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TMI Blog1990 (3) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... ate is concerned was enacted by virtue of the powers vested in the State Legislature under entry 54 of the State List (List II) which was and is "taxes on the sale or purchase of goods other than newspapers, subject to the provisions of entry 92A of List I". In the Act the definition of "sale" as given in section 2(o) of the Act prior to April 1, 1987, when it was substituted by Act No. 7 of 1987 was as under: "'Sale', with all its grammatical variations and cognate expressions, means any transfer of property in goods for cash or for deferred payment or for any other valuable consideration, and includes a transfer of property in goods on hire purchase or other system of payment by instalments, but does not include a mortgage or, hypothecation of or a charge or pledge on goods and the word 'purchase' or 'buy' shall be construed accordingly;" In Gannon Dunkerley's case [1958] 9 STC 353; AIR 1958 SC 560, the Supreme Court held that the expression "sale of goods" as used in the entries in the Seventh Schedule to the Constitution has the same meaning as in the Sale of Goods Act, 1930. That decision related to works contracts. On the basis of that decision and by a series of subseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, delivery or supply is made." Sub-section (1) of section 6 of the aforesaid Forty-sixth Constitutional Amendment Act which is in respect of "validation and exemption" provides that for the purposes of every provision of the Constitution in which the expression "tax on the sale or purchase of goods" occurs, and. for the purposes of any law passed or made, or purporting to have been passed or made, before the commencement of that Act, in pursuance of any such provision (a) the said expression shall be deemed to include, and shall be deemed always to have included a tax (hereinafter in this section referred to as "the aforesaid tax") on the supply by way of, or as part of any service or in any other manner whatsoever, of goods being food or any other article for human consumption or any drink (whether or not intoxicating) for cash, deferred payment or other valuable consideration; and it also provides in clause (b) that every transaction by way of supply of the nature referred to in clause (a) made before such commencement shall be deemed to be and shall be deemed always to have been, a transaction by way of sale, with respect to which the person making such supply is the seller a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsumption or any drink (whether or not intoxication), where such supply is for cash, deferred payment or other valuable considerationand such transfer, delivery or supply shall be deemed to be a sale and the word 'purchase' or 'buy' shall be construed accordingly; Explanation I.-The transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract shall be deemed to take place within the State of Rajasthan if the goods are within the State at the time of their appropriation or application or use for the execution of the works contract irrespective of the place where the agreement for such works is made or from where the goods are transferred or delivered for use in the works contract. Explanation II.-Where the work under a works contract is spread over many States including the State of Rajasthan, the proportionate work done within the State of Rajasthan shall be deemed to be the sale under this clause irrespective of the place of agreement for the works or the point of movement of goods involved in the execution of that works contract." 4.. I will now discuss as to which of the two views referred to in the beginning of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground of legislative competence, the defect or want of competence was removed by the validation provision. But if the law which was in force at the relevant date did not expressly impose or authorise the imposition of a tax on the supply of food and drinks in a hotel or restaurant, the Constitution (Forty-sixth Amendment) Act did not amend that law including in it a tax on the sale of food and drinks in a hotel or restaurant. The amendment only expanded the legislative entry and conferred legislative competence in respect of a matter when the State Legislature was found not competent. The Act did not have the effect of altering the definition of "sale" in the various State legislations. The result of the Act was that if any State sales tax law had included any transaction of works contract, hirepurchase, supply of food and drinks in a hotel or transfer for consideration of controlled commodities in the definition of "sale", then such a provision, though lacked legislative competence at the time when it was enacted, stood validated by the Constitution (Forty-sixth Amendment) Act so that the levy and collection of tax under these provisions would become legally valid. In the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of "turnover" as contained in section 2(t) of the Act was amended by the Rajasthan Act No. 7 of 1987, with effect from April 1, 1987. Thus, in my opinion in between the period from February 3, 1983, when the Forty-sixth Constitutional Amendment received the assent of the President to April 1, 1987, when the definition of "sale" in section 2(o) of the Act was amended for bringing it in conformity with clause (29A)(f) of article 366 of the Constitution of India and only on the basis of Forty-sixth Amendment Act as aforesaid, the sales tax could not be charged and was without authority of law on the supply of food or any other article for human consumption in case any element of service in hotel or restaurant was included in it (sic). It is so because a bare reading of definition of "sale" as given in section 2(o) of the Act prior to its amendment by Act No. 7 of 1987, with effect from April 1, 1987, will show that it did not provide levy of tax on the supply. 7.. It appears that in the, present case the dispute relates to the period for assessment year, 1983-84 (July 1, 1982 to June 30, 1983) and as many as four quarterly returns were filed by the petitioner and in last two, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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