THIRU MANICKAM AND CO. v. THE STATE OF TAMIL NADU
Citation: [1977] 1 S.C.R. 950; 1976 INSC 263
Court: Supreme Court of India
Bench: HANS RAJ KHANNA , JASWANT SINGH
Judgment date:
Case summary
1976 INSC 263. Supreme Court of India judgment dated 1976-10-26. THIRU MANICKAM AND CO. v. THE STATE OF TAMIL NADU. Read the judgment and case details on...
Judgment text
952 SUPREME COURT REPORTS [ 1977) 1 S. C. R. y THIRD MANICKAM AND CO. V. THE STATE OF TAMIL NADU October 26, 1976 (H. R. KHANNA AND JASWANT SINGH, JJ. ] DR. R. D. NAJIAH AND ORS. Central Sales Tax . Act, 1956-S. 15(b)-Scope of-Assessee bought declared goods and paid State sales tax-Sq/e by way of inter-state Safe-If entitled to refund of state sales tax. • Interpretation "refund" meaning of-Subsequem amendment of section-If could be used to interpret earlier ambiguous provision. Section 15(a) of the Central Sales Tax Act, 1956 as it existed at. the relevant time enacted that tax in respect of any sale or purchase of declared goods J ~nside the State shall not be levied at more thim one stage. According to cl. (b) 1f these goods were subsequently sold, in the course of inter-state trade, the tax so levied shall be refunded to such person as prescribed in the State law. The proviso to s. 4 of the Tamil Nadu General Sales Tax Act and r.
23 of the Rules provide for the refund of the sales tax in the type of cases mentioned in s. 15 (b). The appellant bought cotton yarn from local dealers and sold it by way of inter_state sale. It paid the State sales tax and claimed refund under s. 15 (b) of the1 Central Act. It . succeeded in part at each of the different stages; but on second appeal for the balance, the Appellate Tribunal rejected the :. i. ppellant's claim and held that it was not entitled to any refund including the relief granted by, the Appellate Assistant Commissioner. The High Court rejected its revision petition. Allowing the ~ppeal, HELD : ( 1) The appellant-firm is entitled to be paid the amount of eales tax levied under tbe State Act in respect of the goods sold by it in the course of inter-State trade provided the appellant has paid the sales tax under the Central Act in respect of those sales. [956 El (2) The proviso to s.
4 of the State Actread with the rules leaves na doubt that the amount has to be paid to the dealer who sells the goods in the course ... --of inter-State trade and who has paid the tax under the Central Act in respect of such sale. [955 BJ (3 )(a) There is no anomaly in paying tbe amount of the sales tax under the State Act to a dealer who sells declared goods in the course of inter-State trade even tbough he did not himself pay the tax under the State Act in respect of those goods. The reason for that is the price charged from such dealer by ilie person from whom he purchased the goods would normall v take into account the sales tax paid by the seller. [955 CJ (b) The case of M. A. Khader & Co. v. Deputy emphasis in the word "refunded" as used in clause (b) of section 15 of the Central Act and the proviso to section 4 of the. State Act is ··on repayment of the amount. A word can have many meanings. .
J'o find out the exact connotation of a word in a statute, we must look to the context in ;. --which it is used. The context would quite often provide( the key to meaning of the word and the sense it should cairy. lts setting would give colour ·to it and provide cue to the intention of the legislature THIRU MANICKAM v. TAMIL NADU (Khanna,!. ) 955. in using it. A word, as said by Holmes, is not a crystal, transparent and unchanged; it is the skin of a living thought and may vary greatly in colour and content according to the circumstances and the time in wWch it is used. Th" context in wWch the word "refunded" is med shows that such repayment need not be to the person who initially , paid the tax. It is indeed for the State legislature to specify the person to whom such amount is to be repaid either in the statute enacted by it or to make a provision for that purpose in the rules. The State legislature has made it clear in the proviso to section 4 of the statute · .
that provision in this respect would be made in the rules. · The rules wWch have been framed leave no doubt that the amount has to be paid to the dealer who sells the goods in the course of intelr-State trade· and who has paid the tax under the Central Act in· respect of such sale. There is also no anomaly in paying tha amount of the sales tax under the State Act to a dealer who sells declared goods in the course of inter-State trade, even though htl did not Wmself pay the tax under the State Act in respect of those goods. The reason for that is that the price charged from such dealer by the person from whom he pur-chases the goods would normally take into account the sales tax paid by the seller. Assuming that there was some ambignity in the languages of clause (b) of section 15, as it existed at the relevant time, the matter is made clear by the amendment made in the Central Act by the Central Sales. Tax (Amendment) Act, 1972 (Act No. 61 of 1972).
As a result of the amendment, clause (b) of section 15 of the Central Act reads as under: "(b) Where a· tax has been levied under that law in . respect of the sale or purchase inside the State of any / declared goods and such goods are sold in the course of inter-State trade or commerce, and tax has been paid under this Act in respect of the sale of such goods in the course of inter-State trade or commerce, the tax levied under such law shall be reimburse. d to the person making such sale in the course of inter-State trade or commerce in such manner and subject to such conditions as may. be provided in any law in force in that Sta. le. " · · The amended provision makes it plain beyond any pale of controversy that the tax levied under the State Act in respect of declared goods has to be reimbursed to the person making sale of those goods in the course of inter-State trade or commerce in such manner and subject to such conditions as may be provided in the law in force in that State.
According to the notes explaining the different clauses appended to the statement of objects and reasons of the. Bill which emerged as the amending Act, the amendment made in clause (b) makes it clear that local sales tax would be reimbursed to the person making the sale in the course of inter-State trade and commerce. The amendment made in clause (b) can thus be taken to be an exposition by the legislature itself of its intent contained in the earlier provision. We are not impressed by the argument of the learned Additional Solicitor-General lt-! 338SCI/76 that the amendment mad~ in clause (b) was intended to mark a de-partnre from the position in law as it existed before the amendment. The fact that the amendment of clause (b) of section 15 was not like some other provisions given retrospective effect, 'would not materially affect the position. ~s :i.
Iready m~ntioned above, the legislature ·as a result of the amendment, clarified what was implicit in the provisions <ts they existed earlier. An amendment which is by way· of clarification of an earlier ambigiicius provision can be useful aid in construing the earlier provision, even though such amendment is not given retrospective effect. We may refer in this context to observations on page 147 of Craies on Statute Law (Sixth Ed. ) which read as 'Ullder : " .... iri · Cape Brandy Syndicate v. I. R. C. (') Lord Sterndale M. R. said : 'I thin! < it is clearly established in Att. -Gen. v.
Clarkson, supra, that subsequent legislation may be looked at in order to see the proper construction to be put upon an earlier Act where that earlier Act is ambiguous: I quite agree that subsequent legislation if it pro-ceeded on an erroneous construction of previous legislation cannot alter that previous legislation; but if there be any ambiguity in the earlier legislation, then the subsequent legislation may fix the proper interpretation which is to be put • upon the earlier'. " · Looking to all the facts, we are of the view that the appellant-firm is entitled to be paid the amount of sales tax levied under the State Act in respect of the goods sold by it in the course of inter-State trade provided the appellant has paid the sales tax under the Central Act in respect of thooe sales. We accordingly accept the appeal, set aside the judgment of the High Court and order that the appellant-firm .
be paid the amount of sales tax levied under the State Act in respect of the goods sold by it in the course of inter-State trade· provided the appellant has paid the sales tax under the Central Act in respect of those sales. The appellant shall be entitled to recover its costs both in this Court as well as in the High Court from the respondent. P. B. R. Appeal allowed. I (I) [19211 2 KB. 403 at P. 156.
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