Case: Kedarnath Jute Manufacturing Co. Ltd Vs. The Commercial Tax Officer, Calcutta &amp; Others

terms of sub-cl. (ii) will be exempted provided a declaration in the form prescribed is furnished. To put it in order words, a dealer cannot get the exemption unless be furnishes the declaration in the prescribed form. It is well settled that "the effect of an excepting or qualifying proviso, according to the ordinary rules of construction, is to except out of the preceding portion of the enactment, or to qualify something enacted therein, which but for the proviso would be within it": see "Craies on Statute Law", 6th Edn., p. 217.If the intention of the Legislature was to give exemption if the terms of the substantive part of sub-cl. (ii) alone are complied with, the proviso becomes redundant and otiose. To accept the argument of the learned counsel for the appellant is to ignore the proviso altogether, for if his contention be correct it will lead to the position that if the declaration form is furnished, well and good; but, if not furnished, other evidence can be produced. That is to rewrite the clause and to omit the proviso. That will defeat the express intention of the Legislature. Nor does R. 27A support the contrary construction. The expression "on demand" only fixes the point of time when the declaration are to be produced; otherwise the rule would be inconsistent with the section. Section 5 (2) (a) (ii) says that the declaration form is to be furnished by the dealer and R. 27A says that it shall be furnished on demand, that is to say it fixes the time when the form is to be furnished. This reconciles the provisions of R. 27A with those of S. 5 (2) (a) (ii) of the Act, whereas the construction suggested by the learned counsel introduces an incongruity which shall be avoided. Section 21A on which reliance is placed has no bearing on the question to be decided. It only empowers the Commissioner or any person appointed to assist him under sub-s. (1) of S. 3 to take evidence on oath, etc. It can be invoked only in a case where the authority concerned is empowered to take evidence in respect of any particular matter; but that does not enable him to ignore a statutory condition to claim exemption. 9. Sub-rules (3) and (4) of R.27A are not helpful to the appellant. They provide only safeguards against abuse of the declaration forms by the purchasing dealers; they do not enable the selling dealer to either directly apply or to compel the purchasing dealers to apply for duplicate forms; nor do they enjoin the appropriate authority to give the selling dealer a duplicate form to replace the lost one. We realise that the section and the rules as they stand may conceivably cause unmerited hardship to an honest dealer. He may have lost the declaration forms by a pure accident, such as fire, theft, etc., and yet he will be penalised for something for which he is not responsible. But it is for the Legislature or for the rule-making authority to intervene to soften rigour of the provisions and it is not for this Court to do so where the provisions are clear and unambiguous. 10. There is an understandable reason for the stringency of the provisions. The object of S. 5 (2) (a) (ii) of the Act and the rules made thereunder is self-evident. While they are obviously intended to give exemption to a dealer in respect of sales to registered dealers of specified classes of goods, it seeks also to prevent fraud and collusion in an attempt to evade tax. In the nature of things, in view of innumerable transactions that may be entered into between dealers, it will wellnigh be impossible for the taxing authorities to ascertain in each case whether a dealer has sold the specified goods to another for the purposes mentioned in the section. Therefore, presumably to achieve the two fold object, namely, prevention of fraud and facilitating administrative efficiency, the exemption given is made subject to a condition that the person claiming the exemption shall furnish a declaration form in the manner prescribed under the section. The liberal construction suggested will facilities the commission of fraud and introduce administrative inconveniences, both of which the provision of the said clause seek to avoid. 11. The decision of this Court in State of Orissa v. M. A. Tulloch and Co. Ltd., (1964) 15 STC 641 (SC), does not help the appellant. That decision was concerned with S. 5 (2) (a) (ii) of the Orissa Sales Tax Act, 1947. That section was similar in terms to S. 5 (2) (a) (ii) of the Act in question, but there was no proviso to that section in the Orissa Act similar to the one found in the present section. That makes all the difference, for it is the proviso that imposes the condition. But under R. 27 (2) made under the Orissa Act "a dealer shall produce a true declaration in writing by the purchasing dealer or by such responsible person as may be authorised in writing in this behalf by such dealer that the goods in question are specified in the purchasing dealers certificate of registration as being required for resale by him or in the execution of any contract." This Court held that the said mandatory provision was inconsistent with S. 5 (2) (a) (ii) of the Orissa Sales Tax Act, and to avoid that conflict it reconciled both the provisions by holding that the rule was only directory and, therefore, it would be enough it was substantially complied with. The said provisions may afford a guide for amending the relevant provisions of the Act and the rules made thereunder, but do not furnish any help for construing them. 12. Before parting with the case we must make it clear that we are not expressing any opinion on the bona fides of the appellant or the appropriate sales tax authorities for we have not scrutinized the evidence in that regard.

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

Explanation:
0[ds]9. Sub-rules (3) and (4) of R.27A are not helpful to the appellant. They provide only safeguards against abuse of the declaration forms by the purchasing dealers; they do not enable the selling dealer to either directly apply or to compel the purchasing dealers to apply for duplicate forms; nor do they enjoin the appropriate authority to give the selling dealer a duplicate form to replace the lost one. We realise that the section and the rules as they stand may conceivably cause unmerited hardship to an honest dealer. He may have lost the declaration forms by a pure accident, such as fire, theft, etc., and yet he will be penalised for something for which he is not responsible. But it is for the Legislature or for the rule-making authority to intervene to soften rigour of the provisions and it is not for this Court to do so where the provisions are clear and unambiguous10. There is an understandable reason for the stringency of the provisions. The object of S. 5 (2) (a) (ii) of the Act and the rules made thereunder is self-evident. While they are obviously intended to give exemption to a dealer in respect of sales to registered dealers of specified classes of goods, it seeks also to prevent fraud and collusion in an attempt to evade tax. In the nature of things, in view of innumerable transactions that may be entered into between dealers, it will wellnigh be impossible for the taxing authorities to ascertain in each case whether a dealer has sold the specified goods to another for the purposes mentioned in the section. Therefore, presumably to achieve the two fold object, namely, prevention of fraud and facilitating administrative efficiency, the exemption given is made subject to a condition that the person claiming the exemption shall furnish a declaration form in the manner prescribed under the section. The liberal construction suggested will facilities the commission of fraud and introduce administrative inconveniences, both of which the provision of the said clause seek to avoid11. The decision of this Court in State of Orissa v. M. A. Tulloch and Co. Ltd., (1964) 15 STC 641 (SC), does not help the appellant. That decision was concerned with S. 5 (2) (a) (ii) of the Orissa Sales Tax Act, 1947. That section was similar in terms to S. 5 (2) (a) (ii) of the Act in question, but there was no proviso to that section in the Orissa Act similar to the one found in the present section. That makes all the difference, for it is the proviso that imposes the condition. But under R. 27 (2) made under the Orissa Act "a dealer shall produce a true declaration in writing by the purchasing dealer or by such responsible person as may be authorised in writing in this behalf by such dealer that the goods in question are specified in the purchasing dealers certificate of registration as being required for resale by him or in the execution of any contract." This Court held that the said mandatory provision was inconsistent with S. 5 (2) (a) (ii) of the Orissa Sales Tax Act, and to avoid that conflict it reconciled both the provisions by holding that the rule was only directory and, therefore, it would be enough it was substantially complied with. The said provisions may afford a guide for amending the relevant provisions of the Act and the rules made thereunder, but do not furnish any help for construing them.