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TMI Blog1970 (3) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... fication of 1st December, 1962, as also the earlier notifications of similar nature are ultra vires. We have heard Sri K.L. Misra, learned counsel for the petitioner, in this case and other counsel appearing on behalf of the petitioners in the connected writ petitions. The common contention raised is that according to the trade structure in the State of Uttar Pradesh bricks are sold directly by the manufacturers to the consumers. There are no middlemen and as such section 3-A which contemplates a series of sales by successive dealers, cannot be applied to bricks. Section 3 is the charging section which provides for the levy of sales tax on the sale of every commodity and at all points of sale except the turnover of goods which are exempt under section 4 of the Act, at a rate which since 1959 is 2 nP. per rupee. (The rate was 3 pies per rupee when the Act was originally enacted and has been enhanced to 3 paise per rupee by Act No. 11 of 1969). Section 3-A provides for a single point taxation under which the State Government has been authorised to declare that the turnover in respect of any goods or class of goods shall not be liable to tax except at such single point in the series ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at such rate as may be specified not exceeding one anna per rupee if the sale relates to goods specified below: (i) Motor vehicles including motor cars, motor taxicabs, motor cycles and cycle combinations, motor scooters, motorettes, motor omnibuses, motor vans and motor lorries. Chassis of motor vehicles. Component parts of motor vehicles. Articles (including rubber and other tyres and tubes and batteries) adapted for use as parts and accessories of motor vehicles, not being such articles as are ordinarily also used for other purposes than as parts or accessories of motor vehicles. (ii) Refrigerators and air-conditioning plants. (iii) (a) Wireless reception instruments and apparatus and component parts thereof, including all electrical valves, accumulators, amplifiers and loudspeakers which are not specially designed for purposes other than wireless reception. (b) Radio gramophones. (iv) Cinematographic, photographic and other cameras, projectors and enlargers and films, plates, paper and cloth required for use therewith. (v) Scents and perfumes, and nine pies per rupee if it relates to any other goods." It is urged that it is a matter of common knowledge that a la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceeding one anna per rupee as may be specified." (ii) Sub-section (3) was added which read as below: "(3) Every notification made under this section shall be laid before the Legislative Assembly of the State as soon as may be after it is made and if a resolution amending or modifying it is passed by the Assembly within the Session in which it is laid, it shall, from the date of passing of the resolution, be amended or modified accordingly but without prejudice to the validity of anything previously done or of any liability incurred or assessment made." By these amendments the distinction between the luxury goods and other goods was done away with and a uniform maximum rate of one anna per rupee was prescribed in respect of all goods. The selection of goods for a single point taxation was left to the State Government, but such selection was brought under the legislative control by the addition of subsection (3). These amendments, however, do not indicate that there was any change of policy on the part of the Legislature in the sense that section 3-A was no longer intended to be used to provide relief in suitable cases to the trade and the consumer. This contention, in our op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o read an intention in the section that only those commodities could be notified under the section which are capable of being sold more than once." In Dr. Sukh Deo's case[1963] 14 S.T.C. 581., the court was examining as to whether a mixture sold by a practising physician to his patient on a prescription can be subject of a notification under section 3-A. The court expressed the opinion that such a commodity was incapable of being sold more than once. The learned author has expressed the opinion that there are no commodities which are intrinsically incapable of more than one sale and that even in the case of sale by a practising physician of a mixture to a patient, it is possible that the practising physician might get the mixture from another chemist at a lower rate and sell the same to the patient at a higher price. In our opinion this approach of the learned author is not correct. It is not the hypothetical possibility of a commodity being capable of more than one sale that determines the question as to whether such commodity was intended to be included in section 3-A. We are of opinion that before a commodity can be taxed at a higher rate under section 3-A it must be shown tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contended that whatever might have been the position in the past, the same is now materially altered as a result of the promulgation of the U.P. Sales Tax (Amendment and Validation) Ordinance, 1970 (U.P. Ordinance No. 2 of 1970). This Ordinance was passed during the pendency of these petitions and this court accordingly allowed the petitioners to amend their petitions so as to include fresh grounds based upon the amendment introduced by the Ordinance. The material portion of this Ordinance is section 2 which seeks to amend sections 3-A and 7 and reads as below: "2. In section 3-A of the U.P. Sales Tax Act, 1948, hereinafter referred to as the principal Act, in sub-section (1)- (i) for the words 'at such single point in the series of sales by successive dealers as the State Government may specify' the words 'at such single point of sale as the State Government may specify' shall be substituted and be deemed always to have been substituted........" "7. Validation.-Notwithstanding any judgment, decree or order of any court or tribunal to the contrary, every notification issued or purporting to have been issued under section 3-A or section 3-D of the principal Act before the comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business, expected to be sold only once is clearly fallacious. Even the amended section 3-A contemplates "such single point of sale as the State Government may specify". Where there is only one sale, this expression would be wholly meaningless. Moreover, if the interpretation of the learned Chief Standing Counsel is accepted, no guiding principle would be left for the State to take a particular commodity out of section 3 and to place it under section 3-A for higher taxation, with the result that the amended section 3-A may well be hit by article 14 of the Constitution. We are not prepared to accept an interpretation as would render the provisions ultra vires particularly when in the provision itself there are words which militate against such a contention. There is nothing to show that the intention behind the amendment brought about by the Ordinance in section 3-A was to change the policy and the purpose underlying that provision. Section 7 of the Ordinance also does not help the department. It merely declares that every notification issued under section 3-A before the commencement of the Ordinance shall be deemed to have been issued under that section as amended by the Ordinan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dity which according to the normal trade channels did not go through the series of sales by successive dealers. It is a matter of common knowledge that cement like most other consumer goods passes through dealers like manufacturers, distributors, wholesalers and retailers. The other case relied upon is M/s. Seth Vishan Dass Co. v. The State of Uttar Pradesh and OthersCivil Misc. Writ No. 1712 of 1967 decided on 6th August, 1968. That case related to bricks. That writ petition was dismissed because the petitioner had failed to bring on record sufficient material in support of his contention, as would be apparent from the following observations occurring in that judgment: "There is no clear statement in the petition from which an inference could reasonably be drawn that the trade structure confines the bricks as a commodity to one sale only and precludes it from being the subject of successive sales." Here in this petition there is a clear averment that according to the normal trade structure relating to the trade of bricks there are no middlemen like distributors, stockists and retailers and therefore bricks do not pass through a series of sales by successive dealers. The av ..... X X X X Extracts X X X X X X X X Extracts X X X X
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