Report No. 61
Note By Member, Shri S.P. Sen-Varma
Reasons for a separate note.- I regret that I have to differ from the view of my esteemed colleagues regarding the scope and nature of the amendment of section 5 of the Central Sales Tax Act, 1956. I think that unless that section is made comprehensive as well as precise, as far as practicable, by suitable amendments, doubts and ambiguities regarding the scope and meaning of the section will persist and they will not be likely to be removed by the two proposals (negative in character) suggested in the majority report. I am fortified in the view I have taken regarding the amendment of section 5 by what S.R. Das, J. (as he then was) said in his dissenting judgment in the second Travancore case. He first posed the question as to what was the scope of the ban imposed on the States by Article 286(1)(b)?
He felt, the answer would depend on the meaning that may be ascribed to the phrase "in the course of occurring in clause (1)(b) of Article 286. He referred to the unanimous decision of the Court in the first Travancore case according to which "whatever else may or may not fall within Article 286(1)(b), sales and purchases which themselves occasion the exports or imports of the goods, as the case may be, out of or into the territory of India come within the exemption ". According to him, this was sufficient to dispose of that case and it was not then necessary to decide what else might fall within that phrase. Then Das, J. said-
"This Court is now called upon to decide that point."
(Vide para. 48 of the judgment as reported in the AIR)
In my opinion, the two proposals of the majority relating to the amendment of section 5 will leave the point still undecided thereby keeping the door open for doubts, disputes and ambiguities. I circulated this note without this paragraph and the few subsequent paragraphs to the other Members of the Commission including the Chairman. The specific suggestions made in this note were not made before the Commission on any previous occasion during our discussion although the matter was discussed in a general way when I put forward my views that a comprehensive amendment would be very likely to reduce chances of doubts and ambiguities. But neither my view expressed at that time was acceptable to my colleagues nor the specific suggestions now made in this note have been agreed to by them before the finalisation of their views. Before I close this topic I like to make a brief mention of the objections made by the Chairman and other Members to my specific suggestions during the discussions of their note and my note.
In the revised draft note of the majority prepared after such discussions substantially the same objections in a slightly different language have been given. These objections are, (1) "it would not be quite appropriate to insert such elaborate provisions in the Act" in view of the narrow problem before the Commission arising from Khosla's case, (2) any attempt "to cover other aspects of import-sales and export-purchases is likely to create complications. The verbal formula that may be thought of in this respect would create intricacies of its own", (3) "while a detailed discussion and elaborate treatment of various aspects might be appropriate in a judgment, it would be out of place in a statutory provision of the nature under consideration."
As regards objection (1), I may say that in view of the sharp divergence of opinions since almost the very beginning, on this complex subject not only in the highest judiciary of the land and other Courts and authorities but also in the Law Commission of India, we should try to ensure that section 5 which in a sense explains and defines the scope of Article 286(1)(b) should be as clear as possible. In view of the history before us we should not hesitate to make elaborate provisions in the section in spite of the narrow problem arising from Khosla's case. And on a perusal of the judgment, in Khosla's caseit appears clear that problem thrown up by it cannot be regarded as narrow because it has several facets . In my view the suggestions of the majority may make it necessary to make yet another reference to the Law Commission on the same subject as contained in section 5.
As regards objection (2), it is difficult to see why other necessary and relevant aspects of import-sales and export-purchases should not be clearly specified in section 5. Because in present section 5 this has not been done, brevity of the section has been attained with serious consequences trailing behind in the shape of ambiguities, doubts and disputes about the scope and extent of the section.
So far as sales or purchases preceding export and sales or purchases succeeding import are concerned, they may-but only may-be covered by the suggestions of the majority, but those suggestions do not expressly take such sales or purchases out of the purview and cope of section 5 and Article 286(1)(b) with the result that again it may be agitated before the Supreme Court that such sales or purchases come within the scope of that section and that article. And who knows that the Supreme Court may not in the absence of clear language in section 5 in this regard decide, in spite of the suggestions of the majority being incorporated in that section, to adopt the view which Das, J. (as he then was) so elaborately and forcefully put forward in his dissenting judgment in the second Travancore case?
A dissenting judgment is as if it were, to use the word of a great Judge in America, "brooding" in the heavens ready for descent and acceptance on earth at any time in this way, the suggestions of the majority may, if accepted, create more intricacies and complications because those suggestions of the majority do not specifically exclude the first sale or purchase before the export and the last sale or purchase after the import. Therefore the sharp controversies as to whether they are sales or purchases in the course of export or import will remain. I am fortified in this view because Das, J. did not accept the view that the first sale or purchase before export and the last sale or purchase after import were sales or purchases for the purpose respectively of export or import. His stand was that such sale or purchase was so integrally connected with export or import that they formed integral parts of such export or import. In my suggestions, I have tried to make the position as clear as possible.
As regards objection (3), here again I respectfully differ, I readily admit that human language is imperfect and slippery and any unnecessary length and prolixity of language must be avoided in a statute. But if after elaborate discussion and examination of an enactment from various aspects with the assistance of the members of the Bar, the Court has pointed out flaws, defects, lacunae and ambiguities in the enactment, the framers of the statute should make every attempt to remove those flaws, defects, lacunae and ambiguities and for that purpose should not fights of making the language of the enactment elaborate in so far as that is necessary, but no more. As Viscount Bryce said in his Inaugural Lecture on February 25, 1871 on entering the duties of Regius Professorship of Civil Law at Oxford-
"The power of stating a proposition of law in comprehensive and exact terms wide enough to cover all cases contemplated and yet precise enough to exclude cases more or less similar, to which the rule is not intended to apply, is valuable to the text-writer and quite indispensable to the framers of statutes."
(underlined by me.)
If we look at the Indian Statute Book and the Statute Book of any other English-speaking country, we shall find that they abound in sections with elaborate provisions. Even the Constitution of India has many articles which are very lengthy and these lengthy articles occur in large number in Part XIII-Finance, Property, Contracts and Suits (Article 286 occurs in this Part), because provisions relating to these matters are in their very nature very complex and intricate and to bring out their scope, meaning and implications, elaborate provisions were felt necessary. I must admit, however, in all humility that human-being being imperfect, a perfect statute has not yet been written nor will it ever be.
Introductory.- I now propose to deal with and discuss Article 286(1)(b) of the Constitution and section 5 of the Central Sales Tax Act, 1956 in an attempt to find out the exact scope and meaning of these two provisions as they have been topics of controversy for a long time. For this purpose I like to discuss in brief the constitutional position in regard to sales taxes in general because that may help us in forming a clear view of the particular matter which is the immediate object of this study.
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