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TaxTMI 
TaxTMI 
TaxTMI 
2012 (8) TMI 863
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.... of law and facts and have been heard together, they are being disposed of by this common judgment. 2. For the purpose of disposal of these appeals, the facts may be noticed only in brief because this court framed the following two substantial questions of law for determination in these appeals at the stage of issuance of notice. They are to the effect: (i) Whether the Tribunal has erred in law in holding the Department of Railways of Union to be a dealer under section 3 of the ET Act on the basis of section 2(1)(b) of this Act which adopts the definition of dealer in the repealed Bihar Finance Act, 1981? and (ii) Whether the Tribunal ought to have relied upon the definition of the term "dealer" as given in the VAT Act whereby the Bihar Finance Act, 1981 was repealed in 2005? However, at the time of final arguments learned counsel for the appellant also raised another question as to whether, in the facts of the case, considering the bona fide of the appellant in raising the aforesaid dispute, imposition of penalty was legal and permissible? 3. Revision Case No. PT 64 of 2010 relates to the period August 29, 2006 to March 31, 2007 and involves entry tax of Rs. 2,96,23,534 and a....
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.... be held to have undergone an amendment because the VAT Act defines the term "dealer" differently and does not include Central Government or its Departments. An alternative argument was also advanced that even if definition of "dealer" remains the same as in Bihar Finance Act, 1981, Explanation II of section 2(a) would cover only the State Government under the clause "a Government" and not the Central Government because under section 2(ii) of the Bihar Finance Act, 1981 "Government" means only Government of the State of Bihar. 6. So far as the alternative argument is concerned it needs to be noticed only for rejection. Section 2(ii) of the Bihar Finance Act, 1981 no doubt defines the word "Government" to mean the Government of the State of Bihar but Explanation II to section 2(a) uses the term "A Government" and not the word "Government". When the entire Explanation II is read as a whole it is clear that the term "a Government" has been deliberately used to describe any Government and not the Government of the State of Bihar. As a result of the said Explanation any Government, whether or not in course of business, buys, sells, supplies or distributes goods, directly or otherwise, ....
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....m registered outside the State of Bihar or a company or other body corporate, the principal office, or headquarters whereof is outside of the State of Bihar shall be deemed to be a dealer for the purposes of this Act. Explanation II.-A Government which whether or not in the course of business, buys, sells, supplies or distributes goods, directly or otherwise, for cash or for deferred payment or for commission, remuneration or other valuable consideration, shall be deemed to be a dealer for the purposes of this Act. Section 2(1)(b) of the ET Act.-'Dealer' shall have the meaning assigned to it under the Bihar Finance Act, 1981. Section 2(i) of the VAT Act.-'Dealer' means any person who, whether regularly or otherwise, in the course of business buys, sells, supplies, distributes or does anything incidental to such buying, selling, supplying or distributing of goods, directly or indirectly, whether for cash, or for deferred payment or for commission, remuneration or other valuable consideration and includes- (A) a local authority; (B) a Hindu undivided family; (C) a company, or any society (including a co-operative society), club, firm, association of persons or body of individua....
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.... bodily lifting the definition or meaning given to the term "dealer" in the Bihar Finance Act, 1981 for the purpose of having the same meaning to this term under the ET Act. 9. In order to supplement and support his submission learned State 9 counsel has placed reliance upon the following three judgments of the Supreme Court:- (1) Ram Sarup v. Munshi AIR 1963 SC 553. (2) Mahindra & Mahindra Ltd. v. Union of India [1979] 49 Comp Cas 419 (SC); AIR 1979 SC 798. (3) Vrajlal Manilal & Co. v. State of Madhya Pradesh [1986] 63 STC 1 (SC); AIR 1986 SC 1085. 10. The Constitution Bench of the Supreme Court in the case of Ram Sarup AIR 1963 SC 553 considered a similar provision in section 3(1) of the Punjab Pre-emption Act, 1913 wherein agricultural land was defined thus-"agricultural land" shall mean land as defined in the Punjab Alienation of Land Act, 1900 (as amended by Act 1 of 1907), but shall not include the rights of a mortgagee, whether usufructuary or not, in such land. Although the earlier Act of 1900 was subsequently repealed by a later Act of 1951, the Supreme Court held that the repeal of the Act of 1900 has no effect on the continued operation of Pre-emption Act, 1913 and ....
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....hout incorporation. According to the Supreme Court, the later Act had incorporated provision of earlier Code of Civil Procedure and, therefore, the repeal or amendment of Code of Civil Procedure in 1976 would have no effect on the incorporating statute. In this judgment several authoritative judgments of courts of England and of our Supreme Court were extracted to highlight the difference between legislation by mere reference of one enactment in another and legislation by incorporation. It was held that "legislation by incorporation is a common legislative device implied by the Legislature, where the Legislature for convenience of drafting incorporates provisions from an existing statute by reference to that statute instead of setting out for itself at length the provisions which it desires to adopt. Once the incorporation is made, the provision incorpo rated becomes an integral part of the statute in which it is transposed and thereafter there is no need to refer to the statute from which the incorporation is made and any subsequent amendment made in it has no effect on the incorporating statute". 12. So far as the judgment in the case of Vrajlal Manilal & Co. [1986] 63 STC 1 (SC....
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....Proviso thereto relies upon the Bihar Finance Act, 1981 for a stipulation that for goods which are liable to tax under that Act, entry of goods shall mean entry of goods into local area from any place outside the State for consumption, use or sale therein. Section 2(1)(g) defines "motor vehicle" in following words-"Motor Vehicle" means a motor vehicle as defined in clause (28) of section 2 of the Motor Vehicles Act, 1988. Section 2(2) provides that the words and expressions used in this Act but not defined therein shall have the meaning assigned to them under the Bihar Finance Act, 1981. As already noticed, section 3(2) provides for payment of tax under this Act by every dealer liable to pay tax under the Bihar Finance Act, 1981 besides other person who meets the specification. In fact, section 3(2) refers to the Bihar Finance Act, 1981 in the third proviso also which is by way of an exception to the second proviso which was amended by Act 19 of 2006 to refer to the provisions of the VAT Act, 2005 for reduction of tax liability to the extent of tax paid under this Act in case the importer of scheduled goods incurs liability to pay tax at the rate specified under section 14 of the V....
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....he Legislature has incorporated the meaning assigned to certain words in the Bihar Finance Act, 1981 but has also preferred to retain those provisions even after repeal of that Act by the VAT Act of 2005. However, wherever found necessary such as in section 3(2) the Legislature has brought about amendments for referring to the provisions of the VAT Act 2005 also. Such a state of affairs clearly indicates that the Legislature did not intend to merely refer to the Bihar Finance Act, 1981 in general for the purpose of defining the term "dealer" but it incorporated the said definition and as a result the meaning of the term "dealer" in the Bihar Finance Act, 1981 has to be treated as bodily lifted and made a part of section 2(1)(b) of the ET Act, 1993. In such a situation, the subsequent repeal of the Bihar Finance Act, 1981 by the VAT Act, 2005 shall have no effect upon the definition of the term "dealer" which must derive its meaning as given in the Bihar Finance Act, 1981 regardless of its subsequent amendment or repeal. 15. On behalf of the appellant, in course of reply, a submission was advanced that in view of the law laid down by the Supreme Court in the case of Girnar Traders ....
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....rkable and ineffectual and (4) where the amendment of the previous Act, either expressly or by necessary intendment, applies the relevant provisions to the subsequent Act. In our considered view, none of the four situations is applicable in the present case so as to militate against the consequences of our finding that the term "dealer" has been defined in the ET Act by way of legislation by incorporation. 16. The judgment in the case of Bharat Coop. Bank (Mumbai) Ltd. [2007] 4 SCC 685 was a case where a plea of exceptional situation was not accepted on the ground that the concerned Act was a complete and self-contained code and its working was not dependent upon the earlier Act which was subsequently amended. That case cannot be treated to be an authority for laying down the proposition that if an Act is not a complete code by itself, there can be no legislation by incorporation in such an Act. That judgment reiterates the well established principle that determination of the question whether legislation is by incorporation or by reference is ultimately a matter of probing the legislative intention. It may require insight into the working of the concerned enactment if one or the o....