Holding

The additional tax under the 1975 Act is subject to the single‑point levy rule of section 8 of the 1947 Act and applies only to turnover taxable under the Principal Act, so the two Acts must be read together as one.

Summary

The case concerned the interpretation of the Orissa Additional Sales Tax Act, 1975 as amended in 1979 and whether its additional tax was subject to the single‑point levy rule of section 8 of the Orissa Sales Tax Act, 1947. The appellants argued that, because section 3(2) of the 1975 Act made the provisions of the 1947 Act apply mutatis mutandis to the additional tax, the prohibition on taxing the same goods at more than one point should also apply. The State contended that only the assessment and collection machinery of the 1947 Act was incorporated and that the additional tax was a multi‑point levy. The Supreme Court held that the two statutes must be read together as one, giving effect to the later Act’s intention to modify the earlier Act only where expressly provided, and that section 8’s non‑obstante clause therefore applies to the additional tax, making it a single‑point levy limited to turnover taxable under the Principal Act. Consequently, dealers exempted under the Principal Act are not liable to the additional tax. The Court allowed the appeals and set aside the High Court judgments.

Issues considered

The applicability of section 8 of the Orissa Sales Tax Act, 1947 to the additional tax levied under the Orissa Additional Sales Tax Act, 1975 (as amended).
Whether the additional tax is a single‑point levy or a multi‑point levy.
The proper construction of the phrase ‘mutatis mutandis’ in section 3(2) of the 1975 Act.
Whether dealers exempted under the Principal Act are liable to pay the additional tax.
The extent to which the provisions of the Principal Act concerning assessment, collection and exemption apply to the additional tax.

Legislation cited

Central Sales Tax Act, 1956s. 15, s. 2(c)
Orissa Additional Sales Tax Act, 1975s. 2, s. 3, s. 3(1), s. 3(2)
Orissa Additional Sales Tax (Amendment) Act, 1979s. 2, s. 3
Orissa Sales Tax Act, 1947s. 13, s. 3(2), s. 4, s. 6, s. 7, s. 8, s. 9, s. 9-A, s. 9-B

Subjects

sales taxadditional taxmutatis mutandissingle point levymulti‑point levystatutory interpretationOrissatax exemptionconstitutional law

Judgment

•

363
A
... ASHOK SERVICE CENTRE & ANOTHER ETC.

v.
' f
STATE OF ORISSA

February 18, 1983

[A.P. SEN, E.S, VENKATARAMIAH AND R.B. MISRA, JJ.]

Orissa Sa/eJ Tax Act, 1947-Section 8-0ri1sa Additional Sa/eJ Tax Act,
1975 as amended in 1979-Section 3(2)-Levy of tax ander tht amending Act of . C
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 in an Act are clear-
lf open.to court to go in search of the intention of the Legislature-Later of two D
Acts provides that the two are to be read together·-Whether every part of each
Act must be con3trued as if the two Acts had been one.

Words and phrases: Muta/is mutandi~Meaning of.

. The proviso to section 8 of the Orissa Sales Tax Act, 1947 (Principal Act)
~ lays dowil that' the same goods cannot be taxed uader it" at more than one point
E
in the same series of sales or purchases by successive dealers. In 1975 the State
, Legislature enacted the Oris~a Additional Salos Tax Act (the Act) levying addi-
l tional 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 F
addition to the sales tax payable by him for a year under the said Act be liable
to pay additional ·ta1 at such rate not exceeding one per cent of his gross turn-
over (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 Govern..
meat. . 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 1nade it clear that the G
' provisions of the Principal Act would fnutatis mutandis apply ia relation to the
additional tax as if they apply in relation to the tax payable under the Principal
Act.

Construing section 3 of the Act arter its amendment, the State Government
took' the view tbat the new levy was in the natrire of a multi point tax and that H
every dealer was liable to pay additional tax on his annual gross h,1rnoy(lr irre·s-
pective of its taxobility under the Principal Act, · •
364 SUPREME COUR1' REPORTS [1983] 2 S.C.R,

In a number of writ petitions filed 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 '.
B High Court held that since the Principal Ac:t 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 thls Court it was contended on behalf of tho appellants that
wherever there was no express provision to the contrary in the Act the provisions
c of the Principal Act, including those relating to the incidence and levy of tax
should apply to tho additional tax also.

The Department on the other hand contended that section 3(2) of tho Act
was intended only to make those provisi1ons of the Principal Act relating to
assessment and collection of tax applicable to proceedings under the Act and no
part of section 3B to section 8 of the Principal Act would be applicable to tho
D levy of additional tax.

Allowing tho appeals,

HELD : If the contention of tho Department that only the machinery
provisions of the Principal Act become.applicable to the proceedings under tho
Act is accepted it would lead to many anomalies. (377 F]
E
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]

F The Act was virtually in tho nature of an amendment of tho Principal Act,
The additional sales tax payable by doalen1 specified in section 2(a), (b) and (c)
as originally enacted was in the nature of an enhancement oftheir 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
G Principal Act itself, by the, introduction of sections 2 and 3 in the Principal Act 1 .;
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 mutat/1 mutandis
apply in relation to the additional tax as they apply in relation to the tax payable
. under the Principal ~ct. The two Acts, i.e., the· Principal Act and tho Act as
originally enacted had to be read together in order to make the provisions con-
H tained in the Act effective. This position c:ontinued upto the coming into force
of the Amending Act on April I, 1979 by which sections 2 and 3 of tho Act were
eubslituted by new sections 2 and 3. [373 G-H, 374 A-CJ
ASRO!r SERVICE v. OR!SSA 365

With the substitution of section 3(2) in 1979 the prohibition of passing of
the additi.onal tax, which existed formerly was removed. Secondly the addi~
tional tax, instead of being an enhancement of the tax payable by a dealer by a
r certain percentage, became a percentage of the annual turn over of a dealer. Both
the statement of objects and reasons and the 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] B
2. The view of the High Court that. th~ 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 we.re one. and while doing so to give effect to
the provisions of the Act. which is a later on~ in preference to the provisions of
the Principal Act wherever the Act has manifested an intention to modify the
Principal Act. [377 B-C] c
The definition of mutatis mutant/is 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-FJ

Extension of. an earlier Act mulatis mutandis to a later Act brings in the
idea of adaptation,'. but so far only as it is necessary for the purpose, making a
D
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 statute, it could not be considered E
as an independent statute but must be read together with ttae Principal Act to
be effective. [379 A-CJ

Earl Jowitt's The Dictionary of English Law (1959) ; Black's Law Diction-
ary (revised 4th edn. (1968) Bouvier's Law Dictionary (3rd Revision) Vol. II,
referred to.
11
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 tb.e 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 ·s of the Principal Act expre!:isly in section 3(2) of the Act. G
·,,- In the absen~ of any such words in the Act, by reason of section 3(2) of the
Act section 8 of the Principal Act must be con~trued as being applicable to the
levy of an additional tax also. The gross turn.over 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]
H
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 lb•
366 iUPl.BlllB COURT REPORTS ( 1983) 2 s.c.R.

A at
said Act, be liable _to pay addition.al tax 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 band it would effectuate the intention of the
legislature. (381 A·B)

It is true that if the words used in a statute are clear it is not open to the
B Court to go in search of the intention of the legislature and to arrive at a
me~ning dilferent from what the words of the statute convey. When the Act is
read as a whole it becomes inevita.ble that it has to be read together with the
Pfincipal 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 t·wo Acts had been one. unless there is some
manifest discrepancy making it necessary to bold that the later Act has. to some
c 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 attracted. [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 undef the Principal Act and could
D not be extended to the additional tax payable under the Act has bo force. When
the Principal Act was enacted, sec:tion 8 could apply only to the liability under
the Princip81 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 accepteQ. many provisions of the Principal Act
wb_ich 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
E 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 Ac:t which forms an integral part of the charging
section. Consequently any exemption granted under sections 6 and 7 ot the
Principal Act would also be applicable in the case of levy of additionai tax under
the Act. (382 C·D] ..
F
CIVIL APEELCATE JURISDICTION: Civil Appeal Nos. !408-16.....•.
2650-67, 2498-2524, 2640-47, 1874-79, 2127-38 and 3255 of 1982. 4

Appeals by special leave from the Judgments and Orders dated
the 4th and 5th February, 1982 of the Orissa High Court in
G
Original Jurisdiction Case Nos. 1391of1979, 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 1159of1981, 694, 1031, 945, 944, 400, 617, 375, 697, 616/81,
2015 and 2016/80, 118, 1935, 2803, 1646, 1647,2831,2167, 59, 1637,
JI
602, 603, 695, 1224, 1195, 1230, 60, 1360, 1359, 1393, 1394, 604,
~152 Of 1981, 846/80, 57/81, 1464/80, 595, 797, 1538, 1537 of 1981,
ASHOK SERVICE •• ORISSA (Venkataramiah, J.) 367

1584/80, 676, 677 of 1981, 1008/80, 1009/80, 2379/ 81, 1915/80, A
235/81, 236/81, 1837/80, 1839/80, 1533/79, 1649/81 and 535 of 198!.

A.B. [Divan, A.K. Sen, Shankar Ghose, P.R. Mridul and
S.T. Desai, Talat Ansari, Ashok Sagar, · Sandeep Thakore,
Ms. Rainu Walia, D.N. Mishra, D.P. Mukherjee, J.R. Das
M.C. Dhingra, Laxmi Kant Pandey, B.R. Agarwala, Miss, Vijaya- B
/akshmi Menon, U.P. Singh, B.B. Singh, B.S. Chauhan, Anil Kumar
Sharma, Praveen Kumar, A.T. Patra, Vineet Kumar, A.K. Jha, ·
M.P. Jha, R.S. Sodhi, Hardev Singh, A. Minocha, Mrs. lndu Goswamy
S.K. Sinha, Vinoo Bhagat, P.N. Mishra, K.K. Jain and Pramod Dayal,
for the Appearing Appellants.
c
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.K. Panda and
R,K. Mehta for the appearing Respondents.

the Judgment of the Court was delivered by
D

VBNKATARAMIAH, J. The usual complaint against some of the
modern fiscal statutes is that they are unduly Jong and therefore
complex. But here we have an Orissa Act which is very short but
clarity is not certainly its virtue.
E
""r
..,/ The only point for determination in these appeals by special
leave is whether the levy of additional tax under the Orissa Additio·
..l. nal 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 F
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
'°f the State of Orissa and to refer to some of its salient points.
G
The Orissa Sales Tax Act, 1947 (Orissa Act XIV of 1947) (here·
inafter referred to as 'the Principal Act') was enacted and brought
into force in the year 1947. It bas 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 tax~s H
on the sale or purchase of goods other than. newspap5rs, ·subject to
.the provisions of Entry 9f-,A., pf List I of the Seventh Schedule to th~

·~·
A
368 SUPREME COURT REPORTS [1983] 2 s.c.~. 1
Constitution. Section 3•B,4, 4·A, 5, 6, 7 and 8 of the Principal Act to-
gether lay down the extent of the charge Section 4 (I) of the Principai
Act reads:

"4 (l) Subject to the provisions of sections 3-B, 5, 6,
7 and 8 and with effect from such date as the State Govern-
B ment may, by notification, in the Gazette, appoint, being
not earlier than 30 days after the date of the said notifica-
tion, 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
c 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 a1 the aggregate of the
amounts of sale prices and tax, if any, received and receivable by a
dealer in respect of sale or supply of goods other than those declar·
ed 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 poini 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
F
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 2 (bb) of the Principal Act who is liable to pay
tax irrespective of his gro<s turnover a; provided in section 4-A of
the Principal Act, every dealer would become liable to pay tax under
the Principal Act only when his groH turnover exceeds Rs. 50,00o,
G
otherwise not. The· expression 'dealer' is defined in section 2 (c) of
the Principal Act as a person who carries on the business of purcha-
sing, selling, supplying or distributing goods, directly or otherwise,
whether for cash, or for deferred payment or for commission, ,....
....
B remuneration or other valuable consideration and includes others
Jpentioned in that clause. It may be noted that this definition does
µot specify the extel\t of the ·gross turnover of such persou as a

• •
ASHOK SERVICE v. OR!SSA ( Venkataramiah, J.) 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
Aci 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 t:rx under section 4 of that Act to
register himself and to obtain a registration certificate. On such
registration he becomes a registered dealer. Section 9-B (!) (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 c
voluntary registration of a dealer . whose annual gross turnover
exceeds Rs. I 0,000 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 correspond-
D
ing provisions made -in section 9·C of the Principal Act for provi-
sional registration of certain other kinds of dealers. Section I 0 of
the Principal Act provides for the publication of the list of registered
dealers. Any other dealer cannot collect tax from bis customers.
There are other provisions in the Principal Act providing for the
machinery for assessment and recovery of the tax due under it. E
Before proceeding further it is necessary to quote section 8 of !he
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, F
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 : G

Provided that the same goods shall not be taxed at
more than one point in the same series of sales or purcha-
ses by successive dealers.
H
Explanation-Where in a series of sales, tax is prescrib-
ed to Qe levied at ti!ll first point, su~h point, in respect of

... ----
• 370 SUPREME COURT REPORTS [1983] 2 S.C.R,

A 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 inside the
State of Orissa."

B
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-
c 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 Princi-
pal Acl ·and such prescription was introduced deliberately by the
D 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 whicfi would be the
natural result of a multi-poimt 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
E multi-point levy and to prescribe a single point levy in order to
emphasise the principle of single point levy of tax, section 4 (!) of.
the Principal Act was expressly made subject to secti0n 8.

When such was the position, with a view to augmenting the
F resources of the State Government, the Orissa Legislature enac_ted
the Act in the year 1975 levying additional sales tax on certain
classes of dealers. The Act as it was originally passed read thus :

"OR!SSA ACT 24 OF 1975
THE ORISSA ADDITIONAL SALES TAX ACT, 1975
G
AN ACT TO PROVIDE FOR LEVY OF ADDITIONAL
TAX ON SALE OR PURCHASE OF GOODS IN
ORISSA r
Be it enacted by the Legislature of the State of Orissa
H
in the Twenty-Sixth Ye~r of tp~ Republic of India! a~
follows ;

... .
ASHOK SERVICE v. ORISSA (Venkataramiah, J.) 311
"
A
I. (I) This Act may be called the Orissa Additional
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
1st day of April, 1975.
B

2. (I) 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 togethedwith
the additional tax . payable under this sub·section exceeds B
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 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.
G
(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 H
Act, no dealer referred to in sub-section (I) shall be entitled
to collect the additional tax payable under this Act,
372 SUPREME COURT REPORts [1983) 2 S.C.,t<.

A 3. (I) 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
B of the first class shall try an offence under this Act.

4. (I) 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
c 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 modifi-
cations, if any, therein, the rules shall thereafter have effect
only in such modified form; so, however, that such modifi-
D cations shall be without prejudice to the validity of anything
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
E validity of which arose. for consideration in S. Kodar v. State of
Kera/a('). The additional sale:s 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 Prindpal A:~t by the specified percentages but they
were prohibited from passing on· the incidence of additional tax to
F 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
,G been proposed to impose an additional sale< 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. ·-
<
H
(I) [1975] l S.C.R. 121. ·
ASHOK SERVICE v. ORISSA (Venkataramiah, J.) 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 propos-
ed 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
B
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 incidence of this tax to con-
sumers. 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,
c
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 of goods so as to recoup 0
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 E
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
show the concern of the mover of the Bill regarding the likely in-
crease in the burden on the consumers by reason of the probable
escalation in the prices of goods as a result of the new levy. G
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
R
abcYc p~sscJ a separate .Act. It was, however, made clear by section
2 (2) thereof that the provisions of the Principal Act would mutatis
374 SUPREME COURT REPORTS (1983] 2 s.c.a.

.A 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
B 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 upto the coming into force of
the Amending Act on April I 1979 by which sections 2 and 3 of the
Act were substituted by new sections 2 and 3. After such Amend-
ment, sections 2 and 3 of the Act read thus -
c
"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;
D
(b) words and expressions used but not defined shall have
the same meanings as are respeciively assigned to then
in the Orissa Sales Tax Act, 1947 (hereinafter referred
to as the said Act).

l!l 3. (I) Every dealer shall, in addition to the tax payable
by bim 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;

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
G 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
H mutandis apply in relation to the said additional tax as they
apply in relation to the tax payable under the said Act,"
ASHOK SERVICE v. ORISSA (Venkataramlah, J.) 375

Sections I and 4 of the Act however remained as before. After A
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 expres-
sions used but not defined shall have the same meanings as are
respectively assigned to them in the Principal Act. Section 3, how-
ever, altered the pattern of levy of additional sales tax from what B
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 implemen-
. tati on of the Act.
D
2. The Bill seeks to aciiieve the above obj~ctives".

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 exceed-
ing one percent of his gross turnover (excluding the gross turnover E
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
1. the. rate of additional tax payable under section 3 of the Act as
amended in 1979 at one-hii'lf 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 insiead of being
an enhancement of the tax payable by a dealer by a certain percent-
age 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
G
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 c,f section 3 of the Act H
·after its amendment. The stand of the State Government was that
every dealer was liable to pay additional tax on his annual gross
376 SUPREME COURT REPORT$ [1983} 2 s.c.il. ·

A· 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 Ip the constitutionality of the amended Act. All the
petitions were dismissed by the High Court. The main judgment
B was delivered in O.J. Case No. 1391 of 1979, filed by M/•. Ashok
Service Centre. Following that judgment, the other writ petitions
were dismissed. These appeals are filed against the decision of the
High Court w.ith the special leave of this Court.

c 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 additio·
nal tax leviable under the Act as amended in 1979. The High Court
D 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 diffe·
rent 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
E their contention. The High Court observed in para 8 of the judgment
thus:

"8. On an analysis of Section 3 (I) 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
F
under the 1947 Act in respect of a dealer is taken as 'X'.
Section.3 (I) 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 prescri-
bed half percent which may be taken as 'Y'). 'Y' is an
additional liability and, therefore, has been nomenclatured
G
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
ASROlt SERVICE v. ORISSA (Venkataramiah, J.) 377

turnover and combine the two for the purposes of compu-
tation 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 inde-
pendent Act it could not be read subject to the provisions of the.
the Principal Act. It may, however, be noticed that there is no B
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 charg-
ing section and provides that the provisions of the Principal Act
shatl 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 th~ judgment of the High
c
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 pro-
vision to the contrary in the Act, the provisions of the Principal Act D
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 of the Principal Act would E
be applicable to the levy of additional tax.

We may straight away say that the contention of the Depart·
ment leads to some anomalies. Section 3 (I) of the Act states that
every dealer shal,I, in addition to the tax payable by him for a year
under the Principal Act liable to pay additional tax at such rate not F
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 (I) 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. 5U,000 stipulated in section 4 (I) of the Principal G
Act, then itrespective of his annual gross turnover every person who
carries on the business of purchasing, :felling, supplying or distri-
buting goods directly or otherwise would become liable to pay
additional tax even though he ma~ not be liable to pay any tax
under the Principal Act. If he is not registered as a dealer on
H
account of bis annual gross turnover being less than the prescribed
378 SUPRBlfl! COURT REPORTS [1983] 2 S.C.R,

A 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. Tne 'dealer' referred to
in section 3 (l) of the Act should be understood as a 'dealer' 'who is
•.
B ·liable to pay tax under the Principal Act as provided in section 4 (I)
of the Principal Act. Next 'gross turnover' means the total of
'turnover of sales' and 'turnover of purchase'. If under section 3 (I)
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 tnr11-
-0ver 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 anoma-
lies show that the contention of the Department that only machinery
D provisions of the Principal Act become applicable to the proceedings
nnder 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
11
'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
G 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 chanlles. This is a phrase of frequent practical
occurrence, meaning that matters or things are generally the same,
but to be altered when necessary, as to names, offices, and the like.
H 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
purposd, making a change without altering the essential nature of the
ASHOK SERVICE v. ORISSA (Venkataramiah, J.) 37~

thing changed, subject of course to express provisions made in the A
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 to 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 B
tax in addition to what had been levied by the Principal Act. The
nature or' the taies 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 c
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
D
' 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 provisioni of the Act which is a later
one in preference to the provisions of the Princi;ial Ac\ wherever the
Act bas manifested an intention to modify the Principal Act. The
following observations of Lord Simonds in Fendoch Investment Trust E
Co. v. Inland Re~enue Commissioners(') 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 F
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".
G
Originally when tbe Act was passed in 1975, the Act levied an
additional tax on dealers whose annual gross turnover did not
exceed rupees one lakh at two percent of the tax payable by them
under the Principal _Act, on dealers whose gross turnouer exceeded
rupees one lakh but did not exceed rupees five lakhs at three percent

(3) [!945) 2 All E.R. 140 (H.L.).
380 SUPREME COURT REPORTS [1983] 2 s.c.R.

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

B
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
c wanted that the new levy i.e. the additional tax should be a multi
l
point tax which had to be paid by every dealer irrespective of the
fact that ihe entire annual gross t1unover in his hands may not be
liable to bear the tax under the Principal Act, it would have ex-
pressly said so as it would have amounted to a substantial departure
D 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
E 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 over-
riding effect by the use of the non-obstante clause is applicable to the
F levy of additional tax also: This construction receives support from
the use of the word 'additional' in section 3 (I) 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
G 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 fore-
going, section 3 (!) of the Act has to be read as :
ASHOK SERVICE v. ORISSA ( Venkataramiah, J.) 38 l

"Every dealer (who is liable to pay tax under the A
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
B
Government.

Provided ......................................................... ..

Provided ........................ , ............................... .

If section 3 (I) is so read there would not be any anomaly but
c
on the other band it would effectuate the intention of the State Legis-
lature. We are aware of the principal that a statute bas to be inter~
preted according to the words used thi!rein and if the word used there·
in are clear it is not open to the Court to go in search of the inten-
tion of the Legislature and to arrive at a meaning different from what D
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. Craieson Statute Law (7th Edn) says at page 223 that 'where the·
later of two Acts provides that th.e two 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 bold E
that the later Act has to some extent modified the provisions of the
errlier Act'. When section 3 (I) of the Act read in the light of sub-
section (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 anything to F
the contrary in this Act', the operation of section 8 should be con-
fined 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 tl1e Principal Act. Now by G
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
H
recovery of tax and penalty would become unavailable for collecting
the additional tax under the A~t as section 13 also uses the word~

,, ----·-- - ~- . -
.-

382 SUPREME COURT RBp0RTS (1983] 2 s.c.R.

A '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 (I) 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
on the State Government. That proviso only empowers the State
Government to exempt certain dealers or transactions pertaining to
c 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' Ii and section 7 of t~e Principal Act
will also be applicable iq the case of levy of additional tax under tile
Act,
.D

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
E under the Act. If a dealer is exempted by the State Government
under the second proiviso 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 u11der 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.
F The Government Notifications S.R.O. No. 410/79 dated March 23,
1979 issued under the second proviso to section 3 (I) 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 pay-
ment of additional tax under the Act is, therefore, redundant. The
G 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 t)te 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 (I) of the Act. Any other
H
turnover which is exempted by the State Government under the
~econd proviso to section 3 (I) of the Act is 11lso not taxable under
ASHOK SBRVICB v. ORISSA (Venkataramiah, J.) 383

the Act. The levy of the additional tax on the gross turnover of a A
dealer under section 3 of the Act is subject to these conclusions.

In the result the appeals succeed. The judgment of the High
Court in each of these cases is set aside. It 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 pre- ·B
vious paragraph.

There shall, however, he no order as to costs.

j'.B.R. Appeals allowed.
c