AI Drafter 
TaxTMI 
TaxTMI 
2008 (8) TMI 823
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted by the authorities of the Excise Department. The petitioner opted to pay compounding tax in respect of its business and payment of compounding tax is statutorily permitted as per rule 90AA of the Orissa Sales Tax Rules, 1947 (hereinafter referred to as, "the Rules"). The assessing authority for the assessment year 2002-03 determined the sale turnover of country liquor of the petitioner at Rs. 16,38,000 being oneandhalf times of the consideration money payable to the Government in the Excise Department for obtaining exclusive privilege licence vide order of assessment dated May 16, 2003 (annexure 1). In addition to the tax paid as per the compounding agreement the assessee was asked to pay the surcharge and some other additions were also made by the assessing authority. The petitioner, being aggrieved by the said order of assessment preferred an appeal before the Assistant Commissioner of Sales Tax, which was disposed of vide judgment and order dated October 31, 2003 (annexure 2) only by reducing the estimated purchase value of mohua flower and sustaining the rest of demand. The petitioner being aggrieved filed a further appeal before the Orissa Sales Tax Tribunal (hereina....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rd. In order to understand the issue involved herein it may be necessary to refer to relevant statutory provisions. Relevant parts of section 5 and 5A of the Act and rule 90AA of the Rules read as under: "Section 5. Rate of tax.-(1) The tax payable by a dealer under this Act shall be levied on his taxable turnover at such rate (not exceeding seventy-five per cent in case of liquor and twenty-five per cent in case of other goods), and subject to such conditions as the State Government may, from time to time, by notification, specify: ... Provided that the State Government may direct that in such circumstances, and under such conditions and for such period as may be prescribed, a dealer shall pay in lieu of the tax assessable on his taxable turnover, a sum fixed in such manner as may be prescribed and in such a case the tax shall be deemed to have been compounded: Provided further that a dealer, who is subject to payment of a sum fixed as aforesaid, may, by a written application to the prescribed authority made within the prescribed period, opt for being assessed in the usual manner under the provisions of this Act in respect of the year in which such option is exercised.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e of quantification of tax on sale of out-still liquor. So far as surcharge provided under section 5A of the Act is concerned the same stands for additional or extra charge or payment. It is a superadded charge and a charge over and above the usual or current dues. In view of such settled position the appellants are liable to pay surcharge at the admissible rate in addition to compounding tax paid by them on sale of out-still liquor in accordance with rule 90AA of the Rules." (emphasis Here italicised. added) The findings recorded by the Tribunal are justified for the reason that in case the argument advanced on behalf of the assessee is accepted, the words contained in section 5A itself become redundant and it does not require to be read in the manner the assessee pleads. The provisions of section 5A make it crystal clear that surcharge is "in addition" to the tax payable by the assessee under the Act. "In addition" indicates that surcharge is additional/extra/superadded tax over and above the tax under section 5 of the Act. In case it is accepted that the surcharge is inclusive and it has been agreed by the authorities in the compounding agreement the words "in addition" would....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eting the provisions of a statute, it can neither add or subtract a word. Legal maxim "A Verbis Legis Non Est Recedendum" means from the words of law, there must be no depature. The said maxim was applied by the honourable Supreme Court in Balasinor Nagrik Co-operative Bank Ltd. v. Babubhai Shankerlal Pandya AIR 1987 SC 849, holding that a section is to be interpreted by reading all its part altogether and it is not permissible to omit any part thereof. In Nalinakhya Bysack v. Shyam Sunder Haldar AIR 1953 SC 148, the honourable Supreme Court has taken a similar view placing reliance on various judgments particularly Hansraj Gupta v. Dehradon-Mussoorie Electric Tramway Co. Ltd. AIR 1933 PC 63 and Commissioner for Special Purposes of Income-tax v. Pemsel [1891] AC 531, wherein it has been held that the court cannot proceed with the assumption that the Legislature while enacting the statute has committed mistake; the court must proceed on the footing that the Legislature intended what it has said; even if there is some defect in the phraseology used by the Legislature, the court cannot add and amend or by construction, make up the deficiencies which are left in the Act. In Sri R....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ry provisions, cannot add words to a statute or read words into it which are not there especially when the literal reading produces an intelligible result. While deciding the said case, reliance had been placed on the judgment in Crawford v. Spooner [1846] 6 Moo. P.C. 1. In Dadi Jagannadham v. Jammulu Ramulu [2001] 7 SCC 71, the Constitution Bench of the Supreme Court considered the earlier judgments and concluded on the issue observing as under: "...The settled principles of interpretation are that the court must proceed on the assumption that the Legislature did not make a mistake and that it did what it intended to do. The court must, as far as possible, adopt a construction which will carry out the obvious intention of the Legislature. Undoubtedly if there is a defect or an omission in the words used by the Legislature, the court would not go to its aid to correct or make up the deficiency. The court could not add words to a statute or read words into it which are not there, especially when the literal reading produces an intelligible result. The court cannot aid the Legislature's defective phrasing of an Act, or add and mend, and, by construction, make up deficiencie....