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SUPREME COURT OF INDIA
A.P. SEN AND D.P. MADON, JJ.
M/s. Vrajlal Manilal and Co. and another, Appellants
Versus
State of M.P. and another, Respondents.
Civil Appeal No. 2635 of 1972, D/-2-4-1986.
Advocates appeared
Mr. Rameshwar Nath Advocate, for Appellants; Mr. A.K. Sanghi, Advocate, for Respondents.
It was contended that as the sales and purchases of tendu leaves cease to be exigible to tax under section 8 by reason of the amendments made therein and as tendu leaves were not mentioned in any of the entries in Schedule II to the M. P. Sales Tax Act, sales and purchases of tendu leaves could not be made exigible to tax under section 6 read with the residuary entry No. 1 in Part 6 of Schedule II.
Schedule I of the M. P. General Sales Tax Act, 1958, sets the list of goods which are exempted from payment of tax under section 10. Parts I to V of Schedule II to the M P. Sales Tax Act set out the different classes of goods and the rate at which tax is payable in respect of the sales and purchases thereof. The residuary Entry No 1 of Part VI states that the rate of tax on sales and purchases of "All other goods not included in Schedule I or any other Part of this Schedule" shall be the one specified in that Entry. Therefore, sales or purchases of any class of goods not specifically mentioned in any of the entries in Schedule I or any of the entries in parts 1 to V of Schedule II are exigible to tax at the rate shown in the residuary entry, unless there is any specific provision in the M. P Sales Tax Act to the contrary as there is in section 8 which originally provided that its provisions would apply notwithstanding anything contained in the M. P. Sales Tax Act and after the amendment of section 8 by the Madhya Pradesh General Sales Tax (Amendment) Act, 1961 (M. P. Act No. 20 of 1961) which was brought into force on June 1, 1961, provided that they would apply notwithstanding anything contained in section 6 or section 8 of the Act. (1961) I SCR 709 relied on. [Para 9]
(2) Sales Tax--General Sales Tax Act, 1958 (M.P.)-S. 2 (d)--dealer -meaning of.
The Central Government or the State Government or the Forest Department could not merely by selling the forest produce grown on their land be regarded as carrying on any business of buying, selling, supplying or distributing goods and therefore, in respect of mere sales of forest produce, neither the State Government nor the Forest Department was a dealer within the meaning of the definition of that term contained in clause (d) of section 2.
After the amendment of clause (d) by the 1971 Act, it is irrelevant for the purposes of the levy of tax under the M. P. Sales Tax Act whether the Central Government or a State Government or any of their departments or offices have bought or sold goods in the course of business. 1971 JLJ 514 relied on. [Para 10]
(3) Constitution of India--Art. 14--Tendu leaves are not of the same class as other raw materials--different rates of sales tax can be levied--there is no unreasonable classification.
Tendu leaves do not stand on the same footing as other raw materials. Their only use appears to be as a consumable packing material or container for tobacco in the manufacture of bidis just as a cigarette paper is used in the manufacture of cigarettes. Thus, tendu leaves form a separate class of commercial commodity and it is open to the State to tax them differently from other commercial commodities falling in the class of goods known as "raw material". [Para 15]
(4) Tendu Patta (Vyapar Viniyaman) Adhiniyam, 1964 (M.P)--S.19-monopoly of Tendu leaves created in favour of the State--does not violate Art. 14 of the Constitution. (1966) 2 SCR 40 relied on. [Para 15]
(5) Sales Tax-General Sales Tax Act, 1958 (M. P.)-Ss. 2 (7) & section 2 (1) not amended--section 8 amended-result-Constitution of India Art. 14.
By section 8, tendu leaves are expressly excluded from the concessional rates of tax in respect of other raw materials. Clause (1) of section 2 defines the term 'raw material'. This cannot, however, prevent the State from taxing different classes of raw materials at different rates. [Para 16]
(6) Sales Tax-General Sales Tax Act, 1958 (M. P.)-S. 8 (1)-levy of sales tax on Tendu leaves-levy of tax on it at the rate different from that on the sales or purchase of others goods-are not unconstitutional. [Para 16
(7) Constitution of India--Art. 286 (3), 301 & 304-Tendu leaves not declared special goods under section 14 of the Central Sales Tax Act, 1956 in Central Excise and Salt Act, 1944-Arts. 307 and 304 not offended because Tendu leaves are sold at a higher rate, outside the M. P. State. (1970) I 3CR 700 relied on. [Paras 17, 20, & 21
Judgment
MADON, J. :- The First Appellant is a partnership firm registered under the Indian Partner-ship Act, 1932 (Act No. IX of 1932). The Second Appellant is one of the partners of the First Appellant Firm. The First Appellant Firm carried on at all relevant times business as manufacturers of bidis and dealers in tendu leaves. The Appellants filed a writ petition under Articles 226 and 227 of the Constitution of India, being Miscellaneous Petition No. 317 of 1971, against the State of Madhya Pradesh and the Divisional Forest Officer, Ralsen Division, challenging the validity of the amendment made in sub-section (1) of section, 8 of the Madhya Pradesh General Sales Tax Act, 1958 (M.P. Act No. 2 of 1959), by the Madhya Pradesh General Sales Tax (Amendment) Act, 1968 (M.P. Act No. 9 of 1968) to the extent that the said amendment treated tendu leaves differently from other raw materials and for an appropriate writ, order or direction quashing the levy of sales tax on tendu leaves disposed of (imposed?) by the State Government and for restraining the State Government and its officers from enforcing or giving effect to the Madhya Pradesh General Sales Tax (Amendment) Act, 1968, to the extent that it amended section 8(1) of the Madhya Pradesh General Sales Tax Act. 1958. In view of the reliefs claimed in the said writ petition, it is difficult to understand how Article 227 of the Constitution could at all come into the picture. This obviously was the result of the general laxity in drafting pleadings which is unfortunately becoming more prevalent as each year passes. The said writ petition was in reality a petition filed under Article 226 of the Constitution. After the enactment of the Madhya Pradesh General Sales Tax (Amendment and Validation) Act 1971 (M.P. Act No. 13 of 1971), which inter alia amended the definition of dealer in clause (d) of section 2 with retrospective effect and further amended section 8, the Appellants amended their writ petition to challenge also the validity of the said amendments. The said writ petition was heard along with sixty-four similar writ petitions filed by other bidi manufacturers and dealers in tendu leaves and by a common judgment delivered on October 14, 1971, all these writ petitions were dismissed with costs. The Appellants thereafter obtained from the High Court under sub-clause (a) of clause (1) of Article 133 of the Constitution, as it stood prior to the amendment of clause (1) by the Constitution (Thirtieth Amendment) Act, 1972, a certificate of fitness to appeal to this Court on the ground that the amount or value of the subject-matter of the dispute in the High Court, namely, the liability to pay tax, as also of the dispute on appeal was more than Rs. 20,000 and the Appellants have accordingly filed the present Appeal.
2. Prior to April 1, 1959, there were different laws in force in the State of Madhya Pradesh relating to the levy of tax on the sales and purchases of goods, each of them applying to different regions of the State. These laws were the Central Provinces and Berar Sales Tax Act, 1947, the Madhya Bharat Sales Tax Act, Samvat 2007, the Central Provinces and Berar Sales Tax Act, 1947, as extended to and in force in the Vindhya Pradesh and Bhopal regions, the Rajasthan Sales Tax Act, 1954, as in force in the Sironj region, and the Vindhya Pradesh Sales Tax on Coal Ordinance, 1948. With a view to consolidate and amend all these laws and to replace them by a uniform law for the levy of tax on the sales and purchases of goods in the entire State of Madhya Pradesh, the Madhya Pradesh Legislature enacted the Madhya Pradesh General Sales Tax Act, 1958 (M.P. Act No. 2 of 1959). This Act will hereinafter be referred to in short as "the M.P. Sales Tax Act". Under sub-section (2) of section 1, the M.P. Sales Tax Act extended to the whole of Madhya Pradesh and under sub-section (3) of section 1 it was to come into force on such date as the State Government may, by notification, appoint i
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