Shah, J.— Under the Bombay Sales Tax Act, 1953, which replaced and re-enacted the Bombay Sales Tax Ordinance 2 of 1952, the respondents held a licence under Section 12 as dealers, but they did not register themselves under Section 9 even though they were liable to pay General Tax as well as Special Tax as dealers in commodities set out in Schedule II of the Act. By Section 5, a dealer whose turnover exceeded a specified amount was required to pay in addition to the Special Tax, General Tax at the rates specified in Section 6 sub-section (1). By Section 9, a dealer who is liable to pay General Tax could not carry on business as a dealer unless he had applied for registration within the period prescribed by the Act. Every dealer whose turnover in respect of special goods described in Schedule II to the Act exceeded the amount specified, was liable to pay Special Tax at rates set out in column (2) of Schedule II. By Section 12, a dealer liable to pay Special Tax could not carry on business as such dealer unless he had applied for a licence within the period prescribed. The material parts of Section 21 sub-sections (2) and (4) provided:
“(2) No person selling any goods shall collect from the purchaser any amount by way of tax unless he is a registered dealer or a licensed dealer and is liable to pay the tax under this Act in respect of such sale:
Provided....
(4) If any person collects any amount by way of tax in contravention of the provisions of sub-section (2) the amounts so collected shall, without prejudice to any prosecution that may be instituted against such person or dealer for any offence under the Act, be forfeited to the State Government and such person or dealer, as the case may be, shall, within the prescribed period, pay such amount into a Government Treasury and in default of such payment, the amount shall be recovered as arrears of land revenue.”
2. By Section 36, carrying on business as a dealer without applying for registration or obtaining a licence in contravention of Sections 9 and 12 was made punishable.
3. The respondents carried on business as dealers in special goods, and they were liable to pay General Tax as well as Special Tax for the period of assessment November 1, 1952, to March 31, 1954. For the period of assessment in question, the respondents submitted separate returns for Special and General Tax. The Sales Tax Officer on discovering that the appellants had not applied for a registration certificate under Section 9 of the Act, ordered that for contravention of sub-section (2) of Section 21 the General Tax collected by the respondents be forfeited. The order passed by the Sales Tax Officer was confirmed by the Assistant Collector of Sales Tax and the Additional Collector of Sales Tax. But the Sales Tax Tribunal, Bombay, set aside the order passed by the Taxing Authority. The State of Bombay has with special leave appealed to this court against the order of the Sales Tax Tribunal.
4. The only question which falls to be determined is as to the true interpretation of Section 21 sub-section (2). Under the Bombay Sales Tax Act, 1953, dealers in special goods were liable to pay two taxes, General Tax and Special Tax. Without registration, a person could not carry on business as a dealer if his turnover exceeded the amount specified in Section 5. Similarly, without a licence, a person could not carry on business as a dealer in special goods. The respondents did not register themselves as dealers under Section 9 and they may have incurred penalty for breach of that provision; but the prohibition against collection of special and general tax appears to be cast in a different scheme. A person selling goods is enjoined by sub-section (2) of Section 21 not to collect from the purchaser any amount by way of tax unless he is a registered dealer or a licensed dealer and is liable to pay the tax in respect of such sale. It is manifest that this prohibition does not operate if a person is a registered dealer or a licensed dealer. The respondents being licensed dealers though not registered dealers are not prohibited from collecting general tax.
5. Counsel for the State contended that the Legislature has imposed a prohibition against a person who is liable to pay general tax restraining him from carrying on business as a dealer without registration as a dealer, and it could not have been the object of the Legislature to authorise such a person, by obtaining a licence as a dealer in special goods, to collect from the purchasers general tax without obtaining a registration certificate. He contends that the expression, “no person shall collect any amount by way of tax unless he is a registered dealer or a licensed dealer” is used in Section 21(2) as meaning that no person shall collect general tax unless he is a registered dealer and no person shall collect special tax unless he is licensed in that behalf. But the courts in interpreting a taxing statute will not be justified in adding words thereto so as to make out some presumed object of the Legislature. The Legislature appears expressly to enable a dealer to collect special tax and general tax if he is either a licensed dealer or a registered dealer and there is no ground for holding that the prohibition against collection was to be read distributably as suggested i.e the prohibition against collection of general tax is against the person who fails to register himself as a dealer and against collection of special tax against the person who fails to obtain a licence under the Act. Sub-section (2) of Section 21 is a penal provision contained in a taxing statute and the court cannot speculate contrary to the plain intendment of the words used about the object of the Legislature. If the Legislature has failed to clarify its meaning by the use of appropriate language, the benefit thereof must go to the taxpayer. It is settled law that in case of doubt, that interpretation of a taxing statute which is beneficial to the taxpayer must be adopted.
6. In our view, the Tribunal was right in holding that the Sales Tax Officer had no jurisdiction to forfeit the amount of general tax collected by the respondents.
7. In that view of the case, it is unnecessary to consider whether in view of the composition of tax liability under Section 39, the order imposing penalty under sub-section (4) of Section 21 could not be passed.
8. The appeal therefore fails and is dismissed with costs.