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M/S FOOD CORPORATION OF INDIA, SANGRUR v. THE STATE OF PUNJAB - GSTR-64-1989  RD-P&H 3341 (22 May 2006)
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
G.S.T.R. NO. 64 OF 1989
DATE OF DECISION: 30.5.2006
M/S FOOD CORPORATION OF INDIA, SANGRUR
THE STATE OF PUNJAB
CORAM: HON'BLE MR. JUSTICE ADARSH KUMAR GOEL
HON'BLE MR. JUSTICE RAJESH BINDAL
PRESENT: MR. K.L. GOYAL, ADVOCATE
FOR THE PETITIONER
MR. AMOL RATTAN, ADDL. A.G., PUNJAB
The following question of law, arising out of order dated 3.3.1983 in STA Nos. 16 and 17 of 1982-83, for the assessment years 1972-73 and 1975-76, was referred to this Court for opinion by Sales Tax Tribunal, Punjab (for short 'the Tribunal'): "Whether in the facts and circumstances of the case section 10(d) is attracted and thus penalty under section 10-A of the Act has been rightly sustained by the Tribunal ?"
Briefly the facts, as found by the Tribunal, are that the petitioner-assessee is a dealer registered under the provisions of Punjab General Sales Tax Act, 1948 (for short 'the State Act') and the Central Sales Tax Act, 1956 (for short 'the Central Act'). During the year in question, the assessee purchased gunny bags (packing material) from outside the State of Punjab, on the strength of its registration certificate under the Central Act, after issuing statutory Form 'C' to the selling dealers.
The gunny bags, which were purchased, were used by the assessee in packing of foodgrain, which were transferred to its branches outside the State of Punjab along with the foodgrains and were ultimately sold in other States.
The Assessing Authority considering this to be a case of violation of provision of Section 10 (d) of the Central Act, issued a show cause notice to the assessee for levy of penalty under Section 10 A of the Central Act for 22.2.1980. The notice was duly replied to by the assessee G.S.T.R. NO. 64 OF 1989 
in the following terms:
"1. That the gunny bags (packing material) were purchased by the Corporation after issuance of 'C' form from dealers outside the State of Punjab. The notice has been issued for imposing penalty with respect to an alleged breach under Section 10 (d) of the Act. Section 10 (d) squarely deals with a case where a dealer having purchased the goods for the purpose as specified in sub-clause (b) of sub-section 3 of Section 8 uses the goods for any other purpose than the purpose for which these were purchased. Now sub-section 8(3)(b) deals with a case where the goods are intended for sale by the Corporation. The Corporation has transferred the goods to its branches alongwith foodgrain and thus are covered under clause (c) of sub-section (3) of Section 8 and thus the goods purchased on the basis of certificate of registration against form 'C' have been used for the packing of goods for sale. The goods having been transferred to the branches remain the property of the Corporation, wherever the branches are situated and the branches in turn have sold those goods to the various customers or such distributing agencies which the appropriate Government may have appointed." (emphasis supplied)
Dissatisfied with the plea raised by the assessee, the Assessing Officer levied penalty under Section 10 A of the Central Act which was upheld by the first appellate authority as well as the Tribunal.
Thereafter, on an application filed by the assessee, the question of law arising out of order passed by the Tribunal was referred to this Court for opinion. This is how the matter is before us for consideration.
Learned counsel for the assessee-petitioner argued that the view taken by the authorities below to uphold penalty under Section 10 A of the Central Act is totally contrary to the provisions of Central Act. There is no violation of provision of Section 8(3)(c) of the Central Act by the assessee-petitioner on account of which, it is being penalised. It is further argued that the assessee-petitioner is a public sector undertaking and G.S.T.R. NO. 64 OF 1989 
there being no means-rea, penalty should not have been imposed. In support of his arguments, learned counsel referred to Hindustan Steel Ltd. vs. The State of Orissa  25 STC 211, The Cement Marketing Co. of India Ltd. vs. The Assistant Commissioner of Sales Tax, Indore, and others  45 STC 197, Polestar Electronic (Pvt.) Ltd. v. Additional Commissioner, Sales Tax, and another  41 STC 409, Assessing Authority-cum-Excise and Taxation Officer, Gurgaon, and another vs. East India Cotton Mfg. Co. Ltd.
 48 STC 239, Sahney Steel & Press Works Ltd. and another vs. Commercial Tax Officer and others,  60 STC 301, Food Corporation of India vs. Commissioner of Sales Tax, Gujarat, Ahmedabad  86 STC 199, and Commissioner of Sales Tax, U.P., Lucknow vs. Kashi Prasad Ram Chandra Lal  122 STC 567.
On the other hand counsel for the State while supporting the orders passed by the authorities below, on the reasoning contained therein, argued that in terms of provisions of Section 8(3)(c) of the Central Act, the assessee after purchasing the packing material was required to resell the same within the State of Punjab and since admittedly in the present case the packing material was transferred by the assessee along with foodgrains to its branches situated outside the State of Punjab, penal provision of Section 10 (d) of the Central Act was clearly attracted for violation of provisions of Section 8(3)(c) of the Central Act and also the certificate issued by the assessee to the purchasing dealer. Counsel has further relied upon the judgments of Hon'ble the Supreme Court of India in Haryana State Electricity Board vs. State of Punjab and others 1974 (3) Supreme Court Cases 347, Assessing Authority-cum-Excise and Taxation Officer, Gurgaon, and another vs. East India Cotton Mfg. Co. Ltd. Faridabad 1981 (3) Supreme Court Cases 537 and State of Tamil Nadu vs. Kodaikanal Motor Union (P) Ltd. 1986(3) Supreme Court Cases 91.
Relevant provisions of the Central Act, necessary for determination of the controversy in the present case, are extracted below: "Section 8. Rates of tax on sales in the course of inter- state trade or commerce.-
(3)The goods referred to in clause (b) of sub-section(1),- (a) xx xx
(b) are goods of the class or classes specified in the G.S.T.R. NO. 64 OF 1989 
certificate of registration of the registered dealer purchasing the goods as being intended for resale by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture or processing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power;
(c) are containers or other material specified in the certificate of registration of the registered dealer purchasing the goods, being containers or materials intended for being used for the packing of goods for sale;
(4) The provisions of sub-section (1) shall not apply to any sale in the course of inter-State trade or commerce unless the dealer selling the goods furnished to the prescribed authority in the prescribed manner,-
(a) a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority; or
(b) xx xx
10. Penalties- If any person,- (a) xx xx
(b) xx xx
(c) xx xx
(d) after purchasing any goods for any of the purposes specified in (clause (b) or clause (c)or clause (d) of sub section (3) of section 8 fails, without reasonable excuse, to make use of the goods for any such purpose;
(e) xx xx
(f) xx xx
he shall be punishable with simple imprisonment G.S.T.R. NO. 64 OF 1989 
which may extend to six months, or with fine, or with bond; and when the offence is a continuing offence, with a daily fine which may extend to fifty rupees for every day during which the offence continues." 10A. Imposition of penalty in lieu of prosecution:- (1) If any person purchasing goods is guilty of an offence under clause (b) or clause (c)or clause (d) of Section 10, the authority who granted to him, or as the case may be, is competent to grant to him a certificate of registration under this Act may, after giving him a reasonable opportunity of being heard, by order in writing impose upon him by way of penalty a sum not exceeding one and a half times ( the tax which would have been levied under sub-section (2) of Section 8 in respect of the sale to him of the goods, if the sale had been a sale falling within that sub-section):
Provided that no prosecution for an offence under section 10 shall be instituted in respect of the same facts on which a penalty has been imposed under this section.
(2) The penalty imposed upon any dealer under sub- section (1) shall be collected by the Government of India in the manner provided in sub-section(2) of section 9,- (a) in the case of offence falling under clause (b) or clause (d) of section 10, in the state in which the person purchasing the goods obtained the form prescribed for the purposes of clause (a) of sub-section (4) of Section 8 in connection with the purchase of such goods; (b) in the case of an offence falling under clause (c) of section 10, in the State to which the person purchasing the goods should have registered himself if the offence had not been committed."
The relevant provision of Central Sales Tax (Registration and Turnover) Rules 1957 are reproduced hereunder: G.S.T.R. NO. 64 OF 1989 
"12. (1) The declaration and the certificate referred to in sub-section(4) of section 8 shall be in Forms 'C' and 'D' respectively."
The contents of the declaration given by the assessee in Form C at the time of purchase of goods in question is extracted below: "Certified that the goods
Dated...................... and supplied....................as per Bill/Cash Memo/Challan No......................... dated as stated below _________________________________________________ purchased from you as per bill/cash memo/challan No..............dated......................as stated below are for ..............................................................use in manufacture/processing of goods for sale.
.....................................use in mining ........................... use in generation/distribution of power ..........................packing of goods for sale/resale...........................and are covered by my/our registration Certificate No............................
dated................................. issued under the Central Sales Tax Act, 1956."
A perusal of Section 10 (d) of the Central Act shows that in case any dealer after purchasing any goods for any of the purpose specified in Clause (b), (c) and (d) of Sub-section 3 of Section 8 of the Central Act fails, without reasonable excuse, to make use of the goods for the purposes specified therein, the assessee shall be punishable with simple imprisonment which may extend to six months, or fine, or with both.
Section 10 A of the Central Act provides that in lieu of prosecution provided for under Section 10 of the Central Act, a penalty not exceeding one and half time of the tax, leviable under Section 8 (3) of the Central Act, could be levied. Where the penalty is levied no prosecution under Section 10 of the Central Act was to be instituted.
Core question for the determination by this Court in the present case is as to whether there is violation of Section 8(3)(c) of the Central Act attracting penal consequences under Section 10 (d) of the G.S.T.R. NO. 64 OF 1989 
Central Act and resultantly penalty in lieu of prosecution under Section 10A of the Central Act.
A perusal of Section 8 (3) (b) of the Central Act shows that a registered dealer is entitled to purchase goods specified in its certificate of registration as intended for resale by him or for use by it in the manufacturing or processing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power.
Whereas Clause (c) of Sub-section 3 of Section 8 of the Central Act prescribes that a registered dealer is entitled to purchase materials for being used for packing of goods for sale. The dispute in the present case relates to the purchase of packing material by the assessee which is used in packing of foodgrains which were transferred by the assessee to its branches situated outside the State of Punjab and were ultimately sold there. The Tribunal while rejecting the appeals of the assessee held that the requirement of Section 8 (3)(b) of the Central Act is that the goods purchased by the assessee on the strength of its registration certificate were required to be resold by him in the State and since the assessee, in the present case, had conducted branch transfer thereof, penal consequences of Section 10(d) of the Central Act were attracted.
The relevant provision in the present case would be Clause (c) of Sub-section 3 of Section 8 of the Central Act and not Clause (b) thereof as has been referred to by the Tribunal in its order. As per provision of Section 8(3) of the Central Act certain conditions are attached on purchase of goods on the strength of registration certificate i.e. (i) in case the goods are meant for resale only, the same has to be by the dealer himself (Section 8(3)(b)); (ii) in case of purchase of goods to be used by the assessee in the manufacturing or processing of goods for sale (here the conditions for sale by the assessee is missing) (Section 8(3)(b)); (iii) whereas in Clause (c) which deals with purchase of containers or packing material, the requirement is that the same should be used for packing of goods for sale. In this provision there is no requirement that the sale should be by the assessee itself or that such sale should be conducted within State only.
Even the statutory Form 'C' which is furnished by the assessee at the time of purchase of goods also does not contain any undertaking to the effect that the goods so purchased are meant to be sold by him or in the State only. All what it contain is that the goods are meant to be used in packing of goods for sale.
G.S.T.R. NO. 64 OF 1989 
A reference to judgment of Hon'ble the Supreme Court of India in Polestar Electronic (Pvt.) Ltd. v. Additional Commissioner, Sales Tax, and another  41 STC 409 (pages 420-422, 424 and 434) would be relevant for consideration of the issue involved in the present case, where the point involved was as to whether word 're-sale' mentioned in the section meant re-sale within Union Territory of Delhi or it could be any where even outside Delhi. It was held therein as under: "Now, the first question that arises for consideration is whether "re-sale" in Section 5(2)(a)(ii) and the second proviso means re-sale anywhere without any geographical limitation or it is confined only to re-sale inside Delhi. The contention of the Revenue was that though the words "inside the Union Territory of Delhi" are not to be found in Section 5(2)(a)(ii) and the second proviso, they must be read in these provisions as a matter of construction and three reasons were given in support of this contention. The first reason was that if re- sale outside Delhi were held to be within the terms of Section 5(2)(a)(ii) and the second proviso, the Union Territory of Delhi would lose tax altogether in cases where the goods were resold outside Delhi, because in that event the first sale would escape tax by reason of the deduction granted under Section 5(2)(a)(ii) and the re-sale would also be free from tax since it is outside Delhi and hence covered by the exempting provision contained in Section 27. The Legislature could never have intended to bring about such a result where the Union Territory of Delhi would be deprived altogether of tax. The intention of the Legislature was to recover tax at only one point whilst the goods were in the stream of trade and the Legislature, therefore, granted deduction in respect of the first sale on the basis that it would be levying tax when the goods were resold and that postulated the requirement that the re-sale should be inside Delhi. Secondly, it was urged that the Legislature had no legislative competence to tax sale outside Delhi and moreover, by reason of Section 27 sale outside G.S.T.R. NO. 64 OF 1989 
Delhi was taken out of the purview of the Act and re-sale within the meaning of Section 5(2)(a)(ii) and the second proviso could not, therefore, possibly include re-sale outside Delhi. The last argument was that the words "by him" following upon the word "re-sale" in Section 5(2)(a) (ii) and the second proviso clearly indicated that the re- sale contemplated under these provisions was re-sale by the purchasing dealer as registered dealer and since the concept of registered dealer has relation only to sale inside Delhi, the re-sale must be within the Territory of Delhi. We do not think there is any substance or validity in these arguments and we see no cogent or compelling reasons to add the words "inside the Union Territory of Delhi" to qualify "re-sale" in Section 5(2)(a)(ii) and the second proviso.
Here, the word used in Section 5(2)(a)(ii) and the second proviso is "re-sale" simpliciter without any geographical limitation and according to its plain natural meaning it would mean re-sale anywhere and not necessarily inside Delhi. Even where the purchasing dealer resells the goods outside Delhi, he would satisfy the requirement of the statutory provision according to its plain grammatical meaning. There are no words such as "inside the Union Territory of Delhi" qualifying "re-sale" so as to limit it to re-sale within the territory of Delhi. The argument urged on behalf of the Revenue requires us to read such limitative words in Section 5(2)(a)(ii) and the second proviso. The question is whether there is any necessity or justification for doing so? If "re-sale" is construed as not confined to the territory of Delhi, but it may take place anywhere, does Section 5(2)(a)(ii) or the second proviso lead to a result manifestly unintelligible, absurd, unreasonable, unworkable or irreconcilable with the rest of the Act? Is there any compulsive necessity to depart from the rule of plain and natural construction and read words of limitation in Section 5(2)(a)(ii) and the second G.S.T.R. NO. 64 OF 1989 
proviso when such words have been omitted by the law- giver? We do not think so."
We fail to see any reason why the word "resale" in section 5(2)(a)(ii) and the second proviso should not be construed according to its plain natural meaning to comprehend resale taking place anywhere without any limitation as to situs and it should be read as referring only to resale inside Delhi as if the words "inside the Union Territory of Delhi" were added by way of limitation or restriction." ( emphasis supplied )
While dealing with an issue, where Section 8 (3) (b) of the Central Act was under consideration, Hon'ble the Supreme Court in Assessing Authority-cum-Excise and Taxation Officer, Gurgaon, and another vs. East India Cotton Mfg. Co. Ltd.  48 STC 239, held as under:
"The question which therefore arises for consideration is as to what is the scope and meaning of the expression "for use ... in the manufacture ... of goods for sale" occurring in Section 8(3) (b) and in the declaration in Form C and Rule 13. Does it mean that the goods manufactured by a registered dealer by using the goods purchased against his Certificate of Registration and the declaration in Form C must be intended for sale by him or does it also include a case where goods are manufactured by a registered dealer for a third party under a job contract and the manufactured goods are intended for sale by such third party? Now it is a well-settled rule of interpretation that a statute must be construed according to its plain language and neither should anything be added nor subtracted unless there are adequate grounds to justify the inference that the legislature clearly so intended. It was said more than seven decades ago by Lord Mersey in Thompson v. Goold and Company  A.C. 409:
"It is a strong thing to read into an Act of Parliament words which are not there and in the absence of clear necessity, it is a wrong thing to do."
G.S.T.R. NO. 64 OF 1989 
Lord Loreborn, L.C. also observed in Vickers, Sons and Maxim Limited v. Evans  A.C. 444:
"We are not entitled to read word into an Act of Parliament unless clear reason for it is to be found within the four corners of the Act itself."
Now here we find that the expression used by the legislature as also the rule making authority is simpliciter "for use ... in the manufacture ... of goods for sale" without any addition of words indicating that the sale must be by any particular individual.
The legislature has designedly abstained from using any words of limitation indicating that the sale should be by the registered dealer manufacturing goods. It is significant to note that where the legislature wanted to restrict the sale to one by the registered dealer himself, the legislature used the qualifying words "by him" after the words "for resale" in the first sub-clause of Section 8(3)(b) indicating clearly that the resale contemplated by that provision is resale by the registered dealer purchasing the goods and by no one else, but while enacting the second sub-clause of Section 8(3)(b) the legislature did not qualify the words "for sale" by adding the words "by him". This deliberate omission of the words "by him" after the words "for sale" clearly indicates that the legislature did not intend that the sale of the manufactured goods should be restricted to the registered dealer manufacturing the goods.
If the legislature intended that the sale of the manufactured goods should be by the registered dealer manufacturing the goods and by no one else, there is no reason why the words "by him" should have been omitted after the words "for sale" when the legislature considered it necessary to introduce those words after the words "for resale" in the first sub-clause of Section 8(3)(b). The omission of the words "by him" is clearly deliberate and intentional and it cannot be explained away on any reasonable hypothesis except that the legislature did not intend that the sale should be limited to that by the registered dealer manufacturing the goods. The Court must G.S.T.R. NO. 64 OF 1989 
construe the language of Section 8(3)(b) according to its plain words and it cannot write in the section words which are not there. To read the words "by him" after the words "for sale" in Section 8(3)(b) would not be construction but judicial paraphrase which is impermissible to the Court. It is also important to note that the word `use' is followed by the words "by him" clearly indicating that the use of the goods purchased in the manufacture of goods for sale must be by the registered dealer himself but these words are significantly absent after the words "for sale". On a plain grammatical construction, these words govern and qualify only "use" and cannot be projected into the words "for sale". The goods purchased by the registered dealer must be used by him in the manufacture of goods which are intended for sale but such sale need not be by the registered dealer himself; it may be by any one.
Now ordinarily when the language of a statutory provision is plain and unambiguous, there is no need to resort to the object and purpose of the enactment because in such a case, the language best declares the intention of the law-giver. But, even if we look at the object and intendment of Section 8 (1)(b) read with Section 8(3)(b), we reach the same conclusion. The object of providing a lower rate of tax under Section 8(1)(b) for sales of goods described in Section 8(3)(b) clearly is that when goods are purchased by a registered dealer for being used by him in the manufacture or processing of goods which are intended for sale, the goods which are ultimately sold should not become unduly expensive to the consumer by addition of a high rate of sales tax on the purchase of goods which are used in the manufacture or processing of the goods ultimately sold.
Now if this be the object of Section 8(1)(b) read with Section 8 (3)(b) it should be immaterial whether the sale of the manufactured or processed goods is by the registered dealer manufacturing or processing goods or by another person for whom the goods are manufactured or processed by the registered dealer. The intendment of the statutory provision being that the cost of the manufactured or processed goods to G.S.T.R. NO. 64 OF 1989 
the consumer should not be unduly enhanced by reason of higher rate of tax on the goods used in the manufacture or processing of the goods sold, it is obvious that if this intendment is to be fully effectuated, the benefit of the statutory provision should be available irrespective of whether the manufactured or processed goods are sold to the consumer by the registered dealer or by some one else who has got the same manufactured by the registered dealer. It was for this reason that the legislature deliberately omitted to add the words "by him" after the words "for sale" so as to make it clear that this sub-clause of Section 8(3)(b) would apply even if the goods manufactured or processed by the registered dealer were intended for sale by some one else. The words "for sale" following upon the word `goods' clearly indicate that the goods manufactured or processed by the registered dealer must be goods for sale or in other words, they must be goods intended for sale and it is immaterial whether they are intended for sale by the registered dealer himself or by anyone else. This sub- clause of Section 8(3)(b) would therefore clearly cover a case where a registered dealer manufactures or processes goods for a third party on a job contract and uses in the manufacture or processing of such goods, materials purchased by him against his Certificate of Registration and the declarations in Form C, so long as the manufactured or processed goods are intended for sale by such third party. It is of course, true that if proceedings are taken against the registered dealer under Section 10, clause (d) or Section 10-A, the question would arise whether the goods manufactured or processed by the registered dealer for a third party were intended for sale by such third party and that would have to be decided by the Court or the competent authority according to the appropriate and relevant rules of evidence, but merely because some difficulty may arise in the determination of this question by reason of the third party coming into the picture that would be no ground for refusing to place on the language of Section 8(3) (b) the only construction which it can reasonably bear." In Sahney Steel & Press Works Ltd. and another vs.
G.S.T.R. NO. 64 OF 1989 
Commercial Tax Officer and others,  60 STC 301, Hon'ble the Supreme Court of India, while considering as to whether head office and branches of the same company are two separate judicial personalities or not , observed as under:
"..... We must not forget that both the registered office and the branch office are offices of the same company, and what in effect does take place is that the company from its registered office in Hyderabad takes the goods to its branch office outside the State and arranges to deliver them to the buyer.
The registered office and the branch office do not possess separate juridical personalities."(Sic)
Kerala High Court in Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam vs. Lakshmichand Vasanji & Co. [1990 ] 79 STC 209, while dealing with the issue regarding penalty under Section 10 (d) of the Central Act for violation of conditions of Section 8(3) (b) of the Central Act , held as under: "3. It is not disputed that the goods were purchased by the assessee in Tamil Nadu for the purpose of sale and after bringing them to Kerala it transport them to Bombay for the purpose of sale. What is contended is that the sale should have been effected in Kerala and in so far as it was not done, the assessee has violated the provisions of clause (b) of sub-section (3) of section 8 thereby attracting the penal provisions of section 10(d).
4. The Tribunal has, in our view, correctly stated that, in the absence of a specific provision under the Act or the Rules requiring that the goods purchased by the assessee outside Kerala on the strength of C form should be sold within the State of Kerala itself, the penal provision is not attracted. We agree with this conclusion. In the circumstances, we see no merit in the contention of the State on the question of penalty."
G.S.T.R. NO. 64 OF 1989 
As far as contention of the counsel for the State, to the effect that the requirement of law is that the assessee dealer after purchasing the goods was required to resell the same within the State itself and since in the present case the assessee dealer had transferred the goods to its branches situated outside the State, there was a clear violation of provision of Section 8(3)(c) of the Central Act as well as the declaration given by the assessee, hence, the penal provision of Section 10(d) of the Central Act was rightly invoked, is totally misconceived. We are not even impressed with the arguments raised by the counsel for the State that even if the goods had ultimately been sold in other States, the same would not be in compliance to the provision of Section 8(3)(c) of the Central Act and certificate issued by the assessee at the time of purchase of goods, as the same also runs totally contrary to the plain language of the statute itself.
We have gone through the judgments referred by the counsel for the State in the cases of Kodaikanal Motor Union (P) Ltd. (supra), East India Cotton Mfg. Co. Ltd., Faridabad (supra) and Haryana State Electricity Board (supra) case and and it would be suffice to add that both the judgments have no relevance with the issue involved in the present case.
The effort of the State counsel seems to be that word 'within the State' should be read in the statute otherwise the State, which is entitled to tax a transaction at least once in the State will be deprived of its legitimate right in doing so and resultantly loose revenue.
The provision of the Act is to be given its plain and natural meaning. If we read provision of Section 8(3)(c) of the Central Act, it neither specifies that the goods are to be resold by the purchaser or the sale should take effect within the State itself. There being no such words in the Section, we do not see any reason to read these words in the statute. If there is one principle of interpretation more well-settled than any other, it is that a statutory enactment must ordinarily be construed according to the plain natural meaning of its language and that no words should be added, altered or modified unless it is plainly necessary to do so in order to prevent a provision from being unintelligible, absurd, unreasonable, unworkable or totally irreconcilable with the rest of the statute and the guidance for the same is available in the statute itself. This rule of literal construction is firmly established and it has received judicial recognition in numerous cases. Crawford in his book on "Construction of Statutes" (1940 Edn.) at p. 269 explains the rule in the following terms: G.S.T.R. NO. 64 OF 1989 
"Where the statute's meaning is clear and explicit, words cannot be interpolated. In the first place, in such a case they are not needed. If they should be interpolated, the statute would more than likely fail to express the legislative intent, as the thought intended to be conveyed might be altered by the addition of new words. They should not be interpolated even though the remedy of the statute would thereby be advanced, or a more desirable or just result would occur. Even where the meaning of the statute is clear and sensible, either with or without the omitted word, interpolation is improper, since the primary source of the legislative intent is in the language of the statute." Lord Parker applied the rule in R.v. Oakes to construe "and", as "or" in Section 7 of the Official Secrets Act, 1920 and stated:
"It seems to this Court that where the literal reading of a statute, and a penal statute, produces an intelligible result, clearly there is no ground for reading in words or changing words according to what may be the supposed intention of Parliament. But here we venture to think that the result is unintelligible."
In J.P. Bansal vs. State of Rajasthan and another, 2003(5) Supreme Court Cases 134, it was held as under: "14. Where, however, the words were clear, there is no obscurity, there is no ambiguity and the intention of the legislature is clearly conveyed, there is no scope for the court to innovate or take upon itself the task of amending or altering the statutory provisions. In that situation the Judges should not proclaim that they are playing the role of a law-maker merely for an exhibition of judicial valour.
They have to remember that there is a line, though thin, which separates adjudication from legislation. That line G.S.T.R. NO. 64 OF 1989 
should not be crossed or erased. This can be vouchsafed by "an alert recognition of the necessity not to cross it and instinctive, as well as trained reluctance to do so". (See: Frankfurter: Some Reflections on the Reading of Statutes in "Essays on Jurisprudence ", Columbia Law Review, p.51)
In a recent judgment in State of West Bengal and another vs. Kesoram Industries Ltd. and others AIR 2005 Supreme Court 1646 a Constitutional Bench of Hon'ble the Supreme Court of India with approval quoted Justice G.P.Singh's Principles of Statutory Interpretation in the following terms:
"109. There is nothing like an implied power to tax. The source of power which does not specifically speak of taxation cannot be so interpreted by expanding its width as to include therein the power to tax by implication or by necessary inference. States Cooley in Taxation (Vol. 4, Fourth Edition) - "There is no such thing as taxation by implication.
The burden is always upon the taxing authority to point to the act of assembly which authorizes the imposition of the tax claimed. (para 122 at p.278).
110. Justice G.P. Singh in Principles of Statutory Interpretation (Eighth Edition, 2001) while dealing with general principles of strict construction of taxation statutes states "A taxing statute is to be strictly construed". The well-established rule in the familiar words of Lord Wensleydale, reaffirmed by Lord Halsbury and Lord Simonds, means: " the subject is not to be taxed without clear words for that purpose; and also that every Act of Parliament must be read according to the natural construction of its words". In a classic passage Lord Cairns stated the principle thus: "If the person sought to be taxed comes within the letter of the law he must be taxed, however great the hardship may appear to the judicial mind to be. On the other hand, if the G.S.T.R. NO. 64 OF 1989 
Crown seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of law the case might otherwise appear to be. In other words, if there is admissible in any statute, what is called an equitable construction, certainly, such a construction is not admissible in a taxing statute where you can simply adhere to the words of the statute. Viscount Simon quoted with approval a passage from Rowlatt, J. expressing the principle in the following words: "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 tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used." (at p. 635)
111. The judicial opinion of binding authority flowing from several pronouncements of this Court has settled these principles: (i) in interpreting a taxing statute, equitable considerations are entirely out of place. Taxing statutes cannot be interpreted on nay presumption or assumption. A taxing statute has to be interpreted in the light of what is clearly expressed; it cannot imply anything which is not expressed; it cannot import provisions in the statute so as to supply any deficiency; (ii) before taxing any person it must be shown that he falls within the ambit of the charging section by clear words used in the Section; and (iii) if the words are ambiguous and open to two interpretations, the benefit of interpretation is given to the subject.
There is nothing unjust in the tax-payer escaping if the letter of the law fails to catch him on account of Legislature's failure to express itself clearly. (See, Justice G.P. Singh, ibid, pp 638-639)"
In view of our above discussion, on a simple reading of the plain language of Section 8(3)(c) of the Central Act, the only possible G.S.T.R. NO. 64 OF 1989 
conclusion is that there is no violation by the assessee of these provisions in case goods (packing material) purchased by it from outside the State, on the strength of registration certificate, is transferred to its branches situated outside the State and ultimately sold there. There is no requirement under Section 8(3)(c) of the Central Act to effect the sale of goods within the State of Punjab.
For the reasons recorded above, the question of law referred to this Court is answered in negative i.e in favour of the assessee and against the State.
May 30, 2006 (ADARSH KUMAR GOEL)
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