TMI Blog1957 (5) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 75,000 on an estimated turnover of Rs. 12 lakhs on the ghee, cloth and sugar imported by the petitioner from outside Uttar Pradesh at the rate of one anna per rupee. In order to appreciate the principal argument addressed to us it is necessary to refer to certain provisions of the Act. Sub-section (1) of section 3-A of the Act as it stood prior to the coming into force of the U.P. Sales Tax (Amendment) Ordinance, 1956, empowered the State Government by notification in the Official Gazette to declare that the turnover in respect of any goods shall not be liable to sales tax save at such single point as the State Government may specify. Sub-section (2) of this section then provided that if the State Government makes a declaration under sub-section (1) it may further declare that the turn- over of the dealer who is liable to pay tax on the sale of such goods shall, in respect of such sale, be taxed at such rate as may be specified not exceeding one anna per rupee if the sale related to any of the classes of goods specified in the sub-section and to be taxed at such rate not exceeding nine pies per rupee if the sale was in respect of other goods. On the 31st March, 1956, the U.P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31st March, 1956. The argument is that the Governor's power to make such a declaration is to be found, if at all, in section 3-A(2) as amended by the Ordinance. That amendment did not however have effect under section 1(2) of the Ordinance until the 1st April, 1956. On the 31st March, 1956, section 3-A(2) of the Act stood unamended and under the unamended sub-section the Governor had no power to make the impugned declaration. The learned Standing Counsel has argued that the Governor had authority to make the impugned declaration in anticipation of the amended section 3-A(2) becoming law by virtue of section 22 of the U.P. General Clauses Act. Section 22 of the U.P. General Clauses Act was amended with effect from the 19th January, 1957, by section 3 read with item 2 of Schedule II of the Uttar Pradesh Repealing and Amending (Second) Act, 1956 (U.P. Act No. V of 1957), hereinafter called the Amending Act. It was conceded that the declaration in question was not saved by section 22 prior to this amendment; but it is contended that the amended section which has been given retrospective effect validates the declaration. The first question is, therefore, whether this contention is wel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Governor under the Constitution as they apply to an Uttar Pradesh Act. Our attention was drawn to the fact that under section 30 of the (Central) General Clauses Act, 1897, the expression "Central Act" in section 5 of that Act does not include an Ordinance made by the President; but the proviso to clause (b) of section 30 of the U.P. General Clauses Act makes specific provision for the application of that Act to Ordinances made by the Governor. In my opinion no question of the application of section 22 of the U.P. General Clauses Act for the purpose of establishing the validity of the notification issued by the Governor on the 31st March, 1956, arises. That notification was issued in exercise of powers "conferred by section 3-A of the U.P. Sales Tax Act, 1948, as amended from time to time". This can mean only that the notification was issued by the Governor in exercise of the power conferred on him under the unamended section 3-A. The notification was issued, in other words, under section 3-A prior to its amendment by section 4 of the Ordinance. In my opinion recourse can be had to section 22 of the U.P. General Clauses Act only if a notification is issued under an Act or Ordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in respect of any month before the expiry of the succeeding month, or if the return is submitted without the treasury chalan or cheque, the Sales Tax Officer shall, after making such enquiry as he considers necessary, determine the turnover to the best of his judgment, assess the tax payable for the month and serve upon the dealer a notice in Form XI; and the dealer shall pay the sum demanded within the time and in the manner specified in the notice." Prior to its amendment by the U.P. Act VIII of 1954, sub-section (1) of section 7 of the U.P. Sales Tax Act, so far as is material, provided that: "7. Determination of turnover and assessment of tax-(1) Subject to the provisions of section 18, every dealer whose turnover in the previous year is Rs. 12,000 or more in a year shall submit such return or returns of his turnover of the previous year within sixty days of the commencement of the assessment year in such form and verified in such manner as may be prescribed: Provided that the Provincial Government may prescribe that any dealer or class of dealers may submit, in lieu of the return or returns specified in this section, a return or returns of his turnover of the assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted for the existing sub-rule(1). Under this substituted sub-rule a dealer was required to submit a quarterly return on certain prescribed dates, but the substitution of the new sub-rule for the old was not effected until the 29th September, 1956. Between the coming into force of U.P. Act VIII of 1954 and the 29th September, 1956, it appears that there was no rule which authorised the assessing officer to make a provisional assessment. It has not been argued that the assess ing authority could make a provisional assessment under section 7-A read with section 7 of the U.P. Sales Tax Act, as then in force, nor have we been referred to any order of the State Government requiring dealers to submit quarterly returns, or prescribing the necessary forms. Other questions have been agitated in the course of the hearing of this petition and I think it proper, in deference to the arguments which have been addressed to us, to state shortly the conclusions at which I have arrived. It has been contended on behalf of the State that the Ordinance did not come into force on the day on which it was first published in the Gazette, and that accordingly the provisions of section 22 of the U.P. Genera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e State, it was the intention that sections 2 to 13 should come into force on the 1st April it is difficult to understand why the Ordinance did not plainly say so. With the exception however of sub-section (3) of section 3 each of the sections 2 to 13 amends a section of the U.P. Sales Tax Act, and in these circumstances I can see no substantial difference between the coming into force of sections 2 to 13 and the coming into force of the amendments made by them. It is in my judgment an over-refinement to say, as was suggested in the course of argument, that these sections came into force on one date and the amendments made by them on another. The position then is (in my view) that sections I and 3(3) came into force on the day on which the Ordinance was first published in the official Gazette, and that the remaining provisions of the Ordinance came into force on the following day. The phrase used in section 5 of the U.P. General Clauses Act is "expressed to come into force" which means, in my opinion, that the Act or Ordinance must contain a provision stating the date upon which it is to come into force. In the past it was not unusual for provision to be made in an Act that the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the day the Act was published it necessarily follows that the Act has come into force. Whether it has done so or not must in my opinion depend on the intention of the Legislature to be derived from the enactment itself. Now in the case of the present Ordinance there can I think be little doubt that it was the intention of the Governor that the Ordinance should come into force on the 1st April. The purpose of the Ordinance was to amend the U.P. Sales Tax Act, 1948; that purpose was to be achieved by sections 2 to 13 of the Ordinance, and the amendments effected by those sections were not to be effective until the 1st April, 1956. The Ordinance was, in the words of Lord Goddard, in a state of suspended animation, until that date. I do not see any good reason why section 22 of the U.P. General Clauses Act should be narrowly construed. It is, as I have said, an enabling section; and in the public interest it should be liberally interpreted. In my opinion the Ordinance did not come into force, within the meaning of section 22, on the day on which it was published. The remaining submissions made by the learned counsel for the petitioner fall into two groups. 1.. On the assumption that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . On the other hand dealers in commodities to which the notification did not apply could, and did, pass on to their customers the burden of the sales tax which they had to pay. The petitioner and other dealers in the commodities in which he deals have, in this way, been discriminated against without any fault on their part. There is, it is argued, no reasonable or rational basis for imposing a sales tax which can be passed on to the customers of one class of dealers while imposing a similar tax which cannot be passed on to the customers of another class of dealers. It is also contended that as the ability to pass on the burden of a sales tax to the consumer is an essential feature of such a tax, it follows that if a tax is imposed in the guise of sales tax which does not possess that essential feature, it is not a tax which can fall under item 54 of List II of the Seventh Schedule of the Constitution and is beyond the competence of the State Legislature. There are several assumptions underlying this argument which, in my opinion, are not justified. In the first place, where the consumer has to pay sales tax, as such, each time he makes a purchase in the market, it is difficult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant has not been able to cite any authority in support of the proposition that a sales tax cannot be imposed with retrospective effect. On the other hand, in the case of Darsan Ram v. The State of Bihar[1957] 8 S.T.C. 534; A.I.R. 1957 Pat. 173., sales tax had been imposed in the Chhota Nagpur area with retrospective effect, and its validity was not questioned on that ground. In the present case it is not contended on behalf of the petitioner that there was anything discriminatory in the Notification that was issued on the 31st March, 1956. All dealers in the commodities mentioned in the Notification were dealt with on the same footing. It is further conceded that there is nothing discriminatory in the amended provision of section 22 of the U.P. General Clauses Act. That, too, applies to every one in the same manner. In the ultimate analysis, therefore, the real basis of the grievance that the retrospective validation of the notification is discriminatory as against the petitioner and the class of dealers to which he belongs is the contention that a sales tax cannot be levied with retrospective effect. We are unable to accept this contention. A person who is subjected to a tax can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorise the dealer to withhold payment of tax on the ground that he is not liable therefor. In the present case the return submitted by the petitioner was not accompanied by a treasury chalan or cheque. I am therefore of opinion that the Sales Tax Officer was-assuming rule 41 to be valid-free to determine the turnover of the petitioner to the best of his judgment, and provisionally to assess the tax payable by the petitioner for the quarter ending the 30th June, 1956. (b) The petitioner's contention is that under section 7-A of the U.P. Sales Tax Act read with the proviso to sub-section (3) of section 7 of that Act the assessing authority could not proceed to make a best judgment assessment, on the ground that the assessee's return was in- correct or incomplete, without first giving the assessee a reasonable op- portunity of proving the correctness and completeness of his return; and that the petitioner had no such opportunity. This complaint however is not to be found among the grounds on which relief is sought in the petition. No statement is made in the affidavit filed in support of the petition that the petitioner was not in fact afforded an opportunity of proving the corr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s promulgated as the need for immediate action was one of the factors justifying the promulgation of the Ordinance. The preamble of the U.P. Ordinance in suit is "whereas the Governor is satisfied that circumstances exist which render it necessary immediately to amend the U.P. Sales Tax Act, 1948." This makes it clear that the Governor considered it necessary to amend the U.P. Sales Tax Act immediately. Such an immediate amendment could be the result only if the Ordinance came into force at once on its promulgation. Section 5 of the United Provinces General Clauses Act provides that where an Uttar Pradesh Act is not expressed to come into force on a particular day, then such an Act made after the commencement of the Constitution shall come into operation on the day on which the assent thereto of the Governor or the President, as the case may be, is first published in the official Gazette. According to section 30, the provisions of the Act apply to an Ordinance promulgated by the Governor under Article 213 of the Constitution as they apply in relation to Uttar Pradesh Acts made by the State Legislature. Where such an Ordinance is not expressed to come into force on a particular da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dment) Ordinance, 1956." The expression "this Ordinance" does not mean any particular section or sections but means the entire Ordinance. It is the coming into force of the entire Ordinance that we have to look to. The entire Ordinance as such is not expressed to come into force on any particular day and, therefore, must be held to have come into force on the 31st March, 1956, when it was first published in the U.P. Gazette. Learned Standing Counsel has drawn our attention to section 30 of the General Clauses Act, 1897, according to which the expression "Central Act" in section 5 of the Act and the word "Act" in certain clauses including clause (13) of section 3 do not include an Ordinance. Section 5 refers to the coming into operation of the Act and is: "5. (1) Where any Central Act is not expressed to come into operation on a particular day, then it shall come into operation on the day on which it receives the assent,- (a) in the case of a Central Act made before the commencement of the Constitution, of the Governor-General, and (b) in the case of an Act of Parliament, of the President. (2) Unless the contrary is expressed, a Central Act or Regulation shall be construed as comi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of those Acts do not take effect till a much later date. Those provisions as part of the Act do come into force when the Act itself comes into force, but do not operate or become effective till a later date on account of the provisions of the Act itself. It is just incidental that in this particular Ordinance sections 2 to 13 are the substantive enactments and, but for the provisions of sub-section (3) of section 3, amend the provisions of the U.P. Sales Tax Act, 1948, but it can be easily visualised that an Ordinance might have had many other provisions as well whose coming into effect was not put off to a later date. The question would still have been whether that Ordinance came into force at once or not. To us it is clear that the Ordinance would be deemed to have come into force at once and that its provisions which were to take effect later were to do so on account of the provisions of the Ordinance itself and not on account of the fact that the Ordinance had not come into force. Lastly, sub-section (2) of section 1 simply provides that the amendments to the U.P. Sales Tax Act, 1948, made by sections 2 to 13 shall have effect on and from the first day of April, 1956. It ..... X X X X Extracts X X X X X X X X Extracts X X X X
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