Back
SUPREME COURT OF INDIA
M.H. BEG C.J.I., Y.V. CHANDRACHUD, P.N. BHAGWATI, V.R. KRISHNA IYER, N.L. UNTWALIA, S. MURTAZA FAZAL ALI AND P.S. KAILASAM, JJ.
R. S. Joshi etc., Appellant
Versus
Ajit Mills Ltd. and another etc., Respondents.
(2) Civil Appeals Nos. 1410 and 1671-1685 of 1975:
J. S. Joshi etc., Appellants
Versus
Idar Taluka Sahakari etc., Respondents.
Civil Appeals Nos. 533, 1004, 1410 and 1671-1685 of 1975,
D/- 31-8-1977.
Advocates Appeared
Mr. S. T. Desai and R. M. Mehta, Sr. Advocates (Mr. M. N. Shroff and Miss Radha Rangaswami, Advocates with them), for Appellants in C. As. Nos. 533, 1004 and 1410 and 1671-1685/-1975; Mr. F. S. Nariman, Sr. Advocate (Mr. M. N. Shroff and Miss Radha Rangaswami, Advocates with him), for the Intervener (State of Maharashtra) in C. A. No. 1410/75; Mr. Kanishkar H. Kaji, Advocate, Mrs. S. Bhandare, Advocate, M/s. M. S. Narasimhan, A. K. Mathur, A. K. Sharma and Miss Nalini Paduval, Advocates for Respondent in C. A. No. 1671/75; Mr. K. J. Johan, Advocate, for Respondents in C. A. 1685/75; Mr. B. Sen, Sr. Advocate (in C. A. 533/75), for Respondent No. 1 in C. A. No. 533 and Respondents in C. As. Nos. 1677-78, 1680 and 1682-1683/75.
COLOURABLE EXERCISE OF POWER
Bombay Sales Tax Act, 1959 - Sections 37 (1) (a) and 46 (2) - Criminal Procedure Code – Constitution of India, 1950 – Article 19 (1) (f) - Simple imprisonment – Appeal against conviction - Whether it is permissible for the State Legislature to enact having regard to triple Lists of Seventh Schedule and Articles 14 and 19, that sums collected by dealers by way of sales tax but are not eligible under the State law – and indeed prohibited by it- shall be forfeited to public exchequer punitively under Entry 54 read with Entry 64 of List II - Whether forfeiture clause in Section 37 (1) is bad because of the besetting sin of colourability - Whether this true nature of forfeiture is contradicted by anything we can find in S. 37 (1), 46 or 63 - Whether it was open to State legislature under its powers under Entry 54 of List II to make a provision to the effect that money collected by way of tax even though it was not due as a tax under Act shall be made over to Government - When examining a legislation from angle of its vires Court has to be resilient not rigid forward-looking not static liberal not verbal in interpreting the organic law of nation – Court must also remember constitutional proposition enunciated that courts do not substitute their social and economic beliefs for judgment of legislative bodies – Moreover while trespasses will not be forgiven a presumption of constitutionality must color judicial construction - These factors recognized by Court are essential to modus between judicial and legislative branches of State both working beneath canopy of Constitution - Meat of matter – rather core of dispute – Ignoring for moment minor variations among several appeals which court may relegate for separate treatment - Is as to whether it is permissible for State Legislature to enact having regard to triple Lists of Seventh Schedule and Articles 14 and 19 that sums collected by dealers by way of sales tax but are not eligible under State law - and indeed prohibited by it- shall be forfeited to public exchequer punitively under Entry 54 read with Entry 64 of List II - Gujarat State whose law in this behalf was held ultra vires by High Court has in its appeal by certificate raised this issue squarely and argued for an answer affirmatively - Law we are concerned with is Bombay Sales Tax Act, 1959 applicable during relevant period to Gujarat State although State of Maharashtra itself has since modified law as pointed out who intervened on behalf of that State to supplement and substantiate validity of legislation – Held, In other words he submitted that penalty would be confined only to willful acts of omission and commission in contravention of provisions of the enactment - This plea cannot be accepted as penal consequence can be visited on acts which are committed with or without a guilty mind. For proper enforcement of various provisions of law it is common knowledge that absolute liability is imposed and acts without means real are made punishable - It was submitted that where assessed innocently collected amounts on impression that tax was livable amounts so collected were forfeited while his obligation to purchasers to refund amounts continued - If assessed by a mistake failed to collect tax from purchasers tax was levied and collected from assessed making him suffer in any event - When after a costly litigation assessed succeeded in establishing that sales tax cannot be collected on railway freight on cement bags or inter-State sales Government promptly forfeited such amounts - Court agree these are instances of hardship to assesses and deserve Government attention - But for that reason Courts cannot say that Act is beyond the legislative competence. The fact that in some cases the dealers are prejudiced would not affect the validity of the legislation which is question we are called upon decide - On a careful consideration of points raised court satisfied that provisions of Section 37 (1) are within competence of State legislature – Court unable to agree with conclusion of High Court that Section 46 (2) which prohibits any person who is not a registered dealer and liable to pay tax in respect of any sale or purchase from collecting on sale of any goods any sum by way of tax and any Registered dealer from collecting any amount by way of tax in excess of amount of tax payable by him the provisions of Act is violative of Constitution - Court see no unconstitutionality in such a provision - For enforcement of sales tax law the provision is absolutely necessary for without such prohibition unauthorized collection of tax can never be checked - Sales tax law will have to demarcate articles on which tax can be collected and prohibit collection of tax in any manner not authorized by law - High Court held that provisions do not contravene either of two Articles - As court have construed word penalty to include forfeiture also section is clear that when proceedings are taken up under Section 37 no prosecution can be instituted under S. 63 (1) (h) on same fact - Plea as to contravention of Art. 24 have therefore to fail - Equally untenable is plea that provisions contravene Article 19 (1) (f) - In case the SC held that section 12-A (4) is not valid as forfeiture cannot be enforced without proper inquiry - That plea is no more available for Section 37 (2) prescribes procedure which makes it obligatory on part of commissioner to give notice to enable assessed to show cause against levy of penalty or forfeiture – Further there are provisions for appeal and revision against any order made by Commissioner - Plea based on Art. 19 (1) (f) has to fail - Appeals allowed
Judgment
KRISHNA IYER, J. (on behalf of himself and M. H. Beg C. J., Chandrachud, Bhagwati, Untwalia and Fazal Ali, JJ.):- This bunch of appeals brought by the State of Gujarat certificate has a pan-Indian impact, as the sales-tax project which has been struck down by the High Court may adversely affected cousin provisions in like statutes in the rest of the country. Contradictory verdicts on the constitutionality of a certain pattern of sales-tax legislation, calculated to counter consumer victimisation by dealers, have been rendered by different High Courts and what complicates the issue is that reasonings in the prior rulings of this Court on the topic have been pressed into service by both sides. This slippery legal situation makes it necessitous for the Constitution Bench of this Court (numerically expanded, almost to breaking point, by the recent 42nd Constitution Amendment) to declare the law with relative certitude, reviewing, in the process, its previous pronouncements and overruling, if required, the view of one High Court or the other so that the correct position may finally be restated. The certainty of the law is the safety of the citizen and, having regard to the history of judicial conflict reflected in the rulings we will presently unravel, an authoritative decision is overdue.
2. A prefatory caveat. When examining a legislation from the angle of its vires, the Court has to be resilient, not rigid, forward-looking, not static, liberal, not verbal in interpreting the organic law of the nation. We must also remember the constitutional proposition enunciated by the U. S. SC in Munn v. Illinois (1876) 94 US 113 (quoted in Labor Board v. Jones and Laughlin, (1936), 301 US 1, 33-34 - Corwin, Constitution of the U. S. A., Introduction, p. xxxi) viz., that courts do not substitute their social and economic beliefs for the judgment of legislative bodies. Moreover, while trespasses will not be forgiven, a presumption of constitutionality must colour judicial construction. These factors, recognised by our Court, are essential to the modus vivendi between the judicial and legislative branches of the State, both working beneath the canopy of the Constitution.
3. The meat of the matter - rather, the core of the dispute - ignoring, for the moment, minor variations among the several appeals which we may relegate for separate treatment - is as to whether it is permissible for the State Legislature to enact, having regard to the triple Lists of the Seventh Schedule and Articles 14 and 19, that sums collected by dealers by way of sales tax but are not exigible under the State law - and, indeed, prohibited by it- shall be forfeited to the public exchequer punitively under Entry 54 read with Entry 64 of List II. the Gujarat State whose law, in this behalf, was held ultra vires by the High Court, has, in its appeal by certificate, raised this issue squarely and argued for an answer affirmatively. The law we are concerned with is the Bombay Sales Tax Act, 1959 (Bombay Act LI of 1959) (for short, the Act) applicable during the relevant period to the Gujarat State, although the State of Maharashtra itself has since modified the law, as pointed out by Shri Nariman, who intervened on behalf of that State, to supplement and substantiate the validity of the legislation.
4. The statutory provisions which have succumbed to unconstitutionality (as expounded by the High Court) are Ss. 37 (1) and 46 of the Act. The High Court of Maharashtra, however, has taken a diametrically opposite view and other High Courts have ranged themselves on one side or the other in this controversy, while dealing with more or less similar statutes. We confine our judgment to the Act that is before us and do not go into the validity of the other statutes which have been incidentally referred to in court. The point involved is so critical, yet delicate, that, theateven short but significant variations in the scheme of the statute may well spell a result which is opposite
The main legal point established in the judgment is the binding effect of the settlement between the parties, the waiver of the right to seek re-employment by the workmen, and the entitlement of the ....
A lockout is justified if it is declared in response to an illegal strike or a strike that is in breach of a settlement or award.
The combination of eyewitness testimonies, recovery of the weapon used, and forensic examination results can establish guilt in criminal cases, even based on circumstantial evidence.
The conviction of an accused person under Section 27(3) of the Arms Act is not permissible in law if the accused is also charged with committing murder under Section 302 of the Indian Penal Code.
The court can enhance compensation based on the deceased's income and family dependency, and adjust the multiplier used by the Tribunal if found unjustified.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
