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TMI Blog1959 (8) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... entioning the respective contentions of the parties before us on these questions, it would be necessary to set out the material provisions of the Madras Sugar factories Control Act, 1949, rules framed under the said Act and the actual notifications issued by the Government under S. 14 thereof. They are as follows:-- (3) The preamble of the Act shows that it is an act to provide for the licensing of Sugar factories and regulating the supply and the price of sugarcane used in such factories and for other incidental matters. Section 1 of the said Act reads as follows:-- (1) This Act may be called the Madras Sugar Factories Control Act, 1949. (2) It extends to the whole of the State of Madras. (3) This section shall come into force at once, and the Government may, from time to time, by notification, apply all or any of the remaining provisions of this Act to the whole or any portion of the State of Madras from such date or dates as may be specified in the notification. Sub-section (b) of S. 2 defines 'crushing season' as the period beginning on the 1st November in any year and ending on the 30th June next following. Sub-section (c) of S. 2 defines 'factory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this petition. It reads as follows:- 14(1) The Government may, after consulting the Advisory Committee, by notification, levy a cess not exceeding four annas per standard maund as defined in the Standards of Weight Act, 1939, on sugarcane brought into any area specified in such notification, for consumption, use or sale therein. (2) Subject to the maximum aforesaid, the Government may from time to time, after consulting the Advisory Committee, by notification, alter the rate of levy of such cess. (3) The Government may, by order, remit in whole or in part any cess paid or payable under this section in respect of any sugarcane specified is such order. (4) The Government, may after consulting the Advisory Committee, make rules, specifying the authorities by which the persons from whom, and the manner in which, the cess levied under this section shall be collected. (5) Any sum payable under this section may be recovered as if it were an arrear of land revenue. The only other section which remains to be referred to is S. 17 of the Act. Sub-section (1) of S. 17 provides that the Government may make rules to carry out the purpose of this Act. Sub-section (2)(f) reads ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of date in which they were published and as notifications A, B and C. Respectively:-- Notification A. GOVERNMENT OF MYSORE No. I. 133 Mysore Government Secretariat, Mo. 34-56-6 Bangalore, dated 9th April 1956. Notification. In exercise of the powers conferred by S. 14 of the Madras Sugar Factories Control Act, 1949(Madras Act No. XX of 1949), as in force in Bellary District, as amended by the Madras Sugar Factories Control (Mysore Amendment) Act 1954, the Government of Mysore direct that access at the rate of three annas and six pies per standard Maund (as defined in the Standards of Weight Act, 1939) of sugarcane crushed by the Hospet Sugar Factory (The India Sugars and Refineries Ltd.,) be levied for the crushing season 1955-56. By Order and in the name of the Rajapramukh. Sd/- M. S. Swaminathan,Secretary to Government, Development Department. NOTIFICATION B. Notification. No. RD 13 SCC/57 dated Bangalore 15th October, 1957. In exercise of the powers conferred by S. 14 of the Madras Sugar Factories Control Act, 1949(Madras Act No. XX of 1949), as amended by the Mysore Sugar Factories Control (Mysore Amendment) Act, 1954(Mysore Act No. VII of 195 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... His contention was that the said section when it says that the Government 'may.....by notification levy cess.. on sugarcane brought into any area , only empowers the Government to levy cess on sugarcane that are brought into the specified area after the date of such notification, and not on sugarcane that had already been brought into the area before the notification. In support of his said contention he relied on the rules of interpretation of a statute and contended that unless a statute is made expressly retrospective it is always prospective. He further contended that if an event is mentioned on the happening of which a liability is to attach that event is to happen in future i.e. after the statute comes into force and he cited before us a passage from Craies on statutes. Vth Edn., page 367 in support of the said contention. He further relied on a decision of the Bombay High Court reported in Tamboli Boghalal Chhotalal v. Mohan Lal Chunilal, and on an English decision reported in Bradford Union v. Clerk of the Peace for the County of Wilts, (1867) 3 QB 604 and urged that unless a statute is expressly made retroactive, it cannot have that effect. In this case, he contend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r can be retrospective in operation. In this case, there being no such restriction imposed by S. 14, a retrospective notification under that section can be issued. (12) As for the rules of interpretation on which the learned advocate for the petitioner relied, the learned Advocate-General conceded that if the levy was directly made by the Act itself then the expression brought-into must be construed as prospective, but the position, according to him, becomes different when a power to legislate is conferred and there is no express prohibition against making retrospective legislation. In other words, Mr. Advocate-General's contention was that although a charging section, unless it is made expressly retrospective, cannot have that effect, if a power to legislate is conferred and the said power does not expressly prohibit retrospective legislation, then such power may be exercised to make a retrospective legislation. The rules of interpretation, Mr. Advocate General contended, relate to interpretation of a Statute and not to conferment of power to legislate. Section 14, he contended, did not impose a tax but only conferred the power to impose a tax. (13) I have given anxiou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legislative powers, cannot make legislation retrospective in effect unless that power is expressly conferred. It was no doubt argued before us by the learned Advocate General that the actual decision in the above case was based on the interpretation of the notification in question issued in exercise of the power so conferred. That may be so, but their Lordships in the said observations enunciated the principle with which I respectfully agree for determining the extent of the powers of a delegated body e.g. Government to make retrospective legislation. (15) In the case reported in Strawboard Manufacturing Co. Ltd. V. Gutta Mill Worker's Union, their Lordships of the Supreme Court also expressed the same view. In that case the Labour Commissioner of U. P. to whom the dispute between a Company and its employees was referred fir adjudication made his award 8 days after the expiry of the time originally fixed for the making of the award. About 13 days after the delivery of the award the notification in question was issued whereby the Governor allowed the said Adjudicator to submit his award by 30-4-1950. The question which arose for their Lordships' determination was whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry on an activity otherwise prohibited by statutory order as including a licence with retrospective effect. It would be a dangerous power to place in the hands of Ministers and their subordinate officials to allow them, whenever they had power to license, to grant the licence ex post facto; and a statutory power to license should not be construed as a power to authorise or ratify what has been done unless the special terms of the statutory provisions clearly warrant the construction . (17) In the case of Agarwal, Ayengar and Co. v. The State, Chainani J. (As he then was) of the Bombay High Court sitting with Bavdekar J. after referring to the Full bench decision of the Bombay High Court in Fram Nusserwanji v. State of Bombay, , in which it was observed that the sovereignty of the Provincial Legislature to legislate with regard to the items mentioned in list 2, in the 7th schedule carries with it the power to legislate with regard to all ancillary and subsidiary matters, observed as follows:-- The principle laid down in these cases applies, in my opinion, to laws passed by a Legislature, whose powers have to be ascertained by reference to lists, in which the various matters o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limitation or restriction is imposed in regard to retroactive legislation by the Constitution it is competent for the Parliament to make a law imposing a tax on the income of any area prior to the commencement of the Constitution and no retrospective operation of the Constitution is involved in the conferment of those powers. Thus, it would appear that their Lordships of the Supreme Court were dealing in that case with the powers of the Parliament. In my opinion a different principle would apply to the case of an executive Government exercising subordinate and delegated legislative powers. In such cases of an executive Government exercising subordinate and delegated legislative powers. In such cases unless the power to act retrospectively is expressly conferred by the Legislature on the Government, the Government cannot act retrospectively. (19) The learned advocate General also relied in the course of his argument before us on two other decisions, one of the Madras High court Guruviah Naidu v. State of Madras. AIR 1958 Mad 249, and another of the Supreme Court reported in Mohammad Ghouse v. State of Andhra . The decision of the Madras High Court was a decision of a single Judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of prospective nature. Sub-section (3) of S. 1 provides that the Government may, from time to time, by notification, apply all or any of the provisions of this Act, other than the provisions contained in sub-section (1) and sub-section (2) of the said Section, to the whole or any part of the State of Madras from such date or dates as may be specified in the notification. Sub-sections 1 and 2 of S. 1 merely say that the Act may be called the Madras Sugar Factories Control Act, 1949 and it would extend to the whole of the State of Madras. Thus all other provisions of this Act would come into operation prospectively as and when the Government by notification may choose to apply the same. Section 6 of the Act also provides that on and after such date as the Government may, by notification, specify in this behalf, no sugarcane shall be crushed in any factory unless a licence for that purpose has been obtained in respect of that factory from the Government. The remaining provisions of the said section indicate the manner in which the application for licence should be made and the conditions under which the licence should be granted or refused. Section 7 lays down that the licence gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of power on the Government although all other provisions of the said Act are made prospective. It is difficult to imagine that that was the intention of the Legislature. The position becomes clearer when we come to sub-section (4) of S. 14 and Clause (F) of sub-section (2) of s. 17 of the said Act. Sub-section (4) of S. 14 provides that the Government may, after consulting the Advisory Committee, make rules, specifying the authorities by which the persons from whom and the manner in which, the case levied under this section shall be collected. Clause (f) of Sub-section (2) of S. 17 enables the Government to make rules providing for the form of the records to be kept and of the returns to be made, and the information to be furnished by persons liable to pay the cess under S. 14. The learned advocate for the Petitioner rightly contended before us that sub-section (4) of S. 14 indicates that something has to be done before a notification under sub-section (1) of S. 14 can be issued and cess can be levied. In other words, rules have to be framed specifying the authorities by which, the persons from whom, and the manner in which, the cess levied under this section shall be coll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or fails to submit on or before the due date, the monthly return in the prescribed form; or fails to credit into the treasury on or before the due date, the full amount payable on account of the cess or credits an amount less than the correct amount; or fails to submit with the monthly return the treasury receipt showing that the amount of cess has been duly credited into the treasury, and the punishment indicated in the said section is fine which may be extended to ₹ 2,000/-. These rules, as I said before, are not reconcilable with the view that the Government can under Section 14 impose a cess retrospectively, that is, for a period anterior to the date of its notification. It would be seen that the terms of the said rule which relate to payment of cess would become unworkable in a case where cess is imposed for a period prior to the date of the notification. For instance, sub-rule (2) of the said rule which provides that within a fortnight of the close of each month the occupier shall pay into the treasury the amount due as cess on sugarcane on the quantity of sugarcane which has entered the factory during such imposed for a period prior to the date when the notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ming into force of the Act and during all that indeterminate time the peasants would not know whether the area in which they lived and tilled the lands might ultimately be reserved for urban, non-agricultural or industrial development. xx xx xx Now, if the State Government, instead of making up its mind immediately on coming into force of the Act whether particular lands are necessary or not necessary for urban, non-agricultural or industrial development, allowed the tenants to acquire and enjoy tenancy rights under Ss. 3A and 5(1) of the Act, it is difficult to hold that the Legislature would have intended to wipe out those rights when it empowered the State Government to issue a notification under clause (d) of sub-s. (1) of S. 88. It might, no doubt, be contended that what his Lordship held in that case was that the Legislature could not have intended to wipe out the vested rights when it empowered the State Government to issue a notification which accrued after the Act came into force and before notification was issued. But it seems to me that the principle of that decision is that the Legislature could not have intended to give such unrestricted power to the government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s petition. That contention was that in any event on a true construction of the notifications in question it should be held that the cess has been levied for the period subsequent to the dates of such notifications but limited to the respective crushing season mentioned in the said notifications. In view of my decision on the first contention of the learned advocate for the petitioner, viz., that S. 14 of the Act does not confer a power upon the State Government to impose cess retrospectively it would be unnecessary for me to deal with this contention of the learned advocate for the petitioner. But as this matter has been fully argued before us, I should also give my decision thereon, (23) The contention of the learned advocate for the petitioner on this point was that the notifications did not say that the levy was being imposed on all the sugarcane crushed during the season. The said notifications only say sugarcane crushed and not sugarcane crushed during the season . The learned Advocate further contended that in all the said notifications levy was for the crushing season mentioned which meant that the levy was limited to that season. In other words the levy was not to ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shing season the natural and obvious meaning of the notifications would be that the said levy is for the whole period beginning with 1st of November and ending with 30th June of the next year. Otherwise, as the learned Advocate-General rightly contended before us, there was no point in referring to the crushing season, which means the period commencing from 1st November of any year and ending with June next year, as in that event the notification could have and would have said that the levy would be from the date of the notification up to the end of the crushing season. In my opinion, there is some meaning in drafting the notifications in that manner and the whole period of crushing season, i.e., 1st November to June next would be the period for which the notifications would be operative. (25) That the construction which the learned advocate is seeking to put on the said notifications cannot be accepted is, at least clear from the terms of the second notification, which was issued on 15th October 1957 and the crushing season mentioned therein is the crushing season in 1956-57(that is the period between the 1st November 1956 and 30-6-57). Thus, the said notification was issued a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod of the crushing season mentioned. That being so, punctuation cannot be allowed to control it. I am also of the opinion that the notifications in this case have not been carefully punctuated. As the learned Advocate-General pointed out, commas have been more or less indiscriminately put in these notifications and no significance can, in my opinion, be attached to them. In this connection I should refer to the view expressed by their Lordships of the privy Council in the case reported in Lewis Pugh v. Ashutosh Sen, AIR 1929 PC 69. Their Lordships observed as follows: The truth is that, if the article is read without the commas inserted in the print, as a Court of law is bound to do, the meaning is reasonably clear. Following these observations of the Privy Council the High Court of Allahabad in the case reported ion Niaz Ahmad Khan v. Parsottam Chandra, AIR 1931 All 154, held as follows: The difficulty is caused mainly by the punctuation, viz., a comma after the word silence which seems to indicate that the words fraudulent within the meaning of S. 17 apply both to 'misrepresentation and to silence . But as observed by their Lordships of the Privy Council ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt thereof. Under sub-rule (4) of the said rule on receipt of such return, the Sugarcane Commissioner shall verify that the amount of cess has been correctly calculated and that the full amount thereof has been remitted into the treasury. It this appears that it is the duty of the occupier of every factory to submit within a fortnight of the close of every month a return showing the quantity of sugarcane that entered into the factory during the month and the amount of cess paid by him on account of the quantity. Thus, the cess became payable within a fortnight of each month for the said month under the said rule. I should at this stage mention that I am not now considering the effect of the said rule on the contention of the Government that S. 14 gives power to the Government to impose cess retrospectively. I have already dealt Th that question. I am for the moment considering the said rule only for the purpose of determining the present contention of the learned advocate for the petitioner, viz., that a computation of assessment and demand has to be made before the Thasildar issued a distraint order for that purpose. It would be seen that the cess becomes payable within the ..... 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