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1977 Supreme(P&H) 47
PUNJAB & HARYANA HIGH COURT
O.Chinnappa Reddy, S.S.Sidhu, Ajit Singh, Harbans Lal and Surinder Singh JJ.
Megha Singh And Co.
Versus
State Of Punjab
Civil Writ Petition No. 719 of 1977,693 of 1977,694 of 1977,714 of 1977,
Decided On : MARCH 25, 1977
The legislature is competent to enact two laws providing for two taxes of the same kind though for different purpose.
Headnote:
PUNJAB PANCHAYAT SAMITIS AND ZILA PARISHADS ACT - TAXATION - IMPOSITION OF TAX ON SALE OF COUNTRY LIQUOR - VALIDITY - DELEGATION OF POWER - LEGISLATIVE POLICY - RULES - LAYING BEFORE LEGISLATURE.
Fact of the Case:
The petitioners, who were licencees having the right to vend country liquor under the Punjab Excise Act and the Punjab Excise Rules, challenged the imposition of tax on the sale of country liquor by various Panchayat Samitis in the State of Punjab. They questioned the demands made on them for payment of the tax.
Finding of the Court:
The Court held that the notifications issued by the Government of Punjab under S. 67 (5) of the Punjab Panchayat Samitis and Zila Parishads Act notifying the imposition of tax on the sale of country liquor by Panchayat Samitis were not contrary to the express provisions of S. 6 read with Entry 37 of Schedule B of the Punjab General Sales Tax Act and the legislative policy underlying them.
Issues: 1. Whether the notifications issued by the Government of Punjab under S. 67 (5) of the Punjab Panchayat Samitis and Zila Parishads Act were contrary to the express provisions of S. 6 read with Entry 37 of Schedule B of the Punjab General Sales Tax Act and the legislative policy underlying them? 2. Whether the Punjab Panchayat Samitis (Sale of Liquor) Rules, 1976, were not validly made as they were not laid before the Legislature as prescribed by S. 115 (4) of the Punjab Panchayat Samitis and Zila Parishads Act?
Ratio Decidendi: 1. The Court held that the legislature was competent to enact two laws providing for two taxes of the same kind though for different purpose. By one law, the legislature may itself impose and levy a tax to go into the Consolidated Fund of the State, and by another law it may authorise a local authority to impose and levy another tax of the same kind to augment the local authority s revenues. 2. The Court held that the failure of the Executive to lay the rules before the Legislature was indeed a very serious matter, but it was not for the Courts to declare delegated legislation as invalid on the ground of non-laying when the Legislature itself attached or prescribed no consequence to the non-laying.
Final Decision: All the writ petitions were dismissed with costs.
O.CHINNAPPA REDDY, J.
1. These cases noise common questions and may be disposed of by one judgment. The petitioners are licencees, having the right to vend country liquor, under the Punjab Excise Act and the Punjab Excise Rules. They object to the imposition of tax on the sale of country liquor by various Panchayat Samitis in the State of Punjab. They question the demands made on them for payment of the tax.
2. The principal submission of Shri H. L. Sibal, learned counsel for the petitioners, was that the notifications issued by the Government of Punjab under S. 67 (5) of the Punjab Panchayat Samitis and Zila Parishads Act notifying the imposition of tax on the sale of country liquor by Panchayat Samitis were contrary to the express provisions of S. 6 read with Entry 37 of Schedule B of the Punjab General Sales Tax Act and the legislative policy underlying them. Shri Sibal urged that there was a legislative injunction, in S.6, that no tax shall be payable on the sale of goods specified in the first column of Sch. B, and since country liquor fell within Entry 37 of Sch. B; the notifications imposing tax, on the sale of country liquor were in clear violation of the legislative mandate. Entry 37 was All goods , except foreign liquor as defined in sub-paragraph (2) of paragraph (2) of the Punjab Excise Liquor Definitions, 1954, on which duty is or may be levied under the Punjab Excise Act, 1914 or the Opium Act, 1878. Shri Sibal submitted that the general legislative policy discernible from Entry 37 was that goods on which excise duty was leviable was not to be subject to sales Tax. The notifications imposing tax on the sale of country liquor were contrary to this legislative policy. Shri Sibal argued that it was not for a delegate like the Government or for a sub-delegate like a Panchayat Samiti to contravene a legislative direction or known legislative policy. It was argued by Shri Sibal that there was an impermissible delegation by a delegate. According to him, the Government was the delegate and the Panchayat Samiti was the sub-delegate. Though he did not expressly say so, we take it that he meant to attack the very vires of S. 66 of the Punjab Panchayat Samitis and Zila Parishads Act on the ground of improper delegation by a delegate. Shri Sibal referred us to the general principles laid down by the Supreme Court in Raj Narain Singh V/s. Patna Administration Committee, AIR 1954 SC 569. It was further contended that the Punjab Panchayat Samitis (Sale of Liquor) Rules, 1976, were not validly made as they were not laid before the Legislature as prescribed by S. 115 (4) of the Punjab Panchayat Samitis and Zila Parishads Act.
3. It will be useful to notice the relevant statutory provisions at this stage. Section 6 of the Punjab General Sales Tax Act is as follows:-
"6. (1) No tax shall be payable on the sale of goods specified in the first column of Sch. B subject to the conditions and exception, if any, set out in the corresponding entry in the second column thereof and no dealer shall charge sales tax on the sale of goods which are declared tax-free from time to time under this section.
(2) The State Government, after giving by notification not less than twenty days notice of its intention so to do, may by like notification add or delete from Schedule B and thereupon Sch. B shall be deemed to be amended accordingly."
We have already extracted Entry 37 of Sch B. Chapter II of the Punjab Panchayat Samitis and Zila Parishads Act provides for the constitution of Panchayat Samitis and the conduct of their business. Section 3 declares that every Panchayat Samiti shall be a body corporate having perpetual succession and a common seal. A Panchayat Samiti is constituted either for every Tehsil in a District or for every Block in a District. Chapter IV deals with the duties and powers of Panchayat Samities. Every Panchayat Samiti has a multiplicity of duties to perform in relation to the requirements the area under its jurisdictio
