LexSTATE OF KERALA versus ATTESEE (AGRO INDUSTRIAL TRADING CORPORATION)
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STATE OF KERALA v. . ATTESEE,(AGRO INDUSTRIAL TRADING . CORPORATION) . OCTOBER 27,, 1988 [SABYASACHI MUKHARJI ANDS. RANGANATHAN, JJ.] Kera/a General Sales Tax Act-Section. 9 and Third Schedule Item 7-'Cotton fabrics'-Definition of-'As defined in Central Excises and Salt Act 1944'-Subsequent amendment of definition in Central Excises and Salt Act-Whether to be taken note of in construing defini- tion of 'Cotton fabrics' in Sales Tax Act-PVC cloth-Exemption of from tax. Statutory Interpretation-Legislation by incorporation or reference--Principle of interpretation. Section 9 read with Third Schedule item 7 of the Kerala General Sales Tax Act 1963 granted exemption from sales tax to certain items including cotton fabrics. 'Cotton fabrics' was defined as having the same meaning as assigned to it in item 19 of the First Schedule to the Central Excises and Salt Act, 1944. This definition of 'cotton fabrics' in A B c D 1944 Act was amended in 1969 by the Finance Act 1969. E In 1957, Parliament enacted the Central Sales Tax Act, 1956 and Additional Duties of Excise (Goods of Special Importance) Act, 1957 affecting the levy of sales tax and excise duty. Definition of 'cotton fabrics' occuring in the aforesaid Acts was also related to its definition under the 1944 Act. F The respondent-assessee was manufacturing PVC cloth, an item of goods which was clearly covered by the amended definition but, perhaps, not by the original one. He claimed exemption from saies tax in respect> of assessment years 1971' 72 and 1972-73. On a reference made to the High Court under the 1963 Act, it observed• that the concept of 'cotton fabrics' in the Central Excises and' Salt Act seemed to be integrally linked with the provisions of the Gene- G ral: Sales Tax Act (the Act unde~ which the levy of sales tax was gover- ned, prior to enforcement of the 1963 Act), and that it would not be justified. in regarding the latter Act as unaffected by the growing con-· H 601 602 SUPREME COURT REPORTS [ 1988] Supp. 3 S.C.R. A cept of the term 'cotton fabrics' in the Central Excises and Salt Act, and that unless the extended definition of the .Central Excises and Salt Act is imported into the Sales Tax Act, the latter Act would become unwork- able and ineffectual. B c D E F In· the appeals by certificate to this Court, it was submitted on behalf of the State-appellant that the PVC cloth manufactured by respondent was not entitled to exemption from sales tax if the earlier definition of the 1944 Act, before the amendment, was to apply, and that the 1963 Act has incorporated in its Third Schedule the definition of the 1944 Act as it stood at the time of its enactment and that this incorporation is unaffected by the subsequent changes made in the'l944 Act, that the concept of 'cotton fabrics' in the 1944 and 1963 Acts were not integrally linked. and that it is not appropriate to say that unless the extended definition of the former were imported into the latter, the latter Act would become unworkable and ineffectual. On the question whether the exemption given to 'cotton fabrics' in item 7 should be restricted to 'cotton fabrics' as defined in the 1944 Act as it stood on 1.4.1963 or whether it would also cover goods falling under the said definition after Its amendment in 1969. Dismissing the appeals, this Court, HELD: (1) It would be correct to say that the 1963 Act brings in the definitions of the 1944 Act by way of reference or citation and not by way of incorporation. For a reading of the Act shows that the Act intended to confer exemption on a number of goods set out in the Schedule. Of these, since items 5 to 7 are defined in the 1944 Act, the Act referes to those definitions to ascertain the scope of these items. There are no express words used by the statute which will justify an inference that the intention was to incorporate those definitions, as standing on that date into the 1963 Act. [613A-C] Secretary of State v. Hindustan Cooperative Insurance Society G Ltd., [1931] 58 I.A. 259; Collector of Customs v. Nathella Sampathu Chetty & another, [1962] 3 SCR 786; Ram Sarup v. State, [1963] 3 SCR 858; Ram Kirpalv. State, [1970] 3 SCR 233; New Central Jute Mills Co. Ltd. v. The Assistant Collector, [1971] 2 SCR 92; Bhajva v. Gopikabai, [1978] 3 SCR 561; Mahindra & Mahindra Ltd. v. Union, [1979] 2 SCR 1038 and Western Coal Fields v. Special Area Development Authority, H [1
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