1985 (9) TMI 98 - HC - VAT and Sales Tax

Imported Sugar Not Subject to Sales Tax: Court Emphasizes Strict Fiscal Statute Interpretation

STATE TRADING CORPN. OF INDIA LTD. Versus ASSTT. COMMR. (ASSESSMENT)

The court held that imported sugar is not exigible to tax under the Kerala General Sales Tax Act, 1963. It determined that the definition of sugar in the ... Sugar - Interpretation of statutes - Fiscal statute Issues:Whether imported sugar is exigible to tax under the Kerala General Sales Tax Act, 1963.Analysis:The judgment revolves around the interpretation of the term 'sugar' as defined in the First Schedule to the Central Excises and Salt Act, 1944, in the context of the Kerala General Sales Tax Act, 1963. The court analyzed the legislative intent behind the definition of sugar and its applicability to imported sugar. The court emphasized that the purpose of incorporating the description of sugar in the Excise Act was solely to define sugar for the Sales Tax Act and not to apply the provisions of the Excise Act to the Sales Tax Act. The court highlighted the need for a strict construction of fiscal statutes and rejected the argument that the definition of sugar in the Excise Act was limited to sugar produced in India. The court concluded that imported sugar should not be subjected to sales tax under the Kerala General Sales Tax Act.The petitioner also argued that customs tariff and additional excise duties had already been levied on the imported sugar, making it unreasonable to impose sales tax on the same goods. The court considered the provisions of the Customs Tariff Act and the Additional Duties of Excise (Goods of Special Importance) Act, emphasizing the intention of the legislature to safeguard the interests of manufacturers in India. The court noted that the levy of sales tax on imported goods, which had already been subject to customs and excise duties, would be against legislative intent and principles of fairness.Furthermore, the court referenced a Supreme Court decision to support the petitioner's argument regarding the nature of additional duty under the Customs Tariff Act. The court clarified that the Supreme Court decision did not advance the case of the revenue and was not relevant to the issues contested in the writ petition. Ultimately, the court allowed the writ petition, quashing the order imposing sales tax on imported sugar. The court declined the State's request for leave to appeal to the Supreme Court, as no substantial question of law of general importance was found in the case.