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SUPREME COURT OF INDIA
A.N. RAY, C.J.I., H.R. KHANNA, K.K. MATHEW, A. ALAGIRISWAMI AND P.N. BHAGWATI, JJ.
Gwalior Rayon Mills Mfg. (Wvg.) Co. Ltd. Appellants
Versus
Asstt. Commissioner of Sales Tax and others, Respondents.
Civil Appeals Nos. 212-215 of 1973, D/- 21-2-1973.
Central Sales Tax Act, 1956 - Section 8(2)(b), 8(2)(a), 8(1), 1(2), 2(1) and 5(2) - Pondicherry Legislature passed Amendment Act 13 of 1966 - Calcutta Municipal Act, 1980 - Section 548 - Delhi Municipal Corporation Act, 1957 - Sections 113, 150 and 150(1) - Essential Supplies (Temporary Powers) Act, 1946 - Section 3 - Central Provinces and Berar Sales Tax Act, 1947 - Section 6(2) - Madras General Sales Tax Act, 1959 - Section 2 (1) - British North America Act, 1867 - Sections 91 and 92 - Criminal Code Procedure, 1973 - Section 534 - Constitution of India, 1950 - Article 269, 133 (1) (c) and 246 - Government goods - Liable to Pay Tax - Fixation of Rate of Tax - Whether provisions of Section 8(2)(b) of Central Sales Tax Act, 1956 suffer from vice of excessive delegation - Whether Parliament in not fixing rate itself and in adopting rate applicable to sale or purchase of goods - Whether they would be of a sweeping character - Whether they would be suitable in Pondicherry - Whether guidance has been given in a particular case at all depends on a consideration - Whether there is sufficient guidance in matter of delegation - Whether a guide or policy exists in Act - Whether legislature exceeded such limits - Whether there is proper use of word "abdication if legislature retains right of repealing law - Whether there is sufficient guidance in matter of delegation – Held, An arrangement, to which certain other Provinces and England became parties, for enforcement in Ontario, against resident husbands, of provisional maintenance orders for which proceedings had been initiated in a reciprocating jurisdiction by wives resident there - By Section 5 (2) of Act a resident husband against whom confirmation of a foreign order was sought was entitled to raise any defence that he might have raised in original proceedings had he had been a party thereto but no other defence - Among objections to validity of Act was one directed to Section 5(2) as being as unconstitutional delegation or abdication of legislative authority – Court think that Parliament fixed rate of tax on inter-State sales of description specified in Section 8(2)(b) of Act at rate fixed by appropriate State legislature in respect of intra-State sales with a purpose, namely, to check evasion of tax on inter-State sales and to prevent discrimination between residents in one State and those in other States - Parliament thought that unless rate fixed by States from time to time is adopted as rate of tax for inter-State sales of kind specified in sub-clause, there will be evasion of tax in inter-State sales as well as discrimination - There can be no doubt that Parliament can repeal provisions of Section 8(2)(b) adopting higher rate of tax fixed by appropriate State legislature in respect of intra-State sales - If Parliament can repeal provision there can be no objection on score that Parliament has abdicated its legislative function - It retains its control over fixation of rate intact - In other words, so long as Parliament can repeal provisions of Section 8(2)(b) adopting higher rate of tax fixed by State legislatures, it has not abdicated its legislative function - Appeals dismissed.
Judgment
KHANNA, J.:- The short question which arises for determination in these four appeals on certificate against the judgment of the Madhya Pradesh High Court is whether the provisions of Section 8(2)(b) of the Central Sales Tax Act, 1956 (Act 54 of 1956) (hereinafter referred to as the Act) suffer from the vice of excessive delegation. The High Court answered this question in the negative and upheld the constitutional validity of those provisions.
2. Sub-sections (1), (2) and (4) of Section 8 of the Act read as under:
"(1) Every dealer, who in the course of inter-State trade or commerce-
(a) sells to the Government any goods; or
(b) sells to a registered dealer other than the Government goods of the description referred to in sub-section (3);
shall be liable to pay tax under this Act, which shall be three per cent. of his turnover.
(2) The tax payable by any dealer on his turnover in so far as the turnover or any part thereof relates to the sale of goods in the course of inter-State trade or commerce or not falling with sub-section (1)-
(a) in the case of declared goods, shall be calculated at the rate applicable to the sale or purchase of such goods inside the appropriate State, and
(b) in the case of goods other than declared goods, shall be calculated at the rate of ten per cent or at the rate applicable to the sale purchase of such goods inside the appropriate State, whichever is higher;
and for the purpose of making any such calculation any such dealer shall be deemed to be a dealer liable to pay tax under the sales tax law of the appropriate State, notwithstanding that he, in fact, may not be so liable under that law.
(4) The provisions of sub-section (1) shall not apply to any sale in the course of inter-State trade or commerce, unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner-
(a) a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority, or
(b) if the goods are sold to the Government, not being a registered dealer, a certificate in the prescribed form duly filled and signed by a duly authorised officer of the Government.
3. It has been argued on behalf of the appellants that the fixation of rate of tax is a legislative function and as the Parliament has, under Section 8(2)(b) of the Act, not fixed the rate of central sales tax but has adopted the rate applicable to the sale or purchase of goods inside the appropriate State in case such rate exceeds 10 per cent. the Parliament has abdicated its legislative function. The above provision is consequently stated to be constitutionally invalid because of excessive delegation of legislative power. This contention, in our opinion, is not well founded. Section 8(2)(b) of the Act has plainly been enacted with a view of prevent evasion of the payment of the central sales tax. The Act prescribed a low rate of tax of 3 per cent in the case of inter-State sales only if the goods are sold to the Government or to a registered dealer other than the Government. In the case of such a registered dealer, it is essential that the goods should be of the description mentioned in sub-section (3) of Section 8 of the Act. In order, however, to avail of the benefit of such a low rate of tax under S. 8(1) of the Act, it is also essential that the dealer selling the goods should furnish to the prescribed authority in the prescribed manner a declaration duly filled and signed by the registered dealer to whom the goods are sold, containing the prescribed particulars in prescribed form obtained from the prescribed authority, or if the goods are sold to the Government not being a registered dealer, a certificate in the prescribed form duly filled and signed by a duly authorised officer of the Government. In cases not falling under sub-section (1), the tax payable by any dealer in respect of inter-State sale of declared goods is the
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