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PETITIONER: ASHOK SERVICE CENTRE & ANOTHER ETC.

       Vs.

RESPONDENT: STATE OF ORISSA

DATE OF JUDGMENT18/02/1983

BENCH: VENKATARAMIAH, E.S. (J) BENCH: VENKATARAMIAH, E.S. (J) SEN, A.P. (J) MISRA, R.B. (J)

CITATION:  1983 AIR  394            1983 SCR  (2) 363  1983 SCC  (2)  82        1983 SCALE  (1)123  CITATOR INFO :  R          1985 SC1211  (5)

ACT:      Orissa Sales  Tax Act, 1947-Section 8-Orissa Additional Sales Tax  Act, 1975 as amended in 1979-Section 3(2)-Levy of tax under  the amending  Act of 1979 subject to section 8 of the 1947  Act-Section 3(2)  provided that provisions of 1947 Act apply  mutatis mutandis in relation to additional tax as if they  apply in  relation to  the tax  payable  under  the Principal Act-The two Acts, if should be read together.      Interpretation-mutatis mutandis-Meaning  of-Words fn an Act are  clear-If open  to court  to go  fn  search  of  the intention of the Legislature-Later of two Acts provides that the two  are to be read- together-Whether every part of each Act must be construed as if the two Acts had been one.      Words and phrases: Mutatis mutandis-Meaning of.

HEADNOTE:      The proviso  to section  8 of the Orissa Sales Tax Act, 1947 (Principal Act) lays down that the same goods cannot be taxed under  it at more than one point in the same series of sales or  purchases by successive dealers. In 1975 the State Legislature enacted the Orissa Additional Sales Tax Act (the Act) levying  additional sales  tax on  certain  classes  of dealers. In  1979 the  State Legislature  amended the Act by the Orissa  Additional Sales  Tax (Amendment)  Act, 1979  by which sections  2 and  3 of  the Act were substituted by new sub-sections 2  and 3.  After the amendment section 3 of the Act provided  that every  dealer shall, in p addition to the sales tax  payable by  him for  3 year under the said Act be liable to  pay additional tax at such rate not exceeding one per cent of his gross turnover (excluding the gross turnover which relates  to sale  and purchase  of declared goods) for that year  as may be notified from time to time by the State Government. By  a notification the State Government notified the rates  of additional  tax payable under section 3 of the Act as  amended in  1979 at  one half per cent of the annual gross turnover.  Sub-section (2)  of section 3 made it clear that the  provisions of  the  Principal  Act  would  mutatis mutandis apply  in relation to the additional tax as if they apply in  relation to  the tax  payable under  the Principal

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Act.      Construing section  3 of  the Act-after  its amendment, the State  Government took the view that the new levy was in the nature  of a  multi point  tax and that every dealer was liable to  pay additional  tax on  his annual gross turnover irrespective of its taxability. under the Principal Act. 364      In a  number of  writ petitions  filled before the High Court by  dealers it  was A  contended that section 8 of the Principal Act  which prohibited the levy of tax at more than one point  in the  same series  of  sales  or  purchases  by successive dealers  was applicable  to  the  additional  tax leviable under the Act as amended in 1979.      Without referring  to the  effect of  the provisions of section 3  of the  Act the  High Court  held that  since the Principal Act and the Act as amended in 1979 had been passed by a  competent legislature  providing for  a different base and for  a different  scheme it was not open to the assessee to rely  upon any  of the  provisions of  the Principal  Act relating to incidence and levy of tax.      In appeal  to this  Court it was contended on behalf of the appellants  that wherever there was no express provision to the  contrary in  the Act the provisions of the Principal Act, including  those relating  to the incidence and levy of tax should apply to the additional tax also.      The Department on the other hand contended that section 3(2) of  the Act  was intended only to make those provisions of the  Principal Act  relating to assessment and collection of tax  applicable to  proceedings under the Act and no part of section  33 to  section 8  of the  Principal Act would be applicable to the levy of additional tax.      Allowing the appeals, ^      HELD: If the contention of the Department that only the machinery provisions  of the Principal Act become applicable to the  proceedings under  the Act is accepted it would lead to many anomalies. [377 F]      Section 8 of the Principal Act which begins with a non- obstante clause is given an over-riding effect over the rest of the  provisions of  the Principal  Act. Levy  of tax at a single prescribed  point and prohibition against levy of tax at more than one point is an important characteristic of the scheme of the Principal Act. [370 C-D]      The Act  was virtually in the nature of an amendment of the Principal  Act. The  additional  sales  tax  payable  by dealers specified in section 2(a), (b) and (c) as originally enacted was  in  the  nature  of  an  enhancement  of  their liability to  pay tax  under the  Principal Act by specified percentages but  they were  prohibited from  passing on  the incidence of additional tax to the purchasers. [372 E-F]      Although the  provisions of  the Act  could  have  been incorporated  in   the  Principal   Act   itself,   by   the introduction of  sections 2  and 3 in the Principal Act, the State Legislature  passed a  separate Act.  But it  was made clear by  section 3(2) of the Act that the provisions of the Principal Act  would mutatis  mutantis apply  in relation to the additional  tax as  they apply  in relation  to the  tax payable -  under the  Principal Act. The two Acts, i.e., the Principal Act  and the  Act as  originally enacted had to be read together  in order  to make the provisions contained in the Act  effective. This position continued up to the coming into force  of the  Amending Act  on April  1, 1979 by which sections 2  and. 3  of  the  Act  wore  substituted  by  new sections 2 and 3. [373 G-H, 374 A-C] 365

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    With the  substitution of  section  3(2)  in  1979  the prohibition of  passing of the additional tax, which existed formerly was  removed. Secondly  the additional tax, instead of being  an enhancement of the tax payable by a dealer by a certain percentage,  became a  percentage of the annual turn over of  a dealer. Both the statement of objects and reasons and tho Amending Act were silent on the question whether the additional tax payable after the amendment was a multi point levy or  a single  point levy  as also  on  the  classes  of dealers liable to pay additional tax. [375 F-H]      2. The  view of  the High  Court that the two Acts were independent of  each other  was not correct. It is necessary to read  and to  construe the  Principal  Act  and  the  Act together as  if the two wore one, and while doing so to give effect to  the provisions of the Act which is a later one in preference to  the provisions  of the Principal Act wherever the Act  has manifested an intention to modify the Principal Act. [377 B-C]      The definition  of  mutatis  mutandis  given  in  legal dictionaries is  "with the  necessary changes  in points  of detail meaning  that matters  or things  are  generally  the same, but to be altered when necessary" as to names, offices and the like. [378 E-F]      Extension of an earlier Act mutatis mutandis to a later Act brings  in the idea of adaptation, but so far only as it is necessary  for  the  purpose,  making  a  change  without altering the  essential nature of the thing changed, subject to express provisions made in the later Act. [378 H, 379 A]      In the  instant case section 3(2) of the Act shows that the State  Legislature intended  not to depart substantially from the  Principal Act  except with  regard to  matters  in respect of which express provision had been made in the Act. Though the  Act had  the usual features of a state, it could not be considered as an independent statute but must be read together with the Principal Act to be effective. [379 A-C]      Earl Jowitt’s  The Dictionary  of English  Law  (1959); Black’s Law  Dictionary (revised  4th edn.  (1968) Bouvier’s Law Dictionary (3rd Revision) Vol. II, referred to      The additional tax levied under the Act could be passed on to  consumer after  the  amendment.  The  object  of  the amendment made  in 1979  as set  out  in  the  statement  of objects  and  reasons  was  to  rationalise  the  scheme  of additional sales-tax  and to  introduce flexibility  in  The implementation of  the Act.  If the  object of the amendment was to  make the  additional tax a multi-point levy, nothing was easier  than using  the appropriate  words in the Act by excluding the  application of section 8 of the Principal Act expressly in  section 3(2) of the Act. In the absence of any such words  in the Act, by reason of section 3(2) of the Act section 8  of the  Principal Act  must be construed as being applicable to  the levy of an additional tax also. The gross turnover referred  to in  section 3(1) should, therefore, be understood as  that part  of the  gross  turnover  which  is taxable under the Principal Act. [380 A-G]      If section 3(1) is read as "every dealer (who is liable to pay tax under the Principal Act) shall in addition to the tax payable by him for a year under the 366 said Act,  be liable  to pay additional tax at such rate not exceeding one  per cent  of  his  gross  turnover  which  is taxable under  the Principal  Act) for  that year  as may be notified from time to time by the State Govt.. " there would not be  any anomaly.  On the  other hand it would effectuate the intention of the legislature. [381 A-B]      It is  true that  if the  words used  in a  statute are

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clear it  is not  open to  the Court  to go in search of the intention of  the legislature  and to  arrive at  a  meaning different from  what the  words of  the statute convey. When the Act is read as a whole it becomes inevitable that it has to be  read together  with the  Principal Act.  It is a well settled principle  of construction  that where  the later of the two  Acts provides  that the two are to be read together every part  of each Act must be construed as if the two Acts had been  one, unless  there is  some  manifest  discrepancy making it  necessary to hold that the later Act has, to some extent, modified  the provisions  of the  earlier Act.  When section 3(1)  of the Act is read in the light of sub-section 2 thereof, section 8 of The Principal Act which prescribes a single point levy becomes immediately attracts. [381 C-f]      The argument  that since section 8 of the Principal Act opens  with  the  words  "notwithstanding  anything  to  the contrary in  ’this Act" the operation of that section should be confined  to the  tax payable under the Principal Act and could not  be extended  to the  additional tax payable under the Act  has no  force. When  the Principal Act was enacted, section 8  could apply  only  to  the  liability  under  the Principal Act,  but by  reason of  section 3(2)  of the Act, section 8  has been  made applicable to the levy, assessment and collection  of additional  tax under  the Act.  If  this argument is  accepted many  provisions of  the Principal Act which are  necessary for  making  the  levy  under  the  Act effective would  become inapplicable, as for example section 13 relating  to  the  machinery  for  recovery  of  tax  and penalty. [381 F-H, 382 A]      The second  proviso to section 3(1) of the Act does not in any  way curtail  the effect  of section  3(2) of the Act which forms  an  integral  part  of  the  charming  section. Consequently any exemption granted under sections 6 and 7 of the Principal  Act would  also be  applicable in the case of levy of additional tax under the Act. [382 C-D]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal Nos. 1408- 16, 2650-67,  2498-2524, 2640-47,  1874-79, 2127-38 and 3255 of 1982.      Appeals by special leave from the Judgements and orders dated the  4th and  5th February,  1982 of  the Orissa  High Court in  original Jurisdiction Case Nos. 1391 of 1979, 218, 320/1981, 2060,  2051/80, 35/81,525/80,  1567  and  1569/80, 1196,319, 1194,  1162, 1658  337, 2044,  1905,  1168,  1766, 1165, 1166,  336, 1659,  1662, 1884, 1161, and 1159 of 1981, 694, 1031,  945, 944,  400, 617,  375, 697, 616/81, 2015 and 2016/80, 118,  1935, 2803, 1646, 1647, 2831, 2167, 59, 1637, 602, 603, 695, 1224, 1195, 1230, 60, 1360, 1359, 1393, 1394, 604, 2152  of 1981,  846/80, 57/81, 1464/80, 595, 797, 1538, 1537 of 1981, 367 1584/80, 676,  677 of  1981,  1008/80,  1009/80,  2379/  81, 915/80, A  235/81,236/81, 1837/80, 1839/80, 1533/79, 1649/81 and 535 of 1981.      A.B.Divan, A.K.  Sen, Shankar  Ghose, P.R.  Mridul  and S.T. Desai,  Talat Ansarl, Ashok Sagar, Sandeep Thakore, Ms. Rainu Walia,  D.N. Mishra,  D.P. Mukherjee,  J. R.  Das M.C. Dhingra, Laxmi  Rant Pandey,  B.R.  Agarwala,  Miss  Vijaya- lakshmi Menon,  U.P. Singh,  B.B. Singh,  B.S. Chauhan, Anil Kumar Sharma,  Praveen Kumar, A.T. Patra, Vineet Kumar, A.R. Jha, M.P.  Jha, R.S  Sodhi, Hardev  Singh, A.  Minocha, Mrs. Indu Goswamy  S.R. Sinha,  Vinoo Bhagat,  P.N. Mishra,  R.R.

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Jain and Pramod Dayal, for the Appearing Appellants.      K. Parasaran,  Sol. Genl. C. Rath, Advocate General for the State  of Orissa,  S. Rangarajan and M.C. Bhandari, F.S. Nariman, CSS  Rao, Pramod  Swarup, R.B.  Mahto, U.S. Prasad, A.R Panda and R.K. Mehta for the appearing Respondents.      The Judgment of the Court was delivered by -      VENKATARAMIAH, J.  The usual  complaint against some of tho modern  fiscal statutes is that they are unduly long and therefore complex.  But here  we have an orissa Act which is very short but clarity is not certainly its virtue.      The only  point for  determination in  these’appeals by special leave  is whether  the levy  of additional tax under the Orissa  Additional Sales Tax Act, 1975 (Orissa Act 24 of 1975) (hereinafter  referred to  as ’the Act’) as amended by the  orissa  Additional  Sales  Tax  (Amendment)  Act,  1979 (hereinafter referred  to as ’the Amending Act’) is a single point levy or a multi point levy.      In order  to understand  the contentions of the parties it is  necessary to  give briefly the legislative history of the sales  tax law  of the  State of  orissa and to refer to some of its salient points.      The orissa Sates Tax Act, 1947 (orissa Act XIV of 1947) (hereinafter referred  to as the Principal Act’) was enacted and brought into force in the year 1947. It has continued to remain in  force even now, although a number of changes have been introduced into it by successive legislative amendments It is  a law  intended for  levying taxes  on  the  sale  or purchase of  goods other  than  newspapers  subject  to  the provisions of  Entry 92-A, of List I of the Seventh Schedule to the 368 Constitution. Section  3-B, 4,  4-A, 5,  6, 7  and 8  of the Principal Act  together lay  down the  extent of  the charge Section 4 (1) of the Principal Act read:           "4 (1)  Subject to the provisions of sections 3-B,      S, 6,  7 and  8 and  with effect  from such date as the      State Government  may, by notification, in the Gazette,      appoint, being  not earlier than 30 days after the date      of the  said notification,  every  dealer  whose  gross      turnover during the year immediately preceding the date      of commencement  of the  Orissa Sales  Tax  (Amendment)      Act, 1981  exceeding Rs.  50,000 shall be liable to pay      tax under  this Act  on sales  and  purchases  effected      after the date so notified."      This provision  imposes the  liability to  pay  tax  in accordance with the provisions of the Principal Act on every dealer whose  gross turnover during a fiscal year exceeds Rs 50,000 According  to section  2(dd)  of  the  Principal  Act ’gross turnover’  means the  total of D, ’turnover OF sales’ and ’turnover  of purchases’, ’ turnover of sales is defined in section  2 (i)  of the  Principal Act a, the aggregate of the amounts  of sale  prices and  tax. if  any, received and receivable b, a dealer in respect of sale or supply of goods other than those declared under section 3-B of the Principal Act and  ’turnover of purchases’ is defined in section 2 (j) of the  Principal Act  as the  aggregate of  the amounts  of purchase prices  paid and  payable by a dealer in respect of the purchase or supply of goods or classes of goods declared under section  3-B of the Principal Act. Sub-sections (2) to (5) of section 4 of the Principal Act deal with the point of time at  which such  dealer would  become liable to pay tax, the period  during which  he would  remain liable to pay the tax and the time at which he would cease to be liable to pay tax after his annual gross turnover has failed to exceed Rs. 50,000. Unless  he is  a casual dealer as defined in section

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2(bb) of  the  Principal  Act  who  is  liable  to  pay  tax irrespective of his gross turnover as provided in section 4- A of  the Principal Act, every dealer would become liable to pay tax under the Principal Act only wh n his gross turnover exceeds Rs. 50,000, otherwise not. The expression ’dealer is defined in  section 2  (c) of  the Principal Act as a person who  carries   on  the   business  of  purchasing,  selling, supplying or  distributing, goods,  directly  or  otherwise, whether for cash, or for deferred payment or for commission, remuneration or  other valuable  consideration and  includes others mentioned  in that  clause It  may be noted that this definition does not specify the extent of the gross turnover of such person as a 369 qualification for  being treated  as a  dealer. every person who carries  A on  the activities specified in section 2 (c) of the  Principal Act  is  a  dealer  for  purposes  of  the Principal Act. Section 2(f) of the Principal Act defines the expression ’registered  dealer’ as a dealer registered under it. Section 9 of the Principal Act imposes the obligation on every dealer  who is  liable to  pay tax  under section 4 of that Act  to register  himself and  to obtain a registration certificate. On such of registration he becomes a registered dealer. Section  9-B (l)  (a) of the Principal Act lays down That no  person who is not a registered dealer shall collect in respect of any sale by him any amount by way of tax under the Principal  Act and  a registered dealer can collect such tax only  in accordance  with the  said Act  and Rules  made thereunder. Section  9-A  of  the  Principal  Act,  however, provides for voluntary registration of a dealer whose annual gross turnover  exceeds Rs  10,000 even  though  he  is  not liable to pay tax under section 4 of that Act and every such dealer on such registration is entitled to collect tax under that Act  and to  pay it  to  Government  as  long  as  such registration  remains  in  force.  There  are  corresponding provisions made  in section  9-C of  the Principal  Act  for provisional registration  of certain  other kinds of dealers Section IO of the Principal Act provides for the publication of the  list of  registered dealers  Any other dealer cannot collect tax  from his  customers. There are other provisions in  the  Principal  Act  providing  for  the  machinery  for assessment and  recovery of  the tax  due under  it.  Before proceeding further it is necessary to quote section 8 of the Principal Act. It reads:           "8. Power  of the  State Government  to  prescribe      points at which goods may be taxed or exempted.           Notwithstanding anything  to the  contrary in this      Act, the  State Government  may prescribe the points in      the series  of sales or purchases by successive dealers      at which  any goods or classes or descriptions of goods      may be  taxed or exempted from taxation and in doing so      may direct that sales to or purchases by a person other      than  a   registered  dealer  shall  be  exempted  from      taxation:           Provided that the same goods shall not be taxed at      more than  one point  in the  same series  of sales  or      purchases by successive dealers.           Explanation-Where in  a series  of sales,  tax  is      prescribed tc be levied at the first point, such point,      in respect of 370      goods despatched from outside the State of Orissa shall      mean and shall always be deemed to have meant the first      of such sales effected by a dealer liable under the Act      after the  goods are  actually taken delivery of by him

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    inside the State of orissa."      The proviso  to section 8 of the Principal Act which is of considerable  significance in  these cases  clearly  lays down that the same goods cannot be taxed under the Principal Act at  more than  one point in the same series of sales (or purchases) by successive dealers. Section 8 of the Principal Act which  begins with  a non-obstante  clause is  given  an over-riding effect  over the  rest of  the provisions of the Principal Act and the proviso found in it also naturally has a similar  over-riding effect.  Levy  of  tax  at  a  single prescribed point and prohibition against levy of tax at more than one  point is an important characteristic of The scheme of the  Principal Act  and such  prescription was introduced deliberately by the State Legislature to prevent hardship to consumers which  would be  caused by the gradual increase of prices as  the goods  pass from dealer to dealer before they reach the  consumer which  would be  the natural result of a multi-point levy of sales tax and also to make collection of sales tax  more convenient.  Even  though  the  language  of section 8  of the  Principal Act by itself was sufficient to prevent a  multi-point levy  and to prescribe a single point levy in order to emphasis the principle of single point levy of tax,  section 4  (1) of  the Principal  Act was expressly made subject to section 8.      When such  was the  position, with a view to augmenting the resources of the State Government the Orissa Legislature enacted the  Act in  the year  1975 levying additional sales tax on  certain  classes  of  dealers  The  Act  as  it  was originally passed read thus:      "ORISSA ACT  24 OF 1975 THE ORISSA ADDITIONAL SALES TAX      ACT, 1975      AN ACT TO PROVIDE FOR LEVY OF ADDITIONAL TAX ON SALE OR      PURCHASE OF GOODS IN ORISSA           Be it  enacted by  the Legislature of the State of      Orissa in  the Twenty-sixth  Year of  the  Republic  of      India, as follows: 371           1.  (1)   This  Act   may  be  called  the  Orissa      Additional A Sales Tax Act. 1975.           (2) It  shall extend  to the whole of the State of      orissa.           (3) It  shall be deemed to have come into force on      the Ist day of April, 1975.           2. (1)  The tax  payable by  a dealer  for a  year      under the  orissa  Sales  Tax  Act,  1947  (hereinafter      referred to  as the  said Act) shall be increased by an      additional tax at the rate of - C           (a)  two percent of the tax, if his gross turnover                for that  year does  not exceed  one lakh  of                rupees;           (b)   three percent  of  the  tax,  if  his  gross                turnover for  that year  exceeds one  lakh of                rupees but  does not  exceed  five  lakhs  of                rupees; D           (c)   five  percent  of  the  tax,  if  his  gross                turnover for  that year exceeds five lakhs of                rupees -           Provided that  where in  respect of declared goods      the tax  payable by  such dealer  under  the  said  Act      together with  the additional  tax payable  under  this      sub-section exceeds  the maximum percentage of the sale      or purchase price thereof specified, from time to time,      under clause (a) of section 15 of the Central Sales Tax      Act, 1956,  the rate  of additional  tax in  respect of      such goods  shall be reduced to such an extent that the

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    tax and  the additional  tax together  shall not exceed      such maximum  percentage of  the sale or purchase price      of such goods.           Explanation-"Declared goods"  shall have reference      to declared  goods as  defined in the Central Sales Tax      Act, 1956.           (2) The  provisions of the said Act shall, mutatis      mutandis apply  in relation  to the said additional tax      as they  apply in relation to the tax payable under the      said Act.           (3) Notwithstanding anything contained in the said      Act, no  dealer referred to in sub-section (I) shall be      entitled to  collect the  additional tax  Payable under      this Act. 372           3. (1)  Any dealer who collects the additional tax      pay able  under  this  Act,  in  contravention  of  the      provisions of  sub-section (3)  of section  2 shall  be      punishable with  fine which  may extend to one thousand      rupees.           (2) No  Court  inferior  to  that  of  a  Judicial      Magistrate of  the first  class shall  try  an  offence      under this Act.           4. (1)  The State  Government may  make rules  for      carrying out the purposes of this Act.           (2) All  rules made  under this Act shall, as soon      as may be after they are made, be laid before the State      Legislature for  a total  period of fourteen days which      may be  comprised in  one session  or in  two  or  more      successive sessions  and if  during the said period the      State Legislature makes modifications, if any, therein,      the rules  shall thereafter  have effect  only in  such      modified form;  so, however,  that  such  modifications      shall be without prejudice to the validity of any thing      previously done under the rules."      A reading of the Act shows that it was virtually in the nature of  an amendment  of the  Principal Act. It, however, followed the  pattern of the Tamil Nadu Additional Sales Tax Act. 1970,  the validity of which arose for consideration in S. Kodar  v. State  of Kerala(’).  The additional  sales tax payable by the dealers specified in clauses (a), (b) and (c) of section  2 of the Act as it was originally enacted was in the nature  of an  enhancement of their liability to pay tax under the  Principal Act  by the  specified percentages  but they were  prohibited  from  passing  on  the  incidence  of addition tax to the purchasers. The Statement of objects and Reasons attached  to the Bill which was latter on enacted as the Act read thus:           "STATEMENT OF OBJECTS AND REASONS           To mobilise  additional resources for the Plan, it      has been  proposed to impose an additional sales tax in      addition to  the sales tax payable by dealers under the      general sales  tax law  of the  State. This  additional      sales tax  may be said to be in the nature of surcharge      on the State sales tax payable by dealers. 373           2. The proposed legislative measure contains a pro      vision that  the incidence  of the tax cannot be passed      on to  consumers. Perhaps, a view may be taken that the      proposed additional  tax would be added to the price of      goods sold  and thereby  jack up  prices. But  as  this      additional sales  tax would  be on a graded scale and a      specific provision  is proposed  to be  made in the Act      debarring dealers to pass on the incidence to consumer,      it will  be  difficult  for  dealers  to  pass  on  the

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    incidence of  this tax  to consumers.  It  may  not  be      possible to  increase the  price of  goods by an amount      equivalent to  the amount  of additional  sales tax  as      there is  statutory price control in respect of certain      goods and  where there  is no  statutory price control,      there is  keen competition  between dealers for sale of      goods. Moreover,  the rate  of the additional sales tax      on big  dealers will  be more  than that in the case of      small dealers.  To meet  the competition from the small      dealers, the  big dealers  cannot increase the price cf      goods so  as to  recoup themselves,  of the  amount  of      additional sales tax paid by them. Moreover, if dealers      increase the price of goods so as to recoup themselves,      they will  be liable  to pay  more sales  tax under the      general sales  tax law  of the State and their turnover      will also  increase as  a result  of which  the rate of      additional sales  tax may  be more.  Besides,  if  they      increase the  price exceeding  the amount of additional      sales, their  profit will increase as a result of which      they will be liable to pay more income tax. It may not,      therefore, be a pragmatic step to pass on the incidence      of this new tax to consumers.      3. The Bill seeks to achieve the above objective." F      The contents  of the  above Statement  of  objects  and Reasons chow  the concern of the mover of the Bill regarding the likely increase in the burden on the consumers by reason of the  probable escalation  in the  prices of  Bonds  as  a result of the new levy.      The provisions of the Act set out above could have very well been  incorporated in  the Principal  Act itself by the introduction of  sections 2  and 3  set  out  above  in  the Principal Act.  But  the  State  Legislature  following  the pattern of  the Tamil  Nadu Act  referred to  above passed a separate Act.  It was,  however, made clear by section 2 (2) thereof that  the provisions  of  the  Principal  Act  would mutatis 374 mutandis apply  in relation  to the  additional tax  as they apply in  relation to  the tax  payable under  the Principal Act.  The   additional  tax   thus  levied   being  only  an enhancement of  the tax payable under the Principal Act by a specified percentage,  it did  not affect the general scheme of the Principal Act including the principle of single point levy contained  in section  8 of  the Principal Act. The two Acts i.e. the Principal Act and the Act as it was originally enacted had  to be  read  together  in  order  to  make  the provisions contained  in the  Act effective.  This  position continued up  to the  corning into force of the Amending Act on April  1 1979  by which  sections 2 and 3 of the Act were substituted by  new sections  2 and 3. After such Amendment, sections 2 and 3 of the Act read thus -           "2. In  this Act,  unless  the  context  otherwise           requires-      (a)  "declared goods" shall have the same meaning as in           clause (c)  of section  2 of the Central Sales Tax           Act, 1956;      (b)   words and  expressions used but not defined shall           have  the   same.  meanings  as  are  respectively           assigned to then in the Orissa Sales Tax Act, 1947           (hereinafter referred to as the said Act).           3. (1)  Every dealer shall, in addition to the tax      payable by him for a year under the said Act, be liable      to pay  additional tax  at such  rate not exceeding one      percent of  his gross turnover for that year, as may be      notified, from time to time, by the State Government;

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         Provided that no additional tax as aforesaid shall      be payable  on that  part of  the gross  turnover which      relates to sale and purchase of declared goods:           Provided further that the State Government may, by      notification,   subject    to   such   conditions   and      restriction, if any, exempt any class of dealers or the      turnover relating  to any  goods or class of goods from      the levy  of the  additional tax  and likewise withdraw      any such exemption.           (2) The  provisions of the said Act shall, mutatis      mutandis apply  in relation  to the said additional tax      as they  apply in relation to the tax payable under the      said Act." 375      Sections 1 and 4 of the Act however remained as before. After the  above amendment,  section 2  took the form of the interpretation clause  of the  Act. Clause  (a) of section 2 defined the  expression  ’declared  goods’  and  clause  (b) provided that the words and expressions used but not defined shall have the same meanings-as are respectively assigned to them in  the Principal  Act. Section 3, however, altered the pattern of  levy of  additional sales  tax from  what it was when  the  Act  was  passed  in  1975.  The  object  of  the alteration is  set out  in  the  statement  of  objects  and Reasons attached to the Bill which later became the Amending Act. It read thus:           ’STATEMENT OF OBJECT AND REASONS           With  a   view  to  rationalising  the  scheme  of      additional sales tax it is proposed to amend the Orissa      Additional Sales  Tax Act,  1975  to  facilitate  wider      application of  first point  levy and  introduction  of      flexibility in the implementation of the Act.           2.The Bill seeks to achieve the above objectives".      Section 3  of the Act after the amendment provided that every dealer  shall, in  addition to  the tax payable by him for a  year under  the said Act, be liable to pay additional tax at  such rate  not exceeding  one percent  of his  gross turnover (excluding the gross turnover which relates to sale and purchase  of declared  goods) for  that year  as may  be notified from  time to  time by  the State  Government. By a notification dated  March 23,  1979,  the  State  Government notified the  rate of additional tax payable under section 3 of the  Act as  amended in  1979 at  one-half percent of the annual gross turnover. The prohibition of the passing of the additional, tax  which existed  formerly  was  removed.  One significant change  which was brought about by the amendment was that  the additional tax instead of being an enhancement of the  tax payable  by a  dealer by  a  certain  percentage became a percentage of the annual turnover of a dealer. Both the Statement  of objects  and Reasons  and the Amending Act were however,  silent on the question whether the additional tax payable  after the  amendment was  a multi-point levy or single point  levy. They  were also  silent on  the class of dealers who were liable to pay additional tax. Controversies arose between  the Department  and many of the assesssees on the  construction   of  section  3  of  the  Act  after  its amendment. The  stand of the State Government was that every dealer was liable to pay additional tax on his annual gross 376 turnover irrespective  of its taxability under the Principal Act. The  State Government  claims that  the new levy was in the nature  of a multi point tax. A number of writ petitions were filed  before the High Court of Orissa raising a number of contentions  including some relating to the constitution- ality of  the amended  Act. All the petitions were dismissed

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by the  High Court.  The main judgment was delivered in O.J. Case No.  1391 of  1979, filed by M/s. Ashok Service Centre. Following that  judgment,  the  other  writ  petitions  were dismissed. These  appeals are  filed against the decision of the High Court with the special leave of this Court.      In these appeals, the only contention pressed before us relates to  the applicability  of section 8 of the Principal Act which  prohibits the  levy of tax at more than one point in the  same series  of sales  or  purchases  by  successive dealers in  the  State  of  Orissa  to  the  additional  tax leviable under  the Act  as amended  in 1979. The High Court negatived the  said contention on the ground that since both the Principal  Act and  the Act  as amended in 1979 had been passed by  a competent legislature providing for a different base and for a different scheme and because they happened to be two independent Acts, it was not open to the assessees to rely upon  any  of  the  provisions  of  the  Principal  Act relating to  incident and  levy of  tax in  support of their contention. The  High  Court  observed  in  para  8  of  the judgment thus:           "8. On  an analysis of Section 3 (1) of the Act it      is also  clear that  the legislative  intention  is  to      raise a tax in addition to the liability under the 1947      Act. If  the liability under the 1947 Act in respect of      a dealer is taken as ‘X’. Section 3 (1) of the 1975 Act      creates an  additional liability which has to be within      one percent  of the  gross turnover  for that year (the      State Government at present has prescribed half percent      which may  be taken  as  ’Y’).  ’Y’  is  an  additional      liability and,  therefore, has  been  nomenclatured  as      additional  tax.  Under  the  1947  Act,  the  dealer’s      liability to  sales tax  is on the basis of his taxable      turnover which  is determined  in the manner prescribed      by that  Act. Under  the 1975 Act, the liability of the      dealer is  with reference  to his gross turnover of the      year. It was competent for the sovereign Legislature to      adopt either  of the  methods for  raising  sales  tax.      While sustaining  the scheme  under the  1947  Act,  it      could also raise an additional tax on the gross 377      turnover and  combine  the  two  for  the  purposes  of      computation as  also recovery.  In  the  premises,  the      submission of  Mr. Agarwala  on this  score has also no      force."      The High  Court was  of opinion  that the  Act being an independent  Act  it  could  not  be  read  subject  to  the provisions of the Principal Act. It may, however, be noticed that there is no reference in the judgment of the High Court to the  effect of the provisions of section 3 (2) of the Act which forms  part of  the charging section and provides that the provisions  of the. Principal Act shall mutatis mutandis apply in relation to the additional tax levied under the Act as they  apply in  relation to  the tax  payable  under  the Principal Act. There is also no reference in the judgment of the High Court to section 8 of the Principal Act.      It is  urged on  behalf of  the  appellants  before  us depending upon  section 3 (2) of the Act that wherever there is no  express provision  to the  contrary in  the Act,  the provisions of  the Principal Act including those relating to incidence and levy of tax should apply to the additional tax also. On  behalf of  the State  Government, it is urged that section 3  (2) of  the Act  is intended  only to  make those provisions of  the Principal  Act relating to the assessment and collection  of tax  applicable to  the proceedings under the Act  and no  part of sections 3-B, 4, 4-A, 5, 6, 7 and 8

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of the  Principal Act  would be  applicable to  the levy  of additional tax.      We may  straight away  say that  the contention  of the Department leads to some anomalies. Section 3 (1) of the Act states that  every dealer  shall, in  addition  to  the  tax payable by  him for a year under the Principal Act liable to pay additional  tax at such rate not P exceeding one percent of his  gross turnover for that year as may be notified from time to  time by  the State  Government.  If  as  stated  in section 2  (b) of the Act, we define the expression ’dealer’ in section  3 (1) of the Act as provided in section 3 (c) of the Principal  Act, and we do not apply the qualification of the minimum  annual gross  turnover of Rs. 50,000 stipulated in section  4 (1) of the Principal Act, then irrespective of his annual  gross turnover  every person  who carries on the business of  purchasing, selling,  supplying or distributing goods directly  or otherwise  would  become  liable  to  pay additional tax  even though  he may not be liable to pay any tax under  the Principal  Act. If  he is not registered as a dealer on  account of  his annual  gross turnover being less than the prescribed 378 minimum, he  would not be able to collect the additional tax in view  of section 9-B of the Principal Act which says that no person  other than  a registered dealer shall realise any amount by  way of  tax under the provisions of the Principal Act. That  could never  have been the intention of the State Legislature. The  ’dealer’ referred  to in  section 3 (1) of the Act  should be understood as a ’dealer’ who is liable to pay tax under the Principal Act as provided in section 4 (1) of the  Principal Act.  Next ’gross turnover means the total of ’turnover  of sales’ and ’turnover of purchase’. If under section 3  (1) of  the Act,  liability to pay additional tax just on  the ’gross turnover’ a dealer has to pay additional tax on  the aggregate  of the  purchases of  goods  declared under section  3-B of  the Principal  Act and  also  on  the turnover of  sales of  other goods.  To determine  the gross turn over  it becomes  necessary to  read section 3-B of the Principal Act  into the  Act although the said section deals with the  liability of  certain class  of goods to tax under the Principal  Act. These anomalies show that the contention of the  Department that  only machinery  provisions  of  the Principal Act become applicable to the proceedings under the Act cannot be accepted.      Section 3  (2) of the Act which makes the provisions of the principal Act mutatis mutandis applicable to the levy of additional tax  is a  part of  the charging provision of the Act and  it does  not say  that only those provisions of the Principal Act  which relate  to assessment and collection of tax will  be applicable  to the  proceedings under  the Act. Before considering  what provisions  of  the  Principal  Act should be read as part of the Act, we have to understand the meaning of  the expression ’mutatis mutandis’. Earl Jowitt’s ’The Dictionary  of English  Law  (1959)’  defines  ’mutatis mutandis’ as  ’with  the  necessary  changes  in  points  of detail’. Black’s  Law Dictionary  (Revised  4th  Edn.  1968) defines ’mutatis mutandis’ as ’with the necessary changes in point  of   detail,  meaning  that  matters  or  things  are generally the  same, but  to be altered when necessary as to names, offices,  and the  like. Houseman  v. Waterhouse, 191 App. Div.  850,  112  N.Y.S  249,  251.’  In  Bouvier’s  Law Dictionary (3rd  Revision, Vol. II), the expression ’mutatis mutandis’ in  defined as ’(T)he necessary changes. This is a phrase  of   frequent  practical  occurrence,  meaning  that matters or  things are generally the same, but to be altered

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when  necessary,   as  to  names,  offices,  and  the  like. Extension of an ’earlier Act mutatis mutandis to a later Act brings in  the idea  of adaptation, but so far only as it is necessary for  the purpose, making a change without altering the essential nature of the 379 thing changed,  subject of course to express provisions made in the  later Act.  Section 3  (2) of the Act shows that the State Legislature  intended not to depart substantially from the Principal  Act except  with regard in matters in respect of which  express provision  had been  made in  the Act. The assumption made  by the  High Court  that  the  Act  was  an independent Act  having nothing to do with the Principal Act is not  correct. The Act only levied some extra sales tax in addition to  what had  been levied by the Principal Act. The nature of  the taxes  levied under  the Act  and  under  the Principal Act  was the  same and  the Legislature  expressly made the  provisions of  the Principal  Act mutatis mutandis applicable to  the levy  under the Act. The additional sales tax was in the nature of a surcharge over and above what was due and  payable by  assessee under  the Principal  Act. The Act, though  it had  a long  title, a  short title and other usual features of every statute, could not be, considered as an independent  statute. It had to be read together with the Principal Act  to be  effective. In  the  circumstances  the conclusion reached  by the High Court that the two Acts were independent of each other was wrong. We are of the view that it is  necessary to  read  and  to  construe  the  two  Acts together as  if the  two Acts are one, and while doing so to give effect  to the  provision, of  the Act which is a later one in  preference to  the provisions  of the  Principal Act wherever the  Act has  manifested an intention to modify the Principal Act. The following Observations of Lord Simonds in Fendoch   Investment    Trust   Co.    v.   Inland   Revenue Commissioners(1) made in connection with the construction of certain fiscal  statutes are  relevant here. He said at page 144:           "My Lords,  I do  not doubt that in construing the      latest of  a series  of Acts  dealing with  a  specific      subject matter, particularly where all such Acts are to      be read  as one, great weight should be attached to any      scheme  which   can  be   seen  in  clear  outline  and      amendments  in   later  Acts   should  if  possible  be      construed consistently with that scheme".      Originally when  the Act  was passed  in 1975,  the Act levied an  additional tax  on  dealers  whose  annual  gross turnover did  not exceed  rupees one  lakh as two percent of the tax  payable by them under the Principal Act, on dealers those gross  turnover exceeded  rupees one  lakh but did not exceed rupees file lakhs at three percent 380 of the  tax payable  under the  Principal Act and on dealers whose gross  turnover exceeded  rupees five  lakhs  at  five percent of  the tax  payable under  the Principal  Act. Such additional tax  levied under  the Act could not be passed on to consumers.  The object of the amendment made in 1979 was, as can be seen from the Statement of Objects and Reasons, to rationalise the  scheme  of  additional  sales  tax  and  to facilitate ’wider  application of  first point  levy’ and to introduce flexibility in the implementation of the Act. What the words  ’wider application  of first  point levy’ mean is not very  clear the  words ’first  point levy’ is no doubt a single point levy. Even a last point levy in the same series of sales  is a  single point  levy which  is distinguishable from a  multi point  levy. If  the State  Legislature wanted

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that the  new levy i.e. the additional tax should be a multi point tax  which had to be paid by every dealer irrespective of the  fact that  the entire  annual gross  turnover in his hands may  not be liable to bear the tax under the Principal Act, it  would have  expressly said  so  as  it  would  have amounted to  a substantial departure from the general scheme of the  Principal Act as set out in the proviso to section 8 of thereof  which stipulated that no goods should suffer tax which could  be passed  on to the purchaser at more than one point in the same series of sales or purchases by successive dealers to  which the  people of  the State  of  Orissa  had become accustomed.  If the  object of  the amendment  was to make the  additional tax  a multi  point levy,  nothing  was easier than  using the  appropriate  words  in  the  Act  by excluding the  application of section 8 of the Principal Act expressly in section 3 (2) of the Act. In the absence of any such words  in the  Act, by  reason of  section 3 (2) of the Act, we have to construe that section 8 of the Principal Act which is  given an  overriding effect by the use of the non- obstante clause  is applicable to the levy of additional tax also. This construction receives support from the use of the word ’additional’  in section  3 (1) which involves the idea of joining  or uniting one thing to another so as thereby to form one  aggregate (see  Black’s Law Dictionary). The gross turnover  referred   to  therein   should,   therefore,   be understood as  that part  of the  gross  turnover  which  is taxable under  the Principal  Act.  The  definition  of  the expression  ’gross  turnover’  in  section  2  (dd)  of  the Principal Act does not present any insurmountable difficulty as the  words defined in section 2 of the Principal Act have to be  given the meaning as indicated in that section unless there is  anything repugnant  in the  subject or context. In view of  the foregoing,  section 3  (1) of the Act has to be read as: 381      "Every dealer  (who is  liable to  pay  tax  under  the Principal Act)  shall, in addition to the tax payable by him for a  year under  the said Act, be liable to pay additional tax at  such rate  not exceeding  one percent  of his  gross turnover (which is taxable under the Principal Act) for that year, as  may be  notified from  time to  time by  the State Government.           Provided .........................................           Provided .........................................      If section  3 (1)  is so  read there  would not  be any anomaly but  on the  other  hand  it  would  effectuate  the intention of  the State  Legislature. We  are aware  of  the principal that  a statute has to be interpreted according to the words  used therein  and if  the word  used therein  are clear it  is not  open to  the Court  to go in search of the intention of  the Legislature  and to  arrive at  a  meaning different from  what the  words of  the statute convey. When the Act is read as a whole it becomes inevitable that it bas to be read together with the Principal Act. Craieson Statute Law (7th Edn ) says at page 223 that ’where the later of two Acts provides  that the  Who are  to be  read together every part of  each Act  must be  construed as if the two Acts had been one,  unless their  is some manifest discrepancy making it necessary  to hold  that the later Act has to some extent modified the  provisions of the earlier Act’. When section 3 (1) of  the Act read in the light of subsection (2) thereof, section 8  of the  Principal Act  which prescribes  a single point levy  becomes immediately  attracted. It was, however, argued on  behalf of  the Department that since section 8 of the Principal  Act opened  with The  words  ’notwithstanding

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anything to  the contrary  in this  Act’, the  operation  of section 8  should be  confined to  the tax payable under the Principal Act  and could  not be  extended to the additional tax payable  under the Act. We do not find any merit in this submission, since  the words ’this Act’ were used in section 8 because when the Principal Act was enacted section 8 could apply only  to the liability under the Principal Act. Now by reason of  section 3 (2) of the Act, section 8 has been made also applicable  to the  levy, assessment  and collection of the additional  tax under the Act. If we accept the argument of the Department even section 13 of the Principal Act which provides for  the machinery  for  ff  recovery  of  tax  and penalty  would   become  unavailable   for  collecting   the additional tax  under the  Act as  section 13  also uses the words 382 ’tax  payable   under  this   Act’.  Likewise,   many  other provisions of  the Principal  Act which  are  necessary  for making  the   levy  under  the  Act  effective  will  become inapplicable. The  above  contention  has  therefore  to  be rejected.      Lastly  it   was  contended  on  behalf  of  the  State Government that section 3 (1) of the Act should be construed as a  complete and self-contained code on the charge created by the  Act in  view of  the second  proviso contained in it which conferred powers of exemption OD the State Government. That proviso  only empowers  the State  Government to exempt certain dealers  or transactions pertaining to certain goods from the  levy of  additional tax.  It does  not in  any way curtail the  effect of  sub-section (2)  of section 3 of the Act which  forms an  integral part  of the charging section. Consequently any  exemption  granted  under  section  6  and section 7  of the  Principal Act  will also be applicable in the case of levy of additional tax under the Act.      In view  of the  foregoing, we  hold that any dealer is not liable  to pay  tax under  the Principal  Act either  by reason of  his not  having sufficient  gross turnover  or by reason of  exemption given  under section 7 of the Principal Act, is not liable to pay additional tax under the Act. If a dealer is  exempted by the State Government under the second proviso to  section 3(1) of the Act he is also not liable to pay the  additional tax  under the Act. If the turnover of a dealer relating  to any  sales  or  purchases  of  goods  is exempted under section 6 of the principal Act, such turnover cannot be  subjected to any levy of additional tax under the Act by  virtue of  section 3  (2) of the Act. The Government Notifications S.R.O.. No. 410/79 dated March 23, 1979 issued under the  second proviso  to  section  3  (1)  of  the  Act exempting the  turnover relating  to goods whose turnover is exempted  from  payment  of  tax  under  section  6  of  the Principal Act  from payment  of additional tax under the Act is, therefore,  redundant. The  turnover in respect of goods whose sales or purchases are not taxable under the Principal Act in the hands of any dealer by reason of section 8 of the Principal Act  is not  liable to  the payment  of additional sales tax  under the  Act. The  turnover in respect of sales and purchases of declared goods is not taxable under the Act by reason  of the first proviso to section 3 (1) of the Act. Any other turnover which is exempted by the State Government under the second proviso to section 3 (1) of the Act is also not taxable under 383 the Act.  The levy  of  the  additional  tax  on  the  gross turnover of  a dealer  under section 3 of the Act is subject to these conclusions.

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    In the  result the appeals succeed. The judgment of the High Court in each of these cases is set aside. lt is hereby declared that the additional tax under the Act can be levied and collected  under section 3 of the Act in accordance with our conclusions set out in the previous paragraph      There shall, however, be no order as to costs. P.B.R.                                      Appeals allowed. 384