TaxTMI 
TaxTMI 
1980 (10) TMI 181
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.... 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). Since the decision of this question turns on the true interpretation of the expression "registered dealer" in section 8(ii) of the Bombay Act, we may reproduce that section as follows: "Section 8. There shall be levied a sales tax on the turnover 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) .......................................... (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 taxati....
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....e purchasing dealer is also to be exempt from tax in respect of resale 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 resale 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 per cent or at the 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-section (2) of section 8 of the....
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....at 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 a....
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....ion. On further appeal, the Gujarat Sales Tax Tribunal agreeing with the sales tax authorities, held that in order to claim deduction from the turnover of sales of goods under clause (ii) of section 8 of the Act, what was required to be shown was that the goods were purchased by the dealer on or after the appointed day from a "registered dealer" under the Act, and that in view of the definition of the expression "registered dealer" in sub-section (25) of section 2 of the Act, such dealer had to be a dealer registered under section 22 of the Act. The Tribunal accordingly held that since Motibhai Gopalbhai Patel, the Baroda dealer, from whom the assessee had purchased the goods, was not a registered dealer under the Act, therefore the requirements of clause (ii) of section 8 of the Act were not fulfilled, and the claim for deduction made by the assessee had been rightly disallowed. On the application of the assessee, the Tribunal referred the following question of law to the High Court under sub-section (1) of section 61 of the Act, for its opinion, namely: "Whether for the purpose of allowing deduction from the turnover of sales under clause (ii) of section 8 of the Bombay Sales ....
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....section 4 of the Bombay Act, would, therefore, be entitled to deduct from his turnover of sales of goods, resales of goods so purchased by him on or after the appointed day if the goods, at the time of their purchase, were goods specified in Schedule C." This conclusion of the High Court can hardly be supported. The short question that falls for determination in the appeal is whether the expression "registered dealer" in clause (ii) of section 8 of the Act must bear the meaning that is assigned to it in section 2(25) which is the definition section, or the said expression is capable of bearing an enlarged meaning, in view of the subject and context in which it is used in clause (ii) of section 8 of the Act. The decision of the appeal must turn on the construction of clause (ii) of section 8 of the Act, which provides: "8. There shall be levied a sales tax on the turnover 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) ........................ (ii) resales of goods purchased by him on or after the appointed day from a registered dealer, if the goods at the time of thei....
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....the meaning of section 2(25) of the Act. It follows that the expression "registered dealer" in clause (ii) of section 8 of the Act must bear the meaning of that expression as given in section 2(25) of the Act. If the meaning of the section is plain, it is to be applied whatever the result. It is a well-settled principle that when a word or phrase has been defined in the interpretation clause, Prima facie that definition governs whenever that word or phrase is used in the body of the statute. But where the context makes the definition clause inapplicable, a defined word when used in the body of the statute may have to be given a meaning different from that contained in the interpretation clause; all definitions given in an interpretation clause are, therefore, normally enacted subject to the usual qualification-"unless there is anything repugnant in the subject or context", or "unless the context otherwise requires". Even in the absence of an express qualification to that effect such a qualification is always implied. The expression "registered dealer" having been defined in section 2(25) of the Act as having a particular meaning, i.e., a dealer registered under section 22 ....
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....ession "registered dealer" in clause (ii) of section 8 would also include a dealer registered under the Central Sales Tax Act, 1956, on whom a special liability to pay sales tax has been imposed under section 4. Upon that view, it held that a dealer who purchased goods from a dealer registered under the Central Act, who was liable to pay sales tax on the sale of such goods by virtue of the provisions of section 4 of the Act, would be entitled to deduct from his turnover of sales of goods, resales of goods so purchased by him on or after the appointed day if the goods at the time of their purchase, were goods specified in Schedule C of the Act. It accordingly held that the meaning of the expression "registered dealer" in clause (ii) of section 8 was not limited only to a dealer registered under the Act but it was wide enough to also include a dealer registered under the Central Act. There is no dispute with the proposition that the meaning of a word or expression defined may have to be departed from on account of the subject or context in which the word had been used and that will be giving effect to the opening sentence in definition section, namely, "unless the context otherwis....
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....certain contingencies be liable to pay tax. It failed to appreciate that clause (ii) of section 8 which allows for deduction of sales by one registered dealer to another, deals purely with inside sales. The expression "registered dealer" in clause (ii) of section 8 is sought to be given an enlarged meaning by stretching, in effect, the legal fiction contained in sub-section (2) of section 4. After observing that the legal fiction in sub- section (2) of section 4 is created for a limited purpose, it goes on to observe: "It would, therefore, have been inappropriate or at any rate wholly inartistic for the legislature to provide in sub-section (2) of section 4 that every dealer who is liable to pay tax under sub-section (1) shall be deemed to be a registered dealer for the purpose of clause (ii) of section 8 since the latter section provides for the levy of sales tax on sales of goods of an altogether different dealer after making certain deductions from the turnover of sales of goods of such dealer. The legislature could have made a specific provision, if any, in this behalf only in clause (ii) of section 8 and not in sub-section (2) of section 4. " The High Court proceeds o....