DATE OF JUDGMENT: 30/03/1953
BENCH: Justice Mukherjea, Justice B. K. Bhagwati, Justice Natwarlal H. Sastri, Justice M. Patanjali Bose, Justice Vivian Hasan, Justice Ghulam
CITATION: 1953 AIR 274 1953 SCR 677
Interpretation of statutes basically means that a statue can be interpreted in a way that it delivers justice to the parties. Legislators make different laws and are amended from time to time for having greater proficient, but laws cannot be made for each and every situation since it would be just amassing up things superfluously. The statute is nothing but a document which helps and guides the citizens what to do and what not to do. H.L.A Hart theoretically explained it that for every situation, the law cannot be made and has to interpret the current things.
This is a plea against the order passed by the Division Bench of Madras High Court, against a criminal plea, which sentenced the plaintiff under Section 15 of the Madras General Sales Tax Act. The petitioner was ordered to pay a fine of Rs. 1000/- and an imprisonment of 3 months. The plaintiff, Poppatlal Shah, was a partner in a company called the Indo Malayan Trading Company. The company was centered in Madras and had its head office there only. The business that the company held was the sale and buying of oil, sago, and Kirana (confectionary) items.
The disagreement arose regarding the non-payment of taxes in Madras under the Madras Sales Tax Act. The suit introduced against him. In the development of his business, he used to pay sales tax in Calcutta. His business dealt with the sale of goods and delivery was done in other states. The business was piloted in such a way that the firm at their Madras head office used to get orders from dealers in Calcutta. Hence, the orders were dispatched to Calcutta by railway and steamers. All the financial deal was done in Calcutta during the time of delivery of orders to the agents. He was later found guilty, and sentencing was pronounced.
LEGISLATION IN ISSUE
The rules and presumptions used in the interpretation are:
The plaintiff argued that they were responsible to pay taxes in Calcutta as the delivery of goods took place there and just the orders were received in Calcutta only. The State argued that the true test is to look where sales took place and not where the goods are to be delivered. Also, the state argued that they used to maintain all the registers in Madras, and henceforth they are liable to pay taxes in Madras only. High Court agreed with the arguments of the state and hence the appeal before the Supreme Court.
Supreme Court took note of the arguments raised by the plaintiff that we need to have a proper interpretation and construction of the legislature and while interpreting the whole statute, it is clear that the act doesn't approve to levy a tax upon the sale where goods are delivered outside the state/province.
The court had given its best effort in order to provide justice. The rule of harmonious construction, the statute must be read as a whole, supported the interpretation of the Madras Sales Tax Act to understand the actual use of the statute. By applying the rule of harmonious construction, the meaning of the phrase ‘Sale’ has been interpreted correctly and contented the criteria that one Section of the Statute must not overthrow the purpose of other sections in the Statute.
Here, the phrase ‘sale’ under the Madras Sales Tax Act was duly coordinated with a sale under the Sale of Goods Act so as to exploit the possible meaning. In addition to this, the court could also have used the Theory of Textualism in interpreting the word ‘Statute’ with the rule of Harmonious Construction, as textualism means focusing on a word rather than any purpose of a statute, and the word ‘sale’ under the Sale of Goods Act was interpreted by the general meaning which stated that the transfer of ownership means the sale as complete.