[2008] 4 S.C.R. 810

ORIENT TRADERS

COMMERCIAL TAX OFFICER, TIRUPATI

(Civil Appeal No. 4491 of 2002)

MARCH 12, 2008

[ASHOK BHAN AND DALVEER BHANDARI,· JJ.]

 Andhra Pradesh General . Sales Tax Act, . 1957 - First Schedule Item 20 - G 0. Ms No. 1092 dated 31. 10. 1994 and

. ' . c 252 dateq 19._5. 1995 reducing rate of sales tax from 2% to ·

% on bullion and specie (gold) -Assessee, dealing in silver bullion claiming benefit under the G. 0. for A Y 1994-1995 - Plea that reduced rate of sale tax under G 0. applicable to both gold and silver bullion and bracketed words 'gold' applies

0 only to specie and not to bullion -- Held: Not justified and tenable - There is no ambiguity in the expression used in the

G.O. - Intention of State Government is clear that only gold bullion arid specie entitled toconcessional rate of tax- 'Bullion and specie' is one single phrase and canndt be bifurcated -1t E cannot be said that word 'gold' is referable to 'specie' only as it is mentioned after word 'specie' - Also benefit of G 0. Ms No. 625 dated 3f 7. 1996 omitting bracketed word 'gold' cannot be sought since G 0. was effective from 01. 08. 1996 - Hence, assessee not entitled to the benefit - Exemption Notifications G 0. Ms No. 1092 dated 31.10.1994, and G 0. Ms No. 252 F dated 19.5.1995.

Interpretation of Statutes - Taxing statutes - Exemption Notifications - Construction of - Held: Are to be construed strictly - If intention of legislature is unambiguous, then courts G should not add words in exemption notification to extend the benefit to items not mentioned in the Notification.

Under item 20 of the First Schedule of the Andhra Pradesh General Sales Tax Act, 1957 the bullion and specie are taxable at the rate of 2% with effect from H 810

8.7.1983. By Notification in G.O. Ms. No. 1092 dated A 31.10.1994 rate of sales tax was reduced on the sale of

bullion and specie (gold) from 2% to %% net. Thereafter, the sales tax on bullion and specie was raised to 4% w.e.f. 01.04.1994. Again by Notification in G.O.Ms. No. 252 dated 19.5.1995 rate of sales tax on bullion and specie (gold) B was reduced to half percent. Subsequently by G.O.Ms No. 625 dated 31.7.1996 the expression 'gold' in the bracket immediately after the term 'gold and specie' occurring in the aforesaid G.O.'s was omitted.

Appellant-dealer in silver bullion, filed return showing c a turnover of Rs. 14,33,01,470/- and paid% percent sales tax for the assessment year 1994-95. The Assessing Authority accepted the return. Theteafter, in view of the G.

0. Ms No. 1092 and 252, the Assessing Authority issued notice to the appellant for re-opening the assessment and D

,..J. bring the turnover to tax at the rate of 2%. Appellant challenged the notice. High Court dismissed the writ petition on the ground of alternate remedy of filing the objections. Thereafter, appellant filed objections that the reduced rate of sale tax under the G. 0. was applicable E not only to gold bullion but also to silver bullion and that the bracketed words 'gold' used in the G. 0. applies only to specie and not to bullion. Assessing Officer rejected the objections and framed the re-assessment. Appellant .)( challenged the re-assessment by filing writ petition which • F was dismissed. Hence the present appeals.

Dismissing the appeals, the Court

HELD: 1.1 Entry 20 of the First Schedule of the the Andhra Pradesh General Sales Tax Act, 1957 refers to levy G of the tax at the point of first sale on bullion and specie.

Explanation. I under the First Schedule provid.es the meaning of the expression 'bullion' as pure gold or silver and includes gold or silver mixed with copper, lead or any other kind of base metal. While issuing Notification No.

A 1092 dated 31.10.1994, the rate of tax was reduced on the sale of bullion and specie (gold) from 2% to %% net. The Legislature used the term 'gold' in bracket after expression 'bullion and specie' thereby making its intention clear that it wanted to restrict the benefit of reduced rate of tax to B gold bullion and specie only and not to silver. Had the intention been to extend the benefit of reduced rate of tax . to silver bullion and specie, then, there was no need to put the word 'gold' in brackets after 'bullion and specie'.

The submission that the word 'gold' is referable to specie c only as it finds mention after the word 'specie', cannot be accepted. "Bullion and specie" is one single phrase and the same cannot be bifurcated. (Para 15 and 16) [820-8-F]

1.2 The submission that bracketed word 'gold' contained in Clause (a) of G.O.Ms No. 1092 dated D 31.10.1994 and G.0.Ms No. 252 dated 19.05.1995 having been omitted by G.0.Ms No. 625 dated 31.07.1996 clearly shows that the intention of the Legislature was that the concessional rate of tax is to be applied to both gold and silver bullion species for the period in question, cannot E be accepted. G.O.Ms No. 625 dated 31.07.1996 has been

made effective from 01.08.1996. The relevant period in the present appeals is from 01.11.1994 to 31.03.1995. Hence, the appellant cannot take any benefit of omission of the word 'gold' in brackets for the period in question. (Para 17)

F [820-G, H; 821-A, B]

1.3 The exemption notifications are to be construed strictly. If the intention of the legislature is clear and unambiguous, then it is not open to the courts to add G words in the exemption notification to extend the benefit to other items which do not find mention in the notification.

In the instant case, there is no ambiguity in the expression used in the G.O. The intention of the State Government is clear that only gold bullion ana specie is entitled to the H concessional rate of tax. Under the circumstances, the

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same cannot be extended. to the silver as claimed by the A assessee. (Para 18) [821-C, D, E]

Deputy Commissioner of Sales Tax v. Mis. G. S. Pai and Co. 1980 (1) sec 142 - relied on.

State of Jharkhand & Others v. Tata Cummins Ltd., and B another, 2006 (4) sec 57 and Kartar Rolling Mills v.

Commissioner of Central Excise, New Delhi 2006 (4) SCC 772 - referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. C 4491 of 2002.

From the final Judgment and Order dated 27 .04.2001 of the High Court of Judicature of Andhra Pradesh at Hyderabad in W.P. No. 1727of1997

WITH D

~ Civil Appeal Nos. 4492 of 2002, 4493 of 2002 and 4494

...

of 2002

S.K. Bagaria, A. Mariarputham and Aruna Mathur (for M/ s.ArputhamAruna & Co.) fortheAppellant.

Anoop G. Choudhari and June Choudhari, Manoj Saxena (for Guntur Prabhakar) for the Respondent.

The Judgment of the Court was delivered by

BHAN, J. 1. This judgment shall dispose of Civil Appeal

No 4491 of 2002 filed against a detailed order by which the High Court has dismissed the Writ Petition filed by the appellant and the three connected appeals which have been filed by the Assessees against the dismissal of their writ petitions by the G High Court following the impugned Order in C1v1I Appeal No. 4491 of 2002.

2 Facts are taken from Civil Appea1 No 4491 of 2002, which rs the main appea1.

A · 3. Th~'-relevant period is from Nove,;, ber, 1994 to March, 1995 which falls in the Assessment Year 1994-95. The appellant. deals: in the sale of silver bars. It filed its r.etum showing a turnover of Rs.14,33,01,470/- and paid sales tax.atthe rate. of%%. The ·

f.\sessing Autority accepted the sa.id return and comp.leted B the' asessment on 27 .11.1995 .. Later, the Assessing Officer

i_ssued roti(?e bn 17.8.1996 proposing to reopen the assessment under'Sedlori 14(4)(c) of the Andhra Pradesh General Sales Tax Act, 1957 (for short "the Act") and bring the above turnover

tota~ at the rate of 2%·, apart from additi9.nal tax and surcharge, c on the premise that G.O. Ms No. 1092 and G.O. Ms No. 252 reducing the rate of sales tax to %% were applicable only to goldbullton and the same were not applicable to silver bullion and' spede.· Questioning the said show cause notice, the appellant filed W.P. No. 21503 of 1996. The High Court

0 dismissed the writ petition on the ground of alternate remedy of

filing the objection and getting a decision from the authorities

under the Act on merits. The appellant thereafter filed objections claiming that the reduced rate of sales tax under the G.O. was appli(!able l)Ot. only to gold bullion but also to silver bullion. That the bracketed words "gold" used in the above G.O. applies only E to specie and not to bullion. The Assessing Officer rejected the contention of 'the assessee and framed the re-assessment.

Questioning the said re-assessment, the appellant filed Writ Petition No. 1727 of 1997 which has been di.smissed by the

F impugned order. ·

4. It was stated i~ the writ petition that though a remedy of appealwas, available'";'. but the. said remedy by way of appeal w(>'uld not be effective. In the light of the clarification issued by the Commissioner df commercial Tax by his order dated G 22.3.1995, clarifying that the G.O.Ms No. 1092 is applicable

only to the gold bullion and not to silver bullion. It was also contended that the issue relates only to the interpretation of G.Os:, therefore, to have effective and binding decis.ion the

appellant has approached the High Court by filing the writ petition.

The said writ petition was entertained. It has been dismissed H

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on merits ..

5. it is not in dispute that the appellant is a dealer in silver bullion. Under ltem-20 of the First Schedule to the Act the original rate prescribed is 2%. However, the State Government issued Notification under Section 9(1) of the Act in G.0.Ms. No. 1092 dated 31.10.1994 reducing the rate of sales tax to Y2% in respect B of 'bullion and specie (gold)' from the date of the said Notification. In order to appreciate the controversy in issue, it would be necessary to refer to the Entry in the First Schedule to the Act as well as the Notification issued on 31.10.1994. Entry 20 in First Schedule to the Act reads :- C

FIRST SCHEDULE

SI.

Description of Point of levy Rate of Effective No. goods tax from

20 Bullion and Atthe point 2 8-7~1983 D

specie (1020) of first sale 4 1-4-1995 .. in the State

6. The expression 'bullion' in Entries 20 and 21 has been defined in Explanation I to the First Schedule which reads:- E

"Explanation-1 :-The expression 'bullion' in itms 20 and 21 means pure gold or silver and includes gold or silver mixed with copper, lead or any other kind of base metal."

,.,'<

7. The relevant portion of G.O.Ms. No. 1092 Rev. (CT-II) F dated 31-10-1994 is extracted hereunder:-

"Notification-1 .

In exercise of the powers conferred by the sub-section (1) of Section 9 of the Andhra Pradesh General Sales Tax G Act, 1957 (Act-VI of 1957), the Governor of Aridhra Pradesh hereby directs:

(a) that the tax leviable under the said Act on the said Act on the sale of bullion and specie (gold) be reduced from 2% to 112 %, all included (net 112%); H

(b) that the tax leviable under the said Act on the sale of jewellery, including those set with precious stones be reduced to 2%; . 1 .·

(c) that the tax 1eviable under:the said Act on the sale of precious stones loose, other than pearls, be reduced to 2%.

This notification shall come into force with immediate

effect." ~· (Emphasis supplied)

8. The subsequent Notification issued u/s. 9(1) dated 19.5.1995 which came into force with effect from 1.4.1995 and the Notification subsequent thereto in G.0.Ms No. 625 dated

31. 7 .1996 superseding the earUer Notification omitting the expression 'gold' (G.O.Ms. Nos: 1092 and 252 of 1995) D occurring in the bracket, are not reproduced as the same are

not relevant for the purposes of disposing of the present appeals.

9. Learned counsel for the appellant contends that the perusal of G.Os. issued by the State of Andhra Pradesh clearly E shows that the bracketed word 'gold' occurs only after 'specie' and not either before or after 'bullion'. Therefore, the said bracketed word ·gold' is relevant for the word 'specie' only and not for the word bullion'. If the G.O. is so interpreted; the reduced rate of sales tax would be available t6 the appellant at }'2% as F provided therein, which was accepted by the Assessing Officer at the first instance. That there was no reason for the Assessing Officer to change his opinion to revise the assessment levying the sales tax at higher rate. Relying upon the G.O. Ms. No. 625. dated 31.7.1996 which omitted the expression 'gold' from the G bracket immediately after the term 'specie', it was contended that the Government did not intend to give the benefit of lower rate of tax only to gold but also to silver bullion. The action of the respondent-authorities in re-opening the assessment as well as framing the reassessment is not in accordance with law and

i,~ 1 is only a change of opinion with reference to the Notification

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issued by the Government under Section 9(1) of the Act. It was A also contended that the Notification was clear and unambiguous and the benefit granted in the Notification would be available to the dealers dealing in silver bullion as well. If the G.Os. are interpreted in this manner, then no case was made out to revise the assessment to levy the higher rate of tax. Reliance was B placed on a decision of this Court in Commissioner of Sales

~ Tax V. Industrial Coal Enterprises, 1999 (2) SCC 607.

10. As against this, the learned counsel appearing for the Revenue submits that there is no justification to contend that the term 'gold' is applicable only to specie and not to bullion. c

According to him, the interpretation sought to be put by the appellant to the G.O. is not proper and correct. It is submitted that 'bullion and specie' is one single phrase and they cannot be bifurcated. The intention of the Government in the said G.O. was to apply the reduced rate of tax to gold bullion and specie D

_...._ only. As these two words constitute one single phrase the word •• 'gold' was bracketed at the end to indicate that it is meant to be applicable to gold only. It was also submitted that Commissioner of Commercial Tax, Government of Andhra Pradesh by its order dated 22.3.(1995 passed on a request made by the Twin Cities E Jewelers Association clarified that the reduced rate of tax is applicable only to gold bullion and specie. As such the contention of the appellant that it is also applicable to silver bullion is unjustified and untenable.

11. Learned counsel for the parties have been heard at F "

length.

12. Bullion and specie are taxable at the rate of 2% with effect from 8. 7 .1983 under item 20 of the First Schedule of the Act. Same rate is applicable to the articles and jewellery G mentioned under Entry 21 made out of bullion and/or specie or both, excluding precious stones. Explanation I to the said Schedule defines bullion as pure gold or silver and includes gold or silver mixed with copper, lead or any other kind of base metal. The Government of Andhra Pradesh by issuing G.O. Ms.

A No. 1092 dated 31.st October, 1994 under Section 9(1) of the Act reduc;; ed the net rate of sales tax to %% on sale of bullion arid specie (goldr Andhra Pradesh General Sales Tax Act was amE:mded by Act 22 of 1995 with effect from 1st April, 1995 prescribing the sales tax in the case of bullion and specie at the B rate.of 4%. Again the Government issued a Notification under Section 9(1) of the Act in G.O.Ms. No. 252, dated 19.5.1995 reducing .the rate of sales tax in the case of bullion and specie

(gold) to%% with effect from 1.4.1995. Subsequent G.O.Ms No: 625 dated 31. 7 .1996 was issued by the State of Andhra Pradesh C omitting the expression 'gold' in the bracket immediatly after the term 'gold and specie' occurring in G.0.Ms Nos. 1092 of 1994 and 252 of 1-995.

13. This Court in the case of Deputy Commissioner of Sales . Tax v. iVl/s. G.S. Pai and Co. I 1980 ( 1) sec 142' D considered the terms 'bullion and spcie', in a different conte)(i

i.e., whether ornaments and other articles of gold could be . regarded as bullion and specie. as .specified in EntrY 56 of .the First Schedule ofthe Kerala General Sales Tax Act, 1963. This Court held iri para 3 as under::- . . .. . ' . . .

"We will.first consider the question whether the ornaments and other articles of gold purchased by the assessee fall within the description of "Bullion and specie" given in Entry 56. There are two expressions in this Entry which require consideration; one is "bullion" and the other is "specie". . Now there is one cardinal rule of interpretation whi9h has

always to _be borne in mind while interpreting entries in ·.sales tax leg.islation ahd it is that the words used in the entries must be construed not in any technical sense nor from the scientific point of view but as understood in common parlance. We must give the words used by the Legislature-their popular sense meaning "that sense which · people conversant with the subject-matter with which the statute is dealing wouldattriute to it". The word "bullion"·

must, therefore, be interpreted according to ordinary parlance and must be given a meaning which people

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conversant with this commodity would ascribe to it. Now A it is obvious that "bullion" in its popular sense cannot include ornaments or other articles of gold. "Bullion" according to its plain ordinary meaning means gold or silver in the. mass.

It connotes gold or silver regarded.as raw material and it may be either in the form of raw gold or silver or ingots or B bars of gold or silver. The Shorter Oxford .Dictionary gives. the meaning of "bullion" as "gold or silver in the Jump; also applied to coined or manufactured gold or silver considered as raw material." So also in Jowitt's Dictionary of English Law and harton's Law Lexicon we find that c the following meaning is given for the word "bullion": "uncoined gold and silver in the mass. These metals are called so, eith.er when melted from the native ore and not perfectly refined, or where they are perfectly refined, but melted down into bars or ingots, or into any unwrought body, of any degree of fineness". It would, therefore, be D seen that ornaments and other articles of gord cannot be regarded as "bullion" because, even if old and antiquated, they are not raw or unwrought gold or gold in the mass; but they represent manufactured or finished products of gold:

Nor do they come within the meaning of the expression E "specie". The word "specie" has a recognized meaning. and according to Webster's New World Dictionary, it means "coin, as distinguished from paper money;'. The Law Dictionaries also give the same meaning. Wharton's Law Lexicon and Jowitt's Dictionary of English Law state F the meaning of "specie" as "metallic money" and in Black's Law Dictionary, it is described as . "coin of the pecius metals, of a certain weight and fineness, and bearing the stamp of the Government, denoting its value as currency" while "Words and Phrases Permanent Edition-Vol. 39A" G also gives the same meaning. Therefore, according to common parlance, the word "specie" means any metallic coin which is used as currency and if that be the true meaning, it is obvious that ornaments and other articles of gold cannot be described as "specie" ....... "· H.

14. From the reading of the above judgment, it is clear that 'bullion' means gold or silver in mass, in bars, plates etc., in uncoined form; whereas 'specie' means coined gold or silver or any other metal and also used as currency. The distinction between the two expressions is that the former refers to gold s and silver when it is in bulk form, either unshaped or shaped

like bars, plates etc., whereas later refers to the coined form of silver or gold.

15. Entry 20 of the First Schedule refers to levy of the tax at the point of first sale on bullion and specie. Explanation I under C the First Schedule provides the meaning of the expression

'bullion' as pure gold or silve.r and includes gold or silver mixed with copper, lead or any other kind of base metal. While issuing Notification No. 1092 dated 31.10.1994, the rate of tax was reduced on the sale of bullion and specie (gold) from 2% to%% D net. The Legislature used the term 'gold' in bracket after expression 'bullion and specie' thereby making its intention clear that it wanted to restrict the benefit of reduced rate of tax to gold bullion and specie only. Had the intention been to extend the benefit of reduced rate of tax to silver bullion and specie, then, E there was no need to put the word 'gold' in brackets after 'bulliEm

and specie'. ·

16. Contention that the word 'gold' is referable to specie only as it finds mention after the word 'specie', cannot be accepted. "Bullion and specie" is one single phrase and the F same cannot be bifurcated, as contended by the counsel for the appellant. The intention of the Government in putting the word 'gold' in the bracket after the words 'bullion and specie' clearly shows that the intention of the Government was to extend the benefit of reduced rate of tax to gold bullion and gold specie G only arid not to silver. The word 'gold' was put in brackets to indicate that the concessional rate of tax is applicable only to the gold in either of the two forms Le. bullion or specie.

17. Contention of the learned counsel for the appellant that H bracketed word 'gold' contained in Clause (a) of G.O.Ms No.

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' ,-

1092 dated 31.10.1994 and G.O.Ms No. 252 dated 19.05.1995 A having been omitted by G.O.Ms No. 625 dated 31.07.1996 clearly shows that the intention of the Legislature was that the concessional rate of tax is to be applied to bolh gold and silver bullion species for the period in question, cannot be accepted.

G.O.Ms No. 625 dated 31.07.1996 has been made effective B from 01.08.1996. The relevant period in the present appeals is from 01.11.1994 to 31.03.1995. Hence, the appellant cannot take any benefit of omission of the word 'gold' in brackets for the period in question as the G.O.Ms No. 625 dated 31.07.1996

is to take effect from 01.08.1996. c

18. It is well established principle that the exemption notifications are to be construed strictly, reference may be made to State of Jharkhand & Others V. Tata Cummins Ltd., and another, 2006 (4) SCC 57 and Kartar Rolling Mills V.

Commissioner of Central Excise, New Delhi, 2006 (4) SCC D

772. If the intention of the legislature is clear and unambiguous,

'°' then it is not open to the courts to add words in the exemption

¥ . notification to extend the benefit to other items which do not find mention in the notification. In the present case, there is no ambiguity in the expression used in the G.O. The intention of the E State Government is clear that only gold bullion and specie is entitled to the concessional rate of tax. Under the circumstances, the same cannot be extended to the silver as claimed by the assessee.

19. For the reasons stated above, we do not find any merit F )f in these appeals and dismiss the same with costs. ""

N.J.

Appeals dismissed.