Satyanarayana Raju, J.
1. This revision case raises a question as to the interpretation of Section 8(2) of the Central Sales Tax Act (hereinafter referred to as 'the Central Act').
2. The material facts are not in dispute. The petitioners are registered dealers under the Central Act. During the period from October 24, 1957 to November 11, 1958, which is their year of account their turnover of inter-State sales of cotton amounted to Rs. 8,17,462-05 of which a turnover of Rs. 50,705-47 was covered by C. forms. A notice issued by the assessing authority to the petitioners proposing assessment at 1 per cent on the turnover covered by C form and at 2 per cent on the balance of the turnover, elicited a reply from them that as the purchase value of cotton had been assessed under the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter referred to as the 'the State Act') their turnover of sales should not be assessed under the Central Act. The assesees' contention was negatived on the ground that the transactions in question were liable to tax under the State Act as he was the last purchaser in the State, and that the sales effected by him to dealers outside the State were liable to the levy of tax under the Central Act as they were transactions in the course of inter-State trade or commerce.
3. It is contended by the learned Counsel for the petitioners that Section 8(2) of the Central Act could not be applied to the transactions representing sales by the petitioners of cotton to dealers outside the State inasmuch as what is contemplated by Section 8(2) is only tax on inter-State sales, which is fiction enacted in the section by which sales in the course of inter-State trade or commerce could be taxed as if they were local sales in the appropriate State, and that there is no provision in fact for taxing cotton at the sale point under the State Act, and that, therefore, the sales effected by the petitioners could not be brought within the scope of the Central Act.
4. For a proper appreciation of this contention, it is necessary to read the material provisions of the Central Act. After the coming into force of the Constitution, there was a good deal of controversy regarding the proper construction of Article 286 of the Constitution. With a view to remove doubts Parliament amended the Constitution by the Constitution (Sixth Amendment) Act, 1956, which received the assent of the President on 11-9-1956, omitting the Explanation in Clause (1) of Article 286 and substituting Clauses (2) and (3). The substituted clause read as follows :
'(2) Parliament may by law formulate principles for determining when a sale or purchase of goods takes place in any of the ways mentioned in Clause (1).
(3) Any law of a State shall, in so far as it imposes or authorises the imposition of a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter-State trade or commerce, be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament may by law specify.'
5. The Central Sales Tax is enacted by Parliament with a view to formulate principles for determining when a sale or purchase of goods takes place in the course of inter-State trade or commerce or outside a State or in the course of import into or export from India; to provide for the levy, collectibn and distribution of taxes on sales of goods in the course of inter-State trade or commerce; and to declare certain goods to be of special importance in the inter-State trade or commerce and specify the restrictions and conditions to which the State laws imposing taxes on the sale or purchase of such goods of special importance shall be subject. The preamble to the Central Act in fact refers to a sale or purchase of goods, which are obviously held to' be synonymous.
6. Section 2(b) of the Central Act defines 'dealer' as meaning any person who carries on the business of buying or selling goods, and as including a Government which carries on such business. 'Declared goods' have been denned in Section 2(c) to mean goods declared under Section 14 to be of special importance in inter-State trade or commerce. In Section 2(g) 'sale' has been defined (omitting what is not necessary) to mean any transfer of property in goods by one person to another for cash or for deferred payment or for any other valuable consideration. Section 2(j) defines 'turnover' as follows :-
'' 'Turnover' used in relation to any dealer liable to tax under this Act means the aggregate of the sale prices received and receivable by him in respect of sales of any goods in the course of inter-State trade or commerce made during any prescribed period and determined in the prescribed manner.'
7. Sections 3, 4 and 5, which are comprised in Chapter II of the Act, lay down the principles for determining when a sale or purchase of goods takes place in the course of inter-State trade or commerce or outside a State or in the course of import or export.
8. Section 6 is the charging section. It is in the following terms :-
'6. Liability to tax on inter-States sales i-
(1) Subject to the other provisions contained in this Act, every dealer shall, with effect from such date as the Central Government may by notification in the Official Gazette, appoint not being earlier than thirty days from the date of such notification, be liable to pay tax under this Act on all sales effected by him in the course of inter-State trade or commerce during any year on and from the date so notified.
(2) Notwithstanding anything contained in Sub-section (1), where a sale in the course of interstate trade or commerce of goods of the description referred to in Sub-section (3) of Section 8(2) --
(a) has occasioned the movement of such goods from one State to another: or
(b) has been effected by a transfer of documents of title to such goods during their movement from one State to another; any subsequent sale to a registered dealer during such movement effected by a transfer of documents of title to such goods shall not be subject to tax under this Act;
Provided that no such 'subsequent sale shall be exempt from tax under this sub-section unless the dealer effecting the sale furnishes to the prescribed authority in the prescribed manner a certificate duly filled and signed by the registered dealer from whom the goods were purchased containing the prescribed particulars.'
9. Section 8(2) provides the rates of tax on sales in the course of inter-State trade or commerce. Sub-section (2) of Section 8 whose interpretation is the subject-matter of controversy in this case, reads as follows: -
'The tax payable by any dealer on his turnover in so far as the turnover or any part thereof relates to the sale of goods in the course of inter-State trade or commerce not falling within Sub-section (1) --
(a) in the case of declared goods, shall be calculated at the rate applicable to the sale or purchase of such goods inside the appropriate State; and
(b) in the case of goods other than declared goods, shall be calculated at the rate of seven per cent or at the rate applicable to the sale or purchase of such goods inside the appropriate State, whichever is higher; and for the purpose of making any such calculation any such dealer shall be deemed to be a dealer liable to pay tax under the sales tax law of the appropriate State, notwithstanding that he, in fact, may not be so liable under that law.'
10. The scheme of taxation provided by Section 8 envisages classification of goods into certain categories. Category (1) comprises declared goods, and category (2), of goods other than declared goods. The object of the classification is clearly to extend the benefit of a lower rate of tax in the case of declared goods, which are defined as meaning goods declared under Section 14 in be of special importance in inter-State trade or commerce. If the goods are declared goods, then the tax of 1 per cent, or the tax levied by the appropriate State, whichever is less, is collected. For the purpose of determining the tax, any dealer if his transactions are capable of being brought within the ambit of the charging section, shall be deemed to be a dealer liable to pay sales tax under the sales tax law of the appropriate State, notwithstanding that he may not be so liable to tax under that law.
11. It is contended that what have been brought within the ambit of Section 8(2) are transactions of sale which, if they had taken place inter-State, the appropriate sale would have been liable for tax under the Sales Tax law of that State. It is argued that if that were the proper mode of construing the provison, cotton, the sate of which, is not taxable under the State law, cannot be taxed under the Central Act as well. This contention, when analysed, reduces itself to this, namely, that the word 'sale' used in Section 8(2) of the Central Act means only a sale and cannot take in a purchase. In our opinion, this argument is unsound. The section, no doubt, refers to a sale but every transaction of sale involves the concept of both a sale and a purchase. Where goods are sold, the transaction is one of sale from the point of view of the seller but from the point of view of the purchaser it is transaction of purchase.
12. A contract of sale has been defined in section 4 of the Sale of Goods Act, as follows: -
'(1) A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. There may be contract of sale between one part-owner and another.
(2) A contract of sale may be absolute or conditional.
(3) Where, under a contract of sale the property in the goods is transferred from the seller to the buyer, the contract is called a sale, but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell.
(4) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred.'
13. The definition of 'sale' which is contained in the Central Act has already been extracted. In the sale of Goods Act as well as in the Central Act or in any of the Sales Tax Laws made in the Several. States, the definition relates to the sale of goods, and not to the purchase of goods. That must be so because the sale of a commodity must include within its ambit the concept of sale as well as purchase. It is impossible to conceive of the sale of goods without a buyer.
14. If so much is conceded, there is really no need to make a specific mention of 'purchase' in Section 8(2), the omission of which has, in fact, been responsible for the argument advanced in this case.
15. During the course of arguments before us, the learned counsel for the petitioner has relied upon the subsequent amendment of Section 8(2) which has introduced the words 'or purchase' in the material provision. It is argued that the addition of this expression is really made to plug the lacuna existing in the unamended section. We are unable to agree. The fact that by way of abundant caution, the words 'or purchase' have been added, does not mean that there was in fact a lacuna in the existing provision which was sought to be remedied by the amendment. The amendment might have been the result of an anxiety on the part of the Legislature to obviate an argument of the kind which has been advanced before us.
16. We were then referred to certain decisions which have laid down the principles with respect to the interpretation of fiscal statutes. It is needless to refer to all the cases on the subject because these principles have been succinctly summarisd by their Lordships of the Supreme Court in Fernandez v. State of Kerala, : [1957]1SCR837 ) as follows: -
'It is no doubt true that in construing fiscal statutes and in determining the liability of a subject to tax one must have regard to the strict letter of the law and not merely to the spirit of the statute or the substance of the law. If the Revenue satisfies the Court that the case falls strictly within the provisions of the law, the subject can be taxed. If, on the other hand, the case is not covered within the four corners of the provisions of the taxing statute, no tax can be imposed by inferences or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter. We must of necessity, therefore, have regard to the actual provisions of the Act and the rules made thereunder before we can come to the conclusion, that the appellant was liable to assessment as contended by the Sales tax authorities.'
17. There can be little doubt that all fiscal statutes have to be construed strictly and the incidence of tax liability cannot be inferred by analogy or by trying to probe into the intentions of the Legislature.
18. We have, on a consideration of the material provisions, held that the word 'sale' in the unamended Section 8(2) covers transactions of purchase as well, and in the view we have taken, there is really no need to draw inferences or to probe into the unexpressed intentions of the legislature. The material provision, in our view, really presents no complicated question of construction. The word 'sale' is of sufficient amplitude to take within its ambit the concept of 'purchase' also.
19. As was pointed out by a Division Bench of the Madras High Court in Syed Mohamed and Co. v. State of Madras, : AIR1953Mad105 : 'The words 'sales tax' are generally understood as imposing a tax on the occasion of sale and it is immaterial whether it is collected in the first instance from the sellers or the purchasers.' The learned Judges pointed out that 'it is in this sense that the words 'tax on sales' would appear to have been used in Entry No. 48.'
20. We may also say that Section 8(2) does not provide for the incidence of tax. It provides only the rate at which tax is to be levied on transactions involving inter-State elements.
21. For the above reasons, we hold that the view taken by the Tribunal is correct. This revision case must, therefore, fail and is dismiss-ed with costs. Advocate's fee Rs. 100/-.