1982 (2) TMI 276 - HC - VAT and Sales Tax

Issues Involved:
1. Validity of new rule 46A due to lack of "previous publication."
2. Retrospective operation of new rule 46A.
3. Reasonableness of the three-month application period under sub-rule (2).
4. Ultra vires nature of sub-rule (3) of new rule 46A.

Issue-wise Detailed Analysis:

1. Validity of New Rule 46A Due to Lack of "Previous Publication":
The core of the controversy is whether the new rule 46A required "previous publication" as mandated by section 25 of the Assam General Clauses Act, 1915. The petitioners argued that the absence of previous publication rendered the rule void, citing Bhopal Municipality v. M. Hasan, which emphasized the necessity of previous publication for ensuring justice and fair play. The court noted that if the rule was made under section 39 of the Act, previous publication was mandatory. However, if it was under section 24A(2), which does not mention previous publication, the rule would be valid. The court concluded that section 24A(2) itself conferred the rule-making power, thus negating the need for previous publication. Consequently, the first ground of challenge was dismissed.

2. Retrospective Operation of New Rule 46A:
The petitioners contended that the new rule 46A was invalid as it was given retrospective effect from January 1, 1968, which was not authorized by the Act. The court agreed, stating that a rule-making authority cannot give retrospective effect unless explicitly authorized by the statute. This principle is supported by multiple Supreme Court rulings, including Income-tax Officer v. M.C. Ponnoose and Hukam Chand v. Union of India. Therefore, the court held that the new rule 46A could not operate retrospectively and must be deemed effective from November 2, 1971.

3. Reasonableness of the Three-Month Application Period Under Sub-rule (2):
The petitioners challenged the three-month application period for claiming benefits under sub-rule (2) as an unreasonable restriction under Article 19. The court noted that the rule should apply to sales occurring on or after November 2, 1971, as the rule could not operate retrospectively. The learned Advocate-General conceded that a dealer could not be expected to comply with an impossible condition. Therefore, the court held that the three-month period would apply only to sales after the rule's effective date, thus addressing the reasonableness concern.

4. Ultra Vires Nature of Sub-rule (3) of New Rule 46A:
The petitioners argued that sub-rule (3), which allowed the State Government to specify classes of goods as raw materials, was ultra vires section 24A(2). They contended that this power could exclude certain goods from being considered raw materials, contrary to the statute's intent. The court interpreted sub-rule (3) to mean that the government could only include additional goods as raw materials but could not exclude any goods that are ordinarily considered raw materials. Thus, sub-rule (3) was not ultra vires section 24A(2).

Conclusion:
The court upheld the validity of the new rule 46A, subject to its interpretation of sub-rules (2) and (3). The rule could not operate retrospectively beyond November 2, 1971. The respondents were directed to grant benefits based on the old rule 46A for periods before this date. The petitions were disposed of accordingly.

← Previous Next →