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Judgment
Bilal Nazki, J
This batch of Writ petitions raise some questions of law and fact and revolve around the interpretation to be placed on relevant entries in the First Schedule of the Andhra Pradesh General Sales Tax Act, 1957. These petitions also raise questions with regard to the power of the Government to issue circulars interpreting the entries in the Schedule to the A.P. General Sales Tax Act, 1957. These petitions are therefore proposed to be decided through one common judgment.
A common counter has been filed and we have heard the learned Counsel for the parties in detail. Controversies have been raised in the light of the following material facts :
The petitioners in all the Writ petitions are dealing with edible oils and are private limited companies registered in accordance with law. They are also registered as dealers under the A.P. General Sales Tax Act, 1957 (hereinafter referred as ''APGST Act'') and the Central sales Tax Act, 1956 (hereinafter referred as "CST Act"). They import unrefined Sunflower oil and refined Palmolien and sell it within the State of Andhra Pradesh. The contention of the petitioners is that they have been paying Sales tax at the rate of 2% under items 24-A and 24-B of the First Schedule of the APGST Act and under the CST Act. They have been duly filing their returns. They further submit that for the years 1995-96 and 1996-97 the respondent No. 1 passed final assessment orders on the same basis. Copies of the assessments in case of B. Arun Kumar Trading Private Limited have been annexed with the petition. It is further stated that Vegetable oils are an essential commodity and are used by every section of the society and it has been the policy of the Government to levy tax on such goods at minimum rates and it is evidenced according to the petitioners by G.O.Ms. No.401 dated 16th August, 1995 and G.O.Ms. No.415 dated 17th May, 1997. These G.Os grant rebate of tax on sales of refined oils derived from tax suffered unrefined oil. It is further stated that the petitioners have paid or are paying sales tax at the rate of 2% on the sales of imported Palmolien oil and Sunflower oil under the APGST Act. The petitioners further state that till 1994 the Government policy on oil seeds and edible oils was aimed at improving productivity and attaining self sufficiency but since there was a large gap between the production and supply, therefore wide fluctuations in the prices was witnessed. International prices of edible oils were 50% less as compared to prices in India, therefore the consumers were suffering and the Government of India keeping these facts in view took certain measures to improve the position. Following measures were taken by the Government of India:
(a) Import of edible oils under OGL (Open General Licence) in July, 1994:
(b) Reduction in the rates of Customs Duty to 30% in 1995 and later in 1996 to 20%:
(c) Removal of storage limits for imported oils under the Pulses. Edible Oil Seeds and Edible Oils Storage Control Order, 1977 and later in 1997 limits were removed for all oil seeds and edible oils.
It is the contention of the petitioners that by reason of the policy of the Government of India, the prices of the edible oils got stable because of the import of the oil, and last year nearly 25% of the country''s needed oil was imported. Further, the petitioners state that Sales tax in most of the States including Kamataka, Gujarat, West Bengal and Madhya pradesh is 2% whereas in Maharashtra it is only 1.5%. By all these factors effort has been made by the petitioners to show that it has been the effort of the Governments to reduce the tax on edible oils to the minimum levels. The Government of Andhra Pradesh fixed a schedule of rates of tax on edible oils by Act No.27 of 1996 with effect from 16th August, 1995. As a consequence of Act 27 of 1996, entries 24-A, 24-B, 24-C and 24-D came into operation with effect from 16th August, 1995. These entries need to be reproduced:
S. No. Description of the goods Point of levy Rate of tax Effective from
24-A
Vegetable oils (non-refined) including groundnut oil, palm oil, sunflower oil. soya bean oil, mustard oil, kusum oil, tobacco seed oil, castrotoil, washed cotton seed oil other than rice bran oil and coconut oil (1204)
At the point of first sale in the State 2 paise in rupee 16-8-95
24-B
Vegetable oil, (refined) obtained from non-refined oil mentioned in item 24-A other than rice bran oil (1205)
-do- 2 -do- 16-8-95
24-C Rice bran oil (1206) -do- 2 -do- 16-8-95
24-C Coconut oil (1207) -do- 10 -do- 16-8-95
The assessments were being made and in certain cases the imported refined Palmolien oil and unrefined Sunflower oil was taxed at the rate of 2% and in some cases it was taxed under Seventh Schedule at the rate of 10% as some of the assessing authorities thought that the case of the petitioners was not covered either under 24-A or 24-B. Consequently, Government of Andhra Pradesh issued an order on 16-9-1997 which is reproduced below:
'' ''Government of Andhra Pradcsh
Revenue (Ct.II) Department No. 27740/CT.II(1)/97-2 Dated:16-9-1997
Sub :-APGST Act,1957 Sale of Imported Vegetable oils -Applicable rate of tax-regarding.
Ref :--From the CCT, AP, Hyd, letter No. A1 (3X1924/94, dated9-5-1996.
The attention of the Commissioner of Commercial Taxes, Andhra Pradesh, Hyderabad is invited to the reference cited. He is informed that the interpretation of the entries has to be done strictly as per language used therein. Since there is a specific mention of the non-refined oils which are linked to refined oils in item 24-B the only interpretation that can be offered is that the concessional rate of 2% is applicable only to those oils which are obtained from non-refined oils subject to tax under entry 24-A of 1st Schedule. Imported refined oils are therefore, taxable at 10% under VII schedule.
The Commissioner of Commercial Taxes, Andhra Pradesh is requested to take necessary action and report compliance.
P. Bhanumurthy
Officer on special duty.
To
The Commissioner of Commercial Taxes,
Andhra Pradcsh,
Hyderabad.
This order interpreted entries 24-A and 24-B and directed the officers that concessional rate of 2% is applicable only to those oils which are obtained from non-refined oils subject to tax under 24-A of the First schedule. It directed assessment at the rate of 10% on imported oils which had not suffered tax under 24-A. Consequently the Commissioner of Commercial Taxes issued an order dated 10-11-1997 which is also reproduced below:
"Most Urgent
Office of the
Commissioner of Commercial Taxes
Andhra Pradcsh:: Hyderabad
CCT''s Ref.A1(3)/2S90/97 Dated 10-11-1997
Sri R.P. Singh, IAS, Commissioner of Commercial Taxes
Sub :--APGST Act, 1957-Vegetable Oils-Entry 24-B- Disputed levy of tax at 2%-regarding.
Under entry 24-B of First Schedule, refined vegetable oils obtained from non-refined oils mentioned in Item 24-A other than Rice Bran oil are taxable at 2 paisc in the rupee with effect from 16-8-1995.
The Government vide Memo No.27740/ CT.II(l)/97-2 dated 16-9-1997 have since issued clarification tliat the interpretation of the entries had to be done strictly as per the language used therein. Since there is a specific mention of non refined oils which are linked to refined oils in Item 24-B the only interpretation that can be offered is that the concessional rate of 2% is applicable to only those oils which are obtained from non-refined oils subject to tax under entry 24-A of First Schedule and therefore imported refined oils are taxable at 10% under Seventh schedule.
In view of the above clarification, all imported oils from outside the country or from outside slate (such as GN oil, Palm Oil, Gingelly Oil, Safflower Oil, Sunflower Oil, Soyabean Oil, Mustard Oil,etc.) when refined in the State are liable to tax at 10% under Seventh Schedule.
In view of the above, the Deputy Commissioners (CT) are requested to furnish the full details of the refineries which are importing vegetable oils in the following proforma:
Sl. No. Name of relinery Nature of refined oil GTO ETO NTO Tax paid Rate at which pail
(1) (2) (3) (4) (5) (6) (7) (18)
Further, the Deputy Commissioners (CT) are also requested to examine the possibility of revising all the assessments where the assesees have paid 2% instead of 10% on imported oil from other State/other countries.
Sd/-
For Commissioner of Commercial Taxes
To
All Deputy Commissioners (CT).
Two prayers have been made, one that the Government order dated 16th September, 1997, and the Commissioner''s order dated 10th November, 1997, be quashed as they ultra vires the Act and both the orders are without jurisdiction. Further it has been prayed that a declaration be made by this Court that the oil in question is assessable at the rate of 2% under Schedule-I and not the rate of 10% under Schedule-VII.
Let us examine the first question first as to whether the Government had any power under the Act to issue an order dated 16th September, 1997 by which the concerned assessing Officers were directed to make assessments in accordance with the terms of the order. If this order sustains, then there will be no difficulty in upholding the order passed by the Commissioner because that is a consequence of the Government order.
There is only one power in the Act given to the Government which is u/s 42 of the Act. Section 42 of the APGST Act lays down:-
"42. Power to remove difficulties :-(1) If any difficulty arises in giving effect to the provisions of this Act, in consequence of the transition to the said provisions from the corresponding provisions of the Acts in force immediately before the commencement of this Act, the State Government may, by order in the Andhra Pradesh Gazette make such provisions as appear to mem to be necessary or expedient for removing the difficulties.
(2) If any difficulty arises in giving effect to the provisions of this Act (otherwise than in relation to the transition from the provisions of the corresponding Act in force before the commencement of this Act), the State Government may by order make such provisions not inconsistent with the purposes of this Act, as appear to them to be necessary or expedient for removing the difficulty.''''
Section 42-A gives further powers to the Commissioner to issue instructions to Subordinate Officers.
"42-A. Instructions to Subordinate Officers :--The Commissioner may form time to time issue such orders, instructions and directions not inconsistent with the provisions of this Act, or the Rules made thereunder to his subordinate officers as he may deem fit, for the proper administration of the Act and such officers and all other persons employed in the enforcement of the Act, shall comply with such orders, instructions and directions :
Provided that no such orders, instructions or directions shall be such as to interfere with the discretion of any appellate authority in exercise of its appellate functions."
From bare reading of the above two provisions of the Act it becomes clear that the Government has no power whatsoever to interpret the statute in a vacuum and ask the assessing authorities to make assessments in accordance with the interpretations placed by the Government through a Government order on a statute. Assessing authorities, Appellate authorities and the Revisional authorities under the Act are performing quasi judicial functions and it is in each and every case that these authorities are expected to pass objective orders while interpreting the provisions on their own. One can understand if an order is passed by the assessing authority and it is subjected to an appeal or revision and the Commissioner or the Government passes an order while exercising those powers in a specific matter. In such a situation, such authority may place an interpretation on a statute different from the interpretation placed on it by the assessing authority. But, in our view, the Government order which has been issued, has been issued without any power whatsoever under the Act. Therefore, the order dated 16th September, 1997 passed by the Government is ultra vires of the Act. The consequential order of the Commissioner can also not sustain because it has been passed on the strength of the Government order which we are inclined to quash. We are taking this view particularly in view of the fact that while perusing the records we have found startling facts leading to issuance of the Government order. Before amendment was carried in the entries of First Schedule dealing with Oils, the oil was taxed at the rate of 6.48% and at the rate of 6.40% but it was found that there was of evasion and therefore tax should be reduced, therefore the relevant Schedule was amended to reduce it to 2%. It appears that certain persons represented before the Commissioner that they were being assessed at 10% whereas they had to be assessed at 2%. Therefore the Commissioner wrote a letter to the Government on 9th May, 1996. He brought the matter to the notice of the Government and made the following observations:
"As represented by the petitioners, reduced rate of tax seems to have left a positive effect taxable sales of oil imported into the State. They are able to sell huge quantities of oils in the State and also in other States in the course of inter-State sales which they may not do in case tax is levied at 10%. As it is only going to add to the tax base for this commodity, it may be desirable to review the situation and eliminate the scope for confusion and resultant litigation."
This letter shows that the Commissioner suggested an amendment because according to him the words appearing in 24-B i.e., "obtained from non-refined oil mentioned in item 24-A" was not only creating confusion but was running contrary to the scheme of rationalisation of reducing tax. After this letter went to the Government on 9th May, 1996, the Government came with the order referred to above that too after one year of the letter of the Commissioner.
For the reasons given above, the order dated 16th September, 1997 passed by the Government and the consequential order passed by the Commissioner are hereby quashed.
Now coming to the second question of interpretation of entries 24-A and 24-B the relevant portion of which has been reproduced herein above, item 24-A clearly states that, Vegetable oils (non-refined) shall be taxable at the point of first sale in the State at the rate of 2% from 16th August, 1995. There is no confusion and as such there is no difficulty in making out that all non-refined vegetable oils are taxable at 2%. The only exceptions are Rice bran oil and coconut oil. Since the petitioners are dealing with refined oil, therefore they are not subject to item 24-A. Item 24-B lays down that, all refined vegetable oils obtained from non-refined oil mentioned in item 24-A other than Rice bran oil are subject to tax at the rate of 2%. So, there is a condition laid down that, only those refined vegetable oils are taxable at 2% which have suffered tax in the non-refined capacity under item 24-A. Those refined vegetable oils which have not suffered tax under item 24-A have been excluded from the application of 24-B. The learned Counsel for the petitioner wants this Court to interpret item 24-B in such a way that all refined oils including those oils which have not suffered tax under item 24-A are taxable at 2%. Since 24-B in our view is clear and unambiguous therefore we arc not able to agree with the submission of the petitioners. He has placed reliance on number of authorities which arc produced by way of a separate book. He has relied on Shrimati Tarulata Shyam and Others Vs. Commissioner of Income Tax, West Bengal, , in which it has been stated:
"There is no scope for importing into statute words which arc not there such importation would be, not to construe, but to amend the statute. Even if there be a casus omissus, the defect can be remedied only by legislation and not by judicial interpretation. There appears no justification to depart from the normal rule of construction according to which the intention of the legislature is primarily to be garnered from the words used in the statute."
He has also relied on Janapada Sabha Chhindwara Vs. The Central Provinces Syndicate Ltd. and Another, . This is a judgment by a Constitution Bench. In para 7 of the judgment the following principle is laid down by the Supreme Court:
"If the Act does not by plain language used therein carry out the object, the Court will not bejustified in supplying deficiencies in the Act....."
" In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used."
Several other judgments have been produced by the learned Counsel for the petitioners. All judgments point out to one thing in clear terms that, in a statute, particularly in a taxing statute, one has to interpret the statute as it is and not as it ought to be. The learned Counsel''s efforts were to show that because of the letter addressed by the Commissioner to which a reference has been made hereinabove and because of the fact that, before the amendment oil was taxed at 6.48% therefore the intention of the Legislature was not to increase the tax but to decrease the tax, if it was 6.48% it will not be now 10%. He has also argued that since the Government of India''s policy was that, edible oils should be available in the market so that the prices are maintained, therefore, there was no question of levying the tax at the rate of 10% under Schedule-I on the imported oil.
For the reasons given above, we are not inclined to accept the contentions of the learned Counsel for the petitioners. The petitioners want not the interpretation of items 24-A and 24-B by this Court but as a matter of feet want amendment in item 24-B that is exactly what the Commissioner had recommended in his letter dated 9-5-1996 to which a reference has already been made. Even if one goes by the letter of the Commissioner of Commercial Taxes on which reliance has been placed by the learned Counsel for the petitioners, even then one comes to the conclusion that, only interpretation possible on item 24-A and 24-B is that, imported refined oil is taxable at 10% and not at concessional rate of 2%. The Commissioner was also of the same view, therefore he had suggested deletion of words "obtained from non-refined oil mentioned in item 24-A" in entry 24-B which would in effect mean that the Commissioner had also found it impossible to levy tax at 2% in view of item 24-B as it exists, so he had recommended an amendment to 24-B. Clearly this Court will not be within its power to direct amendment.
For the reasons given above, we are not inclined to accept the contentions of the learned Counsel for petitioners. Unless and until an amendment is carried to 24-B no relief can be granted to the petitioners and the amendment of the statute is not within the powers of this Court. Hence the relief claimed by on this account cannot be granted by the Court.
With these observations the Writ petitions are partly allowed and the Government order dated 16th September, 1997 is quashed. No order as to costs.
There shall be suspension of the order for a period of four weeks from the date hereof. Certified copies of this order be furnished to the parties with utmost expedition. The Registrar (Judl.) is directed to act accordingly.