Judgment

SUBBA RAO, CJI. : The decision on these appeals depends upon the interpretation of the relevant provisions of the Punjab General Sales Tax Act, 1948 (Punjab Act XLVI of 1948), as amended by Punjab Act of 1958, relating to three categories of goods, namely, oil-seeds, iron and cotton.

2. The facts may be briefly stated.

3. The assessees in Civil Appeals Nos. 526, 527 and 529 of 1964 carry on business at Moga in Punjab and each owns an oil mill. They purchase oil seeds and, after crushing the same in their oil mills, sell the oil and the residual oil-cake. They are registered dealers under the Act. The Amending Act imposed a purchase tax of 2 per cent on the purchase of oi1-seeds "for the use in the manufacture of goods for sale". This was in addition to the sales-tax leviable on the sales of oil and oil-cake. On June 23, 1959, the Excise and Taxation Officer, Ferozepore, the 3rd respondent in the said appeals issued notices to the 3 appellants-assessees to the effect that they did not submit their returns for the year ending 1958-.39 and failed to pay purchase-tax in respect thereof and asked them to show cause why they should not be prosecuted for the said default. The appellants filed 3 petitions under Art. 226 of the Constitution in the High Court of Punjab questioning the validity of the relevant provisions of the Act and for appropriate reliefs. A Division Bench of the High Court heard the petitions, along with other connected petitions and dismissed the petitions of the appellants so far as they related to purchase-tax on oil seeds. Hence the appeals.

4. Civil Appeals Nos. 39 to 43 of 1965 relate to purchase-tax on iron. The appellants carry on business in rolling steel at Gobindgarh. They purchase steel scrap and steel ingots and convert them into rolled steel sections. Under the Act, the assessing authority imposed purchase-tax at the rate of 2 per cent on the purchase of steel scrap and steel ingots made by them during the period April 1, 1958 to March 31, 1959 for making rolled steel section and selling the same. The appellants filed petitions under Art. 226 of the Constitution in the High Court for appropriate writs for quashing the orders of the assessing authorities and for prohibiting them from levying purchase-tax on the goods purchased and for refund of the tax illegally collected from them. A Division Bench of the High Court dismissed the petitions. Hence the appeals.

5. Appeals Nos. 81 of 1965 and 540 of 1965 relate to purchase-tax on cotton. The appellants in Civil Appeal No. 81 of 1965 are the trustees of Birla Education Trust. They own a cotton and textile mill Bhiwani. They purchase cotton from various dealers in Punjab and outside for the manufacture of yarn and cloth. By an order, dated March 11, 1962, the District Taxation Officer, Hissar, imposed purchase-tax on the appellants in respect of the cotton purchased by them for the assessment years 1958-59 and 1959-60. The appellant in Civil Appeal No. 540 of 1965 is a limited company carrying on the business of producing and selling yarn. For the purpose of its business it acquires cotton from commission agents. It is a registered dealer under the Act. The Excise and Taxation Officer Hissar, by his order dated November 29, 1961, assessed the appellant to purchase-tax for the assessment year 1958-59 in respect of the cotton purchased by it and so too on January 27, 1962, he had taken proceedings for making assessment to purchase tax for the assessment year 1959-60 in respect of the same commodity. The appellants in both the appeals filed petitions under Art. 226 of the Constitution in the High Court questioning the validity of the said orders. The said writ petitions were dismissed by a division Bench of the High Court. Hence the appeals.

6. We shall at first take the points raised which are common to all the appeals and then proceed to consider the points peculiar to some of the appeals.

7. Mr. M. C. Setalvad, learned counsel appearing for the appellants