Judgment

HIDAYATULLAH, J. : (Majority judgment: B. P. Sinha, C.J.I., Hidayatullah, Shah and Mudholkar, JJ.) The appellants are a firm of general merchants, which sells, among other goods, manufactured tobacco as defined in the Punjab Tobacco Vend Fees Act, 1954 (12 of 1954), which came into force in the State of Punjab from April 1, 1954. The firm is also a registered dealer under S. 7 of the East Punjab General Sales Tax Act, 1948, and till the end of March, 1954, was paying sales tax on manufactured tobacco also. Indeed, the firm paid sales-tax on manufactured tobacco, also for the next quarter ending on June 30, 1954, but did not pay in the succeeding quarter in view of certain events, to which a detailed reference will be made presently. On September 27, 1954, the State Government issued a Notification (No. 4556-E & T (Ch) -54/957) by which the schedule of exemptions under S. 6 of the Sales Tax Act, was amended by the inclusion of item 51, which reads as follows:

Item 51 "Manufactured tobacco as defined in the Punjab Tobacco Vend Fees Act, 1954."

This Notification was preceded by a Notification of May, 7, 1954 (No. 427-E &T (Ch)54/369), by which the State Government had given noti