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TMI Blog1971 (1) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... ct to the conditions and exceptions, if any, set out therein." In the original Second Schedule "ghee" was exempted by item No. 16 from sales tax. Item No. 17 originally exempted "cloth of such description as may from time to time be specified by notification in the Gazette, costing less per yard than Rs. 3 or such other sum as may be so specified." The original section 6(2) of the Bengal Finance (Sales Tax) Act, 1941, was as follows: "The State Government, after giving by notification in the Official Gazette, not less than three months' notice of its intention so to do may by like notification add to or omit from or otherwise amend the Schedule, and thereupon the Schedule shall be deemed to be amended accordingly." By the Government of India, Ministry of Home Affairs Notification No. S.R.O. 3908 dated 7th December, 1957, the words "not less than three months' notice" in the original section 6(2) were replaced by the words "such previous notice as it considers reasonable". Item No. 17 was replaced with effect from 14th December, 1957, by the Government of India, Ministry of Home Affairs Notification No. D 3212/57-J. II (S.R.O. 3988) with the following: "All varieties of cotton, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6, withdrawing the said exemption were void as the statutory notice of not less than three months as required by section 6(2) prior to its modification by the impugned notification of 7th December, 1957, had not been given. Learned counsel for the petitioners Shri Ashok Sen did not rest the challenge on the other grounds stated in the writ petitions. The defence by the Government and the Sales Tax Commissioner to the above grounds urged by the petitioners was as follows: (1) The impuged modification of section 6(2) of the Bengal Finance (Sales Tax) Act, 1941, was covered by the authority given by section 2 of the Union Territories (Laws) Act, 1950. (2) Such modifications can be made validly by the Government from time to time even after the Bengal Finance (Sales Tax) Act, 1941, was extended to Delhi. (3) The modification made a minor change without contravening the legislative policy reflected in the Bengal Finance (Sales Tax) Act, 1941. (4) The original exemption granted to durries by the notification dated 14th December, 1957, was itself not preceded by any notice as required by section 6(2) of the Bengal Finance (Sales Tax) Act, 1941. The petitioners, who are sellers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns and modifications is incidental to the Power to apply or adapt the law......The power to modify certainly involves a discretion to make suitable changes, but it would be useless to give an authority the Power to adapt a law without giving it the power to make suitable changes." The basis of the majority decision (Fazl Ali, Patanjali Sastri, Mukherjea, Das and Bose, JJ.) holding the first part of section 2 of the Part C States (Laws) Act, 1950 (which became the Union Territories (Laws) Act, 1950, by adaptation in 1956) in the Delhi Laws Act case(1) was the decision of the Privy Council in Queen v. Burah(1). For, the Privy Council had also given the same reason why the Legislature had to confer the power of modification on the Government in the following words: "The legislature determined that, so far, a certain change should take place; but that it was expedient to leave the time and the manner of carrying it into effect to the discretion of the Lieutenant-Governor; and also, that the laws which were or might be in force in the other territories subject to the same Government were such as it might be fit and proper to apply to this district also; but that, as it was not certa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the Government is allowed to restrict or modify the State law in its application to the Union territory. This is why the language of section 2 uses the expression "extend...with such restrictions and modifications". The power of modification is thus an integral part of the power of extension. It cannot, therefore, be exercised except for the purpose of extension. The power of extension in itself is simply to transplant the State law to the Union territory. It does not comprise any other thing. But it is absolutely necessary to make the State law intelligible and applicable in the Union territory that some of the nomenclature should be adapted to the different set-up of the Union territory. Otherwise the State Act will not make sense as applied to the Union territory. Secondly, as pointed out by Mukherjea, J., at pages 1004-1005 in The Delhi Laws Act[1951] S.C.R. 747. "the word 'restriction' does not present much difficulty. It connotes limitation imposed upon a particular provision so as to restrain its application or limit its scope. It does not by any means involve any change in the principle. It seems to me that in the context, and used along with the word 'restriction' the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pretation" as pointed out by Cardozo, J., in his famous dissenting opinion (which is now regarded as the correct law) given in Panama Refining Co. v. Ryan[1935] 293 U.S. 388.: "One is that the meaning of a statute is to be looked for, not in any single section, but in all the parts together and in their relation to the end in view. The other is that when a statute is reasonably susceptible of two interpretations, by one of which it is unconstitutional and by the other valid, the court prefers the meaning that preserves to the meaning that destroys." If we were to construe the power to modify as including the making of modifications unconnected with the extension of the State Act to a Union territory then the only guideline or standard laid down by the Legislature for the exercise of the power of modification by the Government would be lost and the Government would be left to exercise the power arbitrarily without any fetter whatsoever. As we shall see later, such a power would enable the Government to modify an Act even contrary to the policy of the Legislature. This would make section 2 itself ultra vires for excessive delegation. Such a construction is, therefore, to be avoid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all Central Acts and Regulations made on or after the fourteenth day of January, 1887." But as observed by the Supreme Court in Gopi Chand v. Delhi Administration[1959] Supp. 2 S.C.R. 87 at p. 100., "section 21 of the General Clauses Act embodies a rule of construction, the nature and extent of the application of which must inevitably be governed by the relevant provisions of the statute which confers the power to issue the notification...but the said power must inevitably be exercised within the limits prescribed by the provisions conferring the said power." It follows, therefore, that the answer to the question whether the Central Government can exercise the power of modification repeatedly depends not so much on section 21 of the General Clauses Act but on section 2 of the Union Territories (Laws) Act, 1950. Normally section 2 does not so contemplate. Exceptionally, this may be permitted but as stated above the exceptional circumstances have not come into being. This is equally true of section 14 also. Shri Kirpal relied on the decisions of the Supreme Court in Vasantlal Maganbhai Sanjanwala v. State of Bombay and Others[1961] 1 S.C.R. 341. and in Pandit Banarsi Das Bhanot v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd completely......The legislature must retain in its own hands the 'essential legislative function',...... that the essential legislative function must at least consist of the determination of the legislative policy." In Rajnarain Singh(2), cited above, it was held that one of the essential features of the Bihar and Orissa Municipal Act, 1922, was that no municipality could impose a tax on the inhabitants of a locality without giving them a chance of being heard after the giving of a statutory notice and of being given an opportunity to object to the levy of the tax. The Government was under a statutory duty to listen to the objections. "This is a matter of policy, a policy imposed by the legislature. The application of section 104 of the said Act to the Patna Administration areas without applying sections 4, 5 and 6 was held to be ultra vires inasmuch as this kind of modification of the Act so extended to the Patna administration areas was not authorised by the legislature." The language in which the authority to modify the Act was given to the Government by section 3(1)(f) of the Patna Administration Act, 1915, was the same as the language of section 2 of the Union Territories ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing effect to the legislative policy. On the contrary it has completely changed the legislative policy as shown above. In the Gopi Chand case[1959] Supp. 2 S.C.R. 87. , referred to above, section 36(1) of the East Punjab Public Safety Act, 1949, authorised the Government to direct that offences mentioned therein and committed in the area declared to be dangerously disturbed area under section 20 of the said Act should be tried under the summons procedure. The said Act was a temporary one. The Government issued notifications seeking to do two things. Firstly, it sought to continue the application of the expired statute as respect things done or omitted to be done before the issue of notifications. Secondly, it sought to save pending proceedings from lapsing by the expiry of the Act. It was argued that the modification of the statute attempted by these notifications was eminently reasonable and was made with a view to cure the defects in the statute. Nevertheless, the Supreme Court held that the notifications were wholly outside the authority conferred on the Government by sections 20 and 36(1) of the Act and must be held to be invalid. For, the Government was not authorised to issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber, 1957, is, therefore, ultra vires for this reason also. The effect of the above findings is that the old section 6(2) of the Bengal Finance (Sales Tax) Act, 1941, remained as it was, namely, a notice of at least three months had to be given before an exemption given by the Second Schedule could be withdrawn. The notice period given by the notification of 16th June, 1966, was much less than the statutory period of three months prescribed by section 6(2). The withdrawal of the exemption on 29th June, 1966, was, therefore, invalid. (4) Shri Kirpal contends that the grant of the exemption to the durries by the notification dated 14th December, 1957, was itself invalid as the said notification had not been preceded by any notice whatsoever. Shri Sen replies that the exemption granted on 14th December, 1957, was preceded by representations made by the taxpayers and further that the notice was for the benefit of the taxpayers who could waive it. The object of section 6(2) of the Bengal Finance (Sales Tax) Act, 1941, was twofold, namely, (1) to add to the list of goods exempted from sales tax in the Second Schedule and (2) to omit goods from the list of exempted goods in the Second ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... U.P. Municipalities Act, 1916, prescribes the same procedure for publication of the tax proposals as also for the publication of the draft rules laying down the procedure for the publication. A dissenting Judge (Mudholkar, J.) at page 988 found it difficult to construe section 131(3) as partly directory and partly mandatory inasmuch as the same verb "shall" governs both the publication as well as the manner of publication. The majority of the Constitution Bench, however, divided section 131(3) into two parts; the first dealing with necessity of publication and the second with the manner of publication. The publication of the first is to enable the public to make representations against the proposed tax. The object of the second was only to lay down the procedure of publication. It is, therefore, only the first which was held to be mandatory while the second one was held only to be directory. Following the same reasoning it would appear that the requirements of section 6(2) are mandatory only if the exemption granted to goods is to be withdrawn by omitting the item from the Second Schedule but it is directory if exemption is to be granted by adding an item to the Second Schedule. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Constitution. Before the amendment two different remedies, namely, one by way of suit and the other by way of eviction under the Act were available to the Government and, therefore, the Government could discriminate between unauthorised occupants by resorting to suits to evict some and by resorting to the summary proceedings under the Act to evict others. This vice of discrimination was removed when the amendment made it clear that the only remedy available to the Government was to proceed under the Act and not by way of suit. The amendment was thus directed against the very provision of the Act which made it discriminatory. It was the removal of that provision from the Act which, in my opinion, made the Act constitutional. To meet the argument that the whole Act had to be re-enacted to make it constitutional I observed as follows: "The true principle is that an amendment which changes the provisions of an unconstitutional statute with a view to make it constitutional is in effect a re-enactment of such a statute." The amendment of section 6(2) by the Bengal Finance (Sales Tax) (Delhi Amendment) Act, 1959, was not an amendment which changed the provisions of the Bengal Finance ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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