Back
1997 Supreme(SC) 1373
SUPREME COURT OF INDIA
S. P. Bharucha, Suhas .C. Sen
STATE OF T.N. AND ANOTHER, APPELLANTS
Versus
SUN PAPER MILLS AND ANOTHER, RESPONDENTS.
Civil Appeals Nos. 3243-49 of 1991,
decided on October 23, 1997.
Headnote:
Central Sales Tax Act, 1956 - Section 8(5),8(2)(6) - General Clauses Act, 1897 - Section 21 - Sales tax on sale of white printing paper to newspaper - Notices of reassessment were issued to respondents for period - Notice stated that exemption notification had been withdrawn and that therefore reassessments were required to be made at unexempted rate - Notices of reassessment were challenged in a writ petition filed before High Court of Madras - Writ petition was dismissed - Respondents filed an appeal before Division Bench of High Court - Appeal succeeded and this appeal by special leave is directed against Division Benchs judgment - Division Bench took view that power of withdrawal of an exemption had not been exercised in like manner and subject to like conditions that governed exercise of power to grant exemption - Division Bench took notice of a plea that was raised by respondents in additional grounds taken before it namely that withdrawal notification did not disclose that appellants had been satisfied that it was necessary in public interest to withdraw exemption notification and that there was no material on which appellants were or could be said to have been so satisfied - Held, Court think to see how this second argument has progressed from stage to stage - It was only in appeal court that respondents additional grounds took plea that withdrawal notification did not disclose that appellants were satisfied that it was necessary in public interest to withdraw exemption notification and that this condition for exercise of power of withdrawal had not been satisfied - It was in response to this plea that appellants filed an affidavit setting forth proceedings of Board of Revenue to which Court have adverted - Based upon these proceedings it was argued by respondents before High Court that there had been non-application of mind because proceedings did not refer to Section 8(2)(b) of Central Act which was relevant - High Court upheld argument - It is now contended by respondents that due importance was not given to special place that newsprint occupies - Court are not inclined to give any weight to this line of argument - In our view High Court should not have permitted or upheld argument of non-application of mind in absence of relative pleading - Only plea in written arguments which High Court permitted was that public interest to withdraw exemption notification was not disclosed and that was satisfactorily met by disclosure in appellants aftidavit before Division Bench of proceedings of Board of Revenue - At this point argument should have been closed - Appeal Allowed
ORDER
1. On 12-11-1965, the appellant issued a notification under the provisions of Section 8(5) of the Central Sales Tax Act, 1956, directing that the rate of sales tax on the sale of white printing paper to newspaper concerns in the course of inter-State trade or commerce should be calculated at the rate of 2%. The exemption notification was gazetted on 24-11-1965.
2. On 20-3-1967, another notification was issued under the provisions of Section 8(5) of the Central Sales Tax Act, the relevant portions of which read thus :
"Cancellation of certain notifications relating to reduction in rate of tax under Section 8(5) of Central Sales Tax Act.
(GOP No. 642 Revenue 20th March, 1967) III No. 169 of 1967.
In exercise of the powers conferred by sub-section (5) of Section 8 of the Central Sales Tax Act, 1956 (Central Act 74 of 1956) the Governor of Madras hereby cancels, with effect on and from the 1st April, 1967, the Revenue Department notifications, published in the Fort St. George Gazette, as detailed below :
---------------------------------------------------------------------- Number of the Page, part and section of Date of the Fort St. notification the Fort Sr. George George Gazette in Gazette, in which the which the notification notification was published was published ---------------------------------------------------------------------- 1 2 3 ----------------------------------------------------------------------
* * *
10. III No. P. 2442 of Part III 24th November, 1965." 601 of 1965
3. On 4-1-1982/16-1-1 982, notices of reassessment were issued to the respondents for the period 1975-76 to 1981-82. The notice stated that the exemption notification had been withdrawn on 20-3-1967, and that, therefore, reassessments were required to be made at the unexempted rate. The notices of reassessment were challenged in a writ petition filed before the High Court of Madras. The writ petition was dismissed. The respondents filed an appeal before the Division Bench of the High Court. The appeal succeeded, and this appeal by special leave is directed against the Division Benchs judgment.
4. The Division Bench took the view that the power of withdrawal of an exemption had not been exercised in like manner and subject to like conditions that governed the exercise of the power to grant the exemption. Thee Division Bench took notice of a plea that was raised by the respondents in additional grounds taken before it, namely, that the withdrawal notification did not disclose that the appellants had been satisfied that it was necessary in the public interest to withdraw the exemption notification, and that there was no material on which the appellants were or could be said to have been so satisfied. The High Court noted the proceedings of the Board of Revenue which were produced before it by the appellants and which gave the reason that, in view of the changes in the rates of sales tax payable, the appellants found that there was no need to continue the lower rates of tax admissible under exemption notifications. It appears that it was then contended before the High Court by the respondents that the reasons of the Board of Revenue could not refer to Item 10 of the withdrawal notification because there was no reference to Section 8(2)(6) of the Central Act therein. The High Court, therefore, held that there had been non-application of mind in issuing the withdrawal notification.
5. Section 21 of the General Clauses Act, 1897, provides that where a statute or regulation confers a power to issue notifications, orders, rules or bye-laws, that power includes
"a power, exercisable in the like manner and subject to the like sanction and conditions (if any) to add to, amend, vary or rescind any notifications, orders, rules or bye-laws so issued".
The State statutes
