1955 (7) TMI 24 - HC - VAT and Sales Tax

Summary

Issues:
1. Exemption from sales tax on betel leaves under Sales Tax Act, 1947.
2. Legality of Act XVI of 1949 withdrawing the exemption.
3. Ultra vires nature of Act XVI of 1949.
4. Validity of the procedure followed for amending the Schedule under section 6 of the Act.
5. Ability of an association to seek a writ under Article 226 of the Constitution.

Analysis:

1. The Madhya Pradesh Pan Merchants Association petitioned against the Sales Tax Officers' notices to submit sales returns of betel leaves for sales tax assessment, claiming exemption under the Sales Tax Act, 1947. The Association sought a writ to prevent sales tax on betel leaves, arguing that the exemption was withdrawn by Act XVI of 1949, which they deemed ultra vires and illegal.

2. The petitioner contended that betel leaves were exempted under Item No. 6 of the Second Schedule, even though they were also listed under Item No. 36. The deletion of Item No. 36 was argued to have no impact on the exemption of betel leaves. The petitioner further claimed that Act XVI of 1949 required the Governor-General's assent and discriminated against pan dealers compared to other vegetable dealers.

3. The Court addressed the preliminary objection that an association could not seek a writ under Article 226 on behalf of its members, ruling that there was no interference needed in this case. The Court did not delve into the broader question of associations seeking relief.

4. The Court analyzed the term "vegetables" under the Sales Tax Act, concluding that betel leaves were not included in the common understanding of the term. The exemption granted under Item No. 36 was deemed withdrawn by its deletion, and betel leaves could not be claimed exempt under Item No. 6.

5. The Court examined the ultra vires nature of Act XVI of 1949, referencing previous judgments and the requirement of the Governor-General's assent for certain provisions. It concluded that the Act was not invalidly enacted and was effective in the matter at hand.

6. Regarding the procedure for amending the Schedule under section 6, the Court held that the delegation of power to the State Government did not restrict the Legislature's authority to amend the Act. The conditions for the exercise of power by the delegate did not bind the Legislature, which retained the power to amend the Act and Schedule.

7. The Court dismissed the petition, stating that the imposition of sales tax on selected commodities did not constitute discrimination. The petition was dismissed with costs, and the petitioner was entitled to a refund of the security deposit.