2001 (10) TMI 1159 - HC - VAT and Sales Tax

Interpretation of Tax Law: Newspaper Printing Ink Taxable under APGST Act

SARASWATHI CHEMICALS VIJAYAWADA Versus STATE OF AP

The court held that 'newspaper printing ink' falls within Entry 45 of the APGST Act, subjecting it to a higher tax rate. The absence of a comma in Entry ... - Issues Involved:1. Classification of 'printing ink' under Entry 45 of the First Schedule of the Andhra Pradesh General Sales Tax (APGST) Act.2. Interpretation of statutory language and punctuation in Entry 45.3. Legislative intent behind the amendments to Entry 45.Issue-wise Detailed Analysis:1. Classification of 'Printing Ink' under Entry 45:The primary issue was whether the 'printing ink' dealt with by the petitioner falls within Entry 45 of the First Schedule of the APGST Act. The petitioner, a manufacturer of newspaper printing ink, argued that their product should not be classified under Entry 45, which would subject it to a higher tax rate of 9%, but rather as unclassified goods taxed at 5%.The Assessing Authority initially treated the printing ink as unclassified goods. However, the Deputy Commissioner revised this, classifying it under Entry 45 and subjecting it to a higher tax rate. The Sales Tax Appellate Tribunal affirmed the Deputy Commissioner's view, leading to the current tax revision cases.2. Interpretation of Statutory Language and Punctuation in Entry 45:The petitioner argued that the lack of a comma between 'lithographic' and 'printing' in Entry 45 should be interpreted to mean that Entry 45 includes only 'lithographic printing ink' and 'duplicating ink', not 'printing ink'. The Tribunal, however, found no comma in the original Gazette publication of the Amendment Act 49 of 1976, which amended Entry 45.The court noted that punctuation in statutes is subordinate to the text and should not control the plain meaning of the text. The absence of a comma was deemed an accidental slip, and the court emphasized that the legislative intent must be derived from the entire enactment. The court cited various precedents to support the principle that punctuation should not alter the clear legislative intent.3. Legislative Intent Behind the Amendments to Entry 45:The court examined the legislative history and intent behind Entry 45. Initially, Entry 44, introduced by Amendment Act 16/63, included 'Paints, colours, varnishes, lithographic, printing and duplicating inks.' This was later amended by Amendment Act 5 of 1974 and subsequently by Amendment Act 49/76, which introduced Entry 45 as 'Paints, colours, dry distempers, varnishes and blocks, cellulose, lacquers, polish pigments, indigo enamels, cement based water paints, oil bound distemper, water pigments, finishes for leather or plastic emulsion paints, turpentine oil, bale oil, white oil and tinners and also lithographic printing and duplicating inks.'The court concluded that the legislative intent was to include three kinds of inks: lithographic ink, printing ink, and duplicating ink. The court reasoned that if the Legislature intended to exclude 'printing ink', it would have explicitly done so by stating 'lithographic and duplicating inks' without mentioning 'printing'. The inclusion of 'printing' after 'lithographic' was not redundant but intentional to cover all three types of inks.The Tribunal's reference to the text book 'Printing Inks Manufacture' by A.K. Rastogi, which distinguishes between different printing methods and their respective inks, further supported this interpretation.Conclusion:The court held that the absence of a comma in Entry 45 does not exclude 'newspaper printing ink' from its scope. The phrase 'lithographic printing and duplicating inks' in Entry 45 includes three kinds of inks: lithographic ink, printing ink, and duplicating ink. Consequently, the printing ink manufactured and sold by the petitioner falls within Entry 45 and is subject to the higher tax rate.Judgment:The tax revision cases were dismissed, affirming the Tribunal's decision, with no order as to costs.