9911796707
TMI Blog1971 (4) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... te of Punjab and Others. The counsel for the petitioners state that C.W. 3321 of 1969, in which identical points with regard to the validity of the Central Sales Tax (Amendment) Act (28 of 1969), are involved was admitted by the Motion Bench to a Division Bench and that petition along with a few others is on the daily list of a Division Bench (Mahajan and Sandhawalia, JJ.). It is, therefore, desirable that these three petitions may also be heard along with those petitions by the Division Bench. The papers of those cases may be placed before my Lord the Chief justice for necessary orders. The order of the Division Bench consisting of P.C. PANDIT and SANDHAWALIA, JJ., dated 8th March, 1971, was as follows: P.C. PANDIT, J.-Learned counsel for the petitioners has submitted that in this case he would be challenging two earlier Division Bench decisions of this court: (i) Messrs Auto Pins (India) Registered, Faridabad, through its Partner Shri Gurkirath Singh v. The State of Haryana and Others[1970] 26 S.T.C. 466; A.L R. 1970 Punj. & Har. 333. and (ii) Civil Writ No. 759 of 1969 (Messrs Rattan Lal and Co., Bhatinda v. The State of Punjab and OthersPrinted at p. 607 infra. The first was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Sales Tax Act, 1948, hereinafter called "the State Act" and under section 7 of the Central Sales Tax Act, 1956, hereinafter mentioned as"the Central Act ". During the assessment year 1967-68, the petitioner sold cotton valued at Rs. 1,93,47,324.61 in the course of interState trade or commerce. By the assessment order dated 8th November, 1968, the petitioner was held liable to sales tax of Rs. 5,71,562.00. At the time of assessment, an objection was taken on behalf of the petitioner that baled cotton is cotton and is to be taxed at the rate applicable to the sale of cotton and that it was not open to respondent No. 1 to bifurcate this single commodity into its component parts of cotton and packing material of hessian and bandana for purpose of taxation as there was no separate contract for sale of that packing material. Respondent No. 1 assessed the petitioner to tax at 3 per cent. for the hessian and bandana used for bales, in respect of which 'C' forms had been produced while he charged tax at 10 per cent. for hessian and bandana in respect of bales, for which 'C' forms had not been submitted. By judgment dated 10th November, 1964, in State of Mysore v. Yaddalam Lakshminarasi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts raised on behalf of the petitioner can be appreciated. The following provisions of the Central Act need reference: Section 2(c) defines "declared goods" as goods declared under section 14 to be of special importance in inter-State trade or commerce. "Turnover" has been defined in section 2(j) as under: "'turnover' used in relation to any dealer liable to tax under this Act means the aggregate of the sale prices received and receivable by him in respect of sales of any goods in the course of inter-State trade or commerce made during any prescribed period and determined in accordance with the provisions of this Act and the rules made thereunder." Section 3 formulates the principles to determine as to when a sale or purchase of goods takes place in the course of inter-State trade or commerce. That section runs as follows: "A sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce if the sale or purchase- (a) occasions the movement of goods from one State to another; or (b) is effected by a transfer of documents of title to the goods during their movement from one State to another." Section 6 provides for liability to tax on inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s effected by him in the course of inter-State trade or commerce, whether such sales fall within clause (a) or clause (b) of section 3, shall be levied by the Government of India and the tax so levied shall be collected by that Government in accordance with the provisions of sub-section (2), in the State from which the movement of the goods commenced: Provided that, in the case of a sale of goods during their movement from one State to another, being a sale subsequent to the first sale in respect of the same goods, the tax shall, where such sale does not fall within sub-section (2) of section 6, be levied and collected in the State from which the registered dealer effecting the subsequent sale obtained or, as the case may be, could have obtained the form prescribed for the purposes of clause (a) of sub-section (4) of section 8 in connection with the purchase of such goods. (2) Subject to the other provisions of this Act and the rules made thereunder, the authorities for the time being empowered to assess, reassess, collect and enforce payment of any tax under the general sales tax law of the appropriate State shall, on behalf of the Government of India, assess, reassess, collect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lways been, done or taken in accordance with law; (b) no suit or other proceedings shall be maintained or continued in any court or before any authority for the refund of any such tax; and (c) no court shall enforce any decree or order directing the refund of any such tax. (2) For the removal of doubts, it is hereby declared that nothing in sub-section (1) shall be construed as preventing any person- (a) from questioning in accordance with the provisions of the principal Act, as amended by this Act, any assessment, reassessment, levy or collection of tax referred to in sub-section (1), or (b) from claiming refund of any tax paid by him in excess of the amount due from him by way of tax under the principal Act as amended by this Act." "Section 10. (1) Where any sale of goods in the course of inter-State trade or commerce has been effected during the period between the 10th day of November, 1964, and the 9th day of June, 1969, and the dealer effecting such sale has not collected any tax under the principal Act on the ground that no such tax could have been levied or collected in respect of such sale or any portion of the turnover relating to such sale and no such tax could have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect: Provided further that the rate of tax shall not exceed two naye paise in a rupee in respect of any declared goods: Provided further that with effect from the date of commencement of the Punjab General Sales Tax (Amendment and Validation) Ordinance, 1967, the rate of tax shall not exceed three paise in a rupee in respect of any declared goods. (1-A) The State Government may by notification direct that in respect of such goods other than declared goods and with effect from such date as may be specified in the notification, tax under sub-section (1) shall be levied at the first stage of sale thereof; and on the issue of such notification the tax on such goods shall be levied accordingly: Provided that no sale of such goods at a subsequent stage shall be exempt from tax under this Act unless the dealer effecting the sale at such subsequent stage furnishes to the assessing authority in the prescribed form and manner a certificate duly filled in and signed by the registered dealer from whom the goods were purchased." Section 6 of the State Act provides for exemption from payment of tax on sale of goods specified in Schedule 'B' appended to the Act. Section 7 makes obligatory th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umerated in List III in the Seventh Schedule in this Constitution referred to as the Concurrent List. (3) Subject to clauses (1) and (2), the Legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule in this Constitution referred to as the State List. (4) Parliament has power to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List." Power to legislate in respect of taxes on sale or purchase of goods other than newspapers effected in the course of inter-State trade or commerce has been conferred upon Parliament by entry 92-A in List I of Schedule VII of the Constitution. The subject of that entry is exclusively legislatable by Parliament under clause (1) of article 246. By virtue of clause (3) of article 246, the subject of entry 54 in List II of Schedule VII of the Constitution providing for taxes on sale or purchase of goods other than newspapers subject to the provisions of entry 92-A of List I is exclusively legislatable by a State Legislature. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of sub-section (2) of section 8 of the Central Act. According to clause (a) of that sub-section, tax payable by a dealer registered under the Central Act on his turnover, if the goods are not covered by sub-section (1) of section 8 of the Act and are "declared goods", which have been defined in clause (c) of section 2 of the Central Act as goods declared under section 14 of that Act to be of special importance in inter-State trade or commerce, shall be calculated at the rate applicable to the sale or purchase of such goods inside the appropriate State. Cotton, in which the petitioner deals, is mentioned as item No. (ii) in section 14 of the Central Act as an item of declared goods because of its special importance in the course of inter-State trade or commerce. As provided in clause (a) of sub-section (2) of section 8 of the Central Act, the rate of tax chargeable in respect of the sales of declared goods effected in the course of inter-State trade or commerce shall be the same as is chargeable in respect of those goods under the State Act. As given in the third proviso to sub-section (1) of section 5 of the State Act, the rate of tax applicable to the sale or purchase of the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial importance in the course of inter-State trade or commerce. That is why, the Parliament has placed them at a higher pedestal and on a separate basis from other goods. In order to attain the end of their facile movement and mobile flow from State to State in the course of inter-State trade or commerce, the Parliament has, as a matter of expediency and quite rightly and justifiably, chosen not to fix any uniform and rigid rate of tax for the entire country but availed itself of the rates of taxes fixed under the respective sales tax laws of various States according to the local conditions prevalent in those States. Such rates will no doubt be different in different States. But, in a given State, the rate of tax for the "declared goods" covered by clause (a) of sub-section (2) of section 8 of the Central Act and sold in the course of inter-State trade or commerce will be the same as is applicable to those goods liable to tax under the sales tax law of that State. The machinery of clause (a) of subsection (2) of section 8 of the Central Act has been devised to make uniform rate of tax applicable both under a State Act in force in a given State and under the Central Act. Since a St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tedly, in the States of Punjab and Haryana, the maximum rate of sales tax fixed on sale or purchase of goods falling under clause (b) and that too, on luxury goods is ten per cent. as given in the first proviso to sub-section (1) of section 5 of the State Act. Therefore, in so far as the goods falling within the scope of clause (b) of subsection (2) of section 8 of the Central Act are concerned, it is the rate of 10 per cent. fixed by the Parliament under clause (b), which will be made applicable to sales effected in the course of inter-State trade or commerce and assessable in these two States under the Central Act. To such sales of these goods, the rate fixed under the State Act will not apply. It is only the rate of 10 per cent. fixed by the Parliament under the said clause (b) that will apply to those transactions. Thus there does not arise the question of adoption of the rate of tax fixed by the sales tax law in force in these two States by virtue of clause (b) of sub-section (2) of section 8 of the Central Act in so far as the goods covered by that clause are concerned. Apart from disposing of the second argument on this short ground, let me consider both these points togethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eference made by the President of India under article 143 of the Constitution, the question referred to the Supreme Court was as to whether extension with certain modifications of the Acts passed by the State Legislatures to the territory of Delhi under section 7 of the Delhi Laws Act, 1912, was constitutionally valid. FazI Ali, J., who delivered the majority judgment of the court reported in Delhi Laws Act, 1912, In reA.I.R. 1951 S.C. 332., observed as follows: "The power of introducing necessary restrictions and modifications in the provisions in question is incidental to the power to apply or adapt the law. The modifications are to be made within the framework of the Act and they cannot be such as to affect its identity or structure of the essential purpose to be served by it. 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." His Lordship further observed as under: "Before I conclude, I wish to make a few general observations here on the subject of 'delegated legislation' and its limits, using the expression once again in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e law, and whether it involves any change of policy. Now, the authorities are clear that it is not unconstitutional for the Legislature to leave it to the executive to determine details relating to the working of taxation laws, such as the selection of persons on whom the tax is to be levied, the rates at which it is to be charged in respect of different classes of goods, and the like." The counsel appearing on behalf of the petitioner strongly relied on the decision given by the Supreme Court in B. Shama Rao v. Union Territory of Pondicherry[1967] 20 S.T.C. 215 (S.C.); A.I.R. 1967 S.C. 1480. By section 2(1) of the Pondicherry General Sales Tax Act (10 of 1965), the Madras General Sales Tax Act, 1959, was extended to the territory of Pondicherry. A notification was issued under section 1(2) of the Pondicherry Act No. 10 of 1965 enforcing the provisions of the Madras General Sales Tax Act from a certain date. The Legislature of the State of Madras amended various sections of the Act after the Pondicherry Act had been enforced but before the notification under section 1(2) of that Act had been issued. Subba Rao, C.J., who delivered the judgment of the majority held: "It cannot be h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e question mooted in the case was as to whether in the face of articles 301 and 303 of the Constitution providing for freedom of trade, commerce and intercourse and for prohibition against preference of one State over another or discrimination between one State and another, adoption by the Central Act of varying rates of sales tax in force in various States under the State laws was constitutionally valid. Their Lordships observed as follows: "An Act, which is merely enacted for the purpose of imposing tax which is to be collected and to be retained by the State does not amount to a law giving, or authorising the giving of, any preference to one State over another, or making, or authorising the making of, any discrimination between one State and another, Merely because varying rates of tax Prevail in different States. The flow of trade does not necessarily depend upon the rates of sales tax; it depends upon a variety of factors, such as the source of supply, place of consumption, existence of trade channels, the rates of freight, trading facilities, availability of efficient transport and other facilities for carrying on trade. It is where differentiation is based on consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruled by the Supreme Court in State of Madras v. N.K. Nataraja Mudaliar[1968] 22 S.T.C. 376 (S.C.). The view taken by the Supreme Court that adoption of different rates was not at all violative of these articles has already been reproduced. I fully agree with the view taken by P.C. Pandit and Sandhawalia, JJ., in that judgment in holding that the adoption of the rates in force under the State Act in pursuance of the provisions of section 8(2) of the Central Act does not amount to abdication of legislative power on the part of Parliament. The above referred to observations as reproduced from the judgments given by the Supreme Court in Delhi Laws Act, 1912, In reA.I.R. 1951 S.C. 332., in Pandit Banarsi Das Bhanot v. State of Madhya Pradesh[1958] 9 S.T.C. 388 (S.C.); A.I.R. 1958 S.C. 909., in Messrs Rattan Lal and Co. and Another v. The Assessing Authority, Patiala, and Another[1970] 25 S.T.C. 136 (S.C.); A.I.R. 1970 S.C. 1742. and in State of Madras v. N.K. Nataraja Mudaliar [1968] 22 S.T.C. 376 (S.C.). , admit of no doubt that the adoption of the rates of tax applicable to sale or purchase of goods under the State sales tax law by the provisions of section 8(2) of the Central Act c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owers and impose duties, or authorise the conferring of powers and the imposition of duties, upon the State or officers and authorities thereof." It is in exercise of that power that section 9(2) of the Central Act has been enacted. Availing of the services of the hierarchy of the functionaries functioning under the State Act and conferment of powers on them, providing for the procedure to be followed by them and imposition of duties upon them in terms of the procedural, remedial and other provisions devised thereunder to enable them to administer various provisions of the Central Act falls squarely within the scope of clause (2) of article 258 and cannot legitimately be contended to be unauthorised or excessive delegation on the part of the Parliament in favour of the State or the authorities administering the State Act. The provisions of section 150 of the Delhi Municipal Corporation Act, 1957, conferring power upon the Delhi Municipal Corporation to levy taxes came up for consideration before the Supreme Court in the Municipal Corporation of Delhi v. Birla Cotton Spinning and Weaving Mills, Delhi, and Another A.I.R. 1968 S.C. 1232., on the point of controversy that the section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Sons[1965] 16 S.T.C. 231 (S.C.)., which necessitated the enactment of the Amendment Act. Parliament has power as much to make a law prospectively as it has to give the law a retrospective effect or operation. By virtue of section 9 of the Amendment Act, retrospective effect has been given as if the Central Act as amended by the Amendment Act was in force on the date when an order was passed or an action was taken. This section per se does not reflect any element of discrimination in its retrospective operation or applicability. Section 10 of the Amendment Act provides that dealers registered under the Central Act, who had effected sales of goods in the course of inter-State trade or commerce during the period commencing from the date of the judgment given by the Supreme Court in State of Mysore v. Lakshminarasimhiah Setty and Sons(1) on 10th November, 1964, and terminating on 9th June, 1969, when the Amendment Act came into force and who did not collect any tax under the principal Central Act on the ground that no tax could have in the absence of the enforcement of the Amendment Act, been levied or collected in respect of such sales, shall not be liable to pay tax under the prin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e classification. It is given in the statement of objects and reasons prefacing the Amendment Act that as a result of the judgment given by the Supreme Court in State of Mysore v. Yaddalam Lakshminarasimhiah Setty and Sons[1965] 16 S.T.C. 231 (S.C.)., there arose the necessity of not allowing the dealers, who had collected tax to retain it for themselves, and rendering exemption to the other dealers, who had not collected any tax at all by retrospective effect being given to the Amendment Act. The class of dealers, who had collected the tax have reasonably been placed on a different footing from those, who had no collected any tax. Thus, the differentiation between the two classes of dealers is founded on a justifiable ground and has been devised to achieve one of the objects of the Act. There does exist nexus between the object of the Amendment Act and the classification engendered by section 10 of the Act. Thus the argument that section 9 of the Amendment Act contravenes article 14 of the Constitution has no substance. The question of vires of sections 2, 5, 8 and 9 of the Andhra Pradesh General Sales Tax (Amendment) Act (9 of 1970) enforced retrospectively was recently raised b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent No. 1 is not permissible. In this aspect of the matter, the case of the assessee requires reconsideration in so far as the levy of tax at the rate of 10 per cent. upon the portion of taxable turnover of baled cotton pertaining to hessian and bardana is concerned. The assessee is liable to be charged on hessian and bardana without bifurcation and at the rate at which cotton has been charged. The part of the assessment order relating to the levy of tax on hessian and bardana at 10 per cent. is quashed. The rest of the order will remain intact. Respondent No. 1 is directed to reconsider the levy of tax at the rate of 10 per cent. in respect of hessian and bardana without its bifurcation after giving an opportunity of hearing to the petitioner. Subject to the direction given above, Writ Petitions Nos. 3838 of 1968, 317, 651, 2092, 2093, 2300, 2500 and 2918 of 1969, 68, 543, 1058, 2466, 2467, 2468 and 2469 of 1970 are dismissed. There will be no order as to costs. Petitions dismissed. Appendix [The judgment of the Punjab and Haryana High Court in Rattan Lat Co. v. State of Punjab and Others (Civil Writ No. 759 of 1969) delivered on 1st December, 1970, by a Division Bench co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Sales Tax (Amendment) Ordinance (No. 4 of 1969), was promulgated on the 9th of June, 1969, which in turn was followed by the Central Sales Tax (Amendment) Act, 1969 (Act 28 of 1969). In view of the changes in the law, the petitioner moved for amendment of the original writ petition which has been duly allowed. The return filed on behalf of the respondents in terms reiterates the validity of the legislation which has been challenged by the writ petition. The core of the argument on behalf of the petitioner revolves around and is directed against the validity of section 8(2) and sub-clauses (a) and (b) thereof of the Central Sales Tax Act and for facility of reference the relevant provisions may first be set down"8. (1)................................ (2) The tax payable by any dealer on his turnover in so far as the turnover or any part thereof relates to the sale of goods in the course of inter-State trade or commerce not falling within sub-section (1)(a) in the case of declared goods, shall be calculated at the rate applicable to the sale or Purchase of such goods inside the appropriate State; and (b) in the case of goods other than declared goods, shall be calculated at the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essary to elaborate the principle to repel the argument because in our view the matter is no longer res integra but stands fully covered by a binding decision of their Lordships of the Supreme Court in The State of Madras v. N.K. Nataraja Mudaliar[1968] 22 S.T.C. 376 (S.C.). The burden of Mr. Garg's argument is that there was a static crystallisation of Central sales tax rates, as existing on the date when the Central Act came into force, subject of course, to the right of Parliament to impugn and vary the same. This contention appears to us to be in direct contradiction with the observations of their Lordships in N.K. Nataraja Mudaliar's case(1). Therein the State of Madras had appealed against an elaborate Division Bench judgment of the Madras High Court in Larsen and Toubro Ltd., Madras v. Joint Commercial Tax Officer[1967] 20 S.T.C. 150. , striking down sections 8(2), (2-A) and (5) of the Central Sales Tax Act as violative of articles 301 and 303(1) of the Constitution because differential rates obtaining under diverse State laws applied and varied the rates of Central sales tax in each State of the Union. The Madras High Court held that these differential rates impaired the fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government is a part of the sales tax levy imposed for the benefit of the States. By leaving it to the States to levy sales tax in respect of a commodity on intra-State transactions no discrimination is practised; and by authorising the State from which the movement of goods commences to levy on transactions of sale Central sales tax, at rates prevailing in the State, subject to the limitation already set out, in our judgment, no discrimination can be deemed to be practised. " The above observations in our view fully cover the case and are conclusive. Faced with the above pronouncement, Mr. Garg had first sought to contend that their Lordships of the Supreme Court in the above-said case were construing the provisions of section 8(2) of the Act in the light of the question whether the same were violative of articles 301 and 303 and on that ground the above observations should be treated as obiter dicta. However, when it was pointed out on behalf of the respondents that even the obiter dicta of the Supreme Court is entitled to great weight if not actually binding, Mr. Garg further shifts ground to say that these are mere casual observations wholly divorced from the point. We are af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the majority judgment whose application in the present case is relevant. Wanchoo, C.J., speaking for himself and Shelat, J., after referring to the mass of case law with particular reference to the taxing statutes laid down as follows: "A review of these authorities, therefore, leads to the conclusion that so far as this court is concerned the principle is well established that essential legislative function consists of the determination of the legislative policy and its formulation as a binding rule of conduct and cannot be delegated by the Legislature. Nor is there any unlimited right of delegation inherent in the legislative power itself. This is not warranted by the provisions of the Constitution. The Legislature must retain in its own hands the essential legislative functions and what can be delegated is the task of subordinate legislation necessary for implementing the purposes and objects of the Act. Where the legislative policy is enunciated with sufficient clearness or a standard is laid down, the courts should not interfere." Hidayatullah, J. (as he then was) speaking for himself and Ramaswami, J., whilst agreeing with the conclusions arrived at by Wanchoo, C.J., ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... J., quoted above. In this context it deserves notice that Mr. Garg did not even contend that the legislative will has not been clearly exercised and that it is not categorically spelled out from the statute. The test laid down by Hidayatullah, J. (as he then was) also stands satisfied. In fact, the sole argument on behalf of the petitioner was that the Act did not spell out the legislative policy nor did it give sufficient control or guidance which is requisite for the purposes of delegated legislation. We are unable to accede to this argument and in our view the criteria laid out by Wanchoo, C.J., in the above-said Delhi Municipal Corporation's caseA.I.R. 1968 S.C. 1232. stands more than amply satisfied in the present one. It is first so if one turns to the purposes of the Act. Admittedly it has been enacted in conformity with the provisions of article 269(1)(g) and sub-clauses (2) and (3) thereof. The various provisions of the Act make its purpose self-evident and this is patent even by a bare reference to the preamble: "An Act to formulate principles for determining when a sale or purchase of goods takes place in the course of inter-State trade or commerce or outside a State o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o would not be leviable at more than one stage. Similarly, section 8(2)(b) in the case of goods other than declared goods fixes the rate at 10 per cent. or at the rate applicable to the sale or purchase of such goods inside the appropriate State whichever is higher. The dominant purpose of the Parliament in enacting the provisions of section 8(2)(b) appears to be that the rates of Central sales tax and the general sales tax should not conflict and vary within the jurisdiction of the same State. The broad uniformity of the rates of the tax within the same jurisdiction is what is sought to be achieved. Equally significant is the fact that sub-clause (b) of section 8(2) does not give any unguided power to enhance the rate of Central sales tax. All that is sought to be laid down is that the rate of Central sales tax in each State would follow the rate of the general sales tax prevalent therein. The State Legislature, therefore, cannot enhance the taxes beyond measure without making a corresponding and equivalent rise in the rates of their general sales tax. Again section 14 itself in detail declares certain goods to be of special importance in inter-State trade or commerce thus classif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice the fears forcibly expressed by Mr. Garg that a particular State Legislature may, in an isolated circumstance, act deliberately to raise or lower the rates with the avowed object of prejudicially affecting the trade or commerce interests of sister States. A complete answer to this argument is provided by the succinct observations of Sikri, J., in the Delhi Municipal Corporation's caseA.I.R. 1968 S.C. 1232.: "There is no need to think the delegations of the present type will lead to arbitrary taxation or rules. First, we must have faith in our representative bodies, and secondly, I agree with the learned Chief justice and Hidayatullah, J., that in suitable cases taxation in pursuance of delegated powers by a Municipal Corporation can be struck down as unreasonable by courts. If Parliament chooses to delegate wide powers it runs the risk of the bye-laws or the rules framed under the delegated power being challenged as unreasonable." On a careful consideration, therefore, of the various provisions of the Act we must hold that the power conferred by section 8 on the State Legislature for varying the rates of tax is neither unguided nor arbitrary and does not amount to any excess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment may by notification appoint. Subsequently, the Pondicherry Government issued a notification dated 1st March, 1966, bringing into force the Madras General Sales Tax Act, 1959, as extended by the Pondicherry Act to Pondicherry with effect from 1st April, 1966. What is, however, crucial was that in the meantime the Madras Legislature has amended the original Madras Act and consequently it was a new and amended Madras Act which was brought into force under the notification. It was in the light of these facts that the Pondicherry Act was struck down as "still-born". The observations of Shah and Bhargava, JJ., are as follows: "In point of fact the Madras Act was amended and by reason of section 2(1) read with section 1(2) of the Principal Act it was the amended Act which was brought into operation in Pondicherry. The result was that the Pondicherry Legislature accepted the amended Act though it was not and could not be aware what the provisions of the amended Act would be. There was in these circumstances a total surrender in the matter of sales tax legislation by the Pondicherry Assembly in favour of the Madras Legislature and for that reason we must agree with Mr. Desai that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would refrain from repeating ourselves. In Shama Rao's case[1967] 20 S.T.C. 215 (S.C.). , it was further held that there was a total surrender by the Pondicherry Assembly in favour of the Madras Legislature in the matter of sales tax legislation. Even Mr. Garg could not remotely contend that in the Auto Pins' case[1970] 26 S.T.C. 466; A.I.R. 1970 Punj. & Har. 333.any such total surrender or self-effacement by Parliament could even be suggested. For the foregoing reasons we are of the view that in the context of the Central Sales Tax Act (wherein the legislative will is clearly spelt out and the control, policy and legislative guidance is laid down in unequivocal terms), it was, therefore, rightly held in M/s. Auto Pins' case[1970] 26 S.T.C. 466; A.I.R. 1970 Punj. & Har. 333. that the delegation of the powers to the State Legislatures implicit in section 9(3) of the Act was not excessive. Mr. Garg then assailed the constitutionality of sub-clause (1A) to section 6 of the Act which had been introduced by the Central Sales Tax (Amendment) Act, 1969. It was contended that the cumulative effect of this when read with the validating provisions of the amending Act was that the retrosp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nion of India[1960] 3 S.C.R. 528., the State is undoubtedly prohibited from denying to any person equality before the law or the equal protection of the laws but by enacting a law which applies generally to all persons who come within its ambit as from the date on which it becomes operative no discrimination is practised." and further "It is well-settled that in fiscal enactments the Legislature has a larger discretion in the matter of classification so long as there is no departure from the rule that persons included in a class are not singled out for special treatment." The above-said observations, in our view, fully meet and repel the contention raised on behalf of the petitioner. It was then contended on the basis of section 10 of the amending Act of 1969 that the petitioner had not been given the exemptions due under the same and in any case the matter be remanded to the sales tax authorities for determining the quantum of exemption he is entitled to. This contention also is without merit and what is more is without any factual basis. Nowhere in the petition had any fact been averred which would bring into play the provisions of section 10. Even though expressly asked to poin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
