TMI Blog1973 (4) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... except one dealing exclusively in goods declared tax-free under Section 6, whose gross turnover during the year immediately preceding the commencement of the Act, exceeds the taxable quantum, shall be liable to pay tax, under this Act after coming into force of this Act. This came: into force on 1st of May, 1949. Section 5 of the Act' provides the rate of sales tax to be paid by a dealer. This section further provides a higher rate of tax on the sale of luxury goods as specified in Schedule 'A' of this Act. This section makes a provision that the State Government after giving by notification not less then twenty days notice of its intention to do so, may by like notification add to or delete items from Schedule 'A'. Section 6 of the Act provides, that no tax shall be payable on the sale of goods specified in the first column of Schedule 'B' subject to the conditions and exceptions, if any, set out in the corresponding entry in the second column thereof and no dealer shall charge sales tax on the sale of goods which are declared tax-free from time to time under this section. Sub-section 2 of this section further provides that the State Government, after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -vide its notification No. S.O. 3/P.A. 46/48/S. 6/Amd/72, dated 18th January, 1972, substituted entries of Items- 44, and 54 of Schedule 'B', as under:-- 44. Fertilizer except oil cakes. 54. Fodder of every type (dry or green) except oil cakes. The State of Punjab then issued an ordinance (Punjab Ordinance No. 2 of 1972) called the Punjab General Sales Tax (Amendment and Validation) Ordinance of 1972, published in the Punjab Government Gazette (Extraordinary) dated November 15, 1972, and made an amendment in the provisions of the Punjab General Sales Tax Act through this Ordinance, giving retrospective effect to the amendment made by notification dated 18th January, 1972, in Item Nos. 44 and 54 in the matter of charging sales tax on the oil cakes. This ordinance was taken replaced by an Act, called the Punjab, General Sales Tax (Amendment and Validation) Act, 1972, which act came into operation as Act No. 3 of 1973, on 4th of January, 1973. Section 10 of this Act is in the following terms:-- 10(1) The amendments made in Schedules A and B of the principal Act by notifications No. S.O. 7/P.A. 46/48/S. 5/ 71, dated the 15th February, 1971, and No. S.O. 8/P.A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od of limitation provided therein. (3) For the removal of doubts, it is hereby declared that nothing in sub-section (1) shall be construed as preventing any person-- (a) from questioning in accordance with the provisions of the principal Act and rules made thereunder, the assessment, re-assessment, levy or collection of such tax; (b) from claiming refund of any tax paid by him in excess of the amount due from him under the principal Act as amended by the Punjab General Sales Tax (Amendment and Validation) Act, 1972. In all the writ petitions the petitioners have challenged Ordinance No. 2 of 1972 and Punjab Act No. 3 of 1973, claiming that the said law is ultra vires of the Constitution and it violates Article 19(1)(f) (g) of the Constitution of India and that the State Legislature abdicated its functions in favour of the State Government by not applying its own mind in amending the Punjab General Sales Tax Act, retrospectively. 2. On the other hand, the stand taken by the State Government is that the sale of oil cakes was leviable to the sales-tax with effect from; 19th April, 1958, when entry No. 43 regarding the oil cakes was deleted from Schedule 'B' o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, as this item having been included in Schedule 'A' as luxury goods. On March 6, 1967, the State Government again issued two notifications Nos. S.O. 20/PA-46/48/S-5/67 and S.O. 21/PA-46/48/S-5/67, exhibiting its intention to propose amendment in Schedules 'A' and 'B' of the Act regarding the aforementioned items. The proposal was to substitute Item No. 24 in Schedule 'A' of the Act, as under:-- Foreign liquor as defined in sub-para (2) of paragraph 2 of the Punjab Excise Definitions, 1954 . The proposal to amend entry 37 in Schedule 'B' was as under:-- All goods, except foreign liquor as defined in sub-para (2) of paragraph 2 of the Punjab Excise Liquor Definitions, 1954, on which duty is or may be levied under the Punjab Excise Act, 1914, or the Opium Act, 1878 5. It may be pointed out that the said notifications were published by the State Government under Sections 5 and 6 of the principal Act, so as to give notice to all concerned of Government's intention to make an amendment in the said Schedules. The State Government after the expiry of a period of three months, then issued final notifications on July 18, 1967, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oned 2(a) of paragraph 2 of the Punjab Liquor Definitions, 1954. It is contended by the State Government that the word (a) printed along with sub-para (2) of para 2 of the Punjab Excise Liquor Definitions, 1954, as printed in the; Amended Schedules A and B, referred to above, was in fact, superfluous and the intention of the Government was to levy sales tax on the sale of foreign liquor as defined in sub-para (2) of paragraph 2 of the Punjab Liquor Definitions, 1954. In order to achieve this end, the State Government issued two Notifications, dated 11th August, 1967, purporting to be a corrigendum to correct a typographical mistake which had crept in the notifications, dated 18th July, 1967. The said notifications were to the following effect:-- Omit the letter and brackets '(a)' in the first line of item (24) as substituted by that notification and omit the letter and brackets '(a)' in the second line of item 37 as substituted by that notification. However, since according to the State Government, these notifications were being issued in order to rectify a typographical mistake, therefore, the procedure as prescribed under sections 5 and 6 of the princi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d sales tax on the Indian made foreign liquor prospectively. Subsequently, in order to cover the assessments and the recovery of the sales tax on the sale of liquor from 18th July, 1967 to 14th February, 1971, which according to the State Government was to be levied in keeping with the intention of the Legislature, but could not be levied in view of the judgment of the learned Single Judge of this Court, reported in M/s. Krishan Lal Bajaj Co's case 1970 Rev. L.R. 831, (Supra), the State of Punjab issued Ordinance No. 2 of 1972 on 15th November, 1972, which Ordinance has now been replaced by Act No. 3 of 1973, published in the Punjab Government Gazette (Extra.), of January 4, 1973. Section 10 of the said Act, which is relevant for the present purposes also has already been reproduced in the earlier part of the judgment. This section validates the levy and collection of the sales tax retrospectively on the oil cakes as well as on the Indian made foreign liquor, as is apparant from the provisions of the Act. Since the attack on the impugned enactment is on the common grounds by the petitioners who are dealing with the sale of oil cakes or the liquor, therefore all these writ pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s connection may be appropriately made to Supreme Court decisions in M/s. Krishnamurthi Co., etc. v. State of Madras and another A.I.R. 1972 S.C. 2455, and in Rai Ramkrishna and others, etc. v. State of Bihar A.I.R. 1963 S.C. 1667. 13. I fail to understand how the petitioners can successfully contend that the amending Act has violated Article 19(1)(f) (g) of the Constitution of India. The State Government throughout interpreted the intention of the State Legislature that the sales tax is leviable on the sales of oil cakes and foreign liquor as defined in Punjab Liquor Definitions, 1954, as from 19th April, 1958, onwards when item No. 43 was deleted from Schedule 'B' of the Act in the case of oil cakes and with effect from 18th July, 1967 in case of Indian made foreign liquor. The State Government throughout held the view that sales tax was chargeable on these goods. It is averred in the writ petitions by the petitioners that they have been paying sales tax to the State Government and the only plea taken is that because of the judgment of this Court, reported in M/s. Punjab Corpra Crushing Mill's case C.W. No. 734 of 1970 decided on 4th August, 1971 (supra), they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Goyal also. No doubt while issuing Notification, dated 18th January, 1972, the State Government could levy sales tax on the sale of oil cakes provisionally as the power given to the State Government under sub-section (2) of section 6 is to that effect, but it is equally clear that the State Legislature can amend the Act retrospectively for which it has legislative competency. It is by an Act of the Legislature by section 10 of the Amending Act that entries 44 and 54 are being given to the State Government under sub-section 2 of section 6 cannot be confused with the Legislative competence to overhaul and make minor repairs to the Act itself. The plea that section 10 of the Amending Act gives retrospective effect to the notification, dated 18th of January, 1972, issued by State Government and, therefore, the Legislature abdicated its functions in favour of the State Government is also without any merit. It is only the form of making provisions in the Act that reference has been made to the notification issued by the State' Government. No doubt the Act could be drafted in another way, whereby substituting the original entries by the substituted entries but that is only a quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is no conflict in the entries. It is clear that under entry No. 43, the oil cakes will not be subjected to the sales tax and oil cakes will not be covered either by Fertilisers--entry No. 44 or entry No. 54, i.e., Fodder. This position will continue till 18th April, 1958, when entry No. 43 was deleted from Schedule 'B'. From 19th April, 1958, the entries in the Schedule 'B' will read as follows:-- 44--Fertilisers, except oil cakes. 54--Fodder of every type (dry or green) except oil cakes. From these entries as they are in the amending Act, it would be clear that the sales tax on the sale of the oil cakes will be leviable from 19th April, 1958. To similar effect are my observations regarding the entries relating to liquor and there does not appear to be any conflict in the entries of Schedule B if full effect is given to the provisions of Section 10 of the impugned Act. Therefore, it is idle to contend that there does come into existence conflict in the entries of Schedule B, referred to above, if effect is given to Section 10 of the amending and Validation Act. 17. The only contention in this connection raised is that since entry No. 54 regardin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment will issue a notification specifying the date of the enforcement of the Act. As provided in Section 1, subsection 2, the Pondicherry Government issued a notification, dated March 1, 1966, bringing into force Madras Act, as extended by the Act of Pondicherry from April 1, 1966. In the meantime the Madras Legislature has amended the Madras Act and consequently it was Madras Act, as amended up to April 1, 1966, which was brought into force under the said Notification. The Act passed by the Pondicherry Assembly was quashed by the Supreme Court, on the ground that the Pondicherry Legislature not only adopted Madras Act as it stood on the date when it passed the principal Act but also enacted as if Madras Legislature were to amend its act prior to the date when the Pondicherry Government would issue its notification, it would be the amended Act which would apply. It was held by their Lordships that the Pondicherry Legislature could not at that time anticipate as to what amendment would be effected by the Madras Legislature in the Act and that clearly showed that the Pondicherry Legislature abdicated its functions in favour of the Madras Legislature without even knowing as to wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not charge sales tax from their customers, and, therefore, for this period atleast they could not pass on the levy of the sales tax to the purchasers which they would have ordinarily done if it was known that the sales tax was leviable for that period also. It is,' therefore, contended that the profit earned by the petitioners during this period had become their property and the levy of the sales tax for this period by the amending Act is not justified and is ultra vires of Article 19(1)(f) (g) of the Constitution. In my opinion, this contention of the learned counsel for the petitioners cannot prevail. A similar argument was raised before their Lordships of the Supreme Court in M/s. Krishnamurthi and Co., etc. v. State of Madras and another A.I.R. 1972 S.C. 2455, which was repelled in the following terms:-- Mr. Setalvad has referred to the fact that the appellants did not realise the sales tax on the sale of furnace oil at the rate of 6 per cent during at least some part of the period for which retrospective operation had been given to the amending Act. It is contended that this fact should weigh with this Court in striking down the provisions of the amending Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, in the month of February, 1971, the petitioners did not pass on the sales tax to the customers. Para No. 9 of the Civil Writ No. 429 of 1973, which has been referred to by the learned counsel for the petitioners, is a general averment and no specific averment regarding this period has been made. There is no allegation to the effect that because of the judgment of this Court reported in M/s. Krishan Lal Bajaj Co's case (supra), the petitioners could not pass on the sales tax to the customers. It has further to be seen that when a particular section is struck down by the Court, it naturally takes some time to pass the, validating law. In the nature of things, sometimes bound to lapse between the striking down of a particular section and the validating law being passed. It would be observed that the State Government continued pursuing its remedies by filing Letters Patent Appeal and moving a Supreme Court application after the judgment was announced striking down the notifications of August 11, 1967 and when it failed in getting the judgment of the learned Single Judge in M/s. Krishan Lal Bajaj Co's case, supra, set aside, then the State Government issued notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e authorities in recovering the tax, which was not exigible under the Act, which was sought to be recovered under Section 11(2) of the Amending Act, was struck down. To the similar effect are my observations regarding the decision of the Supreme Court in Kanti Lal Babulal's case relied upon by Shri Tirath Singh. In that case also with provisions of section 12(a)(4) of the Bombay Sales Tax Act, 1946, which authorised the authorities to recover the tax as arrears of land revenue from the assessee who had charged the tax from the customers in contravention of the provisions of sub-section (1) or (2) of the said section, which prohibits the charging of the sales tax by the dealers on the goods declared tax free, were struck down by the Supreme Court and in this view of the matter, the amount realised as arrears of land revenue under these provisions was held to be payable back to the dealers. Therefore, none of the decisions relied upon by the learned counsel for the petitioners is of any assistance to him. It is clear that in view of the amending Act having been passed by the Constitution, the petitioners are not entitled to receive back any amount paid by them as sales tax as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lature derives its power to legislate from Article 245 of the Constitution and that Article specifically makes the power subject to the provisions of the Constitution which include Article 226, therefore, it is not open to the Legislature to enact any law which either directly or indirectly, affects the powers conferred by Article 226 of the Constitution, on the High Court. It was on this ground that the provision of the amending Act was set aside as it encroached upon the powers of the High Court under Article 226 of the Constitution. In the present case, I have already pointed out that there is no direction given to the Courts at all. The impugned section only gives jurisdiction to the Assessing Authority to bring the Assessments and re-assessments in conformity with the Amendment and Validation Act, 1972. No other point has been pressed by Mr. Munjral in support of) his petitions. 25. The only other argument which needs to be noted is that of Mr. R.N. Narula, learned counsel for the petitioner in Civil Writ No. 429 of 1973, to the effect that his client was a licensee for the year 1970-71 and during this period he could not collect the sales tax from 9th of September, 1970, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the State of Kerala. The said area was governed by the Madras Preservation of Private Forests Act, 1949. Under the provisions of this Act, no owner of the Forest could remove the wood from the forest except with the permission of the District Collector. The petitioner in that case was allowed by the Collector to cut certain trees from the forest and the petitioner derived an income of ₹ 3,100 per year from the sale of the said trees. The case of the petitioner was that even though he earned a sum of ₹ 3,100 per year, a tax to the tune of ₹ 50,000 per year was being claimed. On these facts it was held that the impugned Act being discriminatory, imposes unreasonable restriction on the fundamental right of the petitioner. This decision has nothing to do with the facts of the present case. No other argument has been advanced by Mr. R.N. Narula. 26. For the reasons recorded above, there is no merit in all these petitions and the same are dismissed with costs. P.C. Pandit, J. 27. The conclusions arrived at by my learned brother rind full support from a recent decision of the Supreme Court in Hira Lal Rattan Lal v. Sales Tax Officer, Section III, Kanpur, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar; (iv) that Explanation II to section 3-D(1) did not violate article 14 of the Constitution of India; (v) that the retrospective levy was not violative of article 19(1)(f) or (g); the amendment was necessitated because of the Legislature's failure to bring out clearly in the principal Act its intention to separate processed or split foodgrains from unprocessed or unsplit foodgrains and the retrospective amendment became necessary as otherwise the State would have had to refund large sums of money; (vi) that the fact that the retrospective levy did not afford an opportunity to the dealers to pass on the tax to the consumers had no relevance in considering the legislative competence of the levy; (vii) that Explanation II clearly brought to tax with retrospective effect split or processed foodgrains as well; (viii) that no fresh notification was necessary to tax split or processed foodgrains; because of Explanation II, the expression foodgrains in the notification already issued had to be read as containing two different items, processed or split foodgrains and unprocessed or unsplit food-grains; (ix) that section 3-D had not made any excessive delegation of ..... 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