judgement:
CTION: Civil Appeal No. 460 of 1970.
Appeal by special leave from the judgment and order dated May 20, 1969 of the Allahabad High Court in Special Appeal No. 1177 of 1968.
M. C. Chagla and R. Gopalakrishnan, for the appellant.
V. A. Seyid Muhammad, P. C. Chandi, B. D. Sharma and section P. Nayar, for the respondents.
The Judgment of the Court was delivered by Grover, J.
This is an appeal by special leave from a judgement of the Allahabad High Court dismissing a writ petition by which the appellant challenged the validity of a warrant issued by the Assistant Collector, Central Excise, Allahabad, authorising the Superintendent Central Excise, Varanasi, to enter certain premises, search the same and seize the documents therefrom.
The appellant, which is a public limited company having its registered office at Calcutta, owns and runs a factory known as Sahu Chemicals and Fertilisers at Varanasi where chemicals such 94 as ammonia and soda ash are manufactured.
In February 1962 excise duty was fixed on manufacture of ammonia for the purpose of fertilisers at Rs. 25/ per metric ton, the rate being Rs. 125/ per metric ton if it was used for other purposes.
The notification by which the aforesaid duty was payable was later withdrawn by means of another notification dated March 1, 1964 and thereafter no excise duty was required to be paid on the manufacture of ammonia.
For the period from May 1962 to the beginning of March 1964 the appellant had paid duty at the rate of Rs. 25/ per metric ton on the ground that ammonia had been utilised for the purpose of manufacture of chemical fertiliser.
The Central Excise authorities, however, had received information that part of the ammonia had been utilised for purposes other than the manufacture of fertilizers on which higher duty of Rs. 125/ per metric ton was payable.
It was considered that there had been evasion of duty.
On May 11, 1968, the Assistant Collector issued a warrant for the search and seizure of goods and documents pursuant to which the premises of the factory at Varanasi were searched on May 11, 12 and 13, 1968 and various documents were seized.
The writ petition was heard in the first instance by the learned single judge who dismissed it.
In appeal his judgment was upheld by the Division Bench.
Three contentions were raised before the Division Bench; the first was that section 1.2 of the , hereinafter called, the "Act" was void as the powers delegated to the Central Government by the legislature were excessive and beyond permissible limits.
The second point was that the having been repealed it was not open to the Central Government under section 12 of the Act to apply section 105(1) of the to the Act and the notification dated May 4, 1963 by which this was done was illegal and ultra vires.
The, third was that the search and seizure made by the respondents under the impugned authorisation dated August 11, 1968 and the authorisation itself were not in accordance with the provisions of section 105 of the .
Section 12 of the Act is in the following terms: section 12.
Application of the provisions of Act VIII of 1878 to Central Excise Duties.
The Central Government may, by notification in the official Gazette declare that any of the provisions of the relating to the levy on and exemption from customs duties, drawback of duty, warehousing offences and penalties, confiscation, and procedure relating to offences and appeals, shall, with such modifications and alterations as it may consider necessary or desirable to adapt them to the circumstances, be applicable in regard to 95 like matters in respect of the duties imposed by section 3.
" When the Act was enacted section 172 of the which could be applied to the Act under section 12 provided : S.172.
"Any Magistrate may, on application by a Customs Collector, stating his belief that dutiable or prohibited goods (or any documents relating to such goods) are secreted in any place within the local limits of the, jurisdiction of such Magistrate, issue a warrant to search for such goods.
Such warrant shall be executed in the same way and shall have the same effect, as a search warrant issued under the law relating to Criminal Procedure.
" It may be mentioned that the words "or documents" were inserted by the Sea Customs Amendment Act 1955.
After the enactment of the by the notification dated May 4, 1963 as amended by the Notification dated February 6, 1965 amongst other provisions of the , sub section (1) of section 105 and section 1, IO were made applicable with certain modifications of a minor nature under section 12 of the Act.
The material part of these sections are reproduced below ; "section 105(1) Power to search premises. (1) if the Assistant Collector of Customs, or in any area adjoining the land frontier or the coast of India an officer of Customs specially empowered by name in this behalf by the Board, has reason to believe that any goods liable to confiscation or any documents or things which in his opinion will be useful for or relevant to any proceeding under this Act are secreted in any place, he may authorise any officer of customs to search or may himself search for such goods, documents or things." "section 110(3).
The proper officer may seize any document or things which, in his opinion, will be useful for, or relevant to, any proceeding under this Act.
" On the first point it has been urged on behalf of the appellant that section 12 of the Act gave unrestricted and unlimited power to the Central Government to modify or alter the provisions of the and to apply the provisions of that Act with such modifications and alterations as the Central Government might consider appropriate.
Modification, it has been pointed out, may be permissible, and may not fall within the vice of excessive delegation because the basic structure is not changed but alteration, it is suggested, has a much wider connotation and it emm 96 braces even the changing of the essential pattern of a thing or object.
Such a power inherently involves the making of changes even in regard to matters pertaining to legislative policy.
In our opinion the above contention is purely of academic interest in the present case.
In the notifications which were issued applying, inter alia, section 105 (1) and section 1 10 of the no such changes have been made as can possibly fall within the meaning of the word "alterations".
It has been pointed out in the previous decisions of this Court that the power to restrict and modify does not import the power to make essential changes.
It is confined to alterations of a minor character and no change in principle is involved.
See In re Delhi Laws Act, 1912.(1) It was conceded before the High Court and has not been urged before us that the word "modifications" could not be taken as con ferring on the Central Government any legislative power which was in excess of the permissible limits.
Objection was taken only with regard to the word "alterations" but that word must be understood in the sense in which it was open to the legislature to employ it legitimately and in a constitutional manner.
No question is thus involved of delegation either of any essential legislative functions or any change of legislative policy.
The second contention has hardly any merit.
Section 8(1) of the General Clauses Act provides that where any Central Act repeals and re enacts with or without modification any provision of a former enactment then references in any such enactment or in any instrument to the provision so repealed shall, unless a different intention appears, be construed as references to the provision so re enacted.
By virtue of this provision it cannot be disputed.
that in section 12 of the Act the can be read in place of the .
An attempt has been made to argue that section 12 of the Act empowers incorporation of the provisions of in the Act itself and whenever a notification is issued under it such provisions of the as have been applied become incorporated as in integral part of the Act.
Section 8 of the General Clauses Act would not be applicable to a case of such incorporation and it can only apply if section 12 can be regarded as containing a reference to the provisions of the .
In Secretary of State for Indian in Council vs Hindusthan Cooperative Insurance Society Ltd. (2) it was accepted as a settled rule of construction that where a statute is incorporated by reference into a second the repeal of the first statute does not affect the second.
The law laid down by the Privy Council can have no applicability to the present case.
Section 12 of the Act did not bodily lift, as it were, certain provisions of the and incorporate (1) ; (2) 58 I.A.259.
97 them as an integral part of the Act.
It only empowered the Central Government to apply the provisions of the with such modifications and alterations as might be considered necessary or desirable by the Central Government for the purpose of implementation and enforcement of section 3 of the Act.
No exception could be taken to the view of the High Court that section 12 contained a provision delegating limited powers to the Central Government to draw upon the provisions of the for the purpose of implementing section 3 of the Act.
in The Collector of Customs, Madras vs Nathella Sampathu Chetty & Another(1) this Court examined at length the meaning and effect of incorporation by reference of one statute into another and discussed the Privy Council case referred to before in detail.
Section 8(1) of the General Clauses Act, it was pointed out, 'dealt with reference or citation of one enactment in another without incorporation.
The usual or recognised formulae generally employed to effect incorporation were considered; for instance the words used in section 20 of 53 and 54 Vict.
70 Housing of the Working Classes Act, 1890, the words used were " shall, for that purpose, be deemed to form part of this Act in the same manner as if they were enacted in the body thereof." In 54 and 55 Vict.
19, section 1(3), the language employed was,: "The provisions of section 134 of the said Act (set out in the schedule) shall apply as if they were herein enacted.
" It is unnecessary to mention the other provisions because a comparison of the recognised formulae with the text of section 12 of the Act shows that the provisions of the were not meant to be incorporated in the Act and were only to be applicable to the extent notified by the Central Government for the purpose of the duty leviable under section 3.
Another aspect which has been presented under the second contention is that the impugned notification is bad and stands vitiated because under the previous notification which applies section 172 of the it was a Magistrate who had to bring his judicial mind to bear on the expediency or desirability of issuing a warrant for search whereas under the present notification after the enactment of the it is the Assistant Collector of Customs who performs executive functions and who has been empowered to issue the warrant for search and seizure.
The decision of this Court in Collector of Customs & Excise.
Cochin & Ors.
vs A. section Bava(2) has been sought to be pressed into service in support of the argument that extension of section 105 (1), (1) ; (2) 98 is illegal.
In that case the provisions of section 129 of the had been applied under section 12 of the Act.
Section 129 dealt with the procedure relating to appeals and required an appellant to deposit pending the appeal the duty or penalty imposed and empowered the appellate authority, in its discretion, to dispense with such deposit pending the appeal in any particular case.
There was a provision in the Act itself, section 35, which gave an unfettered right of appeal to a person aggrieved by any decision or order made under the Act.
It was in these circumstances that it was held that section 129 of the could not be made applicable so as to whittle down the substantive right of appeal conferred by section 35 of the Act.
The ratio of that decision can afford no assistance to the appellant in the present case.
By the notification issued under section 12 of the Act after the enactment of , the previous notification under the stood superseded and no question survives with regard to the validity of the notification issued in 1963 and amended in 1965.
On the third point an attempt was made to argue that the Assistant Collector, while issuing the, warrant for search and seizure did not apply his mind to the relevant and necessary facts.
Our attention has been invited to the warrant itself in which the documents have not been particularised or specified but the words certain documents" have been used.
The learned single judge dealt with this matter fully and repelled the contention that there was no relevant material before the authority upon which the belief could be founded in terms of section 105(1) of the by the Assistant Collector.
We find no merit in this contention.
The appeal fails and it is dismissed with costs.
G.C. Appeal dismissed.

summary:
The appellant company had a factory at Varanasi at which chemicals including ammonia were manufactured.
It was considered by the Central Excise authorities that there had been evasion of duty on ammonia by the company.
The Assistant Collector Central Excise issued a warrant for search and seizure of goods and documents, pursuant to which the premises of the aforesaid factory were raided in May, 1968 and certain documents seized.
The company filed a writ petition in the High Court which was dismissed by the Single Judge.
The Division bench upheld the order of the Single Judge.
In appeal to this Court by special leave, the questions that fell for consideration were (i) Whether section 12 of the Central Excise Act was void because the powers delegated to the Central Government thereby including the power to make alterations in the Act applied were excessive; (ii) Whether the Sea Customs Act, 1875 having been re pealed, it was open thereafter to the Central Government under section 12 of the Excise Act to apply section 105 of the ; and (iii) Whether the Assistant Collector issued the warrants in the present case after due application of mind to relevant materials and 'facts in terms of section 105(1) of the .
HELD : (i) In the notifications issued inter alia applying section 105(1) and section 1 10 of the , no such changes had been made as could possibly fall within the meaning of the word 'alterations.
The power to restrict and modify does not import the power to make essential changes.
It is confined to alterations of minor character and no change in principle is involved.
The word 'alteration ' in section 12 must be understood in the sense in which it was open to the legislature to employ it legitimately and in a constitutional manner.
No question was thus involved of delegation either of any essential legislative functions or any change of legislative policy.
[96 B D] In re ; , , referred to.
(ii)S. 8(1) of the General Clauses Act provides that where any Central Act repeals and re enacts with or without modification any provision of the former enactment then references in any such enactment or in any instrument, to the provisions so repealed shall, unless a different intention appears, be construed as references to the provisions so re 93 enacted.
By virtue of this provision it could not be disputed that in section 12 of the Central Excise and Salt Act, 1947, the can be read in place of the .
[96 E] The contention that section 12 of the Act empowers incorporation of the provision of the in the Act itself and, therefore, 8(1) of the General Clauses Act, does not apply could not be accepted.
Section 12 only contained a provision delegating limited powers to the Central Government to draw upon the provisions of the for the purpose of implementing section 3 of the Act.
A] Secretary of State for India in Council vs Hindusthan Co operative Insurance Society, 58 I.A. 259, distinguished; The Collector of Customs Madras vs Nathella Sampatha Chetty The extension of section 105 could not be said to be illegal merely because under section 172 of the it was a Magistrate who after applying judicial mind had to issue search warrant whereas under the present notification after the enactment of the , it was the Assistant Collector of Customs performing executive functions who had been empowered to issue a search warrant.
By the latter notification the previous notification applying the provisions of the was superseded and no question with regard to the validity of the notification issued in 1963 and then amended in 1965 could survive.
Collector Custom & Excise Cochine & Ors, vs A. section Bava , distinguished [98 A C] (iii)On the facts of the case it could not be said that the Assistant Collectorhad no relevant material upon which the belief could be founded in termsof section 105(1) of the


judgement:
Appeal No. 1228 of 1966.
Appeal by special leave from the judgment and decree dated December 2, 1965 of the Punjab High Court, Circuit Bench at Delhi in Letters Patent Appeal No. 57 D of 1965.
C. B. Agarwala and P. P. Juneja, for the appellant.
Sardari Lal Bhatia, D. R. Gupta and H. K. Puri, for the respondent.
The Judgment of the Court was delivered by Bhargava, J.
The appellant Hatti was declared a Bhumidar ,of some land belonging to the respondent, Sunder Singh, under section 13 of the Delhi Land Reforms Act No. 8 of 1954 (hereinafter referred to as "the Act").
The respondent then brought a suit in the Civil Court claiming three reliefs.
The first relief claimed was for a declaration that the declaration of Bhumidari issued in the name of the appellant with respect to the land in dispute was wrong, illegal, without jurisdiction, ultra vires, void and ineffective against the respondent.
The second relief was that the respondent be declared entitled to Bhumidari rights under section 11 of the Act; and the third relief was for possession of the land.
The suit was brought on the allegation that the respondent was the owner of the land, while the appellant had no rights in it.
The land along with some other land was on Mustrajri with one Sultan Singh for a period of 20 years ending in June, 1952, and the appellant had been admitted as a tenant at will by the Mustrajar.
On the expiry of the period of 20 years in June, 1952, the Mustrajri stood terminated and the original Mustrajar 's heirs left the land.
The appellant, however, continued in possession, but, since he was a tenant at will of the Mustrajar, he had no rights in the land after the expiry of the Mustrajri.
He was asked to surrender possession, but failed to do so.
On the other hand, he was wrongly granted the declaration under section 13 of the Act that he was a Bhumidar when he had no rights as tenant in the land at all.
The main defence taken on behalf of the appellant was that he was a non occupancy tenant and he was entitled to the declaration of his Bhumidari rights.
Apart from the issues on merits, one issue was raised by the appellant that the Civil Court bad no jurisdiction to entertain the suit in view of the provisions 165 of section 185 of the Act.
The trial Court held that the jurisdiction of the Civil Court was not barred.
On merits, the finding recorded was that the respondent was the proprietor of the land, but no declaration could be granted that he became Bhumidar under section 11 of the Act, as that relief could only be granted by the revenue authorities under the Act.
It was held that he was, however, entitled to possession in exercise of his right as proprietor, so that a decree for possession was granted in his favour.
That decree was upheld, in appeal, by the District Judge and, in second appeal, by a learned single Judge of the High Court of Punjab.
The Letters Patent appeal before the Division Bench was also dismissed, so that the appellant has now come up to this Court in this appeal by special leave.
The only point that was argued before the Division Bench in the Letters Patent appeal was that the Civil Court had no jurisdiction to entertain the suit,, so that, in this appeal, we are also concerned with this issue alone.
Section 185(1) of the Act, on, which reliance has been placed for urging that the Civil Court has no jurisdiction, is as follows : "185.
(1) Except as provided by or under this Act, no court other than a court mentioned in column 7 of Schedule 1 shall, notwithstanding anything contained in the Code of Civil Procedure, 1908, take cognizance of any suit, application, or proceedings mentioned in column 3 thereof.
" The relevant entries in the First Schedule, which require consideration, are Numbers 4, 19 and 28.
Item 4 mentions applications for declaration of Bhumidari rights in column 3 and, inter alia refers to sections 1 1 and 1 3 of, the Act.
For these applications, there is no period of limitation prescribed at all, and the Court of original jurisdiction is that of the Revenue Assistant.
Item 19 refers to section 84 of the Act, and relates to suit for ejectment of a person occupying land without title and for damages.
The three sub clauses mention that the suit can be instituted (i) by a Bhumidar declared under Chapter III of the Act or by an Asami falling under section 6 of the Act where such unlawful occupant was in possession of the land before the issue of the prescribed declaration form; (ii) by a Gaon Sabha where the unlawful occupant was in possession of the land before the constitution of Gaon Panchayat; and (iii) by a Bhumidar, Asami or Gaon Sabha in any other case.
The period of limitation is three years, in the first case, from the date of issue of the prescribed declaration form; in the second case, from the date of constitution of Gaon Panchayat under section 151; and, in the third case, from the 1st of July following the date of occupation.
The 166 Court of original jurisdiction in each case is that of the Revenue Assistant.
Item 28 refers to section 104 and relates to declaratory suit under that section.
No period of limitation is prescribed for such a suit, and the Court of original jurisdiction is again the Revenue Assistant.
The plea put forward on behalf of the appellant was that this suit, which was instituted by the respondent, ,covered only those reliefs which could be granted by the Revenue Assistant under the three items Nos. 4, 19 and 28 of the First .Schedule to the Act mentioned above, so that, by virtue of section 185 of the Act, the jurisdiction of the Civil Court was barred.
The High Court has taken the view that the suit is really in the nature of a title suit and such a title suit is not covered by these items, so that the jurisdiction of the Civil Court was not barred.
It is this view of the High Court that has been challenged before us in this appeal.
Learned counsel appearing for the appellant took us through the various provisions of the Act to show that the Act is a complete Code which lays down the rights that any person can possess in agricultural land in the area to which the Act applies, and the remedies that can be sought in respect of such land for obtaining declaration of their rights or any other declaration for possession.
The Act abolished the ownership of agricultural land by the previous proprietors.
This was effected by first laying down in sections 11 and 13 that proprietors will become Bhumidars in respect of their lands which were their Khud Kasht or Sir, while tenants would become Bhumidars in respect of their holdings.
Under section 6 of the Act, persons belonging to several classes, which included non occupancy tenants of proprietor 's grove and sub tenants of tenant 's grove, and non occupancy tenants of pasture land, or of land covered by water,, and some other classes, shall become Asamis.
"Holding" was defined in section 3(11a) ,of the Act by stating that it means: (a) in respect of (i) Bhumidar or Asami; or (ii)tenant or sub tenant under the Punjab Tenancy Act, 1887, or the Agra Tenancy Act, 1901; or (iii)lessee under the Bhoodan Yagna Act, 1955, a parcel or parcels of land held under one tenure, lease, engagement or grant; and (b) in respect of proprietors, a parcel or parcels of land held as sir or khud kasht.
The effect of sections 6 and 13 was that, thereafter, tenants and :sub tenants are lessees under the Bhoodan Yagna Act, 1955, 167 ceased to continue as such, and either became Bhumidars or Asamis in respect of their holdings.
Similarly, under section 11, proprietors in respect of their sir and khud kasht land became Bhumidars.
These sections have to be read in conjunction with section 154 of the Act of which the relevant portion is quoted below: " 154.
On the commencement of this Act (i) all lands whether cultivable or otherwise, except land for the time being comprised in any holding or grove, situate in a Gaon Sabha Area, shall vest in the Gaon Sabha Sections 6, 11, 13 and 154 of the Act read together, thus, show that, after the Act came into force, proprietors of agricultural land as such ceased to exist.
If any land was part of a holding of a proprietor, he became a Bhumidar of it.
If it was part of a holding of some other person, such as a tenant or a sub tenant etc., he became either a Bhumidar or an Asami, whereupon the rights of the proprietor in that land ceased.
Lands, which were not holdings of either the proprietor or any other person, vested in the Gaon Sabha.
In the case of proprietors, their rights in the land continued to exist only in respect of holdings which, under the definition, must have been either their sir or khud kasht at the commencement of the Act.
If it was not sir or khud kasht of a proprietor, it would not be his holding and, consequently, such land would vest in the Gaon Sabha under section 154, the result of which would be that the rights of the proprietor would be extinguished.
It appears that it was in view of this scheme of the Act that, under section 84, the right to institute a suit for posses sion was granted only to a Bhumidar, or an Asami, or the Gaon Sabha.
The Act envisaged only these three classes of persons who would possess rights in agricultural I and after the commencement of the Act.
Proprietors as such having ceased to exist could not, therefore, institute a suit for possession.
This aspect of the case has been lost sight of by the High Court and the lower courts, because it appears that their attention was not drawn to the provisions of section 154 of the Act, under which all lands of proprie tors, other than those comprised in their holdings, vested in the Gaon Sabha, thus extinguishing their proprietary rights.
168 A second aspect that needs examination relates to the provi sions of the Act for declaration of Bhumidari rights.
Sections 11 and 13 grant power to the Deputy Commissioner to declare proprietors in respect of their holdings and certain classes of tenants in respect of their holdings as Bhumidars.
The procedure to be adopted for issuing the declaration forms was laid down in the Delhi Land Reforms Rules, 1954 (hereinafter referred to as "the Rules") made by the Chief Commissioner of Delhi in exercise of the powers conferred by sections 9, 105, 149, 162, 180 and 191 of the Act.
The relevant Rules are 6 to 8.
These Rules envisaged preparation of declaration forms by the revenue authorities without any application from any party.
The declaration forms are based on the entries in the revenue records and, having been prepared on their basis, the declaration forms are issued to the persons who, under the forms, are held to be entitled to.
be declared as Bhumidars.
These Rules, thus, do not envisage any application under section 11 of section 13 at this early stage.
Rule 8(4) lays down that anyone, who challenges the correctness of entries in the forms of declaration, shall, except where it refers to a clerical omission or error, be directed by the Revenue Assistant to file a regular suit within two months of the date of issue.
Obviously, this sub rule has to be interpreted in conformity with section 185 and item 4 of the First Schedule to the Act, so that the scope of this sub rule must be confined to institution of suits in respect of matters not covered by item 4 of the First Schedule.
This sub rule would not stand in the way of an application being made by any person claiming to be Bhumidar under item 4 of the First Schedule.
The Rules were examined by Khanna J., in Lal Singh vs Sardara and Another(1) and in our opinion, he rightly held that a perusal of the Rules goes to show that there is no provision for giving notice to different interested parties before a declaration of Bhumidari rights is made and the whole thing is done in more or less a mechanical way.
That being the position, it becomes obvious that an application for declaration of a Bhumidari right under item 4 of Schedule I of the Act is intended to be made even in cases where a declaration may have been previously granted under section 11 or section 13 in accordance with the Rules.
The ,scheme of the Act appears to be that, initially, a declaration of Bhumidari right can be granted under section 11 or section 13 without calling for objections and without hearing contesting parties in favour of the person who appears to the revenue authorities to be entitled to the declaration on the basis of the records maintained by them.
Thereafter, any person aggrieved and claiming Bhumidari rights is expected to move an application before the Revenue Assistant (1).
I.L.R. [1964] Vol. 169 who is to adjudicate upon the rights after following the usual judicial procedure.
The order made by the Revenue Assistant in such a proceeding will then have to be given effect to and would override the declarations earlier issued in accordance with the Rules.
This shows that any person, who is aggrieved by a declaration of Bhumidari right issued in favour of another person, can appropriately seek his remedy by moving an application before the Revenue Assistant under item 4 of the First Schedule, whereupon, if he succeeds, he will obtain a declaration that he is the Bhumi dar.
Such a declaration will automatically supersede the declaration issued by the authorities in accordance with the Rules without any adjudication of rights and without notice to interested parties.
Khanna, J., in the case of Lai Singh vs Sardara & Another(1) correctly interpreted the scope and purpose of the Rules, under which forms of declaration of Bhumidari rights are issued, but, in our opinion, incorrectly inferred that, since there is no effectual adjudication of rights by the revenue authorities while declaring Bhumidari rights, their declaration must be subject to the due adjudication of rights which, in the absence of anything to the contrary, can only be by a Civil Court.
It is true that the declarations made by the revenue authorities without going, through the judicial procedure are subject to due adjudication of rights; but such adjudication must be by an application under item 4 of Schedule I and not by approach to the Civil Court.
The jurisdiction of the Civil Court is clearly barred by section 185 of the Act read with the various items of the First Schedule mentioned above.
If a Bhumidar seeks a declaration of his right, he has to approach the Revenue Assistant by an application under item 4, while, if a Gaon Sabha wants a clarification in respect of any person claiming to be entitled to any right in any land, it can institute a suit for a declaration under item 28, and the Revenue Assistant can make a declaration of the right of such person.
So far as suits for possession are concerned, we have already held earlier that section 84 read with item 19 of the First Schedule gives the jurisdiction to the Revenue Assistant to grant decree for possession, and that the suit for possession in respect of agricultural land, after the commencement of the Act, can only be insti tuted either by a Bhumidar or an Asami or the Gaon Sabha.
There can be no suit by any person claiming to be a proprietor, because the Act does not envisage a proprietor as such continuing to have rights after the commencement of the Act.
The First Schedule and section 84 of the Act provide full remedy for suit for possession to persons who can hold rights in agricultural land under the Act.
(1) I.L.R. [1964] Vol.
2 L235Sup.
CI/71 170 The High Court, in this connection, referred to section 186 of the Act under which any question raised regarding the title of any party to the land, which is the subject matter of a suit or proceeding under the First Schedule, has to be referred by the Revenue Court to the competent Civil Court for decision after framing an issue on that question.
Inference was sought to be, drawn from this provision that questions of title could be competently agitated by a suit in the Civil Court, as the jurisdiction of the Civil Court was not barred.
It appears to us that there is no justification for drawing such an inference.
On the contrary, section 186 envisages that questions of title will arise before the Revenue Courts in suits or proceedings under the First Schedule and, only if such a question arises in a competent proceeding pending in a revenue Court, an issue will be framed and referred to the Civil Court.
Such a provision does not give jurisdiction to the Civil Court to entertain the suit itself on a question of title.
The jurisdiction of the Civil Court is limited to deciding the issue of title referred to it by the Revenue Court.
This clearly implies that, if a question of title is raised in an application for declaration of Bhumidari rights under item 4 of Schedule I of the Act, that question will then be referred by the Revenue Assistant to the Civil Court; but a party wanting to raise such a question of title in order to claim Bhumidari right cannot directly approach the Civil Court.
The ,Act is a complete Code under which it is clear that any one, wanting a declaration of his right as a Bhumidar, or aggrieved by a declaration issued without notice to him in favour of another, can approach the Revenue Assistant under item 4 of the First Schedule and this he is allowed to do without any period of limitation, because he may not be aware of the fact that a declaration has been issued in respect of his holding in favour of another.
A declaration by a Gaon Sabha of the right of any person can also be sought without any period of limitation.
If there is dispute as to possession of agricultural land, the remedy has to be sought under section 84 read with item 19 of the First Schedule.
All the reliefs claimed by the respondent in the present suit were, thus, within the competent jurisdiction of the Revenue Assistant, and the Civil Court had no jurisdiction to entertain the suit.
In the result, the appeal is allowed, the decree passed by the High Court is set aside and the suit of the respondent is dismissed.
The appellant will be entitled to his costs in this Court, while, costs in other Courts will be borne by the parties themselves.
Y.P. Appeal allowed.

dataset_name: IN-Abs

summary:
Under section 13 of the Delhi Land Reforms Act, 1954 tenant was declared bhumidhar of land belonging to the respondent filed a suit in the Civil Court claiming that issued to the appellant was illegal, that he should instead bhumidhar and prayed for possession of the land.
Apart on merits, the appellant raised the issue that the Civil jurisdiction to entertain the suit in view of the bar in section The trial court held that the jurisdiction of civil court was the appellant a respondent.
The the bhumidhari be declared the from the issues Court had no 185 of the Act.
not barred, and decreed the suit.
The decree was upheld in appeal by the District Judge.
and, in second appeal, by a single Judge of the High Court.
The Letters Patent Appeal was also dismissed.
Allowing the appeal, this Court, HELD : (i) The reliefs claimed by the respondent were within the competent jurisdiction of the Revenue Assistant and the Civil Court had no jurisdiction to entertain the suit.
Under section 84 the right to institute a suit for possession was granted only to a bhumidar or an asami, or the gaon sabha.
The Act envisaged only these three classes of persons who would possess rights in agricultural land after the commencement of the Act.
Proprietors as such having ceased to exist, could not, therefore, institute a suit for possession.
This aspect of the case has been lost sight of by the High Court and the lower courts, because it appears that their attention was not drawn to the provision of section 154 of the Act, under which all lands of proprietors, other than those comprised in their holdings, vested in the gaon sabha, thus extinguishing their proprietary rights.
[ 1 67 G H] (ii)There is no provision in the rules for giving notice to different interested parties before a declaration of bhumidari rights is made, Any person, who is aggrieved by a declaration of bhumidhari right issued in favour of another person can appropriately seek his remedy by moving an application before the Revenue Assistant under item 4 of the First Schedule, whereupon, if he succeeds, he will obtain a declaration that he is the Bhumidar.
Such a declaration will automatically supersede the declaration issued by the authorities in accordance with the Rules without any adjudication of rights and without notice to interested parties [169 B] Lai Singh vs Sardara & Anr.
I.L.R. [1964] Vol.
17, 2 Pb.
428 referred to.
(iii)It is true that the declarations made by the revenue authorities without going through the judicial procedure are subject to due adjudication of rights; but such adjudication must be by an application under item 4 of Sch.
I and not by approach to the civil court.
The jurisdiction of the civil court is already barred by section 185 of the Act read with various items of the first Schedule [169 D E] The inference contra in Lal Singh vs Sardara & Anr.
I.L.R. [1964] Vol.
17, disapproved.
164 (iv)Section 186 only envisages that question of title will arise before the Revenue Courts in suits or proceedings under the first schedule and only if such a question arises in a competent proceeding pending in a Revenue Court an issue will be framed and referred to the civil court.
Such a provision does not give jurisdiction to the Civil Court to entertain the suit itself on a question of title.
[170 B C]


judgement:
No. 2351 of 1970.
(Application for stay by notice of motion) and Civil Appeal No. 1196 of 1970.
Appeal from the judgment and order dated October 29, 1969 of the Orissa High Court in Misc.
Appeal No. 28 of 1967.
R. K. Agarwal, for the appellants.
Santosh Chatterjee and G. section Chatterjee, for the respondent.
The Order of the Court was delivered by Hidayatullah, CJ.
The appellants before us who come by way of certificate from the High Court seek stay of a suit which has been restored to file by the High Court.
At the very start we put to the counsel how certificate could have been granted in this case when the judgment and order of the High Court were not final.
The counsel brought to our notice the case of Ramesh and another vs Gendalal Motilal Ratni and others(1) and says that his, case is covered by this ruling.
This was a case in which the only question to be considered was whether article 133 of the Constitution was applicable in the two case , decided when the claim in the original suit or appeal to this Court was above Rs. 20,000/ .
This particular question was not before the court at all.
Indeed, them Constitution contemplates the filing of an appeal by certificate only (1) ; 406 against a judgment decree or final order of the High Court it does not contemplate bringing an appeal in a suit which is still a live suit and in which further proceedings are to be taken.
This has been the consistent view not only of this Court but also of the Privy Council. 'Me leading case from the Privy Council is V. M. Abdul Rahman and others vs V. D. K. Cassim and Sons and another(1).
There is a catena of cases in the High Courts and also in this Court that the judgment, decree or order from which appeal is brought to this Court must put an end to the litigation between the parties.
This was reaffirmed in M/s. Jethanand and Sons vs The State of Uttar Pradesh (2 ) approving the view of the Privy Council referred to.
Indeed, we could cite on this aspect of the case quite a large number of precedents from various courts in India.
In the present matter, the suit was decreed in the absence of the defendant who applied to have the decree set aside and gave reasons for it.
The trial court did not accede to the prayer but the High Court held that the matter was governed by O. 9 r. 9 of the Code of Civil Procedure and that there were valid reasons for setting aside the ex parte decree.
As a result of the setting aside of the decree the suit is very much alive today and this cannot be treated as a final adjudication of the suit itself.
The certificate granted by the High Court in such circumstances was premature and was not competent.
We accordingly set aside the certificate and dismiss the appeal.
There shall be no order as to costs.
Y.P. Appeal dismissed.
(1) (1933) L. R. 60 I.A. 76.

summary:
The High Court granted certificate for leave to appeal to this Court in a case where it set aside the ex parte decree in the suit and restored the suit to the Me of the trial court.
HELD: The certificate granted by the High Court was premature and was not competent.
As a result of the setting aside of the decree the suit was very much alive, and it could not be treated as a final adjudication of the suit itself.
The Constitution contemplates the filing of an appeal by certificate only against a judgment, decree of final order of the High Court.
It does not contemplate bringing an appeal in a suit which is still a live suit and in which further proceedings are to be taken.
[405 H] Ramesh & Anr.
vs Gendalal Motilal Ratni & Ors.
A.I.R. , V. M. Abdul Rahman & Ors.
vs D. K. Cassim Sons vs The State of Uttar Pradesh, ; , referred to.


judgement:
Appeal No. 1672 of 1966.
Appeal from the judgment and order dated 16th March 1965 of the Madras High Court in Appeal Suit No. 139 of 1961.
P. Balagopal A. Y. Rangam and Lily Thomas, Advocates for the appellant.
4 28 M.Natesan, R. Ramamurthi lyer and R. Gopalakrishnan, for the Respondent.
The Judgment of the Court was delivered 'by Grover, J.
This is an appeal by certificate from a decree of the Madras High Court.
The appellant mortgaged his property bearing No. 162A West Masi Street, Madurai town for a sum of Rs. 45,000/ with the. respondent Bank on October 14, 1950.
He agreed to repay Rs. 5,0001 within a specified date and the balance was payable within two years from the date of the deed together with interest, at 101%.
It was further agreed that if the mortgagor failed to pay the interest periodically and regularly he would be liable to.
pay interest at the rate of 12% per annum from the date of such ', default and further it he failed to pay the entire amount stipulated, within two years he would have to pay the whole amount together with interest at 3 1/2 % per annum.
The sum of Rs. 5,000/ was paid within the time specified but the balance remained unpaid.
In January 1952 the appellant and his wife borrowed Rs. 25,000/and, jointly executed a promote.
The wife deposited her title deeds relating to premises No. 162 West Masi Street.
On June 25, 1952: the appellant and his wife created a mortgage of their respective properties Nos. '1 62A and, 162 West Masi Street to secure repayment of a sum of Rs. 8850/ .
All the three mortgages were in favour of the respondent Bank.
In 1953 the Bank instituted a suit on the foot of the last two, mortgages and obtained a decree against the appellant and his wife.
, This decree appears to have been satisfied.
In April 1958 the suit out of which the present appeal has arisen was filed by the Bank on the foot of the mortgage dated October 14, 1950.
The main defence of the appellant, who was the sole mortgagor, was that the suit was not maintainable in view of the provisions of section 67A of the Transfer of Property Act and that the stipulation of interest was penal and in contravention of the provisions of the .
A number of other issues were framed but it is altogether unnecessary to mention them.
The trial court granted a preliminary decree for the recovery of principal amount, of Rs.
,40,000/ which remained unpaid with interest at 12% per.
annum from August 1, 1952 till the date of the decree and thereafter at 6% per annum till realisation.
An appeal was taken to the High Court where two points were agitated.
The first was based on the provisions of section 67A of the Transfer of Property Act and the second related to the rate of interest.
The High Court did not accede to any ' of the contentions and dismissed the appeal.
Section 67A of the Transfer of Property Act provides that a I mortgagee who holds two or more mortgages executed by the same,.
mortgagor in respect of each of which he has a right to obtain the same kind of decree under section 67 and who sues to obtain such decree 429 on any one of the mortgages, shall, in the, absence of a contract to the contrary, be bound to sue on all mortgages in respect of which the mortgage money has become due.
This section was inserted by the Amending Act 20 of 1929 in view of certain conflict among the High Courts in this country, with regard to the right of the mortgagee to sue at different times on different mortgages although the mortgagor was the same.
As pointed out in Mulla 's Transfer of Property Act, 5th Edn at page 481 sections 61 and 67A of this Act lay down the simple rule that if a mortgagor has made two or, more mortgages of the same property or of different properties to the same mortgagee the mortgagor may redeem each separately but that the mortgagee must enforce all or none.
To attract the applicability of section 67A it is essential that the, mortgagor must be the same and he should have executed two or more mortgages in respect of each of which he has a right to obtain the same kind of decree under section 67A.
In the present case it is not possible to hold that the mortgagor in the suit on the foot of.
the mortgage dated October 14, 1950 is the same as the mortgagor in the previous suit which was filed on the foot of the mortgages in favour of the appellant and his wife.
In the other two mortgages there were two mortgagors, one the appellant and the other his wife.
There is no statutory provision or rule or principle by which the wife and the, husband could be treated as one entity for the purpose of the mortgages.
Each was owner of a separate and distinct property and both joined in mortgaging their respective properties.
In Moro Raghunath vs Balaji(1) the first mortgage, was by two bro thers and the second mortgage of part of the same property was by one brother.
The Bombay High Court held that the suit to enforce the first mortgage did not bar a suit to enforce the second mortgage.
This was before the insertion of section 67A but the principle embodied in that section is clearly illustrated by that case.
The bar of section 67A, therefore, could not possibly come in the way of the institution of the present suit.
On the question of interest we are of the view in the light of the provisions of the mortgage deed and all the circumstances that the rate of 12% is unfair and penal.
We are inclined, therefore, to give this relief that the interest should be calculated 'at the rate of 10 1/2% (which was the original contractual rate) from the date of the mortgage to the date of the preliminary decree.
Thereafter the interest shall be Payable as directed by the trial court 'at the rate of 6% per annum till realisation.
With this 'modification the appeal is dismissed but in view of the entire circumstances the parties are left to bear their own costs in this Court.
Appeal dismissed.
G.C. (1) I.L.R. 13Bom.

summary:
The appellant mortgaged his property bearing No. 162A West Masi Street Madurai Town for a sum of Rs. 45,000 with the respondent Bank on October 14, 1950.
In January 1952 the appellant and his wife borrowed Rs. 25,000 and jointly executed a pronote.
The wife deposited her title deeds relating to premises No. 162 West Masi Street On June 25, 1952 the appellant and his wife created a mortgage of their respective properties Nos.
162A and 162 West Masi Street to secure repayment of a sum of Rs. 8,850.
All the three mortgages were in favour of the respondent Bank.
In 1953 the Bank instituted a suit on the foot of the last two mortgages and obtained a decree against the appellant and his wife.
This decree was satisfied.
In April 1958 the Bank filed a suit on the foot of the mortgage dated October 14, 1950.
The main defence of the appellant, who was the sole mortgagor, was that the suit was not maintainable in view of the provisions of s, 67A of the Transfer of Property Act and that the stipulation of interest was penal and in contravention of the provisions of the .
The trial court decreed the suit and the High Court dismissed the appeal.
By special leave appeal was filed in this Court.
HELD : If a mortgagor has made two or more mortgages of the same property or of different properties to the same mortgagee the mortgagor may redeem each separately but the mortgagee must enforce all or none.
To attract the applicability of section 67A it is essential that the mortgagor must be the same and he should have executed two or more mortgages in respect of each of which he has a right to obtain the same kind of decree under section 67.
In the present case it was not possible to hold that the mortgagor in the suit on the foot of the mortgage dated October 14, 1950 was the same as the mortgagor in the previous suit which was filed on the foot of the mortgages in favour of the appellant and his wife.
In the other two mortgages there were two mortgagors one the appellant and the other, his wife.
There is no statutory provision or rule or principle by which the wife and the husband could be treated as one entity for the purpose of the mortgage.
Each was owner of a separate and distinct property and both joined in mortgaging their respective properties.
The bar of section 67A therefore could not possibly come in the way of the institution of the ' present suit.
[429 B F] Moro Raghunath vs Balaji, I.L.R , approved & applied.
(ii)In the light of the provisions of the mortgage deed and all the circumstances the interest rate of 12% was unfair and penal.
Rate suitably Reduced.
[429 G]


judgement:
Appeal No. 1985 of 1969.
Appeal from the judgment and order dated January 4, 1969 of the patna High Court in Civil Writ Jurisdiction case No. 520 of 1967.
M. C. Chagla, D. P. Singh and V. J. Francis, for the appellant.
L. M. Singhvi and U. P. Singh, for respondents Nos.
1 to 4.
4 14 The Judgment of the Court was delivered by SHAH, J.
This appeal is filed with certificate granted by the High Court of Patna under article 133 (1) (a) of the Constitution.
The appellant Hansraj Bagrecha carries on business in jute.
In the course of his business the appellant buys raw jute from producers in West Bengal, transports it to Kishanganj Railway Station (which is within the State of Bihar) and then re exports it to purchasers in West Bengal.
He also buys raw jute in Bihar and exports it to the merchants or mill owners in West Bengal by rail from Kishahganj Railway Station.
The Bihar Sales Tax Act 1959, as originally enacted did not provide for levy of purchase tax.
By the Bihar Finance Act, 1966, with effect from April 1, 1967, among others the following sections were incorporated in the Bihar Sales Tax Act, 1959 S.3A "The State Government may from tune to time, by notification declare any goods to be liable to purchase tax on turnover of purchase : Provided that general sales tax and special sales tax shall not be payable on the sale of goods or class of goods declared under this section.
" section 5A "The purchase tax on goods declared under section 3A shall be levied at the point of purchase made from a person other than a registered dealer.
" By a notification dated September 14, 1966 the Governor of Bihar declared 'jute ' as a commodity liable to purchase tax at the rate specified in the notification.
Section 42 of the Bihar Sales Tax Act by the first subsection provided : "No person shall transport from any railway station, steamer station, air port, post office or any other place, whether of similar nature or otherwise, notified in this behalf by the State Govt.
, any consignment of such goods, exceeding such quantity, as may be specified in the notification, except in accordance with such conditions as may be prescribed and such conditions shall be made with a view to ensuring that there is no evasion of tax payable under this Act.
" Section 46 of the Act invested the State Government with power to make rules for all matters expressly required or allowed by the Act to be prescribed and generally for carrying out the purposes of the Act and regulating the procedure to be followed, forms to 415 be adopted and fees to be paid in connection with proceedings under the Act and all other matters ancillary or incidental thereto.
In exercise of the powers conferred under s, 46 (1) the State of Bihar promulgated under Rules 31 B and 8C, Rule 31B, which provided "(1) No person shall tender at any railway station, steamer station, air port, post office or any other place, whether of similar nature or otherwise, notified under section 42, any consignment of such goods exceeding such quantity, as may be specified 'in the notification, for transport to any place outside the State of Bihar, unless such person has obtained a despatch permit in Form XXVIII D from the appropriate authority referred to in the Explanation to rule 31 and no person, shall accept such tender unless the said permit is surrendered to him." Rule 30(1) provided "The first purchase of goods declared under section 14 of the , shall be leviable to tax in terms of sections 3, 3A and 5A of the Act and no subsequent sales or purchases in respect of the said goods shall be liable to any tax under the Act." ' After the enactment of sections 3A and 5A the State Government issued.
a notification dated December 26, 1967 purporting to exercise power under section 42 of the Bihar Sales Tax Act, 1959 read with r. 31B of the Bihar Sales Tax Rules, 1959, notifying that no person shall tender at any railway station mentioned in Sch.
II, and consignment of goods mentioned in Sch.
I, exceeding the quantity specified for transport to any place outside the State of Bihar and no person shall accept such tender in accordance with the conditions prescribed in r. 31B of the Bihar Sales Tax Rules, 1959.
Under Sch.
I `Jute ' exceeding 800 Kg.
could not be tendered for transport without "a despatch pen nit", and Kishanganj was one of the Railway Stations mentioned in Sch.
In July 1967 the Superintendent of Commercial Taxes addres sed a letter prohibiting the railway authorities from loading jute goods and despatching them from any railway station within the Purnea District of Bihar, except on production of a "registration certificate".
By his letter dated July 10, 1967 the Station Master Kishanganj called upon the Secretary, Jute Merchants Association, Kishanganj, to produce a certificate as required in the letter of the Superintendent of Commercial Taxes, before "loading jute goods for despatch was commenced" and informed them that in default wagons allotted to the jute merchants shall be cancelled and 416 registration, fees, forfeited and that "demurrage" win be charged.
The appellants request that jute booked by him be despatched from.
Kishanganj was turned down by the railway authorities, because the registration certificate issued by the Superintendent of Commercial Taxes, Purnea for the movement of jute from the place was not produced.
The appellant then moved a petition before the High Court of Patna on August 29, 1967 challenging the validity of sections 3A, 5A, 42 and 46 and r. 31B of the Bihar Sales Tax Rules, 1959.
The High Court of Patna dismissed the petition.
With certificate granted by the High Court this appeal has been preferred by the appellant.
In support of the appeal counsel for the appellant raised three contentions : (1) that sections 3A & 5A as incorporated 4th Finance Act of 1966 infringed the guarantee of freedom of trade under article 301 of the Constitution and since the amendment made by the Finance Act, 1966 did not receive the assent of the President under article 304(b) the amendment was not saved; (2) that sections 3A & 5A and r. 8C "were contrary to" section 15 of the and were void on that account; and (3) that r. 31B framed by the State Government and the notification issued on December 26, 1967 were unauthorised and liable to.
be struck down.
Article 301 of the Constitution guarantees freedom of trade, commerce and intercourse throughout the territory of India.
By article 302 the Parliament is authorised by law to impose such restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the territory ofIndia as may be required in the public interest.
article 303(1) imposes restrictions upon the power which the Parliament or the Legislature of a State may exercise to make any law giving, or authorising the giving of, any preference to one State over another, or making or authorising the making of, any discrimination between one State and another, by virtue of any entry relating to trade and commerce in any of the Lists in the Seventh Schedule.
But that clause does not operate to restrict the power of the Parliament to make any law giving, or authorise the giving of, any preference or making or authorising the making of, any discrimination, if it is declared by such law that it is necessary to do so for the purpose of dealing with a situation arising from 417 scarcity, of in, any part of, the territory of India Art 303 (2).
article 304 provides in so far as it is relevant "Notwithstanding anything in article 301 :or article 303, the Legislature of a State may by law (a) (b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest Provided that no Bill 'or amendment for the purpose of clause (b) shall be introduced or moved in the pose Legislature, of a State without the Previous sanction of the President.
" article 304 is in terms a restriction on the freedom guaranteed by article 301.
Notwithstanding the amplitude of, the freedom of trade, commerce and intercourse throughout the territory of India, the Legislature of a State may by law impose, among others such reasonable restrictions on the,, freedom of trade,, cow or intercourse with or within that State as may be required in the public interest.
But that authority to impose reasonable, restrictions on the freedom of trade, may only be, exercised by the Legislature of a State if the Bill or amendment for the Purpose of cl.
(b) is introduced or moved in the Legislature of a State with the previous sanction of the President.
It was contended that since section 3A providing for the of purchase tax imposes a restriction on the freedom of trade,, commerce and intercourse and on that account violates the freedom of trade guaranteed by article 301, it way be saved only if it is legislation of the nature contemplated by article 304(b) and the Bill which was enacted into the Act received the previous assent of the President.
The assumption that the levy of purchase tax must be deemed in all circumstances, to violate the .
guarantee under article 30 1, and the levy will be valid only, if the Act is enacted by the State Legislature with the previous sanction of the President, cannot be accepted 'as correct.
This Court in The State of Madras vs N. K. Nataraja Mudaliar(1) examined the validity of laws which impose taxes on sale in the: light of article 301.
It was observed at p. 839 "This Article (article 301) is couched in terms of the widest amplitude, trade, commerce and, intercourse am thereby declared free and unhampered, throughout the story of India.
The freedom of trade (1) ; so declared is against the imposition of barriers or obstructions within the state as well as inter State all restrictions which directly and immediately affect the movement of trade are, declared by Art 301 to in effective.
The extent to which article 301 operates to make trade.
and commerce free has been considered by this Court in several cases In Atiabari Tea Co. Ltd. vs, The State of Assam and others(1) Gajendragadkar, speaking for himself and Wanchoo and Das Gupta JJ., observed at p. 860 ". . we think it, would be reasonable and proper to hold that restrictions, freedom from which is guaranteed by art 301 would be such restrictions as,directly and immediately restrict or impede the free flow or movement of trade." "In Automobile Transport (Rajasthan) Ltd vs The State of Rajasthan and others(2) the view expressed by Gajendragadkar, J., in Atiabari Tea Co 's case was accepted by the majority.
Subba Rao, J., who agreed with the majority observed that the freedom declared under article 301 of the Constitution of India referred to the right of free movement of trade without any obstructions by way of barriers, inter State or intra State, or other impediments operating as such barriers.
The same view was expressed in Firm A.T.B. Mehtab Majid and Company vs State of Madras and Another(3) by a unanimous Court.
It must be taken as settled law that the restrictions or impediments which directly and immediately impede or hamper the free flow of trade commerce and intercourse fall within the prohibition imposed by article 301 and subject to the other provisions of the Constitution they may be regarded as void.
But it is said that by imposing tax on sales, no restriction hampering trade is imposed.
In the Atiabari Tea Company 's case, Gajendragadkar, J., observed: "Taxes may and do amount to restrictions; but it is only such taxes as directly and immediately restrict trade that would fall within the purview of article 30 1.
The argument that all taxes should be governed by article 301 whether or not their impact on trade is immediate or mediate, direct or remote, adopts, in our opinion, an extreme approach which cannot be upheld.
" In a recent judgment of this Court in The Andhra Sugars Ltd. and Another vs The State of Andhra Pradesh.
and others(4) (1) ; (3)[1963] 1 S.C.R. 491.
(2)[1963] Supp.
2 section C. R 435.
(4) 21 S.T.C. 212 419 Bachawat, J., speaking for the Court after referring to, the observations made by Gajendragadkar, J., in Atiabari Tea Company 's case(1) observed "This interpretation of Article 301 was not dissented from in Automobile Transport (Rajasthan) Ltd. vs State of Rajasthan (2) .
Normally, a tax on sale of goods does not directly impede the free movement or transport of goods.
Section 21 is no exception.
it does not impede the free movement or transport of goods and is not violative of Article 301.
" Section 21 of the Andhra Pradesh Sugar Cant (Regulation of Supply and Purchase) Act which was referred to in the judgment authorised the State Government to levy a tax at such rate, "not exceeding five rupees per metric tonne as may be prescribed on the purchase of cane required for use, consumption or sale in a factory.
It must, therefore, be regarded as settled law that a tax may in certain cases directly and immediately restrict or hamper the flow of trade, but every imposition of tax does.
not do so.
" Imposition of tax of the nature of purchase tax does not by itself restrict freedom of trade, commerce or intercourse.
Imposition of tax may in certain circumstances impede free flow oftrade, commerce or intercourse.
But every tax doesn 't have that effect.
Imposition of a purchase tax by the State does not by itself infringe the guarantee: of freedom under Art.301.
The argument that imposition of sales or purchase tax must be regarded in all cases as infringing the guarantee of freedom under article 301 cannot be accepted as correct.
The appellant filed the petition out of which their appeal arises soon after the Station Master informed the Jute Merchants Association about his inability to book consignments of jute.
He has made no averments in the petition which support the plea that imposition of purchase tax "directly and immediately restricts or impedes" the free flow of trade.
Since power to impose purchase tax under section 3A on notified goods is not shown to restrict or impede the free flow of trade directly and immediately, it need not seek to derive, for its validity, support from article 304(b).
The contention that sections 3A & 5A are inconsistent with section 15 of the is without substance.
By section 14 of 'the ' certain classes of goods are declared goods of special importance in inter State trade or commerce.
Jute is one of such classes of goods.
By section 15 as (1) ; , (2) [1963] 1 section C. R, 491.
420 amended by the Central Sales Tax Second Amendment Act, XXXI ,of 1958 it is provided "Every sales tax law of a State shall, in so far as it imposes or authorises the imposition of a tax on the ,sale or purchase of declared goods, be subject to 'the following restrictions and conditions, namely (a) the tax payable under that law in respect of any sale of purchase of such goods inside the state shall not exceed three per cent of the sale or purchase price thereof, and such tax shall not, be levied at more than one stage; (b) where a tax has been levied under that law in respect of the sale or purchase inside the state of any declared goods and such goods are sold in the course of inter state trade or commerce, the tax so levied shall refunded to such person in such manner and subject to such conditions as may be provided in any law in force in that State.
" By section 15 of the in respect of the declared goods on transactions of sale or purchase the tax leviable is restricted to 3 % and is not leviable at more than one stage.
There, is no dispute that the purchase tax on jute is leviable at the first point of purchase under section 3A of the Bihar Sales Tax Act, and the rate of tax also is not shown to exceed the maximum prescribed by section 15 of the .
The provisions of sections 3A & 5A of the Bihar Sales Tax Act are not therefore inconsistent with the provisions of section 15 of the .
But, in our judgment, r. 31B of the Bihar Sales Tax, Rules, 1959 and the notification issued on December 26, 1967 are unauthorised and must be struck down.
The Bihar Sales Tax Act is enacted by the Legislature to consolidate and amend the, law relating to the levy of tax on the sale and purchase of goods in Bihar.
The State Legislature is competent in enacting sales tax legislation to make a provision which is ancillary or incidental to any provision relating to levy,; collection and recovery of sales tax and purchase tax.
_ A provision which is made by the Act or by the Rules which seeks to prevent evasion of liability to pay tax on intra State sales or purchase would therefore be within the competence of the Legislature or the authority competent to make the rules .
But the State Legislature has no power to legislate for the levy of tax on transactions which are carried on in the course of inter State trade or commerce or in the course of export.
Section 42 of the Bihar Sales Tax Act, 1959, prevents any person from transporting from any railway station, steamer station, 421 air port, post office or any other place any consignment of such goods exceeding the.quantity specified with a view to ensuring that 'there is no evasion of tax payable under the Act.
But the power under section 42 can only be exercised in respect of levy, collection and recovery of intra State or purchase tax.
It cannot be utilised for the purpose of ensuring the effective levy of Inter State sales or purchase tax.
The appellant purchased jute both within and without the State of Bihar.
In respect of transactions of purchase within the State of Bihar and despatch of goods liability to pay purchase tax at the point of purchase may arise.
In respect of goods which are purchased in the State of West Bengal and brought within the State of Bihar and then despatched to other States in the course of inter State transactions no question of levy of purchase tax under the Bihar Sales Tax Act arises.
R. 31 B framed by the State Government seeks to prohibit transport in pursuance of transactions which are inter State, for in terms it prohibits transporting of goods to any place outside the State of Bihar.
Again transport of goods for personal consumption oil use, or of goods, gifted, pledged or dealt with otherwise than by sale, falls within the injunction contained in r. 31B. The power of the State Legislature is restricted to legislate in respect of intra state transactions of sale and purchase and to matters ancillary or incidental thereto : it has no power to legislate for levy of tax on sales and purchase in the course of inter State transactions.
The, power conferred by section 42 authorising the imposition of restriction on transport or movement of goods may only be exercised in respect of transactions which facilitate levy, collection and recovery of tax on transactions of intra State sale or purchase.
When r. 31B prohibits transport of goods to any place outside the State of Bihar unless a certificate is obtained from the appropriate authority, it seeks to prohibit transport of goods pursuant to transactions which may not even be of the nature of sale or purchase transactions; in any case it restricts transport pursuant to transactions in the course of inter Statetrade and commerce.
The operation of the rule is not restricted only to transactions in the course of intra State trade and commerce.
The rule authorises restrictions on inter State transactions and is on that account unauthorised.
For the same reasons the notification issued on December 26, 1967 must be regarded as also unauthorised.
In the view we have taken r. 31B and the notification issued bythe State Government on December 26, 1967 must be declared ultra vires, and since r. 31B and the notification are ultra vires the communication issued by the Superintendent of Commercial 4 22 Taxes to the Railway Authorities must also be declared unauthorised A writ will therefore issue declaring r. 31B and the notification issued by the Government of Bihar on December 26, 1967 ultra vires, and the letter written by the Superintendent of Commercial Taxes to the Railway Authorities is also declared unauthorised.
Having regard to the circumstances, we think there should be no order as to costs.

summary:
Under section 5A of the Bihar Sales Tax Act 1959 as amended by the Bihar Finance Act, 1966 the purchase tax on goods declared under section 3A was to be levied at the point of purchase made from a person other than a registered dealer.
By a notification dated September 14, 1966 the Governor of Bihar declared jute as a commodity liable to purchase tax at the rate specified in the notification.
The appellant carried on business in jute, In the course of his business he.
purchased raw jute from producers in West Bengal, transported it to Kishenganj Railway Station in Bihar and then re exported it to purchasers in West Bengal.
He also bought raw jute in Bihar and exported it to merchants and mill owners in West Bengal by rail from Kishenganj Railway Station.
After the enactment of sections 3A and 5A the State Government issued a notification dated December 26, 1967 purporting to exercise power under section 42 of the Bihar Sales Tax Act, 1959 read with r. 31B of the Bihar Sales Tax Rules, 1959 notifying that no person shall tender at any railway station mentioned in Sch.
11 any consignment of goods mentioned in Sch.
I exceeding the quantity specified for transport to any place inside the State of Bihar and no person shall accept such tender in accordance with the conditions laid down in the said R. 31B. Under Sch.
I jute exceeding 800 kg.
could not be tendered for transport without a despatch Permit and Kishenganj was one of the railway stations mentioned in Sch.
In July 1967 the Superintendent of Commercial Taxes prohibited the railway authorities from loading and despatching jute goods from any railway station in Purnea district without the production of a registration certificate.
For non production of such certificate the railway authorities refused to despatch from Kishenganj the jute goods booked by the appellant.
The appellant moved a 'writ petition in the High Court of Patna challenging inter alia the validity ,of sections 3A and 5A of the Bihar Sales Tax Act and of R.31B.
The High Court dismissed the petition.
With certificate the present appeal was filed.
In support of the petition it was urged (i) that sections 3A and 5A infringed the guarantee of freedom of trade under article 301 of the Constitution and since the amendment by the Finance Act, 1966 introducing these sections did not receive the assent of the President under article 304(b) the amendment was not saved; (ii) that sections 3A and 5A were contrary to ' section 15 of the and accordingly void; (iii) that P. 31B framed by the State Government and the notification issued on December 2.6, 1967 were unauthorised and liable to be struck down.
HELD: (i) The assumption that the levy of purchase tax must be deemed in all circumstances to violate the guarantee under article 301 and 413 the levy will be valid only if the Act is enacted by the State Legislature with the previous sanction of the President cannot be accepted as correct.
Imposition of tax may in certain circumstances impede free flow of trade, commerce and intercourse.
But every tax does not have that effect.[417 G; 419 E] State of Madras vs N. K. Nataraja Mudaliar [1968] 3 S.C.R. 829, Atiabari Tea Co. Ltd. vs State of Assam, and The Andhra Sugars Ltd. vs State of Andhra Pradesh, 21 S.T.C. 212, applied.
In the present case the petitioner has made no averments in his petition which supported the plea that imposition of purchase tax directly and immediately restricts or impedes the free flow of trade.
Since power to impose purchase tax under section 3A was not shown to restrict or impede the free flow of trade directly and immediately, it need not seek to derive for its validity, support from article 304(b).
[419 G] (ii) By section 15 of the , tax liable in respect of declared goods on transactions of sale or purchase is restricted to 3% and is not leviable at more than one stage.
There was no dispute that the purchase tax on jute was leviable at the first point of purchase under section 3A of the Bihar Sales Tax Act, and the rate of tax was not shown to exceed the maximum prescribed by section 15 of the .
The provisions of sections 3A and 5A of the Bihar Sales Tax Act are not therefore inconsistent with the provisions of section 15 of the .
[420 E] (iii) Rule 31B of the Bihar Sales Tax Rules must however be struck down as ultra vires.
[420 F] The power of the State Legislature is restricted to legislate in respect of intra State transactions of sale and purchase and to matters ancillary or incidental thereto : it has no power to legislate for levy of tax on sales and purchase in the course of inter State transactions.
The power conferred by section 42 authorising the imposition of restriction or transport or movement of goods may only be exercised in respect of transactions which facilitate levy, collection and recovery of tax on transactions of intra State sale or purchase.
When r. 31B prohibits transport of goods to any place outside the State of Bihar unless a certificate is obtained from the appropriate authority, it seeks to prohibit transport of goods pursuant to transactions which may not even be of the nature of sale or purchase transactions; in any case it restricts transport pursuant to transactions in the course of inter State trade and commerce.
The operation of the rule is not restricted only to transactions in the course of intra State trade and commerce.
The rule authorises restrictions on inter State transactions and is on that account unauthorised.
For the same reasons the notification issued on December 26, 1967 must be regarded as also unauthorised.
[421 E G]