D. C Joseph Member - (1.) A Division Bench has referred the following question of law for an authoritative pronouncement: - "whether in view of the notification dated 11-1-67 the general rate of tax chargeable on gota and kinari was 2% during the period commencing from 17th March 1963 to 14th April 1965 irrespective of the fact whether the dealer realised any tax from the customers or not".
(2.) THE Division Bench was hearing a special appeal under section 15 (4 A) of the Rajasthan Sales Tax Act against an order of a Single Bench dated 20-8-71. THE facts of the case were that the assessee was a dealer in gota and kinari. THE Commercial Taxes Officer Sikar on testing his accounts book found that during the period of assessment i. e. , 1964-65, he deposited tax at the rate of 2% but the bills did not show this separately. He was taxed at the rate of 6%. THE dealer claimed the benefit of notification No. F. 5 (86) FD/gt/66 dated 11-1-67 and went in appeal THE learned Deputy Commissioner, Commercial Taxes (Appeals) Bikaner held that the dealer was not entitled to the concession given in the notification. A revision preferred before a single Member of the Board was unsuccessful and hence the dealer went in special appeal. Before the Division Bench learned counsel on behalf of the assessee placed reliance on a Division Bench decision of this court given on 11-8-67 in revision petition No. 49 (Ajmer) of 1966 State vs. M/s Ladulal Swaroopchand In that case the notification dated 11-1-67 came up for consideration. The learned Members observed as follows : - "thus for the period which is prior to 17-3-63 the assessee is chargeable at 5% general rate and for the period subsequent to 17-3-63 the assessee will be chargeable at 2% only provided he had not collected the tax at more than 2%. If he has not collected any tax he is bound to pay the tax at the rate of 2% which was the general rate by this notification during the period". During the hearing of the special appeal in which this reference has been made it was noted that the earlier Division Bench had held that by virtue of the notification dated 11-1-67, if the dealer had not collected any tax he was to pay at the rate of 2%. On the other hand, in the instant case the learned Single Bench had taken the view that the concession given in the notification was rescricted to those who under a bonafide belief actually recovered tax at 2% It was felt that this view of the Single Bench was more in conformity with the wording of the notification, hence this reference has been made for an authoritative pronouncement. The notification No. F. 5 (86) FD (CT) 66, dated January 11, 1967 reads as follows : - "whereas the rate of tax leviable on the sale and purchase of "gold and silver, gota, salma sitara and badla" after the notification No. F. 5 (27) E&t/61-I, dated the 1st April, 1961 was at the rate of 5%. "and whereas the Board of Revenue, in their decision dated the 17th March, 1963, in M/s Kasidass Hiralal had held that the above goods were liable to be taxed only at 2%, because they were to be treated as goods made of articles of gold and silver and though the Board of Revenue subsequently in their decision in June 1966 in Chandmal Bhagmal's case reversed their earlier view, but in the meantime a very large number of dealers appear to have charged tax only at 2%, acting bonafide on the decision of the Board in M/s Kasidass Hiralal's case. "and whereas the rate of the tax was reduced to 2% from the 15th April, 1965 vide notification No. F. 5 (26) FD (CT) 65 dated the 15th April, 1965. "and whereas it is fit and proper that the above category of dealers who bonafide charged tax at 2% in view of the decision of the Board during 17th March, 1963 to 14th April, 1965 should not be compelled to pay tax at 5%; "now, therefore, in exercise of the powers conferred by section 5 of the Raj-asthan Sales Tax Act, 1954 {rajasthan Act XXIX of 1954) the State Government hereby directs that notwithstanding anything to the contrary contained in any notification for the time being in force, during the period commencing on 17th March, 1963 and ending on 14th April, 1965, the tax on the sale and purchase of all kinds of "gota, kinari, salma sitara and badla" shall be levied at the rate of 2'/. and not 5%. "provided that a dealer liable to pay such tax has bonafide recovered tax only at the said rate of 2% only". The notification itself describes the circumstances in which it was issued. It takes note of the fact that, following the judgment of the Board on March 17, 1963 in the Kasidass Hiralal case there was confusion among dealers as to the rate of tax on the sale and purchase of gota, kinari, salma sitara and badla. Some dealers continued to charge from the customers tax at the rate of 5% and some began to charge only 2% in view of the ruling of the Board. Later, the rate of tax was reduced to 2% from April 15, 1965 and hence the problem was restricted to the charging of tax from March 17, 1963 when the Board handed down the decision in Kasidass Hiralal's case, on April 14, 1965, the day before the notification reducing the rate of tax to 2% was issued.
(3.) SHRI Vinay Sogani, appearing on behalf of the dealer has drawn attention to Sec. 5 of the Rajasthan Sales Tax Act, which is the charging section. He says it has been specifically stated in the notification that the rate of tax during the disputed period will be 2% and not 5% and this was a direction made under section 5 of the Act. The intention of the Government was plainly that the tax on these goods during the relevant period would be 2%. This would not affect cases in which tax had been charged from the consumer at a higher rate, but all other cases would be covered. State of Rajasthan vs. Karim Bux Kasim, reported in 1967 Tax Reporter 42 has been cited in this connection This ruling is not of much relevance to the present case, nor is 1965 RRD 134 State vs. Murlidhar Shankarlal because in these two cases the point at issue was the charging of sales tax at concessional rates in respect of goods sold to Government departments. Here the basic question is whether a concessional rate of tax is attracted as a matter of course when no tax has been realised or shown to have been realised in the accounts maintained by the dealer. The learned departmental representative says that a plain reading of the notification shows that its intention was to cover only those cases where tax had been charged at 2% under the bonafide belief that this was the percentage chargeable in view of the ruling of the Board. This was clarified by the proviso, which said that a dealer would be liable to pay such tax (2%) only if he had bonafide recovered tax at this rate. The notification was not intended to cover dealers who had charged a higher rate and further it was not intended to cover those who had not shown any amount of tax in their bills and who might well have included the tax at a higher rate in the charges made from the customers. There was no justification for a dealer charging no tax at all since the commodities were taxable and in all probability there were few cases of this nature. Discussing the effect of the proviso, the departmental representative has cited Kanpur Vanaspate Stores vs. Commissioner of Sales Tax U. P. , 1973 (XXXII) STC 655 to make the point that no interpretation should be placed on a provision which would have the effect of making it either otiose or a dead letter. Another ruling, 1966 (XVIII) STC 343 Jugionder Nursery vs. Commissioner of Sales Tax, Delhi says there is no equity in the case of taxing statutes and they have to be reasonably interpreted on the plain meaning of the language used by the Legislature. This point has been elaborated by reference to 1961 RLW Inder Singh vs. Sales Tax Officer Jodhpur, in which the HIGH COURT OF RAJASTHAN has held that exemption clauses in taxing statutes are to be interpreted strictly. However, Shri V. K. Singhal, appearing as amicus curiae, has pointed out that there is a later view of the HIGH COURT OF RAJASTHAN in Chohan Pan Bhandar vs. Assistant Sales Tax Officer Beawar, reported in 1965 RRD 3, which says that exemption clauses appearing in taxation laws should be reasonably interpreted. The interpretation should neither be so liberal that it may promote fraud and open the floodgates for the tax-payers to evade the tax by subtle and dishonest devices, nor should it be so narrow and unreasonable that the remedy provided by the Legislature becomes only nominal and the very object which it is sought to accomplish is defeated Shri Padam Kumar Jain, speaking next, has submitted that when there is a dispute regarding assessment, the decision has to be in favour of the assessee. Shri Singhal has further drawn our attention to 1975 (XXXV) STC 1 International Cotton Corporation (P) Ltd. , vs. Commercial Taxes Officer Hubli and others. In this case the Supreme Court was considering the validity of section 8 (2) (a) as well as section 6 (1a) of the Central Sales Tax Act read with section 10 or the Central Sales Tax (Amendment) Act, 1969. Under section 10, where any sale of goods in the course of inter State trade or commerce was effected during the period November 10, 1964 and June 9, 1969, and the dealer effecting such sale had not collected any tax under the principal Act on the ground that no such tax could have been levied or collected in respect of such sale or any portion of the turnover relating to such sale and no such tax could have been levied or collected if the amendments made in the principal Act by this (amending) Act had not been made, then, notwithstanding anything contained in section 9 or the said amendments, the dealer would not be liable to pay any tax under the principal Act, as amended, in respect of such sale or such part of the turnover relating to such sale. It was argued before their Lordships that a similar concession should have been granted to dealers who had not collected any tax on their sales prior to November 10, 1964, when the Supreme Court had passed the judgment which had led to the amendment, or at least to those assessees who had not made any collection after the earlier judgment of the Mysore High Court in the same case on January 23, 1962 Their Lordships held that the fact that transactions of sale prior to November 10, 1964 or at least the period between January 23, 1962 and November 10, 1964 were not given the same concession as transactions between November 10, 1964 and June 9, 1969, did not mean that the latter concession was unconstitutional. "a concession is not a matter of right. Where the Legislature, taking into consideration the hardships caused to a certain set of taxpayers gives them a certain concession it does not mean that action is bad as another set of tax-payers similarly situated may not have been given a similar concession. It would not be proper to strike down the provision of law giving a concession to the former on the ground that the latter are not given such a concession. Nor is it possible for this court to direct that the latter set should be given a similar concession. That would mean legislation by this court and this court has no legislative powers". ;