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TMI Blog1972 (10) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... vocate (R.C. Sharma and Subodh Markandeya, Advocates, with him), for the appellant in C.A. Nos. 821 and 822 of 1971. S.C. Manchanda, Senior Advocate (O.P. Rana and Ravindra Bana, Advocates, with him), for the respondent in C.A. No. 2008 of 1971. O.P. Rana and Ravindra Bana, Advocates, for the respondent in C.A. Nos. 821 and 822 of 1971. N.D. Karkhanis, Senior Advocate (O.P. Rana and Ravindra Bana, Advocates, with him), for the respondent in C.A. No. 1625 of 1971. -------------------------------------------------- The judgment of the court was delivered by HEGDE, J.- These are appeals by certificate. They raise common questions of law for decision, and they are directed against a common judgment of the Allahabad High Court. The facts of the case lie within a narrow compass. The appellants are dealers in foodgrains including cereals and pulses especially split or processed foodgrains and dal. The dispute in this case centres round the question whether the Government is competent to levy sales tax on the purchases made by the appellants of split or processed foodgrains and dal under the provisions of the United Provinces Sales Tax Act, 1948, as amen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... energy or any other form of power." (Explanation to the section is not relevant for our present purpose.) Section 3 of the Act provides for the levy of multi-point tax. The portion of that section which is material for our present purpose reads: "Subject to the provisions of this Act, every dealer shall, for each assessment year, pay a tax at the rate of two naye paise per rupee on his turnover of such year, which shall be determined in such manner as may be prescribed ........" Section 3-A provides for a single point taxation in respect of sale of certain goods. At present we are only concerned with section 3-D(1). It provides: "Except as provided in sub-section (2), there shall be levied and paid, for each assessment year or part thereof, a tax on the turnover, to be determined in such manner as may be prescribed, of first purchases made by a dealer or through a dealer, acting as a purchasing agent in respect of such goods or class of goods, and at such rates, not exceeding two paise per rupee in the case of foodgrains, including cereals and pulses, and five paise per rupee in the case of other goods and with effect from such date, as may, from time to time, be notified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... always to have been, validly and lawfully done or taken." It will be necessary later on to consider what was the vice that the Legislature intended to cure by the amending Act. The sequence of events itself discloses the purpose of the Ordinance as well as the amending Act. That apart, the statement of objects and reasons which can be usefully looked into for the purpose of finding the vice that the Legislature was trying to provide against reads thus: "Sections 3-A and 3-D of the U.P. Sales Tax Act, 1948, provide for single point taxation. Under the former section the tax is levied on the turnover of sales, while under the latter the tax is levied on the turnover of first purchases. Plain and ornamented glass bangles are subject to tax separately under section 3-A. Similarly, unsplit and split pulses are separately subject to tax under section 3-D. It has been held by the High Court in one case that tax cannot be levied separately on plain and ornamented glass bangles under section 3-A and in another that tax cannot be levied separately on unsplit and split pulses under section 3-D because in their opinion plain glass bangles are not a commodity different from ornamented glas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , unsplit or unprocessed as well as foodgrains split or processed; and (7) that the power conferred on the Government under section 3-D amounts to an excessive delegation of legislative power and consequently void. The source of the legislative power to levy sales or purchase tax on goods is entry 54 of List II of the Constitution. It is well-settled that subject to constitutional restrictions a power to legislate includes a power to legislate prospectively as well as retrospectively. In this regard, legislative power to impose tax also includes within itself the power to tax retrospectively. See The Union of India v. Madan Gopal Kabra [1954] 25 I.T.R. 58 (S.C.); [1954] S.C.R. 541., M. P. Sundararamier Co. v. The State of Andhra Pradesh and Another [1958] 9 S.T.C. 298 (S.C.); [1958] S.C.R. 1422., J.K. Jute Mills Co. Ltd. v. The State of Uttar Pradesh and Another [1961] 12 S.T.C. 429 (S.C.)., Chhotabhai Jethabhai Patel and Co. v. The Union of India and Another [1962] Supp. 2 S.C.R. 1., and Sri Ramkrishna and Others v. The State of Bihar [1963] 50 I.T.R. 171 (S.C.); [1964] 1 S.C.R. 897. In the last-mentioned case it was specifically decided that where the Legislature can make a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... early brought out. By means of the amending Act the Legislature wanted to make clear its intent. The fourth contention also appears to be without any basis. It is true that the taxing statutes are not outside the scope of article 14 of the Constitution. But the Legislature has wide powers of classification in the case of taxing statutes. In Jagannath's case', this court ruled that there was no unconstitutional discrimination in the imposition of the excise duty on tobacco in the broken leaf form. Therein it was observed that tobacco in the broken leaf form was capable of being used in the manufacture of biris while tobacco in the whole leaf form could not be so used economically; the two forms of tobacco were different by the test of capability of user; the tariff is not based either wholly or even primarily by reference to the use of tobacco and there was a clear and unambiguous distinction between tobacco in the whole leaf form covered by item 5 and tobacco in the broken leaf form covered by item 6 which had a reasonable relation to the object intended by the imposition of the tariff. In Khandige Sham Bhat v. The Agricultural Income-tax Officer [1963] 48 I.T.R. 21 (S.C.); [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealers to pass on the tax payable to the consumers, has not much validity. The tax is levied on the dealer; the fact that he is allowed to pass on the tax to the consumers or he is generally in a position to pass on the same to the consumer has no relevance when we consider the legislative competence. It was next urged that on a true construction of Explanation II to section 3-D, no charge can be said to have been created on the purchases of split or processed pulses. It was firstly contended that an explanation cannot extend the scope of the main section; it can only explain that section. In construing a statutory provision, the first and the foremost rule of construction is the literary construction. All that we have to see at the very outset is what does that provision say. If the provision is unambiguous and if from that provision, the legislative intent is clear, we need not call into aid the other rules of construction of statutes. The other rules of construction of statutes are called into aid only when the legislative intention is not clear. Ordinarily a proviso to a section is intended to take out a part of the main section for special treatment. It is not expected to en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion as an explanation. In all these matters the courts have to find out the true intention of the Legislature. We are unable to accept the contention that Explanation II to section 3-D did not widen the scope of section 3-D. Section 3-D as it originally stood dealt with foodgrains and pulses. It did not treat the unprocessed or unsplit foodgrains and pulses as a separate item but because of Explanation II, we have now to read the expression "foodgrains" in section 3-D as containing two separate items, viz., (1) foodgrains unprocessed or unsplit and (2) foodgrains processed or split. It is true that Explanation II is not very happily worded but the intention of the Legislature is clear and unambiguous. The newly added explanation brings to tax with retrospective effect the split or processed foodgrains as well. We next come to the contention that no levy of purchase tax can be made on split or unprocessed pulses without a fresh notification under section 3-D read with Explanation II showing therein separately food- grains unsplit or unprocessed as well as foodgrains split or processed. As seen earlier the notification issued merely refers to foodgrains. That notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing tax, we cannot travel beyond the words of the section. There is no doubt that a taxing provision has to be strictly interpreted. If a Legislature intends to impose any tax, that intention must be made clear by the language employed in the statute; but that does not mean that the provision in a taxing statute should not be read reasonably. The contention that we should ignore section 7 of the amending Act is a contention difficult of acceptance. Dealing with a similar contention Venkatarama Ayyar, J., speaking for the court in J.K. Jute Mills' case', observed at page 435: "The object of the legislation as stated in the long title and in the preamble to the Act was to validate the impugned notification in relation to the amended section. Schedule B to the Act expressly mentions that notification. And if we are now to accede to the contention of the petitioner, we must hold that though the Legislature set about avowedly to validate the notification dated March 31, 1956, it failed to achieve that object. A construction which will lead to such a result must, if that is possible, be avoided." We have earlier come to the conclusion that because of Explanation II to section 3-D t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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