9911796707
TMI Blog1989 (7) TMI 323X X X X Extracts X X X X X X X X Extracts X X X X ..... oner of Sales Tax, Orissa are opposite parties Nos. 1 to 3 respectively. Opposite parties Nos. 4 to 8 are Sales Tax Officers of different circles in the districts of Dhenkanal, Cuttack, Puri, Phulbani and Sambalpur. The Orissa Sales Tax Act which has been amended by the impugned statute shall, for convenience, be referred to as "the principal Act" hereafter. 2.. The petitioners challenge the vires of the amending Act on various grounds, such as want of legislative competence, being violative of articles 13(2), 14, 19(1)(g), 265, 300, 300-A read with article 304(b) of the Constitution. It is their case that the decisions of this Court in a series of cases, for example in the cases of Ramakrishna Deo v. Collector of Sales Tax, Orissa [1955] 6 STC 674, State of Orissa v. Divisional Forest Officer [1973] 32 STC 487 and Straw Products Limited v. State of Orissa [1978] 42 STC 302, went against opposite party No. 1. The said opposite party No. 1 applied under article 136(1) of the Constitution for special leave to appeal to the Supreme Court against the judgment passed by this Court and leave was granted by the court. The appeal was pending on the relevant date, i.e., 19th of July, 1979 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided by section 2(i) and 2(j) read with the basic ingredient of the very charging section, namely, section 4 of the principal Act, as regards the essential predicate of the continuity or carrying on of any activity of business of purchasing or selling goods. The impugned Act is also violative under article 245(1) of the Constitution of India, inasmuch as, according to the petitioners by explanation II to section 2 of the amending Act the Central Government or a State Government or any of their employees acting in their official capacity on behalf of such Government have also been brought within the purview, liability and charge of the State sales tax. It is also alleged that patently hostile, irrational and unreasonable discrimination has been perpetrated on the Central Government and/or on the State Government or any of their employees acting in their official capacity on behalf of such Government on the one hand and the dealers requiring as an essential ingredient of dealership, the carrying on the business of purchasing, selling, supplying or distributing goods directly or otherwise for cash and/or for deferred payment and/or for commission, remuneration and/or other valuable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er as- (i) a mercantile agent as defined in the Indian Sale of Goods Act, 1930, or (ii) an agent for handling goods or documents of title relating to goods, or (iii) an agent for the collection or payment of the sale price of goods or as a guarantor for such collection or payment, and every local branch of a firm registered outside the State or of a company the principal office or headquarters whereof is outside the State, shall be deemed to be a dealer for the purposes of this Act. Explanation II.-The Central Government or a State Government or any of their employees acting in official capacity on behalf of such Government, who, whether or not in the course of business, purchases, sells, supplies or distributes goods, directly or otherwise for cash or for deferred payment or for commission, remuneration or for other valuable consideration, shall, except in relation to any sale, supply or distribution of surplus, unserviceable or old stores or materials or waste products or obsolete or discarded machinery or parts or accessories thereof, be deemed to be a dealer for the purposes of this Act.' 3.. Validation of actions.-Notwithstanding anything contained in any judgment, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment, reassessment, levy, collection or imposition or action or thing had been made, taken or done under or in furtherance of the principal Act as amended by the amending Act. In other words what has been done under sections 2 and 3 of the Act is to rectify certain defects on which some assessment proceedings under the principal Act for assessment, reassessment, levy of penalty, etc., were declared to be invalid and after removal of the defect stated in the orders and judgment to validate order/action on the basis of the amendment made by the amending Act. 6.. Though the petitioners in their writ application challenged the amending Act on several grounds at the hearing of the case the learned counsel appearing for them raised the following submissions only: Explanation II in section 2 of the amending Act cannot be construed to be governing the main provisions in the section. Since the Government, Central or State, is not mentioned in the main provision, introduction of the said term in explanation II is bad. Further, the provision in the said explanation II is invalid since it runs counter to the provisions in the main section, inasmuch as, it dispenses with the ingredient ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d force and life to the cure and remedy, according to the true intent of the makers of the Act, Pro bono publico. The Supreme Court in the case of Khyerbari Tea Co. Ltd. v. State of Assam reported in AIR 1964 SC 925, considering the question of validity of the taxing statute operating retrospectively observed that though there are some provisions in the Constitution which prohibit retrospective legislation as, for instance, article 20(1) and (2), article 304(b), they cannot be construed to mean that a law passed under it must in every case be prospective. If a statute is passed under article 304(b) retrospectively, its reasonableness may, of course, fall to be considered on the merits in a given case, but that is not to say that in no case can a statute be passed under the said article to operate retrospectively. The court further observed that it has been consistently held that the mere fact that a validating statute operates retrospectively does not justify the contention that the character of the tax sought to be recovered by such retrospective operation is necessarily changed. In the said judgment the court dealing with the challenge to the validity of the Act on the ground o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termine which articles should be taxed, in what manner and at what rate. It would be idle to contend that a State must tax everything in order to tax something. In the said decision dealing with the question of repeal of the earlier Act and passing of a validating new retrospective enactment, the Supreme Court held that the power to make a law necessarily includes the power to make provisions of the law retrospective and it is within the competence of a legislature to pass validating Acts, because the power to pass such validating Acts is essentially subsidiary to the main power of legislation on the topics included in the relevant List. Therefore, if the legislature felt that the infirmity in the earlier Act could be cured and it proceeded to comply with the requirements of article 304(b), it cannot be said that a law passed under article 304(b) is void, because the legislature has thereby attempted to recover taxes which could not be recovered under the earlier Act owing to the constitutional infirmity in the said Act. On consideration the court ruled that the exercises of legislative power which has resulted in the passing of the Assam Act 10 of 1961 cannot, therefore, be said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing, selling, supplying or distributing goods directly or otherwise, etc., while in explanation II it is provided that the Central Government or a State Government or any of their employees acting in official capacity on behalf of such Government, who, whether or not in the course of business, purchases, sells, supplies or distributes goods, directly or otherwise for cash or deferred payment or for commission, remuneration or for other valuable consideration, shall, except in relation to any sale, supply or distribution of surplus, unserviceable or old stores or materials or waste products or obsolete or discarded machinery or parts or accessories thereof, be deemed to be a dealer for the purpose of the Act. Under the explanation, the requirement that a person in order to be a dealer must carry on business of purchasing, selling, supplying or distributing goods is given a go-by so far as the Central Government or a State Government or any of their employees is concerned. According to the petitioners an explanation is meant to explain the main provisions in the section and not to add to or make a fresh provision contrary to the main provision. 11.. There is no dispute regarding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e special cases from the general enactment and provide for them separately. In short, generally speaking, a proviso is intended to limit the enacted provision so as to except something which would have otherwise been within it or in some measure to modify the enacting clause. Sometimes a proviso may be embedded in the main provision and becomes an integral part of it so as to amount to a substantive provision itself. To sum up, a proviso may serve four different purposes: (1) qualifying or excepting certain provisions from the main enactment; (2) it may entirely change the very concept or the intendment of the enactment by insisting on certain mandatory conditions to be fulfilled in order to make the enactment workable; (3) it may be so embedded in the Act itself as to become an integral part of the enactment and thus acquire the tenor and colour of the substantive enactment itself; and (4) it may be used merely to act as an optional addenda to the enactment with the sole object of explaining the real intendment of the statutory provision." In the said case dealing with the point relating to function of explanation, the Supreme Court observed thus: "It is now well-set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng and distributing the goods. This is one of the permissible purposes for which an explanation may be added to an enactment as held by the Supreme Court in the decision reported in AIR 1985 SC 582 (Sundaram Pillai v. Pattabiraman). If the provision in explanation II is construed to be in the nature of a proviso, which, in my view/opinion, it should be then, as the Supreme Court has held, the proviso can also in suitable circumstances be interpreted to add to the main enactment. Thus viewed either way, the provision in explanation II is clearly permissible and no exception can be taken to its introduction in section 2(c). I wish to reiterate here that the competence of the State Legislature to enact the provision is not being challenged by the petitioners. That the intent and purpose of the amending Act was to validate certain actions taken under the principal Act is clear from the provisions of section 3 of the amending Act. It is provided therein that notwithstanding anything contained in any judgment, decree or order of any court or other authority to the contrary, an assessment, reassessment, levy or collection of any tax or imposition of any penalty made or purporting to hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
