The amendment of section 5(3) of the Rajasthan Sales Tax Act, 1954, and rule 29(2)(i) of the Rajasthan Sales Tax Rules, 1955, by the Rajasthan Sales Tax (Amendment) Act, 1994, revived the provisions and authorized the levy and collection of tax at source, rendering the previous declaration of unconstitutionality ineffective.

The State of Rajasthan has filed this special appeal under section 18 of the Rajasthan High Court Ordinance, 1949, against the order of the learned single Judge dated August 24, 1993, whereby he has disposed of the writ petition on the basis of a single Bench decision of this Court rendered in Gopal Verma v. State (S.B.C.W. Petition No. 1977 of 1993) decided on May 10, 1993.

2. Since the aforesaid special appeal and the appeals mentioned in Schedule A raise a common issue, they are being disposed of by this common judgment.

3. As agreed by the learned counsel for the parties, we have heard the matters finally.

4. Mr. Mehta, learned counsel for the appellant, has moved an application stating that the Rajasthan Sales Tax (Amendment) Act, 1994, has been passed and the same has been published in the Extraordinary Gazette dated March 19, 1994, by which section 5(3) of the Rajasthan Sales Tax Act, 1954 (hereinafter referred to as "the Act") has been substituted with effect from April 1, 1987 (annexure A). He also submits that in exercise of powers conferred by section 26 of the Act, clause (i) of sub-rule (2) of rule 29 of the Rajasthan Sales Tax Rules, 1995, has also been substituted with immediate effect vide Government Notification No. F4(i)/FD/Gr.IV/93-95 dated April 4, 1994 (annexure B). He prays that the special appeal may be accepted and the impugned order may kindly be set aside.

5. We have heard learned counsel for the parties and perused the material on record as well as the amended provisions.

6. The apex Court in Gannon Dunkerley & Co. v. State of Rajasthan [1993] 88 STC 204 has declared section 5(3) of the Act and rule 29(2)(i) of the Rajasthan Sales Tax Rules as unconstitutional and void, as the invalidity of section 5(3) of the Act goes to the root of the imposition of tax, in the absence of that provision, the tax cannot be levied.

7. Since the controversy was resolved in the aforesaid decision by the Supreme Court holding that the authority will not be entitled to deduct the tax at source and thereafter the Commercial Taxes Department, Rajasthan, also issued a circular to the effect that the provision to collect tax in relation to a works contract never existed on the statue but even then the tax was deducted and, therefore, the learned single Judge in Gopal Verma's case S.B.C.W. Petition No. 1977 of 1993 decided on May 10, 1993 ordered that the authorities are not entitled to recover the tax at source as the same has been stuck down. However, it was ordered that the department will be free to proceed in accordance with the provisions of law ignoring section 5(3) of the Act and rule 29(2)(i) of the Rules. However, it was also observed that whatever amount of tax has been deducted or recovered after 17th November, 1992, shall either be refunded or adjusted towards the tax liability. A Division Bench of this Court in State of Rajasthan v. M.E.S. Builders Association (D.B.C. Special Appeal No. 221 of 1993 decided on May 10, 1993), held that once the substantive provision of levy of tax has been declared ultra vires and tax is not at all leviable as a necessary consequence the provisions relating to recovery of such tax also cannot be put into operation unless there is any amendment.

8. Having gone through the case law on the point we find that earlier there was no provision to impose tax on the turnover in respect of goods involved in execution of works contract in Rajasthan Sales Tax Act and there was no authority to levy the tax, therefore, there could not be any authority to collect the tax at source. Now, the Rajasthan Sales Tax (Amendment) Act, 1994, has been introduced by which section 5(3) of the Act has been substituted with effect from April 1, 1987, which is evident from annexure A and similarly clause (i) of sub-rule (2) of rule 29 of the Rajasthan Sales Tax Rules, 1955, has also been substituted with immediate effect which is apparent from annexure B. Subsequent events and change in law can be look