JUDGMENT [ENTITY], C.J.
1. Is a dealer, who opts for payment of sales tax "at compounded rates" under [SECTION], not liable to pay the additional tax under [SECTION] of the [ACT]? The learned Single Judge has answered this question against the dealer. Hence, this appeal. The facts may be briefly noticed.
2. The appellant is a registered dealer in gold and silver ornaments. The sale of ornaments is exigible to the levy of sales tax under [SECTION]. [SECTION] fixes the rate of tax at 4%.
3. [SECTION] of the Act embodies an option for the assessee. It permits a "dealer in gold or silver ornaments or wares" to "pay tax at 15 % of the tax payable by him as conceded in the return or accounts for the immediate preceding year."
4. The appellant submitted an application for permission to pay tax in accordance with [SECTION] for the year 2001-02. It is alleged that the annual tax under [SECTION] was Rs. 1,88,40,678/- being 120% of the tax due for the previous year. Thus, the monthly tax for the year 2001-02 was Rs. 15,70,057/-.
5. On July 23, 2001 the Legislature promulgated [SECTION] providing for the levy of additional tax. In view of this provision, the appellant deposited additional tax "at the rate of 15% of the tax payable" for the months of July and August 2001. Thereafter, it stopped paying. The first respondent issued notices in Form 14-D under [SECTION] of the [ACT] demanding additional sales tax for the two months and the interest. These notices are Exts.P2 and P3 on the record.
6. The appellant felt aggrieved by the imposition of additional tax under [SECTION] Thus, it approached this Court through a petition under [SECTION] of the [ACT].
7. The matter was considered by the learned Single Judge. It was held that when a dealer exercises option to pay tax under [SECTION], it pays "the tax payable under [SECTION]." Thus, it is liable to pay the additional sales tax under [SECTION] of the Act. So far as the demand raised by the issue of Form 14-D is concerned, the learned Judge agreed "with the view of counsel for the petitioner that the tax not shown as due in the return cannot be demanded by issue of Form 14-D under [SECTION] of the Rules as the Assessing Officer has necessarily to issue notice and any demand over and above the tax shown as due in the return should be made after making provisional or regular assessment and after issuing notice to the assessee and after hearing his objections." However, in view of the fact that the assessee was held liable to pay additional tax, the demand as raised by Exts.P2 and P3 was sustained. Resultantly, the Writ Petition was dismissed.
8. Dr. [ENTITY], learned counsel for the appellant, has argued the case ably and fully. He contended, that the provision for the levy of additional sales tax in [SECTION] does not apply to a dealer who has exercised option to pay tax at the compounded rate under [SECTION]. A provision for the levy of additional tax had been made under the '[ACT].' [SECTION] of this Act specifically provided for the levy of additional tax in a case "where the dealer has opted to pay the tax at the compounded rate mentioned in [SECTION]." No such provision having been made in [SECTION], the Legislature had intentionally excluded the dealers covered by [SECTION]. Thus, the appellant was not liable to pay the additional tax. He also contended that the demand by the issue of notices in Form 14-D was illegal.
9. The claim as made on behalf of the appellant was controverted by Mr. [ENTITY], learned counsel for the respondents. He submitted that the view taken by the learned Single Judge is in strict conformity with the provisions of the Act. It deserves to be upheld.
10. It is in the context of the above submissions that the question as raised at the outset has to be considered.
11. [SECTION] of the Act deals with the incidence and levy of tax. [SECTION] inter alia provides that every dealer "whose turnover for a year is not less than two lakh rupees shall pay tax on his taxable turnover for that year (i) in the case of goods specified in the First or Second Schedule, at the rates and only at the points specified against such goods in the said Schedules. [SECTION] in the First Schedule provides for levy of sales tax at the rate of 4% on "jewellery of gold, silver and platinum group metals and articles made of such metals" at the "point of first sale in the State by a dealer who is liable to tax under [SECTION]." Thus, [SECTION] is the charging section. The taxable event is transfer of property in the goods, namely jewellery etc. The tax is leviable at the point of first sale.
12. Similarly, [SECTION] provides for the levy of purchase tax. [SECTION] deals with the levy of license fee on cooked food. [SECTION] provides for the levy of licence fee on lottery tickets "per draw" at the prescribed rates. [SECTION] provides for the 'compounding.' The relevant portion of the provision is:
"7. Payment of tax at compounded rates: -
(1) Notwithstanding anything contained in Sub-section ( 1) of [SECTION],
(a) any dealer in gold or silver ornaments or wares, may, at his option instead of paying tax in accordance with the provisions of that sub-section, pay tax at one hundred and fifty per cent of the tax payable by him as conceded in the return or accounts for the immediate preceding year.
Explanation : - For the purpose of this clause "tax payable as conceded in the return or account for the immediate preceding year" means tax payable on the sales turnover under [SECTION] and the tax payable on the purchase turnover under [SECTION]:
Provided that where during the preceding year, the dealer had not transacted business for any period the tax payable for the whole year shall be calculated proportionately on the basis of the tax payable for the period during which such dealer had transacted business:
Provided further that where a dealer has paid tax under this sub-section for the preceding year, the compounded tax to be paid by him for the succeeding year shall be one hundred and twenty per cent of such tax paid or one hundred and twenty per cent of the tax payable as per the return or accounts of the dealer for the preceding year whichever is higher:
Provided also that where such dealer has paid compounded tax consecutively for a period of three years the compounded tax payable for the succeeding year shall be one hundred and fifteen per cent, and in the case of a dealer who has paid compounded tax consecutively for a period of five years the compounded tax payable for the succeeding year shall be one hundred and ten per cent of such compounded tax paid or payable by him for the immediate preceding year:
Provided also that where such a dealer acquires any running business or a branch of a business with respect to gold, silver ornaments or wares during the year, the amount of compounding tax payable in respect of such business shall be calculated in accordance with the provisions of this clause as if it were an independent business, taking into account the turnover conceded in the return or accounts thereof for the previous year with respect to that business or on the basis of the quantum of compounded tax fixed for the previous year in accordance with the second and third provisos, as the case may be:
Provided also that where a dealer paying tax in accordance with the provisions of this sub-section opens a new branch during a year, such branch shall be treated as if it were an independent place of business and the provisions of this sub-section shall apply to it accordingly.
A perusal of the above provision shows that a dealer in gold or silver ornaments or wares has been given an option to pay at 150% of the tax payable by him in respect of the immediate preceding year. By virtue of the explanation, the tax payable includes not only the levy under [SECTION] but also the purchase tax under [SECTION] The provisos to the provision indicate the rate of tax for the succeeding years.
13. On a reading of the two provisions, it is clear that [SECTION] is the charging section. If the assessee does not opt for the alternate method prescribed under [SECTION], it has to maintain the accounts and file returns. The Assessing Authority can determine the liability under the Act. [SECTION] statutorily fixes the liability and saves the assessee of a lot of botheration.
14. The provision of [SECTION] has been considered by their Lordships of the Supreme Court in [PRECEDENT]. It has been held that the method of taxation provided by the provision is optional. It is "in the nature of composition of tax payable under [SECTION]." The provision has "evolved a convenient, hassle-free and simple method of assessment just as the system of levy of entertainment tax on the gross collection capacity of the cinema theatres." By opting for this alternate method the assessee "saves himself from the botheration of book keeping, assessment, appeals and all that it means."
15. It is in the background of this position that the provision of [SECTION] has to be examined. It provides as under.
"5D. Levy of Additional Sales Tax: - The tax payable under [SECTION] and [SECTION] shall be increased by an additional sales tax at the rate of fifteen per cent of the tax payable under the said sections: Provided that no additional sales tax under this section shall be levied, -
(a) on the tax payable on High Speed Diesel Oil, Petrol and Liquefied Petroleum Gas falling under sub-items (i), (v) and (viii) respectively of serial number 108 and Foreign Liquor falling under serial number 60 of the First Schedule;
(b) on any goods falling under the Second Schedule in such a way that the tax leviable under [SECTION] and [SECTION] and that leviable under this section together exceed four per cent:
Provided further that the levy of additional tax payable under this section shall only be for the period upto 31st March 2002."
A perusal of the above provision shows that it provides for the levy of additional sales tax at the rate of 15% of the tax payable under [SECTION] and [SECTION] By the provision, the sale of specified items like petroleum products and liquor have been exempted. Similarly, in a given situation, the goods falling in the Second Schedule have also been excluded. However, [SECTION] of the First Schedule, viz., gold and silver ornaments etc. have not been exempted.
16. Dr. [ENTITY] contended that [SECTION] begins with a non-obstante clause. [SECTION] embody one provision. Thus, when an assessee opts for the alternate method for the payment of tax under [SECTION], the liability as arising under [SECTION] is covered. Is it so?
17. It is true that [SECTION] begins with a non-obstante clause. The only implication is that in case of conflict, the provision shall have an overriding effect. However, there is no conflict. Still more, [SECTION] has been on the statute book for a long time. It refers to [SECTION] and [SECTION] separately. It is also not disputed that [SECTION] was introduced only on July 23, 2001. Thus, it cannot be said that when [SECTION] was enacted the Legislature was providing for even the compounding of tax leviable under [SECTION] The plain language does not show that the Legislature intended to exclude the dealers availing of the option under [SECTION]. Equally, the words of [SECTION] do not indicate that it covers the additional liability as well.
18. Dr. [ENTITY] submitted that additional sales tax had been actually imposed by the 1978 Act. The whole enactment consisted of three sections. [SECTION] provided for the levy of additional tax on sales and purchases. The explanation after Clause (1) specifically provided that in a case "where the dealer has opted to pay the tax at the compounded rate mentioned in [SECTION], the tax payable at such reduced or compounded rate shall, for the purposes of this sub-section, be deemed to be the tax payable under the [ACT]." On the basis of this explanation, it was pointed out that the Legislature had unambiguously provided for the levy of additional tax even in a case where the assessee had opted for the alternate method of paying tax at the compounded rate. The provisions of the 1978 Act has remained in force for many years. Thereafter, the Act was not in force after the mid-90s. While enacting [SECTION], no provision akin to the explanation was introduced. This omission was intentional. It is indicative of the legislative intent. It should be interpreted in favour of the assessee.
19. It is undoubtedly true that in construing the provisions of a taxing statute "nothing is to be added, nothing is to be subtracted and nothing is to be implied unless there is a clear indication in the Act itself for doing so." ([PRECEDENT] . It is also a settled proposition of law that a taxing statute has to be strictly construed. The rule was enunciated in Cox v. Rabbits 1878) 3 App: Cases 473 at 478). Lord [ENTITY] had observed:-
"A taxing statute must be construed strictly; you must find the words to impose the tax and if the words are not found which impose the tax it is not to be imposed."
Another principle, which is settled, is that there is a distinction between the charging and machinery provisions. The principle in this behalf was laid down by their Lordships of the Supreme Court in [PRECEDENT]. In [PRECEDENT], Lord [ENTITY] had observed: -
"In the words of [ENTITY], J in a taxing Act one has to look 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."
This above rule was followed by their Lordships of the Supreme Court in [PRECEDENT].
20. Still more, another principle which has been laid down in respect of the taxing statutes is that "if the Legislature wilfully omits to incorporate something of an analogous law in a subsequent statute, or even if there is a casus omissus in a statute, the language of which is otherwise plain and unambiguous, the court is not competent to supply the omission by engrafting on it or introducing in it, under the guise of interpretation, by analogy or implication, something what it thinks to be a general principle of justice and equity. To do so 'would be entrenching upon the preserves of Legislature' " This principle was enunciated by their Lordships of the Supreme Court in Commissioner of Sales Tax. [PRECEDENT].
21. It is in the background of these principles that the position in the present case has to be examined. On a perusal of [SECTION] and [SECTION] etc., it is clear that each provision in the nature of a charging section. It provides for a levy. While [SECTION] provides for the levy of sales tax on the transfer of property in the goods, the provision in [SECTION] authorizes the levy of additional sales tax. Still further, a perusal of [SECTION] clearly shows that it covers the liability of the assessee under [SECTION] and [SECTION] Nothing more. The assessee has the option to pay tax in lump sum by following the method laid down by the Legislature and avoid facing the lengthy procedure of assessment and appeals etc. The provision does not, however, deal with the levy of additional tax. That liability on the plain language of the provision was created on July 23, 2001 when [SECTION] was brought on the statute book. Since the provision for the additional tax did not exist after the 1978 Act had ceased to be operative in or about the mid 1990s, till July, 2001 there was clearly a hiatus. However, it cannot be assumed that even a tax, which was levied in July, 2001, shall also be deemed to be covered under [SECTION]. In view of the plain language of the statute, there is no warrant for such an interpretation.
22. It is true that under the 1978 Act a specific provision with regard to the liability of those who had opted for compounding had been made. It is also true that such a provision has not been incorporated in [SECTION] Yet, it cannot be said that there is a willful omission. In fact, the plain words of the statute have to be seen. The clear meaning of the provision is that a person who is paying tax under [SECTION] is liable to pay additional tax under [SECTION] The fact that the tax is paid after assessment or by compounding is of no consequence. This is precisely the view expressed by the learned single Judge. We find no infirmity in it.
23. Dr. [ENTITY] also complained that the clarification issued by the Commissioner could not be relied upon by the learned Single Judge for interpreting the provision. The counsel was at pains to point out that it was not binding even on the Appellate Tribunal.
24. It may be that the clarification given by the Commissioner is not binding on the Appellate Tribunal. It is, however, illustrative of the Department's viewpoint. The learned Single Judge has also taken the view that it is in conformity with the statutory provision. We can read nothing more into it.
25. Dr. [ENTITY] then submitted that the notices at Exts.P2 and P3 issued on November 16, 2001 are not in conformity with [SECTION]. Mr. [ENTITY] submitted that the notices conform to the provision embodied in [SECTION].
26. In view of our finding that the appellant was liable to pay the additional sales tax, the contention is really of no consequence. On facts, it is the admitted position that the appellant had paid additional tax after the promulgation of [SECTION] It was an acknowledgement of the liability. The deposit was made without any reservation. It was made without any protest. It is true that there is no estoppel against the Statute. It is also true that payment of tax under a mistake cannot bind the assessee. However, we find that there was no mistake. Thus, the Department had rightly raised the demand. The necessity for passing an order of assessment arises only when there is a dispute on facts. In the present case, there is no dispute on any factual matter. Even if the Authority had proceeded to decide the matter after giving an opportunity to the appellant, it would have been liable. No prejudice has been caused . We have found that the appellant was liable.
27. Dr. [ENTITY] submitted that passing of an order without assessment carries with it the demand for interest at an exorbitant rate of 24%. He contended that unless an order of provisional assessment as contemplated under [SECTION] was served and an order of assessment was finally passed, the levy of interest could not be justified.
28. The payment and recovery of tax under the Act is governed by [SECTION]. Clause 3 provides that if the amount of the tax as assessed and due under the Act is not paid, the assessee is liable to pay interest. The rate of interest is 1% for each month or part thereof for the first 3 months and 2% for the subsequent period. In view of our finding on the main issue, it is clear that the tax was leviable. The amount was also clear. It was 15% of the monthly rate of tax. This was admittedly not deposited. Thus, it cannot be said that the demand for interest was illegal.
29. Lastly, Dr. [ENTITY] submitted that the tax structure is wholly arbitrary. It does not promote growth of business, industry or trade. It places heavy burden on the taxpayer. He quoted [ENTITY] in [ENTITY] wherein the following passage appears:-
"It was for the welfare of his subjects alone that he ([ENTITY]) collected taxes from them. In this he resembled the [ENTITY] who draws up water or vapour (from the earth) only to pour it thousand fold (in the shape of rain in autumn)."
Similarly, he also quoted the following passage from [ENTITY] of Mahabharatha:-
"Just as the bee draws honey but at the same time leaves the flowers uninjured, so the king should take wealth from men without harming them."
Both the passages have been noticed by the learned counsel in a scholarly article written by him. On the basis of these passages, he has concluded that "if revenue alone is the goal, tax becomes oppressive."
30. We could not agree more with the learned counsel. However, the tax structure is a question of policy. It is a matter for consideration by the Legislature. The courts can examine the issue only when a challenge to the provision is raised on the basis of specific data. In the present case, there is no challenge to the provisions. The statute is not shown to be beyond the legislative competence. In view of the rule laid down by their Lordships of me Supreme Court in [PRECEDENT], there is a presumption in favour of the constitutionality. It has to be presumed by the court that the Legislature is aware of the needs of the people, which have been made manifest by experience. The burden of proving that a particular provision is unconstitutional lies on the person who challenges it. Probably, in some case the court shall have an opportunity to consider this aspect of the matter. However, for the present, we find no ground to interfere with the order of the learned single Judge.
31. No other point has been raised.
In view of the above, we find no merit in this appeal. It is consequently dismissed.