1971 (1) TMI 98 - SC - VAT and Sales Tax

Validity of Notification No. 976 issued under the provisions of the Tamil Nadu General Sales Tax Act 1959 which was to come into force on April 1 1959 questioned - Held that - Appeals are allowed and the decision of the High Court is hereby reversed as the notification in question was stated to come into force on April 1 1959. Besides it was published on that very day. Therefore in terms of clause (b) it came into force only on April 1 1959 and not earlier. No one has challenged nor indeed it can be disputed that on April 1 1959 a valid notification could be issued under section 17 of the Act. For this reason alone the validity of the notification must be upheld.

Summary

Issues:
Validity of Notification No. 976 under Tamil Nadu General Sales Tax Act, 1959.

Analysis:
The case involved a dispute regarding the validity of Notification No. 976 issued under the provisions of the Tamil Nadu General Sales Tax Act, 1959. The respondents, who were dealers in fruits in Tamil Nadu, were initially exempted from paying tax on the sale of fruits under the Madras General Sales Tax Act, 1939. However, a new notification issued under the 1959 Act made the sale of fresh fruits taxable from April 1, 1959. The High Court, in its judgment, struck down the notification, stating that it was issued before the Act came into force, which was deemed as an exercise of power that did not exist at the time of promulgation. The High Court also held that the respondents were entitled to the exemption granted under the previous 1939 Act.

In analyzing the legal provisions, Section 3 of the Act provided for the levy of taxes on the sale or purchase of goods, including fresh fruits. The government was empowered under Section 17 to make exemptions or reductions in tax rates through notifications. The impugned notification was issued on March 28, 1959, before the Act came into force on April 1, 1959. However, the notification was actually published in the Gazette on April 1, 1959, when the Act was in effect. Section 53(4) of the Act specified that notifications come into force on the day of publication unless stated otherwise. As the notification explicitly stated April 1, 1959, as the effective date and was published on the same day, its validity was upheld based on the legal provisions.

The court dismissed the respondents' reliance on a previous case, stating it was irrelevant to the present matter. Ultimately, the Supreme Court allowed the appeals, reversing the High Court's decision and dismissing the writ petitions. Each party was directed to bear their own costs, concluding the legal proceedings.

In conclusion, the Supreme Court upheld the validity of Notification No. 976 under the Tamil Nadu General Sales Tax Act, 1959, and reversed the decision of the High Court, thereby dismissing the writ petitions filed by the respondents.