or into any
unwrought body, of any degree of
fineness". It would, therefore, be seen
that ornaments and other articles of
gold cannot be regarded as "bullion"
because, even if old and antiquated,
they are not raw or unwrought gold or
gold in the mass, but they represent
manufactured or finished products of
gold. Nor do they come within the
meaning of the expression "specie".
The word "specie" has a recognized
meaning and according to Webster’s New
World Dictionary, it means "coin, as
distinguished from paper money". The
Law Dictionaries also give the same
meaning. Wharton’s Law Lexicon and
Jowitt’s Dictionary of English Law
state the meaning of "specie" as
"metallic money" and in Black’s Law
Dictionary, it is described as "coin of
the precious metals, of a certain
weight and fineness, and bearing the
stamp of the Government, denoting its
value as currency" while "Words and
Phrases Permanent Edition-Vol. 39A"
also gives the same meaning. Therefore,
according to common parlance, the word
"specie" means any metallic coin which
is used as currency and if that be the
true meaning, it is obvious that
ornaments and other articles of gold
cannot be described as
"specie". ......"
14. From the reading of the above judgment, it is clear
that ’bullion’ means gold or silver in mass, in bars,
plates etc., in uncoined form; whereas ’specie’ means
coined gold or silver or any other metal and also used as
currency. The distinction between the two expressions is
that the former refers to gold and silver when it is in
bulk form, either unshaped or shaped like bars, plates
etc., whereas later refers to the coined form of silver
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or gold.
15. Entry 20 of the First Schedule refers to levy of the
tax at the point of first sale on bullion and specie.
Explanation I under the First Schedule provides the
meaning of the expression ’bullion’ as pure gold or
silver and includes gold or silver mixed with copper,
lead or any other kind of base metal. While issuing
Notification No. 1092 dated 31.10.1994, the rate of tax
was reduced on the sale of bullion and specie (gold) from
2% to =% net. The Legislature used the term ’gold’ in
bracket after expression ’bullion and specie’ thereby
making its intention clear that it wanted to restrict the
benefit of reduced rate of tax to gold bullion and specie
only. Had the intention been to extend the benefit of
reduced rate of tax to silver bullion and specie, then,
there was no need to put the word ’gold’ in brackets
after ’bullion and specie’.
16. Contention that the word ’gold’ is referable to
specie only as it finds mention after the word ’specie’,
cannot be accepted. "Bullion and specie" is one single
phrase and the same cannot be bifurcated, as contended by
the counsel for the appellant. The intention of the
Government in putting the word ’gold’ in the bracket
after the words ’bullion and specie’ clearly shows that
the intention of the Government was to extend the benefit
of reduced rate of tax to gold bullion and gold specie
only and not to silver. The word ’gold’ was put in
brackets to indicate that the concessional rate of tax is
applicable only to the gold in either of the two forms
i.e. bullion or specie.
17. Contention of the learned counsel for the appellant
that bracketed word ’gold’ contained in Clause (a) of
G.O.Ms No. 1092 dated 31.10.1994 and G.O.Ms No. 252 dated
19.05.1995 having been omitted by G.O.Ms No. 625 dated
31.07.1996 clearly shows that the intention of the
Legislature was that the concessional rate of tax is to
be applied to both gold and silver bullion species for
the period in question, cannot be accepted. G.O.Ms No.
625 dated 31.07.1996 has been made effective from
01.08.1996. The relevant period in the present appeals is
from 01.11.1994 to 31.03.1995. Hence, the appellant
cannot take any benefit of omission of the word ’gold’ in
brackets for the period in question as the G.O.Ms No. 625
dated 31.07.1996 is to take effect from 01.08.1996.
18. It is well established principle that the exemption
notifications are to be construed strictly, reference may
be made to State of Jharkhand & Others V. Tata Cummins
Ltd., and another, 2006 (4) SCC 57 and Kartar Rolling
Mills V. Commissioner of Central Excise, New Delhi, 2006
(4) SCC 772. If the intention of the legislature is clear
and unambiguous, then it is not open to the courts to add
words in the exemption notification to extend the benefit
to other items which do not find mention in the
notification. In the present case, there is no ambiguity
in the expression used in the G.O. The intention of the
State Government is clear that only gold bullion and
specie is entitled to the concessional rate of tax.
Under the circumstances, the same cannot be extended to
the silver as claimed by the assessee.
19. For the reasons stated above, we do not find any
merit in these appeals and dismiss the same with costs.