Lachmi Narain vs Union Of India - 1975 Supreme(SC) 477

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1975 Supreme(SC) 477

SUPREME COURT OF INDIA
Y.V. CHANDRACHUD, R.S. SARKARIA AND A.C. GUPTA, JJ.
Lachmi Narain etc. etc., Appellants
Versus
Union of India and ors. Respondents.
Civil Appeals Nos. 2221-2225, 1801 and 2524 of 1972
Decided on 25-11-1975.
Advocates appeared
M/s. A. K. Sen and Sarjoo Prasad, Sr. Advocates, (M/s. Balram Sengal and C. P. Lal, Advocates with them), for Appellants in CAs. 2221-2225/72; Mr. B. Sen Sr. Advocate, (Mr. S. P. Nayar and Mr. M. N. Shroff, Advocates with him), for Respondents 2-3 : (In CAs. 2221-2225/72) and (for Respondents 1-4 in CAs. 1801), Mr. S. V. Gupte, Sr. Advocate, (Mrs. Leila Sait and Mr. U. K. Kaithan, Advocates, with him), for interveners in (CAs. 2221-2225/72) and Appellants in (CAs. 2524/72); Mr. M. C. Bhandare, Sr. Advocate, (M/s. Sardar Bahadur Saharya, B. N. Kirpal and V. B. Saharya, Advocates with him), for Appellant in CA. 1801/72.
* (1) L. P. A. No. 53 of 1971 D/- 18-11-1971 = reported in ILR (1972) 1 Delhi 475;
(2) C. W. Ps. Nos. 612, 640, 643 and 649 of 1971 and 281 of 1972; and C. W. P. No. 1052 of 1971, D/- 29-3-1972 and 5-1-1972 - (Delhi) respectively.

Advocates:
A.K.SEN GUPTA, B.N.KIRPAL, B.SEN, BALRAM SANGAL, C.P.LAL, LEILA SAIL, M.C.BHANDARE, M.N.SHROFF, S.P.NAIR, S.V.Gupta, SARDAR BAHADUR SAHARYA, SARJU PRASAD, U.K.KHAITAN, V.B.SAHARYA

Headnote:
States (Laws) Act, 1950 – Section 2 – Bengal Finance (Sales-tax) Act, 1941- Tax Case - Whether Notification issued by Central Government in purported excercise of its powers under Sec. 2 of the Union Territories (Laws) Act, 1950, is ultra vires the Central Government, is principal question that arises in these appeals which will be disposed of by a common judgment. 716 – Question has arisen in these circumstances: Section 2 of Part C States (Laws) Act, 1950, empowered Central Government to extend by notification in the Official Gazette, to any Part C State, or to any part of such State, with such restrictions and modifications as it thinks fit, any enactment which is in force in a Part A State – In exercise of this power, the Central Government by a Notification, extended to Part C State of Delhi, the Bengal Finance (Sales-tax) Act, 1941, with, inter alia, these modifications – Held – Plea was not set up by the Respondents in their affidavits – Whether or not notice for the requisite period was given before issuing the exemption notifications, was a question of fact depending on evidence – Thirdly, to allow the Respondents to take their stand on such a plea would be violative of fundamental principal of natural justice, according to which, a party cannot be allowed to take advantage of its own lapse or wrong – Statute had imposed a peremptory duty on the Government to issue notice of not less than three months, of its intention to amend the Second Schedule – Court therefore cannot be allowed to urge that since it had disobeyed this mandate on an earlier occasion when it granted the exemptions it can withdraw the exemptions in the same unlawful mode – Two wrongs never make a right – Nor could the respondents derive any authority or validity from Section 21 of the General Clauses Act, for the notifications withdrawing the exemptions. The source from which the power to amend the Second Schedule, comes is Sec. 6 (2) of the Bengal Act and not pointed out by this Court in Gopichand v. Delhi Administration, 1959 Supp (2) SCR 87 embodies only a rule of construction and the nature and extent of its application must be governed by the relevant statute which confers the power to issue the notification – power, therefore, had to be exercised within the limits circumscribed by Section 6 (2) and for the purpose for which it was conferred – Appeals allowed.

JUDGMENT

SARKARIA, J.:— Whether the Notification No. SRO-2908 (3908?) dated December 7, 1957 issued by the Central Government in purported excercise of its powers under Sec. 2 of the Union Territories (Laws) Act, 1950, is ultra vires the Central Government, is the principal question that arises in these appeals which will be disposed of by a common judgment. 716

2. The question has arisen in these circumstances: Section 2 of the Part C States (Laws) Act, 1950, empowered the Central Government to extend by notification in the Official Gazette, to any Part C State, or to any part of such State, with such restrictions and modifications as it thinks fit, any enactment which is in force in a Part A State. In exercise of this power, the Central Government by a Notification No. SRO 615 dated the 28th April 1951, extended to the then Part C State of Delhi, the Bengal Finance (Sales-tax) Act, 1941 (for short, the Bengal Act), with, inter alia, these modifications:

"In sub-section (2) of Sec 6, -

(a) ........

(b) for the words "add to the Schedule", the words "add to or omit or otherwise amend the Schedule" shall be substituted".

3. For the Schedule of the Bengal Act, this Notification substituted a modified Schedule of goods exempted under Section 6. The relevant items in the modified Schedule were as follows:

"8. Fruits, fresh and dried (except when sold in sealed containers).

11. Pepper, tamarind and chillies.

14. Turmeric

16. Ghee

17. Cloth of such description as may from time to time be specified by notification in the Gazette costing less per yard than Rs. 3/- or such other sum as may be specified.

21A. Knitting wool."

4. Section 6 of the Bengal Act after its extension to Delhi, as modified by the said Notification, reads thus:

"(1) No tax shall be payable under this Act on the sale of goods specified in the first column of the Schedule subject to the conditions and exceptions if any set out in the corresponding entry in the second column thereof.

(2) The State Government after giving by Notification in the Official Gazette not less than 3 months notice of its intention so to do may by like notification add to or omit from or otherwise amend the Schedule and thereupon the Schedule shall be deemed to be amended accordingly."

(emphasis supplied)

5. By a Notification, dated 1-10-1951, in sub-section (1) of Section 6, the words "the first column of" were omitted and for the words "in the corresponding entry in the second column thereof" the word "therein" was substituted.

6. By a notification country liquor was included in the Schedule as item No. 40 of exempted goods with effect from 19-4-1952.

7. On 1-11-1956, as a result of the coming into force of the States Reorganisation Act, 1956, and the Constitution (Seventh Amendment) Act, 1956, Part C State were abolished. Part C State of Delhi became a Union Territory and the Delhi Legislative Assembly was also abolished. In 1956, Part C State (Laws) Act, 1950 (hereinafter referred to as Laws Act) also became the Union Territories (Laws) Act, 1950, with necessary adaptations.

8. On 1-12-1956, Parliament passed the Bengal Finance (Sales-tax) (Delhi Amendment) Act, 1956 which introduced amendments in different sections of the Bengal Act as applicable to Delhi. It made only two changes in Section 6. Firstly, the word Schedule , wherever it occurred, was replaced by the words "Second Schedule". Secondly, the words "Central Government" were substituted for the words "State Government."

9. On December 7, 1957, in the Gazette of India Extraordinary there appeared a notification, which reads as below:

"S. R. O. 3908 - in excercise of the powers conferred by Section 2 of the Union Territories (Laws) Act, 1950 (30 of 1950), the Central Government hereby makes the following amendment in the notification of the Government of India in the Ministry of Home Affairs No. S. R. O. 615, dated 28th April, 1951 (extending to the Union Territory of Delhi the Bengal Finance (Sales Tax) Act, 1941, subject to certain modifications)

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1975 Supreme(SC) 477

Cases Referred (12)