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TMI Blog1961 (7) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... must mean that if a law had been passed prior to the com- mencement of the Act, and it authorised the imposition of a tax on the sale or purchase of certain commodities its validity cannot be challenged on the ground that the said commodities have been subsequently declared by the Act to be essential for the life of the community. The impugned notification with which we are concerned and the Act under which it has been issued are thus outside the purview of section 3 of the Act - Civil Appeal No. 509, 510 of 1960, - - - Dated:- 26-7-1961 - GAJENDRAGADKAR P.B., SUBBA RAO K., HIDAYATULLAH M., SHAH J.C. AND RAGHUBAR DAYAL JJ. R.J. Bhave, Government Advocate for the State of Madhya Pradesh (I.N. Shroff, Advocate, with him), for the respondents (in both the appeals). A.V. Viswanatha Sastri and C.B. Agarwala, Senior Advocates (A.G. Ratnaparkhi, Advocate, with him), for the appellant (in both the appeals). -------------------------------------------------- The Judgment of the Court was delivered by GAJENDRAGADKAR, J.- The appellant, the Indore Iron and Steel Registered Stock-holders' Association (Private) Ltd., is a registered Association whose consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided that the tax had to be paid by the producer or importer at the rate of Rs. 3-2-0 per cent. Meanwhile Article 286(3) of the Constitution had come into force. This Article as it then stood provided that no law made by the Legis- lature of a State imposing, or authorising the imposition of, a tax on the sale or purchase of any such goods as have been declared by Parliament by law to be essential for the life of the community, shall have effect unless it has been reserved for the consideration of the President and has received his assent. Thereafter Parliament by law proceeded to make the declaration as contemplated by this Article by section 2 of Act 52 of 1952 [Essential Goods (Declaration and Regulation of Tax on Sale or Purchase) Act] (hereafter called the Act) which was passed on August 9, 1952. Section 2 of the Act provides that the goods specified in the Schedule are hereby declared to be essential for the life of the community. Item 14 in the Schedule refers to "iron and steel". Thus, as a result of these provisions "iron and steel" came to be declared as essential for the life of the community within the meaning of Article 286(3) as from August 9, 1952. Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt has upheld the plea raised by the respondents, rejected the contentions urged by the appellant and has dismissed the writ petitions filed by it. It is against these orders of dismissal passed by the High Court in the two writ petitions filed by the appellant that the present appeals, Nos. 509 and 510 of 1960, have been brought to this Court by special leave granted by this Court. Two points have been urged before us by Mr. Viswanatha Sastri, on behalf of the appellant, in support of these appeals. It is urged that section 2 of the Act which contains the parliamentary declaration as contemplated by Article 286 (3) covers iron and steel as understood in their commercial sense. The words "iron and steel" should not be interpreted in their narrow dictionary meaning. They do not mean iron and steel as they come out after smelting but they mean articles exclusively made from iron and steel in which the identity of iron and steel has not been lost. In other words, iron and steel in the context mean all articles made exclusively of iron and steel in which steel merchants normally and generally trade. It is further argued that in construing the words "iron and steel" we must bear in mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation has been made by section 2 of the Act include commodities like those with which we are concerned, and (2) that the impugned notification contravenes Article 286(3). It would thus be seen that unless the appellant succeeds in both these contentions the appeals are bound to fail. Since we have reached the conclusion that even on the assumption that the parliamentary declaration made by the relevant provision of the Act includes commodities with which we are concerned is correct it does not follow that the impugned notification contravened Article 286(3) we do not propose to deal with the first point raised by Mr. Sastri. In dealing with these appeals we would assume in his favour that the words "iron and steel" should receive the broad and wide interpretation for which he contends. Assuming then that the articles in which the constituents of the appellant deal are covered by the parliamentary declaration made by the Act does it follow that the impugned notification contravenes Article 286(3)?, and that takes us to the provisions of Article 286(3) which we have already cited. This provision can be successfully invoked only if three conditions are satisfied. The first condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Act 30 of 1950 satisfies the first condition but not the second. It is conceded that the relevant provisions of the M.B. Act of 1950 authorise the imposition of tax on the commodities in question and that the impugned notification is otherwise consistent with, and justified by, the said provisions of the Act. Now, if the said M.B. Act authorises the imposition of tax on the goods in question and the said goods were not declared by Parliament by law to be essential for the life of the community before the date of the said Act its validity cannot be challenged on the ground that it was not reserved for the consideration of the President and had not received his assent. It is only when all the conditions prescribed by Article 286(3) are present that the validity of the impugned law can be successfully challenged. The question about the construction of Article 286(3) has been considered by this Court on two occasions. In Sardar Soma Singh and Others v. The State of Pepsu Union of India [1954] S.C.R. 955; 5 S.T.C. 112., S.R. Das, J., as he then was, who spoke for the Court has observed that it is quite clear that section 3 of Act 52 of 1952 does not affect the Ordinance there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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