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IN THE HIGH COURT OF ALLAHABAD
M. L. Chaturvedi and J. N. Takru, JJ.
FIRM THAKUR DAS SUNDER DAS - Appellant
Versus
SALES TAX OFFICER - Respondents
Civil Miscellaneous Writ Petition 2231 Of 1958
Decided On : 03/24/1959
U. P. SALES TAX ACT, 1948 - SECTIONS 3, 3A, 4 - U. P. SALES TAX (AMENDMENT) ACT, 1956 (ACT XIX OF 1956) - SECTION 2 - U. P. SALES TAX (AMENDMENT) ACT, 1957 (ACT XXIV OF 1957) - SECTION 2 - U. P. SALES TAX (VALIDATION) ACT, 1958 - SECTION 3(1) - CONSTITUTION OF INDIA, 1950 - ARTICLES 14, 348(3) - NOTIFICATION DATED 31ST MARCH, 1956 - VALIDITY - DELEGATION OF LEGISLATIVE POWER - INCONSISTENCY WITH ARTICLE 14 - SAFEGUARD PROVIDED IN SECTION 3A(3) - COMPLIANCE - INTERPRETATION OF SECTION 3(1) OF THE VALIDATION ACT, 1958 - HINDI VERSION OF THE ACT - RELEVANCE.
Fact of the Case:
The petitioner, a dealer in cloth, challenged the assessment order dated 20th May, 1958, and the demand notice bearing the same date, issued by the Sales Tax Officer, Agra, on the ground that the impugned Act was void, as it contained unauthorized delegation of power and was inconsistent with Article 14 of the Constitution. The petitioner also contended that the impugned notification dated 31st March, 1956, was not placed before the Legislative Assembly, as required by Sub-section (3) of Section 3a of the Principal Act.
Finding of the Court:
1. The delegation of authority contained in Section 3a of the Principal Act is not an improper delegation, but only an accessory or subordinate power has been conferred on the State Government to select the commodities, and the object of the conferment of the power was to carry out the purpose and policy of the Sales Tax Act. 2. Section 3a of the Principal Act is not inconsistent with Article 14 of the Constitution. 3. The safeguard provided in Sub-section (3) of Section 3a of the Act was followed, and the notification was placed before the Legislative Assembly of the State, as required by Sub-section (3). 4. Section 3(1) of the Validation Act, 1958, should be interpreted to mean that the notification was issued under Section 3a as it stood on the date of the Validation Act.
Issues: 1. Whether the impugned Act was void, as it contained unauthorized delegation of power and was inconsistent with Article 14 of the Constitution? 2. Whether the impugned notification dated 31st March, 1956, was not placed before the Legislative Assembly, as required by Sub-section (3) of Section 3a of the Principal Act?
Ratio Decidendi: 1. The Legislature had laid down the policy that sales of commodities were to be taxed at every point of sale at the rate of 3 pies per rupee, but with respect to others the tax could be levied at single point and the maximum rate of sales tax was not to exceed one anna. It is obvious that in preparing the list of commodities under Section 3a the Government would have to keep in view the fact of the prevailing prices and numerous other considerations which the Legislature did not consider it necessary to detail. It could have laid down only the general principles governing rules of taxation which every State Government is expected to know. 2. The selection of particular commodities, for the application of the provisions of section 3a of the U. P. Sales Tax Act to them depends on the exigencies of tax collection, and no hard and fast rule could be laid down for the selection of particular commodities. It is really a matter of detail which had to be left to the authority best suited to decide which commodity should be exempted from the operation of Section 3 and brought within the ambit of Section 3a of the Act. 3. Copies of the notification in question were placed on the table of the House and supplied to the Members on the 2nd April, 1956. But no announcement of the fact that the notifications were placed on the table was made, though an announcement regarding the placing of the Amendment Ordinance was duly made by the Finance Minister. A formal motion to place the notification on the table of the House was made on 9th May, 1956, and the Speaker said that the notification had already been placed on the table on 2nd April, 1956, though an announcement of the placing of the notification on the table was not made on that date. The Assembly then continued to be in session till 22nd May, 1956. In spite of the formal motion of the placing of the notification on the table, no Member appears to have raised any objection to the contents of the notification after 9th May, 1956, though on the 4th April, 1956, discussion did take place as regards the propriety of the rates of tax imposed by the notification on some of the commodities. The copies of the notifications were, in fact, placed on the table on 2nd April, 1956. Every Member had been supplied with the copies on that date. Even if the notification be taken to have been placed on the table, when the formal motion was made on 9th May, 1956, the requirement of placing it on the table was fully complied with.
Final Decision: The petition was dismissed with costs.
( 1 ) THIS petition, some other similar petitions in which notices had been ordered to be issued, and a number of others in which notices had not been ordered to be issued, were put up together, as the learned counsel for the petitioners proposed to argue the same points in all these petitions. In the present petition as well as in some others, grounds have not been taken to the effect that the impugned Act was void, as it contained unauthorised delegation of power and was inconsistent with Article 14 of the Constitution. But in all the cases in which notices have not been issued, these two points have also been taken. The learned counsel for the petitioners, Mr. Jagdish swarup, argued the above first two points and, after he had concluded his arguments, the learned junior Standing Counsel raised an objection that, in the petitions in which the above two points had not been taken in the grounds, the learned counsel should not be permitted to argue the points. The objection was made at a late stage of the case and it was further clear that the points had to be considered in some of the writ petitions in which they had been taken. There is the further fact that the learned counsel for the State could not be said to have been taken by surprise, because there was a break of nearly a month after the above two points had been argued by the learned counsel for the petitioners and the time when he started with the points that had actually been taken in the writ case. This break of a month was caused by the fact that one of the judges, constituting the Bench, was on leave for a period of three weeks. In view of all these circumstances, we permitted the above two points to be argued even in the petitions in which they had not been taken in the grounds set forth in the petitions.
( 2 ) THE petitioner is a dealer in cloth and carries on his business for the purchase and sale of cloth in Agra. He is registered as a dealer under the U. P. Sales Tax Act. The petitioner had been paying sales tax on the sales effected by him at a certain rate, but subsequently tax on some of the commodities was made payable at one point of sale and the rate of tax was fixed at one anna per rupee. In view of the change in the law, the Sales Tax Officer assessed a portion of the turnover of the petitioner at the enhanced rate by his assessment order dated 20th May, 1958, and also issued a notice of demand for the payment of the sum assessed. The present petition was filed on the 12th August, 1958, praying for the issue of a writ in the nature of certiorari quashing the assessment order dated 20th May, 1958, and the demand notice bearing the same date. It was also prayed that a writ in the nature of mandamus be issued commanding the Sales Tax Officer, agra, not to give effect to the assessment order and not to enforce the notice of demand. The petition has been opposed on behalf of the State and, in order to appreciate the points in dispute between the parties, a short history of the legislation on the point may be given.
( 3 ) THE U. P. Legislature passed an Act to provide for the levy of tax on the sale of goods called the U. P. Sales Tax Act, No. XV of 1948. It came into force from the 1st April, 1948. (It will hereinafter be referred to as the Principal Act ). Under Section 3 (1) it is provided that every dealer shall in each assessment year pay tax at the rate of 3 pies per rupee on his turnover of the previous year which shall be determined in such manner as may be prescribed. A new Section 3a was added by the U. P. Sales Tax (Amendment) Act, No. XXV of 1948. Sub-section (1)of this section provided that notwithstanding any thing contained in Section 3, the State government may, by notification in the official Gazette, declare that the turnover in respect of any goods shall not be liable to tax except at such single point in the series of sales by successive dealers as the State Government may specify. Under Sub-section (2) the State Gov
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