Law: Sales Tax Act, 1990

Section: 3,16(34)(33),2(16)(17)(41)(47),3,16(34), 13

Law: Constitution of Pakistan, 1973

Section: 199

(a) Sales Tax Act (VII of 1990)---

----S.3---Expression 'Taxable supplies'---Connotation---Scope of the expression has to be restricted only to -such transaction as may amount to ` sale---Any extended meaning would render the provision extra-Constitutional.

(b) Sales Tax Act (VII of 1990)---Ss. 3 & ,---Sales tax, levy of---Condition precedent---Expression 'taxable activity'---Applicability---Tax under the Sales Tax Act, 1990 is charged, levied and paid only when taxable supply is made in the course or furtherance of 'taxable activity, as such the expression 'taxable activity' involves in whole or in part 'the supply of goods to any other person' ---Such is the condition precedent for the levy of sales tax.

(c) Interpretation of statutes---

---- Enactment of a statute on subject on which already there is a statute--�Laws are presumed to be passed with deliberation and with full knowledge of all existing ones on the same subject, it is but reasonable to conclude that the Legislature, in passing a statute would not intend to interfere with or abrogate any former, law relating to the same matter; unless the repugnancy between the two is irreconcilable---Inconsistency or repugnancy is not to be readily assumed in a statute and attempt should be made to reconcile and give effect to all the provisions.

Ali Ameer v. Dalmia Cement PLD 1961 Kar. 255; Said Omer v. Federation of Pakistan and others PLD 1956 Lah. 382; Messrs Karachi Steam Navigation Company Limited v. Messrs Abdul Rehman Abdul Ghani PLD 1962 SC 90; Gul Khan and others v. The State PLD 1986 Kar. 629 and Construction of Statutes by Crawford, para. 166 ref.

(d) Interpretation of statutes---

----Change in existing statute---Object of the change in the law if any, is to be ascertained.

(e) Sales Tax Act (VII of 1990)---

----S. 3(a) [as amended by Finance Act (IX of 1996)]---Substituting word 'business' by expression 'taxable activity'---Effect---Such amendment in S.3(a) of Sales Tax Act, 1990, was intended to bring about a change in the existing law and was to narrow down the scope of the charging section.

Construction of Statutes by Crawford para. 166 ref.

(f) Maxim---

-----"Leges posteriores priores contrarias abrogant (subsequent laws repeal prior contrary laws)---Applicability---When the existing provision of law is absolutely contradictory to. or inconsistent with the amending provision maxim leges posteriores priores contrarias . abrogant comes into play.

Construction of Statutes by Crawford, para. 166 and Ahmed Saeed Kirmani, M.L.A. v. Fazal Illahi, Speaker, West Pakistan Assembly PLD 1956 Lah. 807 ref.

(g) Sales Tax Act (VII of 1990)---

----S. 16(33)(34)---Expressions 'supply' and 'taxable activity'---Defined and distinguished---Both Ss.16(33) & 16(34) can be so construed in the light of rules of Interpretation of Statute that full effect can be given to the both---To achieve this object, definition of 'supply' has to be construed in such a manner that it does not offend against expression 'involves in whole or in part the supply of goods to any other person'---Such can be done, if, instead of giving a very wide and extended meaning to the expression putting to private business or non-business use", it is restricted to disposition of goods to any other person, keeping self-use or in-house use for the manufacture of finished exempt goods outside of its purview---Person, who supplies taxable goods to his wife or to his son even without consideration would be deemed to have made a taxable supply chargeable with sales tax---Supply of goods to another person for the purpose of charity, without consideration, would similarly fall Within the scope of charging section---Interpreted in such manner the activity sought to be taxed would remain within Constitutional limits of taxation on 'sale' otherwise it would transgress the said limits and would be rendered ultra vires of the Constitution---If, however, restricted meaning is not assigned to the definition of 'supply', then either cf. (a) of the definition of 'supply' will have to be treated as absolutely superfluous or phrase 'supply of goods to any other person' in the definition of 'taxable activity' will have to be treated as surplus---While interpreting the two terms appearing in the charging section, choice is to be made between treating the phrase 'putting to private, business or non-business use' as surplus, or treating the phrase 'involves in whole or part, the supply of goods to any other person' as superfluous, or stretching or restricting the scope of any of the two expressions referred to above in any or both the definitions, so as to reconcile the two apparently conflicting provisions and harmonize them--�While making the choice one should not be oblivious of the principle that no part or word of the statute is to be held as surplusage.

East and West Steamship Co. v. Queensland Insurance Co. PLD 1963 SC 663 ref.

(h) Interpretation of statutes---

---- No part or word of a statute is to be held as surplusage.

(i) Sales Tax Act (VII of 1990)---

----S. 16(34)---Expressions 'any activity carried on in the form of a business, trade and manufacture'---Effect---Where term 'manufacture' has been used in the definition of 'taxable activity.' alongwith expression 'trade and business' at the end, the expression 'any activity carried on in the form of a business, trade and manufacture' used at end of the definition is to be read in conjunction with 'any activity which is carted on by any person' in the beginning of the definition of 'taxable activity'.

(j) Sales Tax Act (VII of 1990)---

----S. 16(34)---Expressions 'whether or not for a pecuniary profit' and 'whether for any consideration or otherwise' appearing in definition of 'taxable activity'--- Connotation---Where the two expressions interpolated in the middle of the definition clause, the same are meant to cover the entire spectrum of possible motives for an activity.

(k) Sales Tax Act (VII of 1990)---

----S.16(34)---Term 'taxable activity'---Interpretation---Term 'taxable activity' would mean 'any activity' including any activity in the form of business, trade or manufacture which is carted on by any person, and involves in whole or in part, the supply of goods to any other person, whether or not for any pecuniary profit or for any consideration or otherwise---Read in such manner, expression 'any activity carried on in the form of any business, trade or manufacture' used in the end of the definition of 'taxable activity' does not seem to have the effect of making a supply, which is not made to any other person liable to sales tax.

(l) Sales Tax Act (VII of 1990)---

----Ss. 2(16)(17)(41)(47), 3 & 16(34)---Taxable activity---Sales tax, levy of---Mere fact, that a supply is taxable or that a person is a manufacturer of that he manufactures or produces goods or is wholesaler within the meaning of S.2(16), (17), (41) or (47) of Sales Tax Act, 1990, is not enough to levy tax on the taxable supply or manufacture or wholesale unless the taxable supply is made in the course or furtherance of taxable activity carried on by him as envisaged by S.3 of Stiles Tax Act, 1990, which is the charging section, as distinguished' from 'business activity, as such these terms by themselves cannot be equated with 'sale'.

(m) Interpretation of statutes---

---- Taxing statute---Taxing statutes are to be interpreted strictly---Subject will be taxed only if he falls within the strict letter of charging section.

B. P. Biscuit Factory Limited, Karachi v. Wealth Tax Officer and another 1996 SCMR 1470 ref.

(n) Sales Tax Act (VII of 1990)---

----Preamble---Word "sale" appearing in Sales Tax Act, 1990---Defined--�Sale in its simple parlance means the transfer of a property from one individual to another on payment of or passing of a consideration---Any different interpretation would be against the basic concepts of law---To infer and to suggest that goods consumed by a person would also fall within the ambit of a sale and, therefore, the tax shall be levied, such inference or suggestion is far-fetched and against justice.

(o) Sales Tax Act (VII of 1990)---

----Ss. 3; 16(34) & 19---Constitution of Pakistan (1973), Art. 199--�Constitutional petition---Sales tax, levy of---Taxable activity---Compulsory registration under $.19 of Sales Tax Act; 1990---Issue in question was regarding compulsory registration of petitioner on the basis of his using pre-cast material in construction of a bridge---Authorities while considering the use of pre-cast material as taxable activity, registered the petitioner under S.19 of Sales Tax Act, 1990, and made a demand of sales tax from the petitioner---Validity---Petitioner did not supply pre-cast material as such to any other person---Use of such material in the construction ,of a bridge could not be considered a "taxable supply" in the course of furtherance of a taxable activity---If private use of goods was held to be liable to sales tax merely because it amounted to sale to self, then expression "involves in whole or in part, the supply of goods to any other person' would have to be declared as surplus or redundant---Such an interpretation would be against all canons of interpretation---Where the petitioner had undertaken to build bridge and purchased raw material viz. Sarya, cement and concrete, which were already liable to sales tax and were consumed by him in creating that bridge, under no circumstances, it could have created at the intermediatory stage independent marketable products, which could be sold in the market and, therefore, he would be liable to be registered and pay sales tax.

Hunza Central Asian Textile and Woollen Mills Limited's case 1999 SCMR 526 distinguished.

(p) Sales Tax Act (VII of 1990)---

----S. 16(34)---Finance Act (IX of 1996), S.2(33)---Expression 'taxable activity' as appearing in S.16(34) of Sales Tax Act, 1990 and S.2(33) of Finance Act, 1996 discussed---Definition of the expression under the provisions of �.2(35) of Finance Act, 1996, was the same as it stood at the time of enactment of the Sales Tax Act, 1990 as such the definition clearly envisaged the supply of goods to any other person and in that- respect it was apparently in direct conflict with S.2(33)(a) of the Finance Act, 1996---If there was really a conflict between the two provisions which was irreconcilable, the provision which was inserted in the charging section later in point of time would prevail over the provisions existing earlier, but if the apparent conflict could be reconciled and harmonized so as to give effect to both the provisions, such interpretation would be given effect accordingly.

(q) Sales Tax Act (VII of 1990)---

----Ss. 3 &.16(34)---Sales tax, levy of---Semi-manufactured goods---Scope--�No tax should be levied on an individual only on the ground that since a semi-manufactured goods were capable of independent sale in' the market, therefore, such goods were taxable and fell within the ambit of taxable activity.

(r) Sales Tax Act (VII of 1990)---

----S. 3 & Preamble---Sales tax---Object and scope---Pre-cast material used in construction of bridge---Levy of sales tax---Validity---provisions of Sales Tax Act, 1990 showed that-it was a value added tax, which was levied at every stage, the value addition took place at the time of supply, it was therefore, no more a one-point levy---Pre-cast material was not separately identifiable goods, which could be sold into market as the same was not marketable because of its particular design, size and specification and as it could not be used in any- other fly-over bridge, building or construction work, it could not be used anywhere except the fly-over for which it was specifically designed in consideration of multivariable factors---Sales tax was leviable only when the, transaction in which the person was involved was completed.

Hunza Central Asian Textile and Woollen Mills Limited 1999 SCMR 526 distinguished.

(s) Sales Tax Act (VII of 1990)---

----S.3---Sales tax, levy of---Sales tax becomes leviable only when the transaction in which the person is involved is completed.

Per Sabihuddiun Ahmed, J.---

(t) Interpretation of statutes---

---- Taxing statute---Striking down statutory provisions---When the legislative intent was clear, whereby the tax net had been extended through creation of legal fiction, the Courts were not entitled to nullify it by resorting to an undefined concept of law and justice---Statutory provisions could only be struck down after the same was found to be repugnant to any provision of the Constitution and not otherwise.

(u) Sales Tax Act (VII of 1990)---

----S. 3---Constitution of Pakistan (1973), Fourth Sched., Item 49 [as amended] ---Sales tax, recovery of---Jurisdiction of Federal Government---Scope---Amendment in Item 49 of Fourth Sched.---Object---Item 49 of Fourth Sched. to the, Constitution initially spoke of tax on sales and purchases and subsequently through amendment, its ambit was extended to provide for taxes on sales and purchases of goods imported, exported, produced, manufactured or consumed---Object of such amendment was to pre-empt a challenge on the ground that a tax on manufacture, import, export or consumption as distinguished from a sale also came within the, ambit of the Federal Legislative power.

(v) Sales Tax Act (VII of 1990)---

----S. 3---Sales Tax Act (III of 1951), S.13---Sales tax, levy of---Recovery under the provisions of Sales Tax Act, 1990, and Sales Tax Act, 1951--�Distinction---Sales tax payable under Sales Tax Act, 1990, -is a value added tax as distinguished from the Sales Tax Act, 1951, where it was one point levy---Such distinction, however, does not necessarily lead to the inference that only such activities as may amount to sale of goods in common parlance would fall within the tax net.

(w) Sales Tax Act (VII of 1990)--�

---Ss. 3 & 16(34)(41)---Finance Act (IX of 1996), S.2(35)---Expressions 'taxable supply' and 'taxable activity'---Scope--Pre-cast material used in construction of bridge---Sales tax, levy of---Quantum of tax liability-�Determination ---Both the expressions operate in their respective fields--- Quantum of tax liability was determined on the basis of the value of taxable supply but the liability to pay tax under the charging section would arise only when such supply was made in furtherance of a taxable activity---Applying the provisions of S.2(35) of Finance Act, 1996, to the facts of the present case, the person while manufacturing the goods in question and using them for the construction of a bridge was engaged in making taxable supplies.

(x) Sales Tax Act (VII of 1990)---

----Ss. 2(12), 3 & 16(34)---Constitution of Pakistan (1973), Art. 199--�Constitutional petition---Sales tax, levy of---Term 'goods'---Applicability--�Pre-cast material used in construction of bridge---Petitioner was constructing a bridge in which pre-cast material was being used---Authorities treating the material as taxable activity imposed sales tax on the same ---Validity--�Expression 'goods' was defined in S.2(12) of the Sales Tax Act, 1990, to include every kind of movable property other than money, stocks etc.--�Bridge which was eventually handed over to the Authority could not be treated as goods---Such supply was not made in furtherance of a taxable activity and the petitioner could not be saddled with the liability to pay sales tax in circumstances.

JUDGMENT 

ZAHID KURBAN ALAVI, J.---This writ petition has been filed to challenge compulsory registration of the petitioner under section 19 of the Sales Tax Act, 1990 hereinafter referred to as the Act", whilst certificate Annexure ' D' as being without lawful authority and of no legal consequence. Notices Annexures 'F.H.I. and K' issued to the petitioner by the Superintendent Sales Tax (East), Karachi, pursuant to said certificate Annexure 'D' are also challenged as having been issued without lawful authority. 

2. Facts of the case, succinctly stated- are that Messrs Railway Construction of Pakistan Ltd. Islamabad were awarded contract by the Karachi Development Authority to execute the project of construction of fly over on Rashid Minhas Road and allied works at Gulshan-e-Iqbal, Karachi. The said Company engaged the petitioner with the approval of K.D.A. and both mutually agreed to execute the said project jointly and for that purpose they entered into a sub-contract agreement, according to which the petitioner is the main Sub-Contractor, under obligation to construct, complete and maintain the project at an agreed lump sum cost. 

3. During construction, the petitioner pre cast certain material and put it in its designated position in the fly over. Since, 'in the opinion of Sales Tax Department, pre-casting of material for the construction of fly over is-an act of 'manufacture' as defined in subsection (16) of section 2 of the Act and the use of the said material in the construction of the fly over, is a business activity liable to Sales Tax, Deputy Collector (HQRs.) Sales Tax, East Karachi issued notice, dated 30-6-1998 to the petitioner, directing them to get their organization registered with the Sales Tax Department immediately. 

4. In their reply to the notice, the petitioner inter alia, took up the position that they did not sell, deliver or supply the-pre-cast material as such. The said material was not a marketable commodity because of its particular design, size and specifications. Such material could not be used in any other fly over, bridge building or construction work except the fly over for which it was designed. Besides, it lost separate entity when it was put in its designated position and merged in the fly over, which is not 'goods', as defined in subsection (12) of section 2 'of the Act. It was further contended that the mere act of manufacture did not attract levy of sales tax unless the goods so manufactured were supplied in the course or furtherance of a "taxable activity". 

5. The contentions of petitioner did not, however, find favour with respondent No.2, who compulsorily registered the petitioner as 'wholesaler' instead of manufacturer' and issued the impugned certificate of registration to them. 

6. Deputy Collector (Law) has filed parawise comments to the petition, pursuant to notice issued to the respondents by this Court. His case, in a nutshell, is that the petitioner is engaged in the manufacture of pre cast material within the meaning of section 2(16) of the Act, and is as such a 'manufacturer's as defined in section 2(17) of the Act. The pre cast material is taxable goods, which is supplied on wholesale basis, in the course of a business activity, to K.D.A., who is its consumer. Business activity as a wholesaler attracts the provisions of section 2 (47) of the Act. The petitioner has, therefore, been rightly registered as wholesaler. Since, the petitioner had not filed returns after their compulsory registration as required by section 26, notices were rightly issued to them under section 11 of the Act. Notices issued to the petitioner are, therefore, claimed to be legal and intra vires. It is also the case of the respondent that the Sales Tax is value added tax (VAT) mode based system and whenever any value addition takes place and goods are sold, the same are chargeable to Sales Tax. 

7. It is claimed on behalf of the petitioner that the Sales Tax is a Federal Tax and the Federal Government derives its power of taxation from the Constitution. Article 77 of the Constitution provides that the tax for the Federation can be levied only by or under the authority of the Parliament. Article 70 of the Constitution lays down that only a bill relating to matters falling with in the Federal Legislative list or Concurrent Legislative List can be moved before a House of Parliament. The Concurrent Legislative List; does not include power to impose any tax. Thus, the Federation's authority of taxation is restricted to the items enumerated in the Federal Legislative List more specifically items Nos.43 to 54; item No.49 of which provides for imposition of tax on sales and purchases of goods imported, exported, produced, manufactured and consumed. A cursory glance at the said item would make it clear that Sales Tax Act, 1990, was enacted by the Parliament in exercise of its authority under item 49 (ibid.). Preamble of the Act is also couched in words similar to those appearing in item No.49. Thus, under the Act, tax can be levied only on activities enumerated in the preamble. 

8. The Sales Tax Act starts with the preamble "whereas it is expedient to consolidate and amend the law relating to the levy of tax on the sale (importation, exportation, manufacture or consumption) of goods." Further, the Act goes on in its various clauses to define the terms contained in the Act but primarily starts with section 3 where the scope of the tax has been discussed. The scope of the tax from the bare reading of section 3 has been sub-divided into two portions; (1) taxable supplies made in Pakistan by a registered person in the course or furtherance of any taxable activity carried on by him; (2) goods imported into Pakistan. Section (IA) has been added by Finance Act, 1998 wherein it has been further elucidated that where taxable supplies are made in Pakistan to a person other than registered person there shall be charged levied and paid a further tax. Thereafter, there is a proviso, which stipulates that the additional 3% as contained in section (IA) shall not be charged, levied or paid if the taxable supplies are made by a person registered as a retailer or by any registered person to a person whose income is not liable to tax under the Income Tax Ordinance but has deducted income tax at source. 

9. Although, expression "taxable supplies" instead of "sales" has been employed in the charging section, which seems to have wider connotation than term "sales" used in the preamble and in item No-49 of the Federal Legislative List but in my humble opinion, the scope of the expression shall have to be restricted only to such transactions as may amount to sale. Any extended meaning would render the provision extra-Constitutional. 

10. Three terms/expressions used in the first part of the charging section, have been defined in the Act. These expressions are:--- 

(i) Supply 
(ii) Taxable activity 
(iii) Taxable supply. 

The question to be examined is whether, within the ambit of section 3 of the Act, being the charging section, 'supply' 'taxable activity' and taxable supply' defined in section 2(33), (35) and (41) of the Act, as also 'manufacture' used in definition of taxable activity' as defined in section 2(16) and 'wholesaler' defined in section 2(47) of the Act can be equated with 'sale' even notionally. 

11. For ease of reference, it would be necessary to reproduce these terms as defined in the Act ad seriatim; 

"16. Manufacture or produce includes--- 

(a) any process in which an article single or in combination with other articles, materials, components, is either converted into another distinct article or product or is so changed, transformed or reshaped that it .becomes capable of being put to use differently or distinctly and includes any process incidental or ancillary to the completion of a manufactured product; 

(b)---------------------------------------- 

(c) process and operations of assembling, mixing, cutting, diluting, bottling, packaging, repackaging or preparation of goods it, any other manner; 

(33) 'supply' includes sale, lease or other disposition of goods ill' the course or furtherance of business carried out for consideration and also includes:--- 

(a) putting to private, business or non-business use of goods acquired, produced or manufactured in the course of business; ' 

(b)---------------------- 

(c) ---------------------- 

(d) ---------------------- 

(34) 'taxable activity' means any activity which is carried on by any person, whether or not for a pecuniary profit, and involves in Whole or in part, the supply of goods to any other person, whether for any consideration or otherwise, and includes any activity carried on in the form of a business, trade or manufacture; 

(41) 'taxable supply' means a supply of taxable goods made in Pakistan by an importer; manufacturer, wholesaler (including dealer), distributor or retailer, other than a supply of goods, which is exempt under section 13 and includes a supply of goods chargeable to tjx at the rate of zero per cent under section 4; 

(47) 'Wholesaler' includes a dealer and means any person who curries on, whether regularly or otherwise, the business of buying and selling goods by wholesale or of supplying or distributing goods, directly or indirectly, by wholesale for cash or deferred payment or for commission or other valuable consideration or stores such goods belonging to others as an agent for the purpose of sale; and includes a person supplying taxable goods to person deducting advance tax under subsection (4) of section 50 of the income Tax Ordinance, 1979 (XXXI of 1979), and a person who in addition to making retail supplies is engaged in wholesale business; and--.' 

12. Section 3 of the. Act makes it clear that Sales Tax will be charged, levied and paid only when the taxable supply is made in the course or furtherance of "taxable activity". Definition of "taxable activity" lays down in clear and unambiguous terms that it involves in whole or in part, the supply of goods to any other person. In my view, this is the condition precedent for the levy of Sales Tax but a confusion has been created by clause (a) of subsection (33) of section 2 which lays down that "supply" includes putting to private, business or non-business use of "goods" acquired, produced or manufactured in the course of business. 

13. An apparent inconsistency between these two definitions, both of which appear in the charging section, strikes the mind at once while reading the two provisions in juxtaposition. While the definition of "supply" apparently renders even self-use of taxable goods chargeable to sales tax, the definition of "taxable activity" indicates that the tax can be levied only if the taxable supply is made to any other person. Obviously "self-use" cannot by any stretch of imagination be equated with supply to "any other person". 

14. As the laws are presumed to be passed with deliberation, and with full knowledge of all existing ones on the same subject, it is but reasonable to conclude that the legislature, in passing statute, did not intend to interfere with or abrogate any former law relating to the same matter, unless the repugnancy between the two is irreconcilable. 

15. It is, an accepted rule of construction of statutes that inconsistency or repugnancy is not to be readily assumed in a statute. It is an equally well-accepted principle of construction of statutes that an attempt should be made to reconcile and give effect to all the provisions. In the case of Ali Ameer v. Dalmia Cement (PLD 1961 Kar. 255), the rule was stated thus: 

"In interpreting the provisions of any statute or any other document effort should be made to interpret the various provisions in a manner so as to give effect to all of them and it should not be readily concluded that a particular provisions either redundant or repugnant with another. Attempt should be made to reconcile the various provisions unless it is not possible to do so. " 

16. In the case of Said Omer v. Federation of Pakistan and others (PLD 1956 Lah. 382), it was held that it is a cardinal principle of interpretation that redundancy must not be unnecessarily attributed to the legislature. In the case of Messrs Karachi Steam Navigation Company Limited v. Messrs Abdul Rehmari Abdul Ghani (PLD 1962 SC 90), it was held that redundancy in statutes is not to be attributed unnecessarily.. 

17. In the case of Gul Khan and others v. The State PLD 1986 Kar. 629, while holding that every effort should be made to avoid redundancy, the Court went to step further to hold that if necessary the 'language may be stretched so as to give it some meaning justified b context and object of the legislature. 

18. In para. No. 166 of the Crawford on the, "Construction of Statutes" it is stated: 

"The Court should seek to avoid any conflict in the provisions of the statute by endeavouring to harmonize and reconcile every part so that each shall be effective ...Consequently, that construction which will leave every word operative will be favoured over one, which leaves some word or provision meaningless because of inconsistency. " 

19. In the light of the above, neither expression "activity involving in whole or in part, the supply of goods to any other person" used in the definition of "taxable activity" can be construed as redundant or superfluous, nor can expression "putting to private business or non-business use of goods" (1) clause (a) of subsection (33) of section 2, to the definition of "supply" can be held to be redundant, unless the two provisions are absolutely repugnant or irreconcilable. Therefore, first of all an attempt is to be made to reconcile these two seemingly inconsistent provisions in the same section so as to give full effect to both. 

20. Before I embark upon this task, I would note one more principle: It is that; the object of the change, if any, made in the law is to be ascertained. 

21. In this respect, it is to be noted that a change was brought about in the charging section. The section as it stood before amendment was as under: 

3. Scone of tax.---(1) Subject to the provisions of this Act, there shall be charged, levied and paid a tax known as sales tax at the rate of fifteen per cent. of the value of--- 

(a) Taxable supplies made in Pakistan by a registered person in the course or furtherance of any business carried on by him; and 

Word "business" was substituted in clause (a) by the expression "taxable activity" with effect from 1st July, 1996 vide Finance Act, 1996. The definition of "taxable activity" was already on the statute book as sub�section (24) of section 2 of the Act, even prior to the said substitution. If, while amending a provision of law, a change is made in the phraseology it creates a presumption that the legislature had intended a change in the meaning--- 

22. In this regard reference may be made to para. No.304 of Crawford on the "Construction of Statutes" where it is stated: 

"Conversely a change in the phraseology creates a presumption that the legislature intended a change of meaning." 

It is, therefore, reasonable to presume that the amendment in the section was intended to bring about a change in the existing law. In my humble view, the said amendment was intended to narrow down the scope of the charging section. 

23. It is also a rule of construction of statutes that when the existing provision of law is absolutely contradictory to or inconsistent with the amending provision maxim: leges posteriores priores contraries abrogart would come into play. In the case of Ahmed Saeed Kirmani MLA v. Fazal Illahi, Speaker, West Pakistan Assembly (PLD 1956 Lah. 807), it was observed: 

"If the two provisions involve an absolute contradiction and it is impossible to construe them together, the former provision must give way to the latter. The maxim; lees posteriores priores contraries abrosant will come into play." 

24. In para. No.304 of Crawford on the construction of the statutes at page 620 it isstated.

"moreover, the clear intent of the amending clause of a statute must prevail over contradictory provision within any section thereof. "It is therefore clear that definition of terra 'supply' cannot overthrow the intention of the legislature which was amended to introduce a change in the scope of the tax and narrow it down."