Bombay High Court
Motilal Laxmidas And Co. vs The State Of Bombay on 10 September, 1951
JUDGMENT
1. These are two applications by the same dealers for the revision of the orders of the Collector of Sales Tax confirming the assessment fixed by the Assistant Collector of Sales Tax, but further reducing the penalty imposed on the applicants by the Sales Tax Officer and reduced on appeal by the Assistant Collector of Sales Tax.
2. The applicants have got a stall for selling tea and light refreshments at the Railway Station of Palghat (B.B. & C.I. Rly.) since 1939. They serve refreshments to the public at the counter of their stall, as also on the platform of the station and to the passengers in the trains which come and go. They have also got a general provision store within Palghat, but outside the station. The period of assessment with which we are concerned in Revision Application No. 13 is 1st October, 1946, to 31st March, 1947, while the one in Revision Application No. 14 is 1st April, 1947, to 31st March, 1948. The Sales Tax Officer concerned held that the taxable turnover of the applicants for the first period was Rs. 66,092-14-6 and assessed Rs. 2,065-6-0 thereon. He held that his taxable turnover was Rs. 1,28,473 in the second period and taxed Rs. 4,014-12-0. The Sales Tax Officer passed the orders for both the periods on 28th June, 1950, and for having paid less tax for these periods within the prescribed time, he imposed under Section 12(3A) of the Bombay Sales Tax Act the penalties Rs. 68-10-0 and Rs. 135-12-0 respectively.
3. The applicants went up in appeal to the Assistant Collector of Sales Tax (Additional), Bombay Circle, who reduced the sales tax to Rs. 1,988-1-0 and penalty to Rs. 60-4-0 for the first period, and for the second period to Rs. 1,25,037-13-0 (taxable turnover) and Rs. 3,907-7-0 (sales tax) respectively. He reduced the penalty for the first period to Rs. 60-4-0 and for the second to Rs. 123-4-0. When the applicants next approached the Collector in revision, he upheld the assessment fixed by the Assistant collector but reduced the penalty to Rs. 30-2-0 and Rs. 61-10-0 respectively. The applicants have now applied to this Tribunal in revision.
4. As the periods of assessment are up to 31st March, 1948, the case is governed by the original Bombay Sales Tax Act of 1946 as amended by Act XXV of 1947.
5. The main contention of the applicants was that they are entitled to exemption in respect of sales of food and drinks at the Railway Station. They rely on item No. 10 in the Schedule annexed to the original Act for the exemption. The Assistant Collector's conclusion which was upheld by the Collector was that the item has no application to the sales of liquid articles (tea, coffee, etc.) or to the solid articles of cooked food (biscuits, etc.) sold to the passengers in the train or on the platform. They further contend that penalties for non-payment of sales tax have been wrongly imposed.
6. Taking first the question as regards what is included in "cooked food" mentioned in item No. 10, we may say that reference was made to certain dictionaries where the word "food" is stated to mean anything which is nourishing whether solid or liquid. The question of the interpretation of this word was before this Tribunal in Ashtaputre v. Commissioner of Sales Tax (R.A. No. 3 of 1948) and we have referred in para 5 of the judgment in it to the meaning given in Roland Burrows' "Words and Phrases Judicially Defined" which goes to the farthest limit. As regards it, this Tribunal observed there : "It may be argued with some force, that this was a definition for the purposes of Sales of Food and Drugs Act which exists in England ........." We think that the purpose in view colours the meanings of the term which are variously given and they must be accepted with caution.
7. We will, however, refer to the one given in Webster's New International Dictionary which enjoys a great repute in India. In it (Vol. 1, p. 844) one of the meanings given is "nutriment in solid form as opposed to drink". This meaning goes against the applicants' contention.
8. It is true that the Bombay Sales Tax Act does not contain a definition of the term "food", and therefore we may legitimately consider the dictionary meaning of the word; but we will have to remember here the passage at pp. 34 and 35 in Maxwell on Interpretation of Statutes (9th edition). Dictionaries no doubt inform us about the ordinary meanings of the words but they will have to be adopted in the absence of anything specific in the statute to indicate what the Legislature meant by using the particular word.
9. We find such an indication in the wording of the item in question. The words "cooked food" are followed by the word "eaten". The word is not applied to drinks but to solid food which is capable of being "masticated and swallowed". The use of the word "eaten" thus definitely indicates that the item was intended to cover only solid food. Another indication is to be found in the amendment made in the item by Bombay Act I of 1949. That amendment was intended to exempt drinks and the word "eaten" was substituted by the word "consumed". The addition of the word "drink" and substitution of "consumed" for "eaten" are significant enough.
10. For the reasons given above, we hold that "food" does not include tea, coffee, etc. but only means such food as can be masticated and swallowed, e.g. biscuits, cakes, etc.
11. Going to the point whether the articles of cooked food sold to the passengers in the train or on the platform are exempt, we think that the words in it "or other place where cooked food is served" are sufficient for the purpose. These words are capacious enough to include the platform or the train. Passengers are served with refreshments or meals even at their seats in the train. This is not exceptional, but an ordinary every-day sight. We think "food" supplied there must be treated as served at the usual place.
12. The B.B. & C.I. Railway has leased to the applicants, certain areas inside the station, and at our instance the applicants produced the lease and the site plan accompanying it. The lease is described therein as relating to "stall and table". What the two words exactly mean is not very clear, but the area leased is mentioned to be 710 sq. ft. as shown in the site plan. It includes (i) a kitchen of 150 sq. ft.; (ii) a tea-stall said to measure 252 sq. ft. adjacent to the platform if not also covering it, and (iii) the waiting shed on the other side of the rails measuring 308 sq. ft. This will give the idea of area of operation allowed to the applicants for the purpose of their shop. It cannot certainly be limited to the small counter in front of the kitchen where hardly 5 persons can stand to drink tea. It is evident that all the area the passengers can use for moving or sitting at the stall is permitted to the applicants for serving the passengers and is covered by the description of the other place given in item No. 10.
13. The word "food" is preceded by the word "cooked". In para 6 of the judgment in the revision application referred to above we have accepted the explanation of the word as "prepared by the action of heat". This description applies to biscuits, cakes, etc. Such as have been subjected to heating at some time are exempt. The refreshments do not amount to meals as held by us in the judgment referred to above, which view has been upheld by the Honourable the High Court. The sale of refreshments (solid) prepared after applying heat must, therefore, be treated as wholly exempt in cases arising before the amendment of 1949.
14. The last point relates to the penalties imposed. Section 12(3A), it is pointed out, was added by Bombay Act I of 1949 which came into force on 1st April, 1949, while the last of the returns in question were submitted on 29th April, 1948, i.e. nearly a year before the sub-section came into force. Relying on these facts, it is contended by the applicants that the penalties are imposed on them by giving retrospective effect to the sub-section. The order of the Collector shows that the penalties are imposed under Section 12(3A) and under no other section and unless that sub-section is expressly made retrospective in its operation, it cannot apply in this case. As observed by the Bombay High Court in Nilkanth v. Rasiklal ([1951] 51 Bom. L.R. 280.), "it is a well-established canon of construction of every statute, that ordinarily every legislation is prospective in its effect and does not affect the vested rights. But it is always competent to the Legislature to make any piece of legislation retrospective. If, however, the Legislature intends to do so, it must do so by clear intention or by necessary implication." As regards these observations, we must say that nothing was pointed out to us to show that the Legislature intended Section 12(3A) to be retrospective. If so, we must say that the penalties imposed are not legal and must be set aside.
15. The Collector has observed in para 3 of his order : "I consider that while the applicant should have submitted correct figures of his turnover, he was under a misunderstanding regarding his liability to pay tax and as he has been assessed at a later stage the full penalty under Section 12(3A) is rather too severe and it is desirable to waive the penalty to some extent as a special case". We think the reason given by the Collector is quite correct, but we will request Government to consider the question whether in such a case any penalty is called for. We think that it is only willful withholding of the payment of the tax that should be visited with any penalty and that discretion should be left to the Sales Tax Authorities to decide the question whether in the circumstances of a particular case it should at all be imposed.
16. We may also be permitted to point out that the amount of penalty (which is fixed by the sub-section at a particular percentage) swells owing to the congestion of work with the Sales Tax Officers and the consequent inordinate delay in the disposal of returns. We may be permitted to refer in this connection to the fact that in this very case, returns submitted in 1947 and April 1948 came up for disposal by the Sales Tax Officers on 28th June, 1950.
17. For the foregoing reasons we consider that the orders under revision must be modified by deleting the penalties and exempting in full the refreshments (solid) served by the applicants to passengers at their kitchen or on the platform or in the train.
18. We wanted the parties to give us the exact figures of the tax payable in accordance with the above judgment; but the applicants' representative pleads his inability to give them and wants that the cases should be remanded to the Sales Tax Officer. In the circumstances we shall send the cases back for the purpose.
19. We pass the following order :
ORDER
20. The Sales Tax Officer shall fix the figures of assessment in accordance with the above judgment without any amount of penalty. There will be no order as regards the costs of both the applications before us.
21. Case remanded.