THE COMMISSIONER OF SALES TAX VS MESSRS RIZKI INK COMPANY LIMITED
1991 P T D 783
[Karachi High Court]
Before Mamoon Kazi and Salahuddin Mirza, JJ
THE COMMISSIONER OF SALES TAX
Versus
Messrs RIZKI INK COMPANY LIMITED
Income Tax Reference No.4 of 1983, heard on 25/03/1991.
Sales Tax Act (III or 1951)---
----S. 7---Exemption---Notification No.7, dated 27th June, 1951 [as amended on 26th June,1964 and again by S.R.O. No.897(1)/71, dated 2nd July, 19741---By virtue of amendment word "ordinarily" was inserted between the words "instruments" and "used by the students"---Whether word "ordinarily" referred to all the articles mentioned in item No.l of Notification No.7, dated 27-6-1951.
The assessee claimed exemption on the sale of his product in view of Notification No.7, dated 27th June, 1951 (as amended on 26th June, 1964 and again by S.R.O. No. 897(1)/71, dated the 2nd July, 19741. By virtue of said notifications the following items used by students had been exempted from sales
"School slates, slate pencils, takhties, exercise books, writing ink, penholders, geometry colour and paint boxes and scales and other instruments used by students:'
Vide Notification No.S.R.O. No.897(1)/71 the word "ordinarily" was inserted between the words "instruments" and "used by students". The Notification after the said amendment therefore read as follows:
"School slates, slate pencils, takhties, exercise books, writing ink, penholders, geometry colour and paint boxes and scales and other instruments ordinarily used by students."
The items referred to in the Notification are school slates, slate pencils, takhties, exercise books, writing ink, penholders, geometry colour and paint boxes, and scales. All these items enumerated in the Notification are such items which are ordinarily used by students. No doubt, the word "ordinarily" inserted in the said notification occurs after the word "instruments" but merely because the said word occurs after the word instruments does not mean that it is meant to qualify the word "instruments" alone. This amendment in the said notification clearly appears to have been made for the benefit of the assessee, and therefore, if two interpretations are possible then any interpretation which favours the assessee has to be preferred. Since the words "ordinarily used by students" occur at the end of said notification they apply to all the items enumerated in the list and the conclusion that the exemption applies only to instruments appears to be erroneous. Consequently, the word "ordinarily" refers to all the articles mentioned in the said Notification.
Shaikh Haider for Applicant.
Muqtida Karim for Respondent.
Date of hearing: 25th March, 1991.
JUDGMENT
MAMOON KAZI, J.---The assessee, the respondent in this case is engaged in the manufacture and sale of 'Parker Quink' ink. The assessee claimed exemption on the sale of the said product in view of Notification No.7, dated 27th June, 1951 (as amended on 26th June. 1964 and again by S.R.O. No. 897(1)/71, dated the 2nd July, 1974. It may be pointed out that by virtue of said Notifications the following items used by students had been exempted from sales tax:
"School slates, slate pencils, takhties, exercise books, writing ink, penholders, geometry colour and paint boxes and scales and other instruments used by students:"
It is pertinent to point out that vide Notification No.S.R.O. No.897(1)/71 the word "ordinarily" was inserted between the words "instruments" and "used by students". The. Notification after the said amendment therefore read as follows:
"School slates, slate pencils, takhties, exercise books, writing ink, penholders, geometry colour and paint boxes and scales and other instruments ordinarily used by students."
2. The Sales Tax Officer during the following assessment year 1974-75 held that the exemption which was granted by the said Notification was only applicable to instruments as the word `ordinarily' which was inserted in the said Notification had occurred after the word `instruments' in the said Notification.
3. Such interpretation given by the learned Appellate Assistant Commissioner was, however, not accepted by the Commissioner of Sales Tax who preferred an appeal before the learned Appellate Tribunal. The learned Tribunal held that the intention in inserting the word `ordinarily' was to restrict the exemption from sales tax only to 'instruments' and not to other nine items mentioned in the Notification. It, therefore, upheld the order of the learned Assistant Commissioner. In view of these circumstances, the following question has been referred to us for determination:--
"Whether on the facts and in the circumstances of the case, the word 'ordinarily' refers to all the articles mentioned in Item No.l of Notification No.7, dated 27-G-1951?"
??????????? 4.???????? We have heard Mr. Shaikh Haider, learned counsel for the applicant, and Mr. Muqtida Karim, learned counsel for the respondent.
5. It may be pointed out at the very outset that the items referred to in the Notification are school slates, slate pencils, takhties, exercise books, writing ink, penholders, geometry colour and paint boxes, and scales. All these items enumerated in the Notification are such items which are ordinarily used by students. No doubt, the word "ordinarily" inserted in the said notification occurs after the word "instruments" but merely because the said word occurs after the word instruments does not mean that it is meant to qualify the word "instruments" alone. This amendment in the said notification clearly appears to have been made for the benefit of the assessee, and therefore, according to us, if two interpretations are possible then any interpretation which favours the assessee has to be preferred. Since the words "ordinarily used by students" occur at the end of said notification, in our view, they apply to all the items enumerated in the list and the conclusion arrived at by the learned Assistant Appellate Commissioner, Income-tax that the exemption applies only to instruments appears to be erroneous. Consequently, in our opinion, the word "ordinarily" refers to all the articles mentioned in the said Notification and this reference is answered accordingly.
M.BA./C-205/K????????????????????????????????????????????????????????? Reference answered accordingly.