- (1.) I have had the advantage of reading the judgement prepared by my learned brother Sen and I entirely agree with the conclusion reached by him, but I would like to state briefly my own reasons for arriving at that conclusion. The facts giving rise to this appeal have been stated with admirable succinctness by my learned brother Sen and I need not repeat them The facts indeed are not material, because only one single question of law arises for determination in this appeal and it does not depend on any particular facts. The question is a very simple one, namely, whether the expression 'Registered dealer' in Section 8 (ii) of the Bombay Sales Tax Act, 1959 as applicable to the State of Gujarat (hereinafter referred to as the Bombay Act) means only a dealer registered under Section 22 of that Act or it also comprises a dealer registered under the Central Sales Tax Act, 1956 (hereinafter referred to as the Central Act).
(2.) Since the decision of this question turns on the true interpretation of the expression 'Registered dealer', in Sec. 8 (ii) of the Bombay Act. we may reproduce that section as follows: "Section 8: There shall be levied a sales tax on the turn-over of sales of goods specified in Schedule C at the rate set out against each of them in column 3 thereof, but after deducting from such turnover - (i) xxx xxx xxx (ii) resales of goods purchased by him on or after the appointed day from a Registered dealer if the goods at the time of their purchase were goods specified in Schedule C." This section has obviously been enacted to prevent multiple point taxation on goods specified in Schedule C. Where goods specified in Schedule 'C' are sold by a dealer and obviously he must be a dealer registered under Section 22 of the Bombay Act, if he is liable to pay tax under that Act -- the turnover of these sales is liable to be taxed at the rate specified against each category of goods in that Schedule, but if the sales in question are re-sales of goods purchased by the dealer on or after the appointed day from a "Registered dealer", they would be liable to be excluded from the turnover, because the 'Registered dealer' from whom they are purchased would have paid tax under the main part of Section 8 and the goods having already borne tax in the hands of the selling 'Registered dealer', the legislative intent is that they should not suffer tax again. Now the expression 'Registered dealer' is defined in Section 2 (15) of the Bombay Act to mean "a dealer registered under Section 22" and therefore, ordinarily, the expression 'Registered dealer' as used in Section 8 (ii) must carry the same meaning, namely, a dealer registered under Section 22 of the Bombay Act. But, as the opening part of Section 2 shows, the definitional meaning is subject to anything repugnant in the subject or context. The context in which the defined word occurs may clearly indicate that it is used in a sense different from that given in the definition clause. We must therefore see whether there is anything in Section 8 (ii) or in the context in which it occurs which should compel us to place on the expression 'Registered dealer' as used in that section a meaning, different from that given to it in Section 2 (15). We are afraid we do not find anything in the subject or context of Section 8 (ii) which would persuade us to depart from the definitional meaning of the expression 'Registered dealer'. The subject and context in fact re-enforce the view that the expression 'Registered dealer' in Sec. 8 (ii) is used to mean a dealer registered under Section 22 of the Bombay Act, and does not include a dealer registered only under the Central Act. If a dealer is registered only under the Central Act and not under the Bombay Act, it would mean that he is not liable to pay tax under the Bombay Act and in that event, even if he has sold goods specified in Sch. 'C', to a registered dealer under an intra-State sale, no tax would be payable by him on such sale and if the purchasing dealer is also to be exempt. from tax in respect of re-sale effected by him, the result would be that the goods would escape tax altogether and not suffer even single point tax. That surely could not have been the intendment of the legislature in enacting Section 8 (ii), It would indeed frustrate the object of Section 8 (ii), which is to provide for imposition of single point tax on the goods, specified in Schedule 'C'. The situation would be the same even where the sale effected by the dealer registered under the Central Act is an inter-State sale. That sale would undoubtedly be taxable under the Central Act, but it is difficult to see why the Gujarat State should give exemption to re-sale of goods in respect of which, at the time of the first sale, tax has been levied under the Central Act of which the benefit has gone to another State. Moreover, in such a case the first sale being an inter-State sale, would be taxable at a fixed concessional rate under Section 8 (1) (a) or at the rate of 7% or at a rate equal to or twice the rate applicable to the sale of such goods in the State of the selling dealer, under clause (a) or (b) of sub-sec. (2) of Section 8 of the Central Act and if that be so, it is impossible to understand why the Legislature should have insisted, for attracting the applicability of Section 8 (ii), that the goods re-sold by the dealer should at the time of their first sale be goods specified in Schedule 'C'. The requirement that the goods at the time of their first sale by the 'Registered dealer' should be of one of the categories specified in Schedule 'C', is a clear pointer that the 'Registered dealer' contemplated in this provision is a dealer registered under Section 22 of the Bombay Act, because it is only with reference to such a dealer liable to pay tax under the Bombay Act that this requirement of the goods sold by him being goods specified in Schedule 'C' can have any meaning and significance. We are, therefore, clearly of the view that the expression 'Registered dealer' is used in Section 8 (ii) in its definitional sense to mean a dealer registered under Section 22 of the Bombay Act and it does not include a dealer registered under the Central Act.
(3.) The Revenue, however, relied on Section 4 of the Bombay Act and tried to project it in the interpretation of the expression 'Registered dealer' in Sec. 8 (ii). We fail to see how Section 4 can at all help in throwing light on the true interpretation of the expression 'Registered dealer'. That section provides: "Section 4 (1) : Notwithstanding anything in Section 3, a dealer who is registered under the Central Sales Tax Act, 1956, but who is not liable to pay tax under the said Section 3, shall nevertheless liable to pay tax- (a) on sales of goods in respect of the purchase of which he has furnished a declaration under sub-section (4) of Section 8 of the Central Sales Tax Act. 1956, and (b) on sales of goods in the manufacture of which the goods so purchased have been used; and accordingly, the provisions of Sections 7 to 12 (both inclusive) shall apply to such sales, as they apply to the sales made by a dealer liable to pay tax under Section 3. (2) Every dealer who is liable to pay tax under sub-section (1) shall, for the purposes of Sections 32, 33, 35, 36. 37, 38, 46, 47 and 48 be deemed to be a Registered dealer " It is obvious that if a dealer is not registered under the Bombay Act, it could only be on the basis that he is not liable to pay tax under the Bombay Act, but even so, Section 4, sub-section (1) provides that if he is registered under the Central Act, he would be liable to pay tax under the Bombay Act in respect of the transactions of sale set out in that section. This liability arises despite the fact that the dealer, not being liable to pay tax under Section 3 of the Bombay Act, is not registered under that Act. The question then would be : if the dealer is not registered under the Bombay Act, how to recover the tax from him The dealer not being registered under the Bombay Act, the machinery of the Bombay Act would not of itself apply for the recovery of tax from him. Section 4, sub-section (2) therefore enacts that every dealer who is liable to pay tax under sub-section (1) shall, for the purposes of Sections 32 to 38 and, 46 to 48 be deemed to be a Registered dealer. Sections 32 to 38 and 46 to 48 are machinery sections and it is for the purpose of making the machinery of these sections applicable for recovery of the tax imposed on the dealer under sub-section (1) of Section 4 that an artificial fiction is created deeming the dealer to be a Registered dealer, that is, a dealer registered under Section 22 of the Bombay Act. This legal fiction is created for a specific purpose and it is limited by the terms of sub-section (2) of Section 4 and it cannot be projected in Section 8 (ii). Section 4 has, in fact, nothing to do with Section 8 (ii). They are distinct and independent provisions operating on totally different areas, and it is difficult to see how Section 4 can be availed of for the purpose of interpreting the expression "Registered dealer" in Section 8 (ii).;