Judgement

SHELAT, J. (For himself, Subba Rao, CJI. and Mitter J.) : On August 16, 1962 the administration of Pondicherry, became vested in the Govermnent of India by virtue of de jure transfer. The Pondicherry Administration Act, XLII of 1962 constituted that territory as a separate centrally-administered unit and under the Union Territories Act, XX of 1963 a legislative assembly was set up for that area. The assembly under that Act acquired the power of enacting laws in respect of items in Lists II and III of the Seventh Schedule to the Constitution. The assembly thereafter passed the Pondicherry General Sales Tax Act, X of 1965 (hereinafter referred to as the Principal Act) which was published on June 3, 1965 after receiving the President s assent on May 25, 1965. Section 1(2)of that Act provided that the Act would come into force on such date as the Government may by notification appoint. Section 2 (1) provided that:-

"The Madras General Sales Tax Act 1959 (No. 1 of 1959) (hereinafter referred to as the Act) as in force in the State of Madras immediately before the commencement of this Act shall extend to and come into force in the Union Territory of Pondicherry subject to the fol