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TMI Blog1961 (12) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... n be sustained on the ground that the differentiation arises from historical reasons, and a geographical classification based on historical reasons. - Petition No. 110, 111, 112, 113, 114, 115 of 1960 - - - Dated:- 21-12-1961 - SINHA B.P., KAPUR J.L., HIDAYATULLAH M., SHAH J.C. AND MUDHOLKAR J.R. JJ. B. Sen, Senior Advocate, (B.K.B. Naidu and I.N. Shroff, Advocates,with him), for the respondents (in all the petitions). A.V. Viswanatha Sastri, Senior Advocate, (R.K. Garg, D.P Singh, S.C. Agarawal and M.K. Ramamurthi, Advocates of M/s. Ramamurthi and Co., with him), for the petitioner (in all the petitions.) ------------------------------------------------- The Judgment of the Court was delivered by HIDAYATULLAH, J.- These six petitions under Article 32 of the Constitution have been filed by one Bhaiyalal Shukla, who was doing business of construction of buildings, roads, bridges etc. as contractor for the Public Works Department 'in Rewa Circle of the former Vindhya Pradesh State, now a part of the State of Madhya Pradesh. By these petitions, he challenges the levy of sales tax on building materials supplied by him in the construction of buildings, ro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) of the Ordinance. Parliament then passed the Part C States (Laws) Act, 1950. Section 2 of that Act provided: "Power to extend enactments to certain Part C States.-The Central Government may, by notification in the Official Gazette, extend to any Part C State......... or to any part of such State, With such restrictions and modifications as it thinks fit, any enactment which is in force in a Part A State at the date of the notification and provision may be made in any enactment so extended for the repeal or amendment of any corresponding law (other than a Central Act) which is for the time being applicable to that Part C State." In exercise of the power conferred by the above section, the Central Government by Notification No. S.R.O. 6 dated December 29, 1950, extended to the State of Vindhya Pradesh the Central Provinces and Berar Sales Tax Act, 1947 (21 of 1947) as in force for the time being in the State of Madhya Pradesh, subject to certain modifications necessitated by the application of the Act to this new area. By the same Notification, a new section was added to the Madhya Pradesh Act, which read as follows: "29. Repeal and saving: The Vindhya Pradesh Sales Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chedule. In the Schedule, the Vindhya Pradesh Sales Tax Ordinance, 1949 (2 of 1949) was repealed from December 29, 1950. The Vindhya Pradesh Legislative Assembly, which was set up, then passed the Vindhya Pradesh Laws (Validating) Act. 1952 (6 of 1952). By that Act, which was to extend to the whole of Vindhya Pradesh and to come into force on January 8, 1953, it was provided as follows: "2. For the removal of all doubts it is hereby declared that....... Central Provinces and Berar Sales Tax Act, 1947 as extended to Vindhya Pradesh under section 2 of the Part C States (Laws) Act, 1950 (has been) and shall be deemed to be in force in Vindhya Pradesh from April 1, 1951. 7.. Repeal and savings-As from the dates of the actual enforcement of the Acts specified in section 2 of this Act the corresponding laws in force in Vindhya Pradesh immediately before the said dates shall be deemed to have been repealed without prejudice to anything done or suffered thereunder or any right, privilege, obligation or liability acquired, accrued or incurred thereunder before the aforesaid dates." Section 2 of the Central Provinces and Berar Sales Tax Act, 1947, which was extended to Vindhya Pradesh, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sell or sale of materials as such, nor did the property pass therein as movables. In Pandit Banarsi Das's case [1958] 9 S.T.C. 388; [1959] S.C.R. 427., which was a case from the State of Madhya Pradesh and which was heard simultaneously, it was held that if the parties entered into distinct and separate contracts, one for transfer of materials for money consideration and the other for payment of remuneration for services or works done, then there was a sale within the meaning of the Sale of Goods Act and the levy of tax was valid; but that if the contract was an entire one, the levy was without competence. The sections of the Central Provinces and Berar Sales Tax Act making such a division and taxing the so-called sales of materials were declared to be beyond the powers of the State Legislature. The petitioner contends that the impugned sections of the Central Provinces and Berar Sales Tax Act, as applied to Vindhya Pradesh, fell within these two rulings, and must also be declared ultra vires the Vindhya Pradesh State Legislature, when the latter enacted the Vindhya Pradesh Laws (Validating) Act, 1952. As against this, the respondents contend that the Notification S.R.O. No. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Berar Sales Tax Act, then the extended Act would suffer from the disability pointed out in Gannon Dunkerley's case [1959] S.C.R. 379; 9 S.T.C. 353., but if the Central Provinces and Berar Act was extended by the Notification under the Part C States (Laws) Act, 1950, then it must be treated as incorporated in that Act and to have the authority of Parliament which, in relation to Part C States, had no limitations whatever. We have, therefore, to see whether the Central Provinces and Berar Sales Tax Act, 1947, can be said to have been extended for the first time by the Vindhya Pradesh Legislature in 1952 when it passed the Vindhya Pradesh Laws (Validating) Act, 1952, to the exclusion of the order contained in the Notification No. S.R.O. 6, or whether the Act continued to be in force in Vindhya Pradesh even before, and all that the Vindhya Pradesh Act did was to remove any doubts about its validity. The contention on behalf of the petitioner is that the Notification dated December 29, 1950, was invalid in its latter part, as decided by this Court in the Delhi Laws Act case [1951] S.C.R. 747. That portion dealt with the repeal of Ordinance 2 of 1949, and if the Notification was in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Gannon Dunkerley's case [1959] S.C.R. 379; 9 S.T.C. 353. and must be declared as of no effect. He also referred to Act 9 of 1953 passed by the Vindhya Pradesh State Legislature, by which the Act was further amended, and stated that the extended Act, as amended, owed its existence neither to Parliament nor to the Central Government acting under the Part C States (Laws) Act but to the Vindhya Pradesh Laws (Validating) Act, 1952 (6 of 1952) and the Vindhya Pradesh Amendment Act, 1953 (9 of 1953). There is a fundamental fallacy involved in this reasoning. We are considering the applicability of the Central Provinces and Berar Sales Tax Act as extended to Vindhya Pradesh. The Vindhya Pradesh Amending Act made only verbal changes, but did not alter the structure of the tax. No doubt, that Act contained certain provisions under which sales of building materials are taxable, and if the authority to tax the so-called sales emanated from a State Legislature, then the law would fail. But we have to remember, in this connection, that the law was first extended to Vindhya Pradesh by the Central Government acting under the authority of Parliament legislating for a Part C State, Parliament an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osition to say that Ordinance 2 of 1949 continued in Vindhya Pradesh, because Parliament by the Part C States (Miscellaneous Laws) Repealing Act, 1951, has enacted that the said Ordinance must be deemed to have been repealed from December 29, 1950. Indeed, in the ruling of this Court at the same page are cited passages from Willoughby on Constitution of the United States (2nd Edn.), Vol. 1, p. 10, based on the decision in John M. Wilkerson v. Charles A. Rahrer [1891] 140 U.S. 545; 35 L. Ed. 572 to the effect that if the cause of the unconstitutional- ity is removed then the law does not need to be re-enacted. The facts of this case are entirely different from those in Deepchand's case [1959] Suppl. 2 S.C.R. 8. The extended law did not depend on the repeal of the earlier law for its validity. It would have been operative, even if the earlier law was not repealed; but the earlier law was, in fact, repealed from December 29, 1950, and no question of conflict between the new and the old law ever arose. Parliament by repealing the Ordinance rendered the ineffective portion of the Notification a mere surplusage. The necessary result thus was that its operative part survived and the Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Vindhya Pradesh Legislature were circumscribed by section 22 of the Government of Part C States Act, 1951, quoted earlier. Under that section, the powers of the State Legislatures did not extend to making laws repugnant to any law made by Parliament. The Explanation defines the expression "law made by Parliament", and excludes a law which provides for the extension to the State of any law in force in any other part of the territory of India. The Vindhya Pradesh Legislature, however, did not repeal either section 2 of the Part C States (Laws) Act or the Notification, and all that the Legislature did, was to add its own authority, by a declaration, to the laws earlier extended. The law was extended first by Notification S.R.O. No. 6 on December 29, 1950, but it was brought into force only by Notification No, 52 (Econ.) dated March 20, 1950, from April 1, 1951. The Notification, S.R.O. No, 6, had substituted for sub-section (3) of section 1 of the Central Provinces and Berar Sales Tax Act, the following: "(3) It shall come into force on such date as may be notified by the Central Government in the Official Gazette." Till the Notification No. 52 (Econ.) was made, the Act wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded that a person belonging to the area of the former State of Madhya Pradesh is not liable to sales tax on building materials in a works contract under the Central Provinces and Berar Sales Tax Act because of the decision in Pandit Banarsi Das's case [1958] 9 S.T.C. 388; [1959] S.C.R. 427., but another person living in the area forming part of the former Vindhya Pradesh is liable to sales tax under the same Act, as extended to Vindhya Pradesh. This, it is said, is patently contrary to the spirit of the equal protection clause in Article 14. The laws in different portions of the new State of Madhya Pradesh were enacted by different Legislatures, and under section 119 of the States Reorganisation Act, all laws in force are to continue until repealed or altered by the appropriate Legislature. We have already held that the sales tax law in Vindhya Pradesh was validly enacted, and it brought its validity with it under section 119 of the State Reorganisation Act, when it became a part of the State of Madhya Pradesh. Thereafter, the different laws in different parts of Madhya Pradesh can be sustained on the ground that the differentiation arises from historical reasons, and a geograph ..... X X X X Extracts X X X X X X X X Extracts X X X X
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