State of Orissa Vs. Modi Stores - Court Judgment

Excerpt:
- state financial corporations act, 1951 [63/1951]. section 29; [p.k. tripathy, a.k. parichha & n.prusty, jj] discharge of loan orissa forest act (14 of 1972), section 56 confiscation of vehicle - held, the authorities under section 56 of the orissa forest act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of orissa state financial corporation when such vehicles were purchased on being financed by the orissa state financial corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. on the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the department which initiated the confiscation proceeding. apart from that, the claim of the orissa state financial corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the state financial corporation act, 1951 or the heirs and successors of such persons. procedure is provided in the act, 1951 and the rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. if such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. the financial corporation is concerned with repayment of loan either from the property or persons offered as surety. thus, a vehicle, which is subject matter of confiscation proceeding under the act, 1872, being not available to the orissa state financial corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the orissa state financial corporation. agreement between the orissa state financial corporation and the loanee is a pure and simple contract governed by the provisions of the contract act, 1872 read with the provisions in the act, 1951 and its rules. on the other hand, a confiscation proceeding under the act, 1972 is punitive in nature for commission of a forest offence. thus, by virtue of the provision in section 56 read with section 64 (2) of the act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by orissa state financial corporation. by doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the orissa state financial corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. in other words, on payment of the sale proceeds of the confiscation proceeding to the orissa state financial corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. such a concept is totally not conceivable from any provision in the act, 1972 or the act, 1951. [air 2002 orissa 130 overruled]. -- state financial corporations act, 1951. section 29; discharge of loan orissa forest act (14 of 1972), section 56 confiscation of vehicle - held, the authorities under section 56 of the orissa forest act, 1972 are not obliged to release the vehicle from the confiscation proceeding or to pay the sale proceeds of the vehicle after the order of confiscation in favour of orissa state financial corporation when such vehicles were purchased on being financed by the orissa state financial corporation and the loan had not been liquidated by the date of the seizure/confiscation of the vehicle. concept of first charge or second charge has no applicability when the vehicle is not otherwise disposed of to determine the liabilities of the loanee. on the other hand the vehicle having been found indulged in forest offences was made subject matter of a confiscation proceedings, and therefore, the procedure followed for confiscation of the vehicle and for its sale is punitive in nature and not with a view to give benefit to anybody including the department which initiated the confiscation proceeding. apart from that, the claim of the orissa state financial corporation as against its loanee (who had taken the vehicle on hire- purchase agreement) brings the loanee and the sureties within the default clause under the state financial corporation act, 1951 or the heirs and successors of such persons. procedure is provided in the act, 1951 and the rules thereof about the manner in which such loan is to be recovered, and in that context only the vehicle under the hire-purchase agreement is placed as the first charge. if such property is not available for any reason, then the loan is not automatically waived or the loanee and his sureties are not automatically redeemed of the liabilities to repay. the financial corporation is concerned with repayment of loan either from the property or persons offered as surety. thus, a vehicle, which is subject matter of confiscation proceeding under the act, 1872, being not available to the orissa state financial corporation for adjustment of the unpaid loan, that does not at all bring out an anomalous situation so as to defeat the right of the orissa state financial corporation. agreement between the orissa state financial corporation and the loanee is a pure and simple contract governed by the provisions of the contract act, 1872 read with the provisions in the act, 1951 and its rules. on the other hand, a confiscation proceeding under the act, 1972 is punitive in nature for commission of a forest offence. thus, by virtue of the provision in section 56 read with section 64 (2) of the act, 1972, the action taken for confiscation of the vehicle cannot be extended to grant protection of the loan advanced by orissa state financial corporation. by doing that it amounts to grant premium to the pick-pockets in as much as, by making payment of the confiscation amount in favour of the orissa state financial corporation the loan burden of the accused of the forest offence is reduced to the extent of the sale proceeds of the vehicle. in other words, on payment of the sale proceeds of the confiscation proceeding to the orissa state financial corporation towards discharge of the loan account of the accused of a forest offence, it would lead to a system to reward him by repayment of his loan. then it does not become a penalty nor the action become punitive, but it remains as a reward to the accused of forest offence. such a concept is totally not conceivable from any provision in the act, 1972 or the act, 1951. [air 2002 orissa 130 overruled]. - das the learned assistant commissioner rightly held that carpets are not cloths and so mill-made cotton carpets like sataranjis cannot come under item 33. it however decided in favour of the assessee ultimately holding that the sataranjis as carpets are taxable but as mill-made cotton fabrics they are not taxable. 'entry 33. all mill-made fabrics madewholly or partly of cotton,staple fibre, rayon, artificial silk or wool,including processed fabridsmade in the processing mills .(these articles are not taxable) 4. the learned advocates for both the parties do not dispute that carpets are mill-made fabrics and sataranjis would come within the meaning of 'fabrics'.the law is well settled that if there are two separate and distinct entries, then both the entries must be so construed as to reconcile them. we are clearly of opinion that carpets are taxable as per entry 40 and would not cease to be taxable merely because by dictionary meaning carpets are fabrics as mentioned in entry 33. 5. mr.g.k. misra, c.j.1. the tribunal has referred the following question under section24(1) of the orissa sales tax act, for the opinion of the high court:whether mill-made sataranjis are carpets and can be taxed as coming under item 40 in finance department notification no. 33927 c.t.a. 130/57-f dated 30th december, 1957, or they are not to be taxed as coming under item 33 relating to mill-made fabrics of notification no. 33925 c.t.a. 130/57-f dated 30th december, 1957.2. the findings of the assistant commissioner of sales tax and the tribunal are that sataranjis are carpets. the tribunal observed thus :mr. das the learned assistant commissioner rightly held that carpets are not cloths and so mill-made cotton carpets like sataranjis cannot come under item 33.it however decided in favour of the assessee ultimately holding that the sataranjis as carpets are taxable but as mill-made cotton fabrics they are not taxable. the learned government advocate assails the tribunal's conclusion as being contrary to law. 3. before examining the correctness of the tribunal's view entries 40 and 33 may be quoted :entry 40. 'carpets, pile carpetsincluding kalins and galichas seven per cent.'entry 33. 'all mill-made fabrics madewholly or partly of cotton,staple fibre, rayon, artificial silk or wool,including processed fabridsmade in the processing mills ...' (these articles are not taxable)4. the learned advocates for both the parties do not dispute that carpets are mill-made fabrics and sataranjis would come within the meaning of 'fabrics'. the law is well settled that if there are two separate and distinct entries, then both the entries must be so construed as to reconcile them. if carpets would come within the definition of 'fabrics' as given in entry 33, then entry 40 will become redundant. the legislature is not to be attributed with enactment of any redundant entries. it is not necessary to cite many authorities on this point. a reference to ramavatar budhaiprasad v. assistant sales tax officer [1961] 12 s.t.c. 286 would be enough. in that case the supreme court was construing the meaning of 'vegetables'. as there were two separate entries, one for vegetables and another for betel leaves, their lordships held that the two distinct entries indicated the legislative intent that betel leaves are not vegetables. the identical principle applies in the present case also. there being two entries, carpets in entry 40 are to be excluded from the meaning of 'fabrics' as given in entry 33. the learned tribunal missed this essential principle of construction of distinct entries in a statute. we are clearly of opinion that carpets are taxable as per entry 40 and would not cease to be taxable merely because by dictionary meaning carpets are fabrics as mentioned in entry 33.5. mr. mohanty next contended that sataranjis are not carpets and as such do not fall within entry 40. the question referred to this court assumes that sataranjis are carpets. in fact, the tribunal has given a distinct finding that sataranjis are carpets. that is a pure question of fact and on that point there is no reference to this court. that apart the position of law is also clear. carpets have not been defined in the sales tax act. in the absence of a definition the word must not be construed in any technical sense, but must be taken as understood in common parlance. sataranji is a word of everyday use and must be construed in its popular sense, i.e., that sense which people conversant with the subject-matter with which the statute is dealing, would attribute to it. that was the pronouncement of the supreme court in ramavatar budhaiprasad v. assistant sales tax officer [1961] 12 s.t.c. 286. carpet is a generic word. in orissa carpets are understood to include sataranjis. it appears from vrajlal bhukhandas v. state of gujarat [1964] 15 s.t.c. 437, that sataranjis are understood as carpets even in gujarat. the very opening sentence in the judgment is :the question arising in this reference is whether sataranjis, i.e. cotton carpets, manufactured on handloom, are handloom cloth within the meaning of entry 29 of schedule a to the bombay sales tax act, 1959.in bhashakosh, an authoritative oriya dictionary, the english equivalent of sataranji is given as carpet. thus, the argument of mr. mohanty that sataranji does not come within the purview of carpet is not only concluded by the finding of the tribunal but is also contrary to the accepted meaning of the word in common parlance.6. mr. mohanty next contended that if sataranjis are not carpets, then the rate of tax should not be seven per cent. but would be three per cent. as being declared goods under section 14 of the central sales tax act. this question has not been referred to this court and does not arise out of the order of reference and was never argued at any stage. we express no view on this contention.7. in the result we would answer the question by saying that sataranjis are carpets and fall within the ambit of entry 40 and outside entry 33. the tribunal took a wrong view. the reference is accepted. in the circumstances, we make no order as to costs.b.k. patra, j.8. i agree.