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TMI Blog1958 (8) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... the State Government. In these petitions, the constitutionality of the Regulation mentioned above is impugned. Before we refer to the contentions urged on behalf of the petitioners, it is convenient to refer to the material portions of this Regulation. "Whereas it is expedient to provide for the levy of a tax on retail sales of motor spirit in Hyderabad State: Now, therefore, in exercise of the powers vested in me as the Military Governor of the Hyderabad State and all other powers enabling me in that behalf, I hereby make the following RegulationSection 1.-This Regulation may be called the Hyderabad Sales of Motor Spirit Taxation Regulation, 1358-F, and shall come into force at once in the whole of Hyderabad State." Section 3 is the charging section and provides for the levy of two annas per gallon of petrol sold, payable by the persons effecting the sale thereof. Section 5(1) enacts: "No person shall, after the commencement of this Regulation carry on business in motor spirit as an importer or a wholesale or retail dealer at any place in Hyderabad State unless he has been registered as such under this Regulation." 5(2)(a). "No importer or wholesale dealer shall, unless also regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the attendant circumstances and all the material that is placed before us clearly establish that the Military Governor acted as an administrator only as a representative of the Nizam of Hyderabad and not as an invader who wanted to administer martial law. The very passage called in aid by the counsel for the petitioners in V. P. Menon's "Story of Integration of Indian States" destroys the theory put forward for the petitioners: "The first question we discussed was the basis of administration of Hyderabad. There were two choices before us. The first was to administer the State under martial law; the second, which was more acceptable from all points of view, was to carry on the administration with the co-operation and in the name of the Nizam. The Nizam, whom I saw that same afternoon, was ready to co-operate. Shavax Lal and I then sat together to work out a formula which without affecting the subordination of the Military Governor in service matters to the General Officer Commanding-in-Chief, Southern Command, invested him not only with full executive authority, but also with power to issue regulations having the force of law. The formula was embodied in a Firman which was promulg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey do not communicate the idea of an acknowledgement of the pre-existing authority of the said Military Governor. It cannot be thought that the Nizam was derogating from his own sovereignty by recognising the power of some other outside body to vest administrative authority in the Military Governor. We cannot give weight to the argument of the learned counsel for the petitioners that the expression "now vests in him" connotes that the vesting of authority had 'already taken place without any reference to the Nizam. These words denote that the power is vested in him from that moment and by reason of the Firman. If really the Military Governor owed his authority to someone else and was not constituted his agent or delegate, the Firman was unnecessary and uncalled for because the former could compel the obedience of the subjects as well as the officers concerned in his own right de hors the directions of the Nizam. He would not look to the Nizam for the issue of instructions to his people or to his officers. That the import of the earlier part of the Firman is the one attributed to it by us could be gathered from the second Firman issued on 7th August, 1949, which is in the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocument is ambiguous and susceptible of two constructions, we should lean against an interpretation which would lead to inconvenient results. It was next urged that whatever might have been the intention of those who drafted the Firman the language had not given expression to it. The language of the Firman is not adequate to convey such a concept. The wording by which the sovereign powers are sought to be conferred should be specific and unambiguous. In the absence of it, the delegation of powers cannot be inferred. We are unable to accept this contention. It is an act of a Sovereign in the exercise of his supreme powers and no particular words or a special form is needed to clothe an individual of his choice with power to do anything which he himself could have done. In our opinion, the object and intention of the Nizam are clearly expressed in the Firman. We are supported in this view by a judgment in Habeeb Mohammad v. State of Hyderabad A.I.R. 1954 S.C. 51. It was remarked by Mahajan, J. (as he then was) who delivered the opinion of the Court that the Nizam under a Firman had delegated all his powers of administration including power of legislation to the Military Governor and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an allied topic raised by Sri Narasimharao, counsel for some of the petitioners. The contention pressed upon us by him is that it was not within the competence of the Military Governor to make this Regulation as there was no valid delegation of legislative power to him. According to him, it was not constitutionally permissible for the Military Governor to receive any powers from the Nizam being only a subordinate to the Government of India and not that of the Nizam. Support for this proposition is sought from a passage in Salmond's jurisprudence occurring at page 159 (10th edition): "Legislation is either supreme or subordinate. The former is that which proceeds from the supreme or sovereign power in the State which is not therefore capable of being repealed, annulled or controlled by any other legislative authority. Subordinate legislation is that which proceeds from any authority other than the sovereign power and is therefore dependent for its continued existence and validity on some superior or supreme authority. The legislation of the Imperial Parliament is supreme for 'what the Parliament doth, no authority on earth can undo'. All other forms of legislative activity recognise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion): "The Sovereign part of the State, as thus ascertained, is omnipotent. Since it is the source of all law its acts can never be illegal. As little can they be, strictly speaking, unconstitutional. The latter term is properly applied only to characterise an act of an inferior political authority in excess of its delegated powers.* * * But the authority of the King, Lords and Commons in England is fettered by no such limitation. An act is, strictly speaking, never unconstitutional unless it is also illegal and can never be either, if it is the act of the Sovereign power." To the same effect is the rule stated in Dicey's Law of Constitution (page 90, 9th edition): "There does not exist in any part of the British Empire any person or body of persons, executive, legislative or judicial, which can pronounce void any enactment passed by the British Parliament on the ground of such enactment being opposed to the Constitution or on any ground whatever except, of course, its being repealed by Parliament." The position of the Nizam could be equated to King, Lords and Commons in England before the Constitution. He was the "supreme legislature, supreme judiciary and supreme head of the exec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to include all the sales which include petroleum and petroleum products and since exemption has been granted under section 2(f) of this Act in regard to all the goods specified in Schedule I including motor spirit as defined in the Hyderabad Sales of Motor Spirit Taxation Regulation, petroleum products have been excluded from the purview of taxation for all purposes. Consequently the offending Regulation must be deemed to have been repealed by necessary intendment. We are not impressed with this argument. The turnover envisaged in the Act is that relating to goods which are taxable under it. The dealer is not called upon to include sales in respect of goods which are exempted from taxation altogether. If these goods are not liable to imposition of tax they do not come within the scope of the Act. In that premises the turnover need not contain the sale or purchase of such goods. As pointed out by Bhagwati, J., in A.V. Fernandez v. State of Kerala 1, "the very fact of their non-liability to tax is sufficient to exclude them from the calculation of the gross turnover as well as the net turnover on which sales tax can be levied or imposed." (1) [1957] 8 S.T.C. 561; A.I.R. 195 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ier law, it has specifically said so. If it had contemplated that the Regulation in question should not continue to be in force it would have expressed it in unambiguous language. Nor is there any scope to infer such a repeal by necessary implication. The submission in this regard is therefore not well-founded. An identical argument is advanced in relation to the latest enactment, the Andhra Pradesh General Sales Tax Act, 1957. This statute also contains a similar provision in regard to motor spirits. The charging section in that Act is section 5. Section 8 specifically exempts from tax all goods enumerated in Schedule V to that Act and motor spirit is one of them. Our answer in regard to the Hyderabed General Sales Tax Act governs this also. It is also worthy of note that the repealing section here, i.e., section 41, does not embrace the Regulation now questioned. Another point raised in regard to this subject was that at any rate even if this Regulation was kept alive, the rate of tax cannot exceed that contemplated by section 5 of the Andhra Pradesh General Sales Tax Act. This does not require much thought. The short answer is that the rate contemplated by the new Act has appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old or regulate the storage, transport, distribution, disposal etc., of the petroleum and petroleum products. It is argued that the impugned Regulation purports to regulate the distribution and storage of petroleum and to control the price at which it should be purchased and sold. We are unable to agree with this proposition. First of all, the Regulation does not enforce any restrictions in regard to storage and transport of petroleum and petroleum products. The learned counsel has not been able to draw our attention to anything in the Act bearing on that particular aspect. He only relies upon sections 5, 6, 9 and 11. The first three sections require the importers and dealers to register themselves, to keep books of account and submit returns. Section 11 only provides for penalties for infringement of any of the rules enacted in the Regulation. These cannot have the effect of interfering in any way with either the storage of these commodities or the transport or distribution thereof. The scope and the ambit of the sections set out above are altogether different from those of either the Essential Supplies (Temporary Powers) Act or the Essential Commodities Act. The former seeks to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot amount to fixation or controlling of prices. It is also not the look-out of the State Government as to how the dealer makes up for the payment of this tax. It does not in the least matter to the State whether this is collected from the consumer or not. It is the primary liability of the seller to pay the tax irrespective of whether he has any authority to collect it from the purchaser or not. It is open to him to put up the price so as to include the sales tax even if there is no obligation or liability on the part of the consumer to pay it as sales tax. It is any-the-less a tax on goods. It could not be said that the intention of the legislature in passing either the Essential Supplies (Temporary Powers) Act or the Essential Commodities Act was to prevent the State Governments from levying taxes on the sales of goods, a subject which is entirely within their sphere. In these circumstances, we are of opinion that the impact of the two pieces of central legislation on the Regulation in question has not produced any adverse results. They have left the operation of the Regulation unaffected. It has survived in spite of these statutes and still holds the field and the imposition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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