1959 (12) TMI 51 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Constitutionality of the proviso to Sub-section (1) of Section 3 of the Mysore Sales Tax Act, 1948.
2. Whether the unconstitutional provision is non-existent or merely unenforceable.
3. Applicability of the doctrine of eclipse to the proviso.
4. Binding nature of conflicting Supreme Court decisions on lower courts.

Detailed Analysis:

1. Constitutionality of the proviso to Sub-section (1) of Section 3 of the Mysore Sales Tax Act, 1948:
The petitioner, a partner of Hotel New Krishna Bhawan, was served a notice by the Commercial Tax Officer to produce account books for the year 1956-57. The petitioner contended that the proviso to Sub-section (1) of Section 3 of the Mysore Sales Tax Act, 1948, as amended by Act 25 of 1954, was declared unconstitutional by the High Court of Mysore on 27-9-1956, thus exempting him from paying sales tax. The High Court of Mysore had declared this provision unconstitutional as it offended Article 14 of the Constitution.

2. Whether the unconstitutional provision is non-existent or merely unenforceable:
The petitioner argued that an unconstitutional provision is not non-existent but merely unenforceable, citing Supreme Court decisions in Bhikaji Narain v. State of M.P. and Sundararamier and Co. v. State of Andhra Pradesh. These decisions suggested that such a provision becomes unenforceable but not non-est. The petitioner conceded that if the proviso were non-existent, hotel keepers would be taxed under the general rates specified in Clauses (a) and (b) of Sub-section (1) of Section 3.

3. Applicability of the doctrine of eclipse to the proviso:
The main issue was whether an unconstitutional statutory provision is non-existent or merely unenforceable. The Supreme Court in Bhikaji Narain v. State of M.P. held that a pre-Constitution law inconsistent with fundamental rights becomes void "to the extent of such inconsistency" but can become operative again if the inconsistency is removed. This was extended in Sundararamier and Co. v. State of Andhra Pradesh, where it was held that an unconstitutional provision is unenforceable but remains on the statute book and can operate when the constitutional bar is removed.

4. Binding nature of conflicting Supreme Court decisions on lower courts:
The learned Government Pleader argued that the majority view in Deep Chand v. State of U.P. held that post-Constitution laws infringing fundamental rights are ab initio void and the doctrine of eclipse does not apply. The Court had to determine whether there was a conflict between earlier and later Supreme Court decisions and which view was binding. The Court noted that the majority judgment in Deep Chand v. State of U.P. interpreted earlier decisions as applying only to pre-Constitution laws.

The Court concluded that the view expressed by the majority in Deep Chand v. State of U.P. was binding, as it was the latest pronouncement. The Court held that the proviso to Sub-section (1) of Section 3 of the Mysore Sales Tax Act was non-est and not merely unenforceable, thus dismissing the petition. Each party was ordered to bear its own costs.

Conclusion:
The petition was dismissed on the grounds that the proviso to Sub-section (1) of Section 3 of the Mysore Sales Tax Act, 1948, was non-existent due to its unconstitutionality, and the latest Supreme Court decision in Deep Chand v. State of U.P. was binding.