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TMI Blog1957 (8) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... non-compliance of the condition laid down in sub-section (4) of section 19 of the Act?" The assessee is a dealer in groceries and pulses etc., at Nellore. Having elected to be assessed for the year 1952-53 under rule 13 of the Turnover and Assessment Rules, he submitted the returns of his turnover in Form A-3 for each month of the year of assessment. The Deputy Commercial Tax Officer after visiting the assessee's place of business held that the returns submitted by him were incorrect and incomplete. Accordingly he finalised the assessment for the above year under rule 13(5) of the Turnover and Assessment Rules by adding a sum of Rs. 75,727 to the admitted turnover of the assessee. Several legal grounds have been urged in the petition, but the one that has been referred to us is that which relates to rule 13. I am not here concerned with the application of the provisions of rule 13, to the facts in the case, but only with its validity. It is admitted by the learned Government Pleader before us and it appears from the Tribunal's order that the State Representative also, on information, filed a memo that there was no pre-publication of the amendment of rule 13 by the insertion of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of such goods effected by him. (6) Subject to such rules as may be prescribed, the assessing authority may assess a dealer for any year, as if his transactions in such year had been the same as in the previous year." "19. Power to make rules.-(1) The State Government may make rules to carry out the purposes of this Act. (2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for(a) all matters expressly required or allowed by this Act to be prescribed; (b) to (i) * * * (3) * * * (4) The power to make rules conferred by this section shall be subject to the condition of the rules being made after previous publication for a period of not less than four weeks. (5) All rules made under this section shall be published in the Fort St. George Gazette, and upon such publication shall have effect as if enacted in this Act." The rules relating to the turnover and assessment under sub-sections (4) and (5) of section 3 have to be prescribed which under subsection (f) of section 2 means prescribed by rules made under the Act. The Government have been vested with power of making rules under section 19 to carry out the purposes of the Act and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rules being laid before both the Houses of the State Legislature and their being approved. On the other hand, section 303 of the same Act confers on the State Government a power to make rules for the carrying out the purposes of the Act and particularly with respect to matters specified thereunder. The rules under section 304 are to be made after previous publication. From these provisions it is clear that in so far as rules relating to the classification of service etc. are concerned, they are made by the State Government after the approval of the Legislature, while the other rules are made after previous publication and without the necessity of their having to be approved by the legislature. It is manifest from the above provisions that the manner in which the two sets of rules have to be made is different and distinct. Similar provisions in the District Boards Act (XIV of 1920) as those in the District Municipalities Act are contained in sections 74A, 201A, 199 and 200. The provisions of sections 91 and 92 of the Indian Lunacy Act (IV of 1912) authorise the State Government to make rules for the matters specified therein and the rules so made shall be published in the Official ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns by any authority not specified therein will have the statutory force merely on their being approved by a resolution of the Legislative Assembly. The authority empowered to make rules under sub-sections (4) and (5) of section 3 is the authority referred to in section 19, namely, the State Government. Sub-section (2)(a) of section 19 clearly empowers the State Government to make rules for all matters expressly required or allowed by the Act to be prescribed, one of such matters being those specified in sub-sections (4) and (5). In other words, a plain reading of the provisions of section 19 would itself show that the rules relating to all matters expressly required or allowed by the Act to be prescribed by the rules such as those under sub-sections (4) and (5) of section 3 as well as rules authorised to be made under the other provisions of subsection (2) of section 19 or those providing for penalty for the breach of rules under sub-section (3) of section 19 are to be made in conformity with the conditions laid down in sub-section (4) of section 19, that is, they can only be made after previous publication for a period not less than four weeks. The exercise of that power by the Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with in so far as the amendments in 1947, 1951 and 1953 are concerned. It now remains to be considered as to the effect of non-compliance with the requirements of sub-section (4) of section 19. Admittedly the Madras General Sales Tax (Turnover and Assessment) Rules made in 1939 were made after pre-publication in accordance with the provisions of section 19 read with section 7. The vaidity of these rules was also challenged in K.G. Rangaswami Chettiar and Co. v. The Government of Madras[1957] 8 S.T.C. 222., where a Bench of the Madras High Court held that they were not invalid on the ground that there was failure to observe the provisions relating to the promulgation of these rules. In that case the constitutionality of rule 4(2) of the Turnover and Assessment Rules was also unsuccessfully challenged, but with that we are not now concerned. In that case it was noticed that the rules were published on 18th July, 1939, for eliciting public opinion. In the notice it was stated that the draft would be proposed for approval at the sitting of the Assembly on 3rd August, 1939. Rule 2 of the draft rules provided that the Rules are to come into force on the 1st October, 1939. Accordingly the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he commencement of the Act.' " I agree with the views expressed in the above decision relating to the validity of the Turnover and Assessment Rules made under the Sales Tax Act in 1939; consequently rule 13 as it then stood would be valid. But in so far as the subsequent amendments to rule 13 are concerned, there is no doubt that the condition relating to the previous publication not having been complied with, the power conferred on the Government to make or amend the rules cannot be deemed to have been exercised. Where powers are delegated to an authority, that authority is bound by the terms of its delegation and any exercise of the powers in contravention of the condition precedent or the statutory essentials laid down would be invalid and ultra vires. The exercise of the power is, in my view, dependent upon compliance with the conditions laid down by the statute. The condition of pre-publication has been specifically inserted by the Legislature in the public interest, particularly in the interest of that section of the public which is called upon to pay the sales tax. It enables such of those who have any objection to send them to the authority empowered to make the rules and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment) Rules in 1947, 1951 and 1953 are invalid by reason of the non-compliance with the conditions laid down in sub-section (4) of section 19 of the Act. Learned counsel for the petitioner contends that even the Madras General Sales Tax (Turnover and Assessment) Rules of 1939 were also invalid for the reason that the said rules were not made after previous publication for a period of not less than 4 weeks under sub-section (4) of section 19 of the Madras General Sales Tax Act, 1939 (hereinafter referred to as the Act). Before we test the correctness of this argument on the basis of the material rules, the relevant dates may be noticed. The draft rules were published on 18th July, 1939. They were laid before the Assembly on 3rd August, 1939. The Assembly approved them on 7th August, 1939. The approved rules were published on 15th September, 1939, and came into force on 1st October, 1939. From the aforesaid dates, it is seen that four weeks elapsed between the date of the publication of the draft rules and the publication of the approved rules and the date of their coming into force but the time between the publication and the laying of the rules before the Assembly falls short of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greeing that it is desirable that sufficient time should be given before the rules are finalised by the Government and placed for approval before the Legislature, we cannot say that the words "making of the rules" mean only the finalisation of the draft rules by the Government. Under section 19 of the Act, the State Government is empowered to make rules to carry out the purposes of the Act. Under section 19(4), the power to make the rules is subject to the condition of pre-publication and under sub-section (5) rules made under this section shall be published in the Fort St. George Gazette and upon such publication shall have effect as if enacted in the Act. The rules are made under the Act only after all the necessary conditions for the making of the rules are complied with. Till they are published, they are not rules made under the Act. Rules made under the section can only mean the rules that are legally effective. Till publication, they have no legal force and, therefore, they are not rules made under the Act. The juxtaposition in subsection (5) between the rules made and their publication emphasises the fact that, till publication, the rules have no legal force. Nor does the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uly, 1939, and came into operation on 1st October, 1939." Learned counsel for the petitioner says that it was not contended before the learned Judges that that condition was not complied with on a misapprehension of the legal position and, therefore, the learned Judges recorded their opinion on an admission. Though there is some force in this suggestion, we think the learned Judges applied their mind and accepted the contention of the State. We agree with the conclusion. Learned Government Pleader relies upon section 7(e) of the Madras General Clauses Act and contends that, though there was no publication in the manner prescribed by section 19(4) of the Act, the rule purporting to have been made in exercise of the power conferred under section 19(4) is conclusive proof under section 7(e) of the General Clauses Act and, therefore, it is not open to the petitioner to contest its validity. Section 7(e) of the General Clauses Act reads: "The publication in the Official Gazette of a rule purporting to have been made in exercise of a power to make rules after previous publication, shall be conclusive proof that the rule has been duly made." Under this sub-section, the publication in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment. This question turns upon the following relevant provisions and the notification issued by the Government. "Section 2B-The State Government may appoint as many Deputy Commissioners of Commercial Taxes and Commercial Tax Officers as they think fit, for the purpose of performing the functions respectively conferred on them by or under this Act. Such officers shall perform the said functions within such local limits as the State Government or any authority or officer empowered by them in this behalf may assign to them." "Section 2(a-2): 'Assessing authority' means any person authorised by the State Government to make any assessment under this Act." * * * "Section 19(1): The State Government may make rules to carry out the purposes of this Act. (2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for* * * (j) the duties and powers of officers appointed for the purpose of enforcing the provisions of this Act." Notification under the Madras General Sales Tax Act, 1939. "In exercise of the powers conferred by clause (a) of section 2 and sub-section (1) and (2) of section 14 of the Madras General Sales Tax Act, 1939 (Madras Act IX of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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