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1958 (3) TMI 40 - SC - VAT and Sales TaxWhether the Andhra (Madras) Act, in fact, imposes a tax on the class of sales falling within the Explanation to Article 286(1)(a)? Whether the impugned Act is ultra vires on the ground that it is not authorised by the terms of Article 286(2)? Whether section 22 of the Andhra (Madras) Act is within the protection of the impugned Act, and Whether the impugned Act validates only levies and collections made during the specified period, or whether it authorises the imposition and collection of taxes on such sales in future? Whether section 22 of the Madras Act was null and void on the ground that it was in contravention of Article 286(2), and whether the proceedings sought to be taken thereunder on the strength of the impugned Act are incompetent? Whether tax on inter-State sales is within the exclusive competence of Parliament, and whether the impugned Act is, in consequence, bad as authorising the States to levy tax? Whether the proposed imposition of tax is illegal on the ground that successive sales of yarn are subject under the law to be taxed at only one point, and as the State of Madras has already taxed the present sales, the State of Andhra cannot again levy a tax on them? Whether the proposed imposition of tax on yarn by the Andhra State is hit by the Essential Commodities Act (LII of 1952) read with Article 286(3) and is illegal? Held that:- The contention urged on behalf of the States that the Explanation to Article 286(1)(a), being a provision of the Constitution, operated by its own force to impose a tax on the sales covered by it, and did not require to be sup- plemented by any State legislation to become effective, does not call for any detailed consideration. Suffice it to say that it cannot be maintained if the true scope of Article 286 is to define and limit the powers of State Legislatures with reference to imposition of sales tax and not to itself impose it. If conditional legislation is valid, as we have held it is, then section 22 is clearly intra vires, and the foundation on which this contention of the petitioners rests, disappears and it must fall to the ground. In the result, we are of opinion that the impugned Act is intra vires, and is not open to challenge on any of the grounds put for- ward by the petitioners. We are disposed to think that the concluding words of Article 372(2) preclude an attack on the Adaptation Order only on the ground that it does more than merely bringing the State law into conformity with the Constitution and is, in consequence, ultra vires the powers conferred by that Article. In the result, we must hold that section 22 of the Madras Act is within the protection afforded by section 2 of the impugned Act. The true construction of section 2 is that the two clauses therein are, as indicated by the conjunction, distinct and independent in their operation, and that the laws of the States are kept in force in respect of sales which had taken place during the specified period, and that proceedings in respect thereof for assessment are within the protection of the Act. The fallacy in this contention of the petitioners lies in mixing up the period, the sales during which are brought within the operation of the Act, with the period of the operation of the Act itself. The former may be said to be temporary, but the latter clearly is not. Whether we consider the question on broad principles as to the effect of unconstitutionality of a statute or on the language of Article 286(2), the conclusion is inescapable that section 22 of the Madras Act and the corresponding provisions in the other statutes cannot be held to be null and void and non est by reason of their being repugnant to Article 286(2) and the bar under that Article having been now removed, there is no legal impediment to effect being given to them. If the States had the power under Entry 54 to impose a tax on inter-State sales subject only to the restriction enacted in Article 286(2), then by virtue of the impugned Act such law is rendered operative and proceedings taken thereunder are valid. We have reached this conclusion on a construction of the statutory provisions bearing on the question without reference to the Sixth Amendment of the Constitution which, proceeding on the view that the States had the power to tax inter-State sales under Entry 54, has amended the Constitution, and has vested the power to tax inter- State sales in the Centre. Section 53 merely provides that the laws in existence in the territories which were constituted into the State of Andhra should continue to operate as before. In fact, by an Adaptation Order issued on November 12, 1953, even the name of Andhra was substituted for Madras in the Madras General Sales Tax Act. There is no substance in this contention. The Madras Act was in force in the territories which now form part of the Andhra State until October 1, 1953, and thereafter that Act continues to be in operation by force of section 53 of the Andhra State Act. Moreover, the Madras Act became operative in the new State of Andhra not under any law passed by the Legislature of the State of Andhra but under section 53 of a law enacted by Parliament and therefore Article 286(3) has no application. We should add that the Essential Commodities Act (LII of 1952) has itself been repealed and is no longer in operation. This contention of the petitioners also should be rejected. Appeal dismissed.
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