Judgement

BACHAWAT, J. :- The respondents are dealers assessable to sales-tax under the East Punjab General Sales-tax Act, 1948. In their return for the assessment years 1935-56, 1956-57 and l957-58 they claimed exemption from tax in respect of sales of edible oils. It is common case before us that this exemption was claimed in respect of sales of edible oil produced in ghanis run by mechanical process. By his orders dated March 3, 1959, April 9, 1959 and July 17, 1959. the Assessing Authority, Jullundur held that exemption from tax was not allowable under item No. 57 of the schedule of tax-free goods as substituted by the Punjab Government Notification No. 3483-E and T-54/723(CH) dated August 5, 1954. The appeals from these orders were dismissed by the Deputy Excise and Taxation Commissioner. Jullundur Division by his orders dated August 3, 1959 and February 16, 1960. Bevision Petitions from these orders were dismissed by the Excise and Taxation Commissioner. Punjab by his orders dated November 24, 1961. Revision Petitions from the last orders were dismissed by the Financial Commissioner, Revenue, Punjab by his orders dated April 27, 1962. On the application of the respondents, the Financial Commissioner, Revenue, Punjab by his order dated August 9, 1962 referred under S. 22(1) of the Punjab General Sales-tax Act,1948 the following question of law for the decision of the High Court of Punjab at Chandigarh:

"Whether notification No. 3483-E and T -54/723(CH), dated the 5th August. 1954 whereby exemption from Sales-tax granted by the Government in respect of edible oils was abolished in the case of such edible oils produced in ghanis run by mechanical process was intra vires and not the law made by the Legislature of the State which requires the previous assent of the President of India."

These References were marked as Sales-tax References Nos. 8, 10 and 11 of 1962. By its judgment dated August 19, 1963 the High Court held following its earlier decision in Ganga Ram Suraj Prakash v. State of Punjab, (1963) 14 STC 476 (Punj) that the notification was a law made by the State Legislature after the enactment of Central Act No. 52 of 1952, and since it did not receive the assent of the President it was ultra vires and invalid. In the earlier decision, the Punjab High Court held that (1) S. 5 of the East Punjab General Sales-tax Act, 1948. as it originally stood, was invalid on the ground of excessive delegation of legislative power to the executive (2) the remaining Sections of the Act including S. 6 could not survive the invalidity of S. 5, (3) the Act did not become valid until the insertion of the new S. 5 in the main Act by the East Punjab Act No. 19 of 1952 and (4) as the East Punjab Act No. 19 of 1952 which alone could sustain the impugned notification dated August 5, 1954 was passed after the Central Act No. 52 of 1952, the impugned notification could not be justified and was invalid. The High Court observed that it was not impressed with the argument that the notification was not a law made by the legislature of the State and therefore the assent of the President could be dispensed with. The present appeals have been preferred from the orders of the High Court dated August l9. 1963.

2. To appreciate the points in controversy, it is necessary to refer to the course of legislation. The East Punjab General Sales-Tax Act (East Punjab Act No. 46 of 1948) was enacted on November 15, 1948. Section 4 of the Act provided for the incidence of taxation and declared that the classes of dealers specified in sub-ss. (1), (2), (3) and . (4) would be liable to pay tax under the Act. Section 5 (1) was in these terms:

"5. Rate of tax.-(I) Subject to the provisions of this Act, there shall be levied on the taxable turnover every year of a dealer a tax at such rates as the Provincial Government may by notification direct."

Turnover as defined in S. 2(1) included the aggregate of the amount of sales. Taxable turnover as defined in S. 5 (2) was asc