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1955 Supreme(Nagpur) 48
HIGH COURT OF NAGPUR
Hidayatullah, Managalmurti
MADHYA PRADESH PAN MERCHANTS ASSOCIATION – Appellant
Versus
STATE OF MADHYA PRADESH (SALES TAX DEPARTMENT) AND ORS – Respondent
Miscellaneous Petition No. 320 of 1954
Decided on : 26-07-1955
A S Bobde, M Adhikari, M R Bobde, R R Dandige, Advocates
The term 'vegetables' cannot be given the comprehensive meaning the term beans in natural history and has not been given that meaning in taxing statutes, before. The term 'vegetables' is to be understood as commonly understood denoting those classes of vegetable matter which are grown in kitchen gardens and are used for the table.
Headnote:
SALES TAX - Exemption - Betel leaves - Whether betel leaves are included in the term 'vegetables' - Whether Act 16 of 1949 is 'ultra vires' - Whether the amendment of the schedule was defective because the procedure under Section 6 was not followed - Whether there is any discrimination when betel leaves are sought to be taxed and vegetables are exempted.
Fact of the Case:
The Madhya Pradesh Pan Merchants Association challenged the notices issued by the Sales Tax Officer and the Assistant Sales Tax Officer to submit returns of their sales of betel leaves with a view to assessing them to sales tax. The Association claimed exemption from the operation of the Sales Tax Act, 1947, and sought a 'writ' or 'writs' to restrain the Respondents from charging sales tax on the sale of betel leaves. Alternatively, it urged that Act 16 of 1949 by which the exemption is withdrawn is 'ultra vires' and illegal.
Finding of the Court:
The Court held that betel leaves are not included in the term 'vegetables' and, therefore, the exemption granted by Item No. 36 was withdrawn by its deletion. The Court further held that Act 16 of 1949, in so far as it bears upon the present matter, was not invalidly enacted and was effective. The Court also held that the amendment of the schedule was not defective because the procedure under Section 6 was not followed, as the Legislature could amend the whole Act including the schedule at any time. Finally, the Court held that there is no discrimination when betel leaves are sought to be taxed and vegetables are exempted.
Issues: 1. Whether betel leaves are included in the term 'vegetables'? 2. Whether Act 16 of 1949 is 'ultra vires'? 3. Whether the amendment of the schedule was defective because the procedure under Section 6 was not followed? 4. Whether there is any discrimination when betel leaves are sought to be taxed and vegetables are exempted?
Ratio Decidendi: 1. The term 'vegetables' cannot be given the comprehensive meaning the term beans in natural history and has not been given that meaning in taxing statutes, before. The term 'vegetables' is to be understood as commonly understood denoting those classes of vegetable matter which are grown in kitchen gardens and are used for the table. 2. The power to levy taxes on the sale of goods (Entry No. 48 of List II, Seventh Schedule to the Government of India Act, 1935) was, no doubt, plenary. But the power to make room for new Legislation in an occupied field by enacting lines contrary to existing law made by the Centre did not go with the entry. That power could only be exercised by taking the sanction of the Governor-General to the proposed nactment. The plenary power to tax cannot be confused with the power to make room in the occupied field for the new law in abrogation of the existing law. 3. Under Section 6 there is a delegation of power to the State Government to amend the schedule, for which certain conditions precedent have been laid down. That delegation does not' rob the Legislature of its plenary power to amend the Act as and when occasion arises. It is not necessary that the delegation should be withdrawn before the Legislature itself can amend the Act. Further, the conditions created for the exercise of the power by the delegate do not bind the Legislature. The 'Legislature could, and can, at any time amend the whole Act including the schedule. 4. Only certain commodities are selected for the imposition of sales tax. It has not been contended before this that any discrimination results from the taxation of one article as against another. If the argument is carried to its extreme, every sale transaction will have to be taxed, and also equally, before sales tax can be imposed on any commodity. Such taxing measures imposing Sales tax on selected commodities and not on other cannot be regarded discrimination between one dealer and another.
Final Decision: The petition was dismissed with costs.
1. This petition is by the Madhya Pradesh Pan Merchants Association, Nagpur, through its Secretary L.B. Borgaonkar. Respondents 2 and 3, who are the Sales Tax Officer and the Assistant Sales Tax Officer respectively in the Nagpur district, have issued notices to the dealers forming the Association to submit returns of their sales of betel leaves with a view to assessing them to sales tax. The Petitioner claims exemption from the operation of the Sales Tax Act, 1947, and seeks a 'writ' or 'writs' to restrain the Respondents from charging sales tax on the sale of betel leaves. In the alternative, it urges that Act 16 of 1949 by which the exemption is withdrawn is 'ultra vires' and illegal1.
2. To understand the contention it is necessary to give a short history of the legislation on the subject. In Act 21 of 1947 exemption from the tax is granted by Section 6 of the Act. The section reads as follows:
(1) No tax shall be payable under this Act on the sale of goods specified in the second column of Schedule II, subject to the conditions and exceptions if any, set out in the corresponding entry in the third column thereof.
(2) The State Government may, alter giving by notification not less than one month's notice of their intention so to do, by a notification after the expiry of the period of notice mentioned in the first notification amend either schedule, and thereupon such schedule shall be deemed to be amended accordingly.
In the second Schedule there were two items - Item No. 6 vegetables', and Item No. 36 betel caves'. The Legislature, thereafter, passed Act (6 of 1949 and amended the Second Schedule by deleting from it Item No. 36. The Petitioner contends that betel leaves were exempted under Item No. 6, though the Legislature 'ex majori cauteia' mentioned them once again in Item No. 36. The deletion of Item No. 36, it is submitted, makes no difference whatever to the exemption of betel leaves.
The Petitioner further contends that the Legislature having expressed its will in Section 6 as to the manner in which the schedule could be amended. No other mode for the amendment thereof was possible so long as Section 6 remained intact, and that even if the Legislature wished to amend the schedule, it had to give a month's notice to the persona affected thereby, before the change could be made.
It also contends that Act 16 of 1949 is 'ultra vires' the Provincial Legislature because the Bill needed the assent of the Governor-General under Section 100, Government of India Act, 1935, and the assent was not obtained. The Petitioner claims further that there discrimination between Pan dealer and other vegetable dealers, and Act 16 or 1949 cannot be enforced after the inauguration of the Constitution.
3. On behalf of the Respondents a preliminary objection is taken that an indeterminate body like the Pan Dealers. Association cannot seek 'a writ' under Article 226 of the Constitution. It is contended that either all the persons affected thereby must join in this petition or all of them must file separate petitions. An application has now been filed by the Secretary of the Association to limit the petition to L.B. Borgaonkar who is himself a Pan dealer, in case the objection is upheld.
4. We heard the preliminary objection as well oh the petition and in view of our decision that there is no room for interference, there is no need to decide the question whether an association can move this Court under Article 226 of the Constitution on behalf of its constituent members. In Halsbury's Laws of England there are cases in which associations moved for relief, but we do not consider it necessary to go into this question in this case.
5. Shri Bobde contends on the strength of certain passages in Craie's Statute Law, p. 98, that Item No. 36 was not outside Item No. 6 but was added 'ex abundanti cauteia'. According to him, the exemption from the operation of the Act was granted to betel leaves dealers by Item No. 6 because the term 'vegetables' is wi
