Area-specific tax construction confined Bangalore cess to transactions within the Planning Area and invalidated the broader circular.

Section 6-D cess under the Karnataka Sales Tax Act was treated as confined to sales or purchases within the Bangalore City Planning Area. The charging provision was construed in light of legislative history, budget speeches, a later declaratory amendment, and pari materia cess provisions to confirm that the levy was intended to fund the Bangalore Mass Rapid Transit System only for area-based taxable events. The proviso also pointed to an area-specific charge, and a wider reading was rejected because the Legislature had not used language such as "total turnover". On that construction, transactions through branches outside the Planning Area were not subject to the cess, and the circular was invalid.

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Issues: Whether cess under section 6-D of the Karnataka Sales Tax Act, 1957 was leviable only on sales or purchases effected within the limits of Bangalore City Planning Area or also on transactions effected by the dealer through branches outside that area.

Analysis: The charging provision was read in the light of its legislative history, the budget speeches that preceded the enactment, and the subsequent amendment made to remove ambiguity. The stated object of the cess was to fund the Bangalore Mass Rapid Transit System, and the speeches of the Finance Minister made it clear that the levy was intended to be confined to activities within the Bangalore Planning Area. The later amendment was treated as declaratory and as confirming that original intention. Support was also drawn from the pari materia cess provisions in the Profession Tax Act and the Luxury Tax Act, both of which were confined to taxable events within Bangalore. The proviso to section 6-D likewise indicated that the levy was area-specific. The wider construction suggested by the Revenue would have required language such as "total turnover", which the Legislature had not used.

Conclusion: Cess under section 6-D was leviable only on sales or purchases effected within the limits of Bangalore City Planning Area, and not on the dealer's transactions outside that area; the impugned circular was invalid.

Ratio Decidendi: Where the language of a taxing provision is ambiguous, its scope may be confined by the evident legislative purpose, the proviso, and subsequent declaratory amendment, and a broader liability will not be inferred unless the statute uses clear words to impose it.

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