1968 (8) TMI 117 - SC - VAT and Sales Tax

Section 22 of the General Clauses Act (corresponding to section 37 of the English Act) is a section dealing not merely with construction but with interpretation and it follows that the provisions of that section are applicable for the interpretation of the Act in view of the requirement of section 29 thereof

Issues Involved:
1. Validity of the Rules under the Rajasthan Sales Tax Act, 1954.
2. Retrospective validation of the Rules by the Rajasthan Sales Tax Rules Validating Ordinance and Act.
3. Applicability of Article 20(1) of the Constitution regarding the imposition of penalties.

Detailed Analysis:

1. Validity of the Rules under the Rajasthan Sales Tax Act, 1954:
The primary issue was whether the rules framed under the Rajasthan Sales Tax Act, 1954, were legally operative from April 1, 1955. The respondent argued that no rules were validly made under section 26(5) of the Act during the material period. The High Court had quashed the penalties imposed on the company on the grounds that the rules were not validly framed initially and could not be given retrospective effect by the Rajasthan Sales Tax Rules Validating Ordinance No. 5 of 1959 and the Rajasthan Sales Tax Rules Validating Act No. 43 of 1959.

The Supreme Court held that section 22 of the General Clauses Act expressly confers on the rule-making authority the power to make rules even during the interregnum between the date of the commencement of the Act and the date of its enforcement. The rules published on March 28, 1955, before the Act came into force, were validly made in exercise of the rule-making power of the State Government. The Court stated, "It is apparent that section 22 of the General Clauses Act expressly confers on the rule-making authority... the power to make rules even during such interregnum."

2. Retrospective validation of the Rules by the Rajasthan Sales Tax Rules Validating Ordinance and Act:
The Solicitor-General argued that even if the rules were not initially valid, they were subsequently validated by the Rajasthan Sales Tax Rules Validating Ordinance No. 5 of 1959 and the Rajasthan Sales Tax Rules Validating Act No. 43 of 1959, which were retrospective in character.

The Supreme Court did not find it necessary to express an opinion on this point since the first argument regarding the validity of the rules from April 1, 1955, was accepted. The Court stated, "It is therefore not necessary for us to express any opinion on the second and third questions raised by the Solicitor-General in the course of his argument."

3. Applicability of Article 20(1) of the Constitution regarding the imposition of penalties:
The High Court had quashed the penalties on the grounds that the imposition of penalties contravened Article 20(1) of the Constitution, which prohibits the imposition of penalties for acts that were not offenses at the time they were committed.

The Supreme Court did not delve into this issue, as the appeal was allowed on the first ground itself. The Court stated, "In our opinion, the argument addressed by the Solicitor-General on the first point is well-founded and must be accepted as correct and the appeal must be allowed and the judgment of the Rajasthan High Court should be set aside on that ground alone."

Conclusion:
The Supreme Court set aside the judgment of the Rajasthan High Court dated April 3, 1965, and dismissed Civil Writ Petition No. 401 of 1963 filed by the respondent. The appeal was allowed with costs. The Court concluded that the rules published on March 28, 1955, were validly made and should be deemed to have come into effect from April 1, 1955. The Court stated, "We accordingly overrule the view taken by the High Court on this aspect of the case."

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