Case: Assessing Authority-Cum-Excise and Taxation Officer, Gurgaon Vs. Messrs East India Cotton Manufacturing Company Limited Faridabad

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 in to 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 dealers 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 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 the consumer should not be unduly enhanced by reason of higher rate of tax on the goods used in the manufactured or processing of the goods sold, it is obvious that if this intendment is to be ful ly 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 sa le 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 10A, 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.We are therefore of the view that the Division Bench of the High Court was right in holding that even if the assessee carried out the work of sizing, bleaching and dyeing of textiles for a third party on job contract basis, its case would be covered by the terms of the second sub- clause of section 8 (3) (b), provided that the textiles so sized, bleached and dyed by the assessee were intended for sale by such third party. If it is proved in any proceedings initiated under section 10 (d) or section 10A that the textiles sized, bleached or dyed by the assessee for a third party on job contract basis were not intended for sale by such third party, as would be evident if s uch textiles were in fact not sold by the third party but were used for its own purposes, the assessee would incur the penalty prescribed in those sections.6. We find that there are three decisions of three different High Court which have taken a view different from the one taken by us. One is the decision of the Madhya Pradesh High Court in Commissioner of Sales Tax v. S. R. Sharma 31 Sales Tax Cases, 480 , the other is the decision of the Gujarat High Court in Navsari Cotton Mills Limited v. State of Gujarat 37 Sales Tax Cases 104 and the third is the decision of the Kerala High Court in O. Parmasivan v. State of Kerala 1971 Taxation Law Reports 1241. These three decisions proceed on an erroneous interpretation of section 8 (3) (b) and must be deemed to be over ruled by the present decision.7.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]We will presently set out that section but before we do so, it is necessary to refer to some other provisions of the Central Act as well, for it is a well-settled rule of interpretation that no one section should be construed in isolation but that the statute should be read as a whole with each part throwing light on the meaning of the other. Section 6 is the charging section and it levies Sales Tax on every dealer "on all sales effected by him in the course of inter state trade or commerce during anyCourt must 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 in to 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 dealers 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 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 the consumer should not be unduly enhanced by reason of higher rate of tax on the goods used in the manufactured or processing of the goods sold, it is obvious that if this intendment is to be ful ly 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 sa le 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 10A, 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.We are therefore of the view that the Division Bench of the High Court was right in holding that even if the assessee carried out the work of sizing, bleaching and dyeing of textiles for a third party on job contract basis, its case would be covered by the terms of the second sub- clause of section 8 (3) (b), provided that the textiles so sized, bleached and dyed by the assessee were intended for sale by such third party. If it is proved in any proceedings initiated under section 10 (d) or section 10A that the textiles sized, bleached or dyed by the assessee for a third party on job contract basis were not intended for sale by such third party, as would be evident if s uch textiles were in fact not sold by the third party but were used for its own purposes, the assessee would incur the penalty prescribed in thoseit 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 substracted 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 inThompson v. Goold and Company [1910] A.C.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.Now here we find that the expression used by the legislature as also the rule making authority is simpliciter "forof 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 b y 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 firstof 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 subclause 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 firstof 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. TheCourt must 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 in to 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 dealers the intention of theBut, 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 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 the consumer should not be unduly enhanced by reason of higher rate of tax on the goods used in the manufactured or processing of the goods sold, it is obvious that if this intendment is to be ful ly 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 sa le 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 10A, 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.We are therefore of the view that the Division Bench of the High Court was right in holding that even if the assessee carried out the work of sizing, bleaching and dyeing of textiles for a third party on job contract basis, its case would be covered by the terms of the second subsections.6. We find that there are three decisions of three different High Court which have taken a view different from the one taken by us. One is the decision of the Madhya Pradesh High Court in Commissioner of Sales Tax v. S. R. Sharma 31 Sales Tax Cases, 480 , the other is the decision of the Gujarat High Court in Navsari Cotton Mills Limited v. State of Gujarat 37 Sales Tax Cases 104 and the third is the decision of the Kerala High Court in O. Parmasivan v. State of Kerala 1971 Taxation Law Reports 1241. These three decisions proceed on an erroneous interpretation of section 8 (3) (b) and must be deemed to be over ruled by the present decision.