TaxTMI 
TaxTMI 
2017 (10) TMI 428
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....Act, are made to suffer tax under Section 3(1) of the Delhi Act, whose marginal note reads "incidence of tax". Section 3 (1) states as under:- "3. Incidence of Tax (1) Every dealer whose turnover during the year immediately preceding the commencement of this Act exceeds the taxable quantum and every dealer who at the commencement of this Act, is registered or is liable to pay tax under the Central Sales Tax Act, 1956 (74 of 1956) shall be liable to pay tax under this Act on all sales effected by him on or after such commencement." The obverse side of incidence of tax is provided by Section 7 of the said Act, which reads as under:- "7. Tax free goods (1) No tax shall be payable under this Act on the sale of goods specified in the Third Schedule subject to the conditions and exceptions, if any, set out therein. (2) The Lieutenant Governor may by notification in the Official Gazette, add to, or omit from, or otherwise amend, the Third Schedule either retrospectively or prospectively, and thereupon the Third Schedule shall be deemed to be amended accordingly: PROVIDED that no such amendment shall be made retrospectively if ....
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....ade retrospectively if it would have the effect of prejudicially affecting the interests of any dealer: PROVIDED ALSO that in respect of any goods or class of goods if the Lieutenant Governor is of the opinion that it is expedient in the interest of the general public so to do, he may, by notification in the Official Gazette, direct that the tax in respect of taxable turnover of such goods or class of goods shall, subject to such conditions as may be specified, be levied at such modified rate not exceeding the rate applicable under this section, as may be specified in the notification. (2) For the purpose of this Act, "taxable turnover" means that part of a dealer's turnover during the prescribed period in any year which remains after deducting there from: (a) his turnover during that period on- (i) sale of goods, the point of sale at which such goods shall be taxable is specified by the Lieutenant Governor under section 5 and in respect of which due tax is shown to the satisfaction of the Commissioner to have been paid; (ii) sale of goods declared tax-free under section 7; (iii) sale of goods not liable to tax under section 8; ....
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....ction is included in the return required to be furnished by the dealer in respect of the said sale: [PROVIDED FURTHER that no deduction in respect of any sale referred to in sub-clause (v) shall be allowed unless a true declaration duly filled and signed by the registered dealer to whom the goods are sold and containing the prescribed particulars in the prescribed form obtainable from the prescribed authority in the manner and subject to such condition as may be prescribed is furnished in the prescribed manner and within the prescribed time, by the dealer who sells the goods:] PROVIDED ALSO that where any goods are purchased by a registered dealer for any of the purposes mentioned in sub-clause (v), but are not so utilised by him, the price of the goods so purchased shall be allowed to be deducted from the turnover of the selling dealer but shall be included in the taxable turnover of the purchasing dealer; and (b) the tax collected by the dealer under this Act, as such and shown separately in cash memoranda or bills, as the case may be." The question that has been raised in the present appeals relates to "tobacco" specified in the Third Schedule, read....
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....m 1-3-75 * This is obviously a case of legislation by incorporation as a result of which the only thing that is to be looked at is "tobacco" contained in this Schedule and not subsequent amendments that have been made after the introduction of the Central Excise (Tariff) Act, 1985 w.e.f. February, 1986. It has, in any event, been argued before us that the subsequent legislation would throw light on what is contained in the earlier legislation, for subsequently under the Central Excise Tariff, Pan Masala which contains tobacco, commonly known as Gutka, is specified under Entry 2404.49 under the heading "Chewing Tobacco and preparations containing chewing Tobacco; Pan Masala containing Tobacco". In addition, it was pointed out that under the Chapter notes, para 3 in particular, the definition of "tobacco" remains exactly what it was in 1975, which now subsumes Pan Masala which includes tobacco. 5) The impugned judgment of the Delhi High Court dated 05.11.2004 has held, on a reading of the aforesaid provisions, that a notification dated 31.03.2000, which introduced as Item 46 in the First Schedule "Pan Masala and Gutka" w.e.f. 01.04.2000, would have to be read as eatin....
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....containing tobacco, the legislative competence of the State to enact a State sales tax levying sales tax on the same goods is not taken away. 7) It is well settled that in the area of taxation, the question of going to the measure of a tax would arise only if it is found that the charge of tax is attracted. [See Tata Sky Limited vs. State of Madhya Pradesh and Others, (2013) 4 SCC 656 at para 29] Also, in a recent Constitution Bench judgment delivered by this Court in Commissioner of Income Tax (Central)-I, New Delhi vs. Vatika Township Private Limited, (2015) 1 SCC 1, after referring to an earlier judgment of this Court, this Court stated that the components which enter into the concept of taxability are well known and distinct. The first is the imposition of tax which prescribes the taxable event attracting the levy. The second is an indication of the "taxable person" i.e. the person on whom the levy is imposed and who is obliged to pay the tax. The third is the rate at which tax is imposed. The fourth is the measure or value to which the levy will be applied for computing tax liability. 8) Keeping these parameters in mind, a three-Judge Bench of this Court held, in Relianc....
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....on that when an exemption had already been granted to the goods concerned, if the State Legislature had specifically amended Schedule I so as to include the said goods in Schedule I and make it exigible to tax, it would be incorrect to interpret an entry in a manner so as to defeat the object of the statute, is also not tenable. In the first place, there could be nothing like exemption from tax unless goods are exigible to tax. Thus, unless the goods were specified in Schedule I or II of the KGST Act the goods would not be liable to tax at all and, therefore, there would be no question of granting exemption from tax. Thus, it would be unnecessary to specify them in the Third Schedule, unless by reason of Section 5 read with Schedule I or II, the goods were exigible to tax. The fact that "tarpaulin" was included in the First Schedule does not carry the matter any further in favour of the Revenue as it is clear that the exemption operating in favour of cotton-based tarpaulin as covered by "cotton fabrics" in the Third Schedule continues as no corresponding change has been made therein by the legislature even after the amendment of the First Schedule by the introduction of "tarpaulin"....
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....and the intention to levy the tax is clear we see no justification for not giving effect to the second notification. We would like to point out that the exemption was in regard to a class of goods and while the exemption continues, a specific item has now been notified under Section 3-A of the Act." (at pages 142-143) B.C. Ray, J. dissented from this view and followed the view of the Allahabad High Court, which accords the view of this Court in the Kothari Products (supra) and Reliance Trading Company (supra) judgments. One other interesting feature of this case is whether, after Union of India vs. Raghubir Singh, 1989 (3) SCR 316 at 335-337, it can be stated that Judges of this Court do not sit in 2's and 3's for mere convenience, but that a Bench which is numerically superior will prevail over a Bench of lesser strength. If the doctrine of precedent, as applied by this Court, is to be a matter of numbers, then, interestingly enough, as has been held by Beaumont C.J. in Ningappa Ramappa Kurbar and Another vs. Emperor, AIR 1941 Bombay 408 at 409, the position in law could be as under: "... The Court in that case consisted of five Judges, one of whom, Shah J., d....
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....mical Biology, (2002) 5 SCC 111) is that out of the 7 (seven) learned Judges constituting the Bench, 5 learned Judges overruled the unanimous decision of another set of 5 learned Judges in Sabhajit Tewary (Sabhajit Tewary v. Union of India, (1975) 1 SCC 485). Two of the learned Judges in Pradeep Kumar Biswas found that Sabhajit Tewary had been correctly decided. In other words, while a total of 7 learned Judges took a particular view on an issue of fact and law, that view was found to be incorrect by 5 learned Judges, whose decision actually holds the field today. Is the weight of numbers irrelevant? Is it that only the numbers in a subsequent Bench are what really matters? What would have been the position if only 4 learned Judes in Pradeep Kumar Biswas had decided to overrule Sabhajit Tewary while the remaining 3 learned Judges found no error in that decision? Would a decision rendered unanimously by a Bench of 5 learned Judges stand overruled by the decision of 4 learned Judges in a subsequent Bench of 7 learned Judges? Pradeep Kumar Biswas presents a rather anomalous situation which needs to be addressed by appropriate rules of procedure. If this anomaly is perpetuated then the....
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....An allied question, which often arises, is the discovery of the true ratio decidendi in a given case. In Harper and Others vs. National Coal Board [1974] 2 All ER 441, the Court of Appeal was faced with a judgment of the House of Lords in Central Asbestos Co Ltd vs. Dodd [1972] 2 All ER 1135 by five learned Judges. Whereas Lord Reid and Lord Morris took a particular view of the law in favour of Dodd, stating that his claim was not barred, two other learned Judges namely, Lord Simon and Lord Salmon disagreed on the law, and held that his claim was barred. Lord Pearson was stated to be the odd man out. He held that time did not run against Dodd, since Dodd did not appreciate that the appellants were at fault and that his injuries were attributable to their fault. On that ground, he agreed with Lord Reid and Lord Morris, as a result of which Dodd succeeded. However, he went on to say that he agreed with the opinion of the minority as to the proper construction of the statute in law. Faced with this, Lord Denning M.R. set out four interesting propositions on how a ratio is to be discovered and or read in a judgment. He stated: "How then do we stand on the law? We have listened....
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.... of cases before the decision of the House of Lords. None of these was overruled. They may therefore be said to be binding on us. But in any case we should follow their reasoning, especially as it was accepted by two of their Lordships who were in the majority and was expressed convincingly by Lord Morris of Borth-y-Gest in the passage I have quoted." (at page 446) Stephenson LJ. concurred. The learned Lord stated: "I agree. I cannot find any discernible ratio decidendi common to the majority of the House of Lords in deciding Dodd's case. Their Lordships were divided three to two in the decision to affirm the judgment of the Court of Appeal; but in the reasons for their decision they appeared to be divided two to two, Lord Pearson taking a third view which perhaps came closer to the view of the minority. In those circumstances I do not think that we can treat the reasoning of the majority of the majority - Lord Reid and Lord Morris of Borth-y-Gest - as the ratio decidendi of the house. It is the ratio given by only two out of five. Still less can we treat the 'ratio dissentiendi' appearing from the speeches of the minority - Lord Simon of Glaisdale and Lo....