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Karnataka High Court
Judges : Jagannatha Shetty,S.A.Hakeem
PRINTERS (MYSORE) LTD. - Appellant
Versus
ASSISTANT COMMERCIAL TAX OFFICER, VII CIRCLE, BANGALORE-9 - Respondent
Writ Petition 1848 Of 1976
Decided On : 08/10/1984
Advocates Appeared :
S.G.SUNDARASWAMY, S.RAJENDRA BABU
Taxation - Newspapers - Central Sales Tax Act, 1956 - Section 8(3)(b), Section 2(d) - The court discussed the definition of 'goods' under the Act and its exclusion of newspapers. It highlighted the constitutional constraints on the power of the State to tax the sale or purchase of newspapers and the purpose of concessional rates of tax under section 8(1)(b) and section 8(3)(b). The court emphasized the need to interpret the word 'goods' as defined under the Act and its alignment with constitutional provisions.
Fact of the Case:
The petitioners, a company engaged in the manufacture of newspapers and periodicals, challenged the validity of the action taken by the Commercial Tax Officer, who directed them not to use C forms for purchasing articles used in the manufacture of newspapers.
Finding of the Court:
The court held that the petitioners were not entitled to purchase certain articles used in the manufacture of newspapers at the prescribed concessional rate of tax, as newspapers were excluded from the definition of 'goods' under the Act.
Issues: The primary issue was whether the company was entitled to purchase certain articles used in the manufacture of newspapers at a concessional rate of tax when newspapers are not considered goods under the Act.
Ratio Decidendi: The court emphasized the need to interpret the word 'goods' as defined under the Act and its alignment with constitutional provisions. It held that the intention of the parliament was to exclude newspapers from the concessional rate of tax under section 8(3)(b) and upheld the decision in Samyukta Karnataka v. Commercial Tax Officer.
Final Decision: The rule was discharged, and the writ petition was dismissed with no order as to costs.
( 1 ) THE question raised in this writ petition under article 226 of the Constitution relates to the right of the petitioners to purchase newsprint and other goods under C forms issue under the central Sales Tax Act, 1956 (the "act") for use in the manufacture or processing of newspapers and periodicals.
( 2 ) BRIEFLY stated, the facts are these :
The first petitioner is a company engaged in the manufacture of newspapers - one published in english by the name of "deccan HERALD" and the other in Kannada by the name of "prajavani". The second petitioner is the governing director of the said company. The company also produces two magazines in Kannada - one is a weekly called "sudha" and the other a monthly by the name of "mayura". The company was registered as a dealer under section 7 of the Central Sales tax Act and also under the Karnataka Sales Tax Act. The company was permitted to purchase certain goods under C forms at a concessional rate of tax at 4 per cent. as prescribed under section 8 (1) (b ). But for the C forms, the company has to pay 10 per cent. tax on the sale of those goods. The company has been making use of those goods in the manufacture of newspapers.
( 3 ) BY a notice dated October 15, 1975 the Assistant Commercial Tax Officer, VII Circle, bangalore, informed the company that the definition of "goods" under the "act" excludes "newspapers". He asked the company not to use C forms for purchasing the articles used in the manufacture of newspapers. He directed the company to produce its registration certificate to delete the articles like ink, metal, maplitho paper, machinery parts, craft paper and jute twine which are used in the manufacture and packing of newspapers.
( 4 ) THE company resisted the action proposed. It contended that the newspaper has always been regarded as goods. But it was removed from the definition of the word "goods" in the Act with the primary intention of avoiding tax on sale or purchase of newspapers. That does not necessarily mean that the newspaper cases to be goods for all purposes and even in the popular sense. With these and other please, the company requested the Commercial Tax Officer to permit the use of C forms for purchasing the articles used in the manufacture of newspapers.
( 5 ) THE Commercial Tax Officer did not change his opinion and by order dated December 4, 1975 he deleted the articles "ink, metal, maplitho paper, machinery parts, craft paper" from the certificate of registration. By an order dated February 18, 1980 the Commercial Tax Officer also directed the company not to purchase "newsprint" under C forms. The company has moved this Court with an application under article 226 of the Constitution challenging the validity of the action taken by the Commercial Tax Officer. The primary question for consideration is whether the company is entitled to purchase certain articles which are used in the manufacture of newspapers at the prescribed concessional rate of tax when newspapers are not goods as defined under the Act.
( 6 ) IN a commercial sense, the newspapers may mean goods. It is generally understood as a publication containing news or articles. In the Press and Registration of Books Act, 1967 it means "any printed periodical work containing public news or comments on public news". Section 9 of the Indian Post Office Act, 1898 refers to it as every publication consisting wholly or in great part of political or other news, or of articles relating thereto, or to other current topics, with or without advertisements.
( 7 ) THE Constitution of India has imposed some constraints on the power of the State to tax the sale or purchase of newspapers. Under entry 54, List II of the Seventh Schedule, the State's power to tax sales or purchases extends to "goods" other than newspapers. Under entry 92, List I of the Seventh Schedule, the Central retains such a power to tax on the sale or purchase of newspapers and advertisements. By the Constitution (
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