Article 286(3) of the Constitution contemplates a law which can be but has not been reserved for the consideration of the President and has not received his assent.

Judgment

GAJENDRAGADKAR, J. : The appellant, the Indore Iron and Steel Registered Stock-holders Association (Private) Ltd., is a registered Association whose constituent members carry on business generally in fabricated iron and steel material and more particularly in iron sheets, plain or corrugated, bars, rods, light and heavy structurals, nails, joints, wire nails and all kinds and varieties of wires and pipes. This business is carried on by the constituent members of the appellant at Indore and Ratlam at which places they have their registered offices. The State of Madhya Bharat, by its Act No. 30 of 1950, imposed sales tax in the territory of Madhya Bharat on the sales of goods therein specified with effect from May 1, 1950, and under the provisions of the said Act the Commissioner of Sales Tax, Madhya Bharat, and the Sales Tax Officer, Indore, who are respondents 2 and 3, were appointed authorities for the assessment of tax leviable under the Act and for its recovery in their respective areas.

2. Section 3 of the Act is the charging section and it provides for the incidence of taxation. Section 4, which deals with the application of the Act, exemption and exclusion, provides by sub-sec. ( 2) that no tax shall be payable under the Act on the sale of goods specified in the second column of Schedule 1 on conditions mentioned in column 3 of the Schedule. "Iron and steel" appears in Schedule 1 as item 39. Section 5 prescribes the rate of tax & it provides that the tax will be recoverable as notified from time to time by the Government by publication in the official gazette subject to the condition that it shall not be less than Rs. 1-9-0 per cent, or more than 6 1/4 per cent. Section 4(3) authorises the Government by notification to modify Schedule 1 from time to time. Similarly S. 5(2) authorises the Government while notifying the tax payable by a dealer to notify the goods and the point of their sale at which the tax is payable. It is by virtue of this delegated power that the State of Madhya Bharat, respondent 1, purported to issue notifications to which we will presently refer.

3. On May 22, 1950; a notification was issued under S. 5(2) specifying serially the articles taxed, the stage of sale by traders in Madhya Bharat on which the tax is levied and the rate of sales tax per cent. Item 27 in the list dealt with goods manufactured from things (wastu) except gold and silver or goods manufactured from more than one metal (except circles and sheets of copper, brass and aluminium). The notification provided that the tax had to be paid by the producer or importer at the rate of Rs. 3-2-0 per cent.

4. Meanwhile Art. 286(3) of the Constitution had come into force. This Article as it then stood provided that no law made by the Legislature of a State imposing, or authorising the imposition of, a tax on the sale or purchase of any such goods as have been declared by Parliament by law to be essential for the life of the community, shall have effect unless it has been reserved for the consideration of the President and has received his assent.

5. Thereafter Parliament by law proceeded to make the declaration as contemplated by this Article by S. 2 of Act 52 of 1952 (Essential Goods (Declaration and Regulation of Tax on sale or purchase) Act) (hereafter called the Act) which was passed on August 9, 1952. Section 2 of the Act provides that the goods specified in the Schedule are hereby declared to be essential for the life of the community. Item 14 in the schedule refers to iron and steel . Thus, as a result of these provisions iron and steel came to be declared as essential for the life of the community within the meaning of Art. 286(3) as from August 9, 1952.

6. Respondent I thereupon purported to give effect to the provisions of Art. 286(3) and S. 2 of the Act issuing two notifications on October 24, 1953. By the first notification it was provided that no tax shall be payable, inter alia, on the sale of iron and steel. Iron and stee