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TMI Blog1977 (8) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... ance with the above constitutional provision, the Central Sales Tax Act, 1956, was passed by Parliament, the Section 14 declares goods of special importance In interstate trade or commerce. Sub-clause (ii-a) of the said Section Is: "Cotton Fabrics, as defined in Item No. 19 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944); and Item 19 of the I Schedule of the Central Excises and Salt Act, 1944, in so far as It Is material, read:- " "Cotton fabrics", mean all varieties of fabrics manufactured either wholly or party from cotton, and Include dhoties, sarees, chadare, bed-sheets, bed-spreads, counter-panes and table doth, but do not include arty such fabric - XXX XXX XXX XXX", This was the definition till it was amended by the finance Act of 1969. The amended definition (to notice only its relevant portion) reads "19 Cotton Fabrics :- "Cotton Fabrics" moans all varieties of fabrics manufactures either wholly or partly from cotton and includes dhoties, sarees, chadders,bed-sheets,bed-spreads, counter-panes, table-dothies, embroidary in the piece, instrips or in modfs and fabrics/mpreonated or coatee/with preparations of cellulose derivatives or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sales Tax Act. The said section exempted the dealer of mill-made textiles, tobacco and sugar from taxation under Section 3(1) of the General Sales Tax Act. When the General Sales Tax Act of 1125 M.E. was repealed and replaced by the Kerala General Sales Tax Act, 1963, Section 9 of the Act conferred the" exemption In respect of goods specified in the III Schedule. Item 67 of the said Schedule Is as follows:- "Cotton Fabrics, Woollen fabrics and rayon or artificial silk fabrics as defined in Items Nos. 19,21 and 22 respectively, of the First Schedule to the Central Excises and Salt Act, 1944". - Under the Kerala General Sales Tax Act, 1963, unlike In the Act of 1125, the definition of 'cotton fabrics' etc. is geared directly to the I Schedule to the Central Excises and Salt Act, 1944. 3. Counsel for the petitioner contended that the words 'as defined In the Central Excises and Salt Act, 1944, in Item 7 of the III Schedule to the Sales Tax Act are words of "reference of cotton and not words of 'Incorporation'. He placed the strongest reliance on the decision of the Privy Council in Secretary of State v. Hindustan Co-operative Insurance Society Ltd. (A.I.R. 1931 P.C. 149). One o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be deemed to be a "decree", and the reasons therefore, a "judgment" within the meaning of the C.P.C., the newly added sub-section (2) of Section 26, giving effect to this; and on Section 54, which stood amended to carry a right of appeal to the Privy Council against the High Court's decree passed on appeal from an award. The Judicial Committee observed: "Having regard to the provisions of S. 71 of the Local Act, above referred to under which the Tribunal is not deemed to be the "Court" for the purposes of S. 54, Land Acquisition Act, It is, Their Lordships think, clear that the amendment of S. 54 cannot assist the contention presented to them on behalf of the Secretary of State. For even if the borrowing by the Local Act in 19,11, from the Land Acquisition Act, could be. held to include the new S. 54, an award of the Tribunal would not, by the express words of the Local Ad, come within its provisions." ft)p. 151 and 152) The Judicial Committee observed that there were more cogent objections to the maintainability of the appeal. Their Lordships were not prepared to accept the amendment made to Section 26(2) of the Land Acquisition Act as conferring a right of appeal. It was obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndments of the General Act were not to operate the local sphere. 4. The decision of the Judicial Committee was noticed and considered by the Supreme Court in Nathella Sampathu Chatty's Case (Act 1962 S.C. 316), Briefly stated, the position disclosed was this: one of the questions that arose for consideration was whether Section 178A introduced in the Sea Customs Act by a subsequent amendment, can be relies on for the purposes of the Foreign Exchange Regulations Act which had incorporated the Customs Act at a time before the introduction of Section 178A ;by amendment. The Foreign Exchange Regulation Act, brought into fore on 25-3-1947provided by Section 23-A, introduced by an amendment in 1952, that the restrictions imposed by certain specified provisions of the Act, "shall be deemed to have been imposed under Section 19 of the Sea Customs Act, 1878, and all the provisions of that Act shall have effect accordingly......." Section 19 of the Sea Customs Act enacted: "19. The Central Government may from time to time, by notification in the Official Gazette, prohibit or restrict the bringing or taking by sea or by land goods of any specified description Into or out of India acro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d does hot affect the second". The principles thus stated, it was pointed out by the Supreme Court, was analogous to, although not identical with, what is embodied in Section 6A of the General Clauses Act which enacts: 6A. Where any Central Act or Regulation made after the commencement of. this Act repeals, any enactment by which the text of any Central Act or Regulation was amended by the Express omission, insertion or substitution of any matter, then, unless a different intention appears, the repeal shall not affect the continuance of any such amendment made by the enactment so repealed and in operation at the time of such repeal", s In the light of the principles thus stated the Supreme Court took the view in Oatheffa Sam-pathu Chetty'scase, that on the language of Section 19 of the Sea Customs Act and Section 23A of fhe Foreign Exchange Regulation Act there was no scope for the argument that there was an incorporation of the provisions of the earlier Act into the later one. it was pointed out that the effect of Section 23-A is to treat the notification by the Central Government under Section 8(1) as if it has been issued under Section 19 of the Sea Customs Act, by the cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in its primary or technical sense, the learned Judges ruled that the processed articles have different properties and characteristics, are intended for different use, and in commercial circles, they are treated as entirely different from cloth or 'textile'. Hence they would not fall within Item 4 of the Schedule III to the Act. Counsel for the petitioner invited our attention to the Madras Act 37 of 1974 which amended the Madras Statute in consequence of this decision. He further stressed that the principles stated by the Madras High Court that loss of identify, or different use of the article, or change in the properties and characteristics, has not been accepted as the correct test for deciding the question, by the Kerala High Court in Kesa van Co. v. Assistant Commissioner of Sales Tax (37 S.T.C. 221). It was noticed in that case that 'Caristrap Rayon "cord strapping' is made, using, practically exclusively, rayon cord by a process by which the cordsare pasted together by strong glue, which is resilient and elastic to some extent. Item 22 of the I Schedule to the Central Excises and Salt Act, which is attracted by item 7 in the III Schedule of the Kerala General Sales Tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court in flam Kirpal v. State of Bihar (AIR 1970 S.C. 951) and State of M.P. v. M.V. Narasifnhan (AIR 1975 S.C. 1835). In flam Kirpal v. State of Bthar (AIR 1970 S.C. 951) Section 3(2) of the Imports and Exports (Control) Act, 1947 provided that all goods to which any prohibition under sub-section (1) apply "shall be deemed to be goods, of which the import and export had been prohibited under Section 19 of the Sea Customs Act, 1878". It was pointed out that the effect of bringing into an Act the provisions of an earlier Act is to introduce the incorporated section of the earlier Act into the subsequent Act as if these provisions have been enacted in it for the first time. In State or M.P. v. M. V. Narasimban (AIR 1975 S.C. 1835) the provision considered was Section 2 of the Prevention of Corruption Act, 1947. The said Section enacted that of or the purposes of the 1947 Act public Servant' means 'public servant as defined in Section 21 of the Indian Penal Code' Section 21 of the Indian Penal Code before its amendment by the Criminal Law Amendment Act, 1958. Consisted by of only seven clauses. The clauses did not take In an employee under a Corporation or a Government company. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corporated provision also. The legal position was summarised as follows: "On a consideration of these authorities; therfore, It seems that the following proposition emerges: Where a subsequent Ad Incorporates provisions of a previous Act than the borrowed provisions become an integral and independent part of the subsequent Act and are totally unaffected by any repeal or amendment in the previous Act. This principle, however, will not apply in the following cases: (a) Where the subsequent Act and the previous Act are supplemented each other; (b) Where the two Acts are in parma material (c) Where the amendment In the previous Act, if not Imported into the subsequent Act also, would render the subsequent Act wholly unworkable and in affectual and (d) Where the amendment of the previous Act, either expressly or by necessary jntenderoent, applied the said provisions to the subsequent Act." [para,16] . 10. Counsel for the petitioner stated that the words "as defined by the Centra) Excises and Salt Act, 1944", would not amount to 'incorporation' but only to a 'reference' or a 'citation' as understood in this branch of the law, and as expounded by judicial decision. We notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to In connection with earlier statutes inpart of material, they may be referred to, but only where there is an ambiguity or obscurity in the Incorporated sections which cannot otherwise be resolved". In the light of the principles which have become crystallized by the Judicial decisions and been expounded by the leading authorities, let us examine the position. In Ram Sarup's case (A.I.R. 1963 S.C. 853) and in State of M.P. v. M.V. Narasimhan (A.I.R.1975 S.C. 1835) the mode chosen by the legislative to express itself, was practically the same as we have here, viz., 'as defined in the (Central Excises and Salt Act)'. In the earlier case. the question was regarding the survival of that we may call the 'built in' or 'embanked' provision after the repeal of the parent statute from which it was 'built in' or 'embanked'. It was ruled this would make no difference. That is understandable, whether the words be words of incorporation or of reference. In State Of M.P. v. M.V. Narasimhan (AIR 1975 S.C. 1835) the definition of "public Servant" in the Prevention of Corruption Act, 1947, was held to be an incorporated definition, nevertheless, it was ruled that the amendments affected by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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