1976 Supreme(SC) 400

SUPREME COURT OF INDIA
H.R. KHANNA AND JASWANT SINGH, JJ.
Thiru Manickam and Co., Appellant
Versus
The State of T.N., Respondent.
Civil Appeal No. 1528 of 1971,
D/- 26-10-1976.
Advocates appeared
Mr. S.T. Desai, Sr. Advocate, (Mr. T. A. Ramachandran, Advocate, with him), for Appellant; Mr. V. P. Raman, Addl. Solicitor General for India, Mr. A. V. Rangam and Miss A. Subhashini, Advocates for Respondent.

Headnote:

Tamil Nadu General Sales tax Act, 1959 - Section 38 - Central Act - Section 15 (b) - Tamil Nadu General Sales Tax Rules - Rule 23 - Madras General Sales Tax Rules, 1959 - Rule 23 - Central Sales Tax Act, 1956 – Claim of compensation - Restrictions and conditions in regard to tax on sale or purchase - Matter relates to assessment year - Appellant firm is a dealer in cotton yarn - Appellant bought yarn from local dealers and manufacturers and in turn sold that yarn by way of inter-State sale - Sales tax under State Act on the yarn purchased by the appellant had been paid by those manufacturers and dealers - Inter-State sales of yarn made by the appellant were assessed to tax under the Central Sales Tax Act in the hands of appellant - Appellant claimed refund of the tax amounting paid under the State Act in respect of yarn sold by it in the course of inter-State trade in accordance with Section 15 (b) of Central Act and the proviso to Section 4 of State Act read with Rule 23 of Tamil Nadu General Sales Tax Rules as these provisions stood at the relevant time - Additional Commercial Taxation Officer admitted the claim of the appellant for refund of the tax only in respect of the sum and rejected the claim in respect of balance - On appeal the Additional Appellate Assistant Commissioner allowed refund of a further sum and rejected the claim regarding the balance - On second appeal the Appellate Tribunal relying upon the decision of the Madras High Court rejected claim of the appellant for the balance of Rupees - At instance of the State representative Tribunal further held that the appellant was not entitled to get refund of the amount in respect of which relief had been granted by Appellate Assistant Commissioner - Appellant therefore preferred revision petition to Madras High Court under Section 38 of the State Act - High Court dismissed the said petition after observing that the principle laid down in the case would apply to facts of this case - Appellant thereafter came up in appeal to this Court by special leave – Held, There is also no anomaly in paying the amount of the sales tax under the State Act to a dealer who sells declared goods in the course of inter-State trade even though he did not himself pay the tax under the State Act in respect of those goods - Reason for that is that the price charged from such dealer by the person from whom he purchases the goods would normally take into account the sales tax paid by the seller - Assuming that there was some ambiguity in the language of clause (b) of Section 15 as it existed at the relevant time, the matter is made clear by the amendment made in the Central Act by the Central Sales Tax Act, 1972 - As a result of the amendment, clause (b) of Section 15 of the Central Act - Where a tax has been levied under that law in respect of the sale or purchase inside the State of any declared goods and such goods are sold in the course of inter-State trade or commerce, and tax has been paid under this Act in respect of the sale of such goods in the course of inter-State trade or commerce, the tax under such law shall be reimbursed to the person making such sale in the course of inter-State trade or commerce in such manner and subject to such conditions as may be provided in any law in force in that State - According to notes explaining the different clauses appended to the statement of objects and reasons of the Bill which emerged as the amending Act amendment made in clause (b) makes it clear that local sale tax would be reimbursed to the person making the sale in the course of inter-State trade and commerce. The amendment made in clause (b) can thus be taking to be an exposition by the legislature itself of its intent contained in the earlier provision - Court are not impressed by the argument of the learned - Additional Solicitor General that the amendment made in clause (b) was intended to mark a departure from the position in law as it existed before the amendment - Fact that the amendment of clause (b) of Section 15 was not like some other provisions given retrospective effect would not materially affect the position - As already mentioned above, the legislature as a result of the amendment, clarified what was implicit in the provisions as they existed earlier - An amendment which is by way of clarification of an earlier ambiguous provision can be useful aid in construing the earlier provision, even though such amendment is not given retrospective effect - That subsequent legislation may be looked at in order to see the proper construction to be put upon an earlier Act where earlier Act is ambiguous - Court quite agree that subsequent legislation if it proceeded on an erroneous construction of previous legislation cannot alter that previous legislation but if there be any ambiguity in the earlier legislation, then the subsequent legislation may fix the proper interpretation which is to be put upon the earlier - Appeal allowed