judgement:
Civil Appeal No. 325/61.
Appeal from the judgment and decree dated March 6.
1961, of the Allahabad High Court in Writ No. 3116 of 1960.
WITH Petitions Nos. 180, 181 and 205 of 1961.
Petitions Under article 32 of the Constitution of India for enforcement of Fundamental Rights.
section N. Kacker and J. P. Goyal, for the appellant (In C.A. No. 325/61) and the petitioner (In Petn.
No. 205/61).
H.N. Sanyal, Additional Solicitor General of India, K.L. Misra, Advocate General, U. P. H. N. Seth, J. K. Srivastva and C. P. Lal, for the respondents (in C.A. No. 325/61 and Petn.
No. 205 of 1961).
J. P. Goyal, for the petitioners (In petitions Nos. 180 and 181 of 1961).
C. P. Lal, for the respondents (In Petitions Nos. 180 and 181 of 1961).
December II.
The Judgment of the Court was delivered by SHAH, J.
The appeal and the writ petitions practically raise the same points and may be 78 disposed of together.
At the outset we shall briefly state the facts relevant to each of the said proceedings.
The appellant in Civil Appeal No. 325 of 1961 held a permit for plying stage carriage on the Kanpur Bela Bidhuna route via Chaubepur, in the State of Uttar Pradesh.
The entire route is 68 miles long, and a part of the route 16 miles in length i.e., Kanpur to Chaubepur, is a notified route.
This part was common between the said route and the Kanpur Chaubepur Sarai Miran route, which was a nationalised route.
A condition was, therefore, attached to the appellant 's permit that he would not be entitled to pick up passengers or drop them between Kanpur and Chaubepur.
His permit was to expire on June 10, 1960.
Before the said date, he applied for renewal of his permit, and on May 20, 1960 it was published in the U.P. Govt.
Gazette calling for objections.
On the same day, the State Government published a notification in the Gazette proposing to nationalise the said route.
As the application for renewal could not be disposed of before the expiry of the period fixed in the permit a temporary permit for the route was granted to the appellant.
On July 19, 1960 the application for renewal of the appellant 's permit was considered by the Regional Transport Authority, Kanpur, and his permit was renewed for three years with effect from July 23, 1966, only in respect of a part of the old route, namely, Chaubepur Bela Bidhuna; but under the directions of the Transport Commissioner, the Regional Transport Authority made an endorsement on the renewed permit authorizing the appellant to ply his vehicle between Kanpur and Chaubepur for a period of four months commencing from July 23, 1960.
As regards the proposed scheme of nationalization, on June 22, 1960 the appellant filed his objections thereto.
The said objections were heard by the Joint Secretary, Judicial 79 Department, who approved the scheme with some modifications.
The approved scheme was published in the Gazette on October 8, 1960.
Under the notification the scheme was to be put into operation from October 5, 1960 or thereafter.
On November 12, 1960, a notification dated November 4, 1960 was published in the Gazette under section 68F of the cancelling the appellant 's renewed permit with effect from November 27, 1960.
Under the nationalization scheme the stage carriages belonging to the State Transport Undertaking could ply on the said route without obtaining permits.
The appellant filed a petition under Art, 226 of the Constitution in the High Court of Judicature at Allahabad praying for the following reliefs: (a) That a writ in the nature of mandamus may issue to command the respondents not to interfere with the Petitioner 's right to ply on Kanpur Bela Bidhuna Via Chaubepur route under the permit duly renewed in his favour till the entire duration of the permit viz., till July 22, 1963.
(b) That a Writ in the nature of certiorari may issue to quash so much of the Resolution dated July 19, 1960 passed by the Regional Transport Authority, Kanpur, as directs imposition of illegal conditions to the renewed permit of the petitioner.
(c) That a Writ in the nature of mandamus may issue to command respondents No. 2 and 3 not to give effect to the illegal endorsements made on the petitioner 's permit on July 23, 1960 and to treat the petitioner 's permit as having been renewed without the illegal conditions attached thereto by the two endorsements dated July 23, 1960, reproduced in paragraph 15 of the affidavit.
80 (d) That a Writ in the nature of certiorari may issue to quash the notifications dated May 18, 1960 under section 68C of the Act, so also the subsequent notifications under section 68D(2) of the Act dated September 26, 1960 and the notification dated November 4, 1960 under section 68F (2) of the Act in regard to Kanpur Bela Bidhuna route.
(e) That a Writ in the nature of mandamus may issue directing the respondents Nos. 1 to 3 not to give effect to the notifications dated May 18, 1960, September 26, 1960 and November 4, 1960 in regard to Kanpur Bela Bidhuna route.
(f) That an interim direction may issue to the respondents Nos. 2 and 3 not to interfere with the Petitioner 's right to ply on the entire Kanpur Bela Bidhuna route under the renewed permit irrespective of the illegal conditions attached thereto or of the illegal scheme for the nationalization of the said route.
(g) That costs of this petition may be awarded to the Petitioners as against the opposite parties.
On December 2, 1960 the High Court made an interim order directing the State of Uttar Pradesh not to interfere with the petitioner operating his vehicle on Kanpur Bela Bidhuna route in accordance with the terms of his permit.
To that writ petition, the State of Uttar Pradesh, the Regional Transport Authority, and the Secretary to Regional Transport Authority, were made respondents.
The respondents opposed the petition.
On March 6, 1961 a Division Bench of the High Court, accepting the contentions raised by the respondents, dismissed the petition.
Hence the appeal.
81 Writ Petition No. 205 of 1961 is filed in this Court by another operator under article 32 of the Constitution.
He was plying his stage carriage on the Jaunpur Shahganj route in Uttar Pradesh under Permit No. 430, which was valid upto March 15, The State Government published in the Gazette dated July 23, 1960 a notification dated July 15, 1960 under section 68C of the Act proposing to nationalize the said route along with another route.
The petitioner and others filed objections against the scheme within the time prescribed.
The objections were heard by the Joint Secretary, Judicial Department, who approved the scheme.
The approved scheme was published in the U. P. Official Gazette dated February 25, 1961.
Thereafter, the Secretary to the Regional Transport Authority, Allahabad, issued a notification dated July 29, 1961 wherein it was stated that the permits of the operators on the said routes including that of the petitioner would stand cancelled and that the notification would come into force upon the expiry of 15 days from the date of publication of the said notification.
The petitioner has filed the present writ petition asking for the following reliefs: (a) A writ in the nature of certiorari quashing the notification (Annexures A, B and C to this writ petition).
(b) A writ in the nature of mandamus directing the respondents not to give effect to the notifications.
(c) A writ in the nature of mandamus commanding the respondents not to interfere with the rights of the petitioner to ply his stage carriage on the aforesaid route (Jaunpur Shahganj route), due to the aforesaid scheme.
(d) Award the costs of this petition to the petitioner.
82 Writ Petitions Nos.
180 and 181 of 1961 relate to the route Robertasgunj Dudhi Mamhani.
The State Government issued a notification dated July 13. 1960, proposing to nationalize the said route and published the same in the Gazette on July 23, 1960.
The petitioners filed objections against the scheme and the said objections were heard by the Joint Secretary, Judicial Department, and the scheme was finally approved by him.
The approved scheme was notified in the Gazette on May 20, 1961.
Under the said notification, the State Transport Undertaking would commence to operate its stage carriage service on the said route from July 15, 1961 or thereabout.
Aggrieved by the said scheme, the petitioners filed the said petition for writs in this Court for reliefs similar to those in the other petition.
Mr. Kacker, learned counsel for the petitioner in Writ Petition No. 205 of 1961, raised the following points: (1) Under section 68C of the , the State Transport Undertaking has to form its opinion and prepare a scheme for nationalisation and publish it in the manner prescribed thereunder, but in the present cases the State Government initiated the schemes and, therefore, the schemes were not validly made; (2) As neither the objection to the proposed scheme were heard nor were they approved by the State Government as they should be under section 68D of the , the schemes were invalid; (3) The Regional Transport Authority acted illegally in curtailing the period of renewal this question arises only in the appeal; (4) The Regional Transport Authority had not applied its mind in dealing with the renewal application but mechanically followed the provisions in the proposed schemes and, therefore, its order was bad; (5) Even after the approval of the nationalisation schemes, the State owned buses were required to apply for and get permits under the Act and plying of buses 83 by the State without permits was illegal; and (6) The Secretary to the Regional Transport Authority had no jurisdiction to issue an order under section 68F (2) of the , since under the said section only the Regional Transport Authority had the power to do so this question arises only in Writ Petition No. 205 of 1961.
To appreciate the first argument it is necessary to notice briefly the relevant provisions of Ch.
IVA of the (IV of 1939) hereinafter called the Act.
Section 68A(b) defines "State transport undertaking" to mean "any undertaking providing road transport service, where such undertaking is carried on by (i) the Central Government or a State Government.
Section 68C reads: "Where any State transport undertaking is of opinion that for the purpose of providing an efficient, adequate, economical and properly coordinated road transport service, it is necessary in the public interest that road transport services in general or any particular class of such service in relation to any area or route or portion thereof should be run and operated by the State transport undertaking, whether to the exclusion, complete or partial, of other persons or otherwise, the State transport undertaking may prepare a scheme giving particulars of the nature of the services proposed to be rendered, the area or route proposed to be covered and such other particulars respecting thereto as may be prescribed and shall cause every such scheme to be published in the Official Gazette and also in such other manner as the State Government may direct".
Section 68D reads: "(1) Any person affected by the scheme published under section 68C may, within 84 thirty days from the date of the publication of the scheme in the Official Gazette, file objections thereto before the State Government.
(2) The State Government may, after considering the objections and after giving an opportunity to the objector or his representatives and the representatives of the State Transport undertaking to be heard in the matter, if they so desire, approve or modify the scheme." Section 68E provides for the cancellation or modification of the scheme by the State transport undertaking and in that event the same procedure prescribed for framing a scheme is to be followed.
The effect of the said provisions, in so far as they are relevant to the present inquiry, may be stated thus: The State transport undertaking is an undertaking providing road transport service which is carried on by the State or any other corporation or authority mentioned in section 68A.
The definition creates a statutory authority distinct from authorities which run it.
This is made clear by section 68C whereunder it is the State transport undertaking that will have to form the requisite opinion.
This is further elucidated by the fact that under section 68C of the Act the state transport undertaking is required to publish the proposed scheme in the Official Gazette and also in such other manner as the State Government may direct.
This distinction between the two entities is further made clear by section 68D(2) whereunder the State Government has to hear the representatives of the State Transport undertaking.
Briefly stated, under the said provisions, a statutory authority called the State transport undertaking is created it is authorised to initiate a scheme of nationlisation of road transport, the aggrieved parties are given opportunity to file objections thereto, and 85 the State Government is empowered to hear both the parties and approve or modify the scheme, as the case may be.
Counsel for the appellant contends that the underlying scheme of the Act cannot be worked out unless a clear distinction is maintained between the State transport undertaking and the State Government, for, if one is equated with the other, the State Government would become a judge of its own cause, and that, therefore, it was incumbent upon the Government to form a separate and distinct, authority to enable it to initiate a scheme in accordance with law.
Counsel for the State contends that a transport undertaking run by a State Government is a State transport undertaking and, therefore, the scheme initiated by the State Government which runs the State undertaking is a scheme initiated by the said undertaking.
It is true that the provisions maintain a distinction between a State transport undertaking and the State Government.
It is also true that the State Government has to hear the objections of the aggrieved parties and also the representatives of the State transport undertaking before approving or modifying the scheme, indicating thereby that the State Government has to decide the dispute that may arise between the two contestants.
Though the functions of the different bodies are clearly demarcated in the case of undertakings run by corporations, there is overlapping in the case of an undertaking run by a State Government.
This may lead to anomalous position, but in practice it can be avoided, if the State Government creates a department to be in charge of the undertaking and hears the objections and approves or modifies the scheme in a manner without violating the principles of natural justice.
86 A State transport undertaking means, inter alia, an undertaking run by a State.
The statutory authority created is an undertaking run by a State.
The State can only run an undertaking through its officers; it may entrust the conduct of the transport service to a particular officer or to a department of the State; in either event, it is the State Government that runs the undertaking.
The statutory authority, namely, the State transport undertaking, has to form an opinion within the meaning of section 68C of the Act, and the opinion must necessarily be that of the State Government which runs it.
If the State Government running an undertaking forms an opinion, it can legitimately be said that the statutory authority i. e., the State transport undertaking, has formed the opinion.
In Gullapalli Nageswara Rao vs Andhra Pradesh State Road Transport Corporation (1) before the State of Andhra was formed in November, 1956, the Motor Vehicles (Hyderabad Amendment) Act, 1956 was in force in Telengana area.
Under the said Act the State transport undertaking was defined to mean the road transport department of the State providing road service.
After the Andhra Pradesh State was formed, that department initiated the scheme and this Court held that the said department clearly fell within the definition of state transport undertaking.
This Court observed in that case: "The State Government maintained the department for providing road transport service and therefore the department clearly falls within the definition of State Transport Undertaking.
" If a state directly runs an undertaking, it can only be through a department.
In law there cannot be any difference between an undertaking run by a department of a State Government and that run 87 by the State Government.
In either undertaking is run by the State and that undertaking is a State transport undertaking within the meaning of section 68C of the Act.
The opinion must necessarily be formed by somebody to whom, under the rules of business, the conduct of the business is entrusted and that opinion, in law, will be the opinion of the State Government.
It is stated in the counter affidavit that all the concerned officials in the Department of Transport considered the draft scheme and the said scheme was finally approved by the Secretary of the Transport Department before the notification was issued.
It is not denied that the Secretary of the said Department has power under the rules of business to act for the State Government in that behalf.
We, therefore, hold that in the present case the opinion was formed by the State transport undertaking within the meaning of section 68C of the Act, and that there was nothing illegal in the manner of initiation of the said scheme.
The second ground urged by counsel for the appellant that the scheme was invalid because the objections to the scheme were heard and the scheme was approved by the Joint Secretary, Judicial Department, who was not lawfully invested with authority in that behalf is for reasons to be presently stated not open to the appellant.
By the first sub section of section 68D which we have already set out persons affected by a transport scheme are entitled to file objections thereto.
By sub section (2), the State Government is authorised to approve or modify, the scheme after considering the objections, if any, and after giving an opportunity of being heard in the matter to the objector or his representatives and the representatives of the State transport undertaking.
Sub section (3) provides for the publication of the 88 approved or modified scheme in the Official Gazette by the State Government and on such publication the scheme becomes final.
It must at once be observed that neither in the petition under article 226 of the Constitution to the High Court, out of which Civil Appeal No. 325 of 1961 arises, nor in the Writ Petition under article 32 (No. 205 of 1961) presented to this Court, was the plea raised that the Joint Secretary to the Judicial Department was not authorised to hear the objection and to approve the scheme.
In the petition (No. 205 of 1961) under article 32 of the Constitution it was averred by the petitioner in para 10 that "the petitioner filed objections under section 68D(1) of the Act, against the scheme of the State Government, and it also heard its own representatives in opposition to the petition" and again it was averred in the same paragraph "at the time of hearing of the petitioner 's objections under section 68 D, Before the State Government it was argued on behalf of the petitioner that the aforesaid scheme was bad. " In the petition under article 226 of the Constitution it was averred in paragraph 25 "That no State Transport Undertaking having been constituted the State Government initiated the scheme and heard its own representatives on 13.8.1960.
The petitioner has bonafide belief that the Joint Secretary to the Government of Uttar Pradesh (Judicial Department) who heard the objections acted with bias against the petitioner.
" Even in the petition for special leave to appeal to this Court, no such objection was raised.
There is also no reference to any such contention in the judgment of the High Court.
The validity of the scheme on this ground is sought to be raised for the first time in this Court, and, according to the settled practice of this Court the appellant except in exceptional circumstances and there are none such in this case is not entitled to raise this argument for the first time at the hearing in this Court.
It was urged in the course of the 89 argument that by Rule 7 of the State Land Transport Services Development Rules 1958, which at the material time read as follows: "(1) The objections received shall be considered by the judicial Secretary to Government of U.P. or an officer of his department, not below the rank of Joint Secretary nominated by the former for the purpose.
x x x x x x x x x x (5) After hearing of such parties as appear, the officer shall give a decision whether the scheme be approved or modified as he may deem proper", no authority was lawfully conferred upon the Joint Secretary, and the proceedings of the Joint Secretary in purported exercise of powers under section 68D (2) were without jurisdiction.
But this is another facet of the same argument, and it is clear from a perusal of the petitions before the High Court and this Court and the judgment of the High Court that it was never raised.
There is no doubt that the scheme has been duly published under section 68D(3) and if the objection to the invalidity of the scheme on the ground that the objection were not heard by an authority competent in that behalf cannot be permitted to be raised in this Court for the first time during the course of the arguments, the statutory consequences prescribed by section 68F must ensue.
It is necessary to bear certain facts and considerations in mind in dealing with the remaining contentions.
By the scheme (cl. 7) the permit of the appellant was cancelled.
The scheme as approved was published in the U.P. Gazette on October 8, 1960, and was to come into operation on October 15, 1960, or thereafter.
A notification was published on November 4, 1960, under section 68F(2) 90 of the Act cancelling the appellant 's permit with effect from November 27, 1960.
The appellant therefore ceased to have any right to ply his vehicles on the route and he had no right to object to the vehicles of the State transport undertaking plying on that route.
If the scheme was validly promulgated and became final within the meaning of section 68D(3), it had the effect of extinguishing all rights of the appellant to ply his vehicles under his permit.
After cancellation of his permit, he could not maintain a petition for writ under article 226 because a right to maintain such a petition postulates a subsisting personal right in the claim which the petitioner makes and in the protection of which he is personally interested.
It is true that the appellant did at the date of the petition filed in the High Court hold a permit which was to enure till the 27th November, 1960.
But if the permit was validly terminated from the date specified, he will not be entitled to relief even if he had on the date of the petition a subsisting right.
Ground No. 2 must therefore fail.
Grounds 3 and 4 of the appellant that the Regional Transport Authority acted illegally in curtailing the period of renewal and that, in any event, it did not apply its mind in dealing with the renewal application but mechanically followed the provisions of the scheme may now be considered.
The Regional Transport Authority was by the terms of the scheme left no discretion in the matter.
It was by the scheme that the right of the appellant was restricted and if the scheme became final and binding the Regional Transport Authority had no authority to permit the appellant to ply his vehicles.
The order passed by the Regional Transport Authority was purely consequential on the scheme, and if the scheme is not open to challenge, orders consequential thereon will not 91 also be open to challenge.
We are supported in this view by the observations of this Court in Abdul Gafoor: Proprietor, Shaheen Motor Service vs The State of Mysore (1) that: "It appears to us that when deciding what action to take under section 68F(1) the authority is tied down by the terms and conditions of the approved scheme and his duty is merely to do what is necessary to give effect to the provisions of the schemes.
The refusal to entertain applications for renewal of permits or cancellation of permits or modification of terms of existing permits really flow from the scheme.
The duty is therefore merely mechanical and it will be incorrect to say that there is in these matters any lie between the existing operators and the State Transport Authority.
There is no justification therefore for saying that when taking action under section 68F(2) is really independent of the issue of the permits under section 68F(1).
Once the scheme has been approved, action under section 68F(1) flows from it and at the same time action under section 68F(2) flows from the same scheme".
We are bound by the decision.
We are not called upon to consider whether the State owned buses are being validly plied without obtaining permits under section 68F(1) of the Act.
If the right of the appellant to ply his buses is lawfully extinguished, he is not entitled to maintain an appeal challenging the right of the State Transport undertaking to ply their buses with or without permits.
Nor is any fundamental right of the appellant infringed by the State Transport undertaking plying its buses without permits, and a petition under article 32 of the Constitution cannot be maintained unless a fundamental right of the applicant is infringed.
92 Nor is there any substance in the last contention.
The orders passed under.
sections 68F(2)(a) and (b) flow from the publication of the scheme duly approved and the issue of an order, which is not quasi judicial but administrative, by the Secretary on behalf of the Regional Transport Authority is not open to challenge.
It is not the case of the Petitioner in W. P. 209/61 in which alone this contention is raised that the order unauthorised.
what is contended above this contention is raised that the order is being quasi judicial, power to make it cannot be delegated.
But for reasons already set out the order is not quasi judicial; it is purely administrative.
In our view, therefore, the appeal and the petitions must fail, and are dismissed with costs.

summary:
The appellant, whose permit for plying stage carriage was shortly to expire, applied for its renewal.
The renewal application was published in the Gazette calling for objections.
The State Government published a notification proposing to nationalise the route.
The permit was renewed for three years for a part of the route but an endorsement was made thereon authorising the appellant to ply on the remaining part of the route for four months.
The appellants filed objections to the proposed scheme for nationalisation.
The objections were heard by the Joint Secretary, Judicial Department, who approved the scheme with certain modifications.
The scheme was published in the Gazette.
Thereafter, a notification was issued under section 68F of the cancelling the appellant 's renewed permit.
Under the Scheme the stage carriages of the State Transport Undertaking could ply on the route without obtaining permits.
The appellant challenged the validity of the scheme and the cancellation of his licence.
^ Held, that the scheme was valid and the appellant 's licence was properly cancelled.
Section 68C of the required the scheme to be initiated by the State Transport Undertaking.
Even though the scheme in the present case was actually initiated by the State Government there was no non compliance with the provisions of section 68C.
There was no difference between an undertaking run by a department of the State Government and that run by the State Government.
In either case the undertaking was run by the State and it was a State transport undertaking within the meaning of section 68C. Initiation of the scheme by the State Government running an undertaking was initiation by the statutory authority i.e., the State Transport undertaking.
The appellant could not be allowed to challenge the validity of the scheme on the ground that the Joint Secretary was not lawfully invested with the authority to hear objections and to approve the scheme as the point was not raised at the proper stage.
77 Gullapalli Nageswara Rao vs Andhra Pradesh State Road Transport Corporation, [1959] Supp. 1 S.C.R. 319, applied.
The scheme having been validly promulgated and having become final under section 68D(3) it had the effect of extinguishing all rights of the appellant to ply his stage carriage under his permit and he could not maintain a petition under article 226 of the Constitution.
The order passed by the Regional Transport Authority cancelling the appellant 's permit was purely consequential on the scheme and could not be challenged if the scheme was valid.
Once the right of the appellant to ply his stage carriage was validly extinguished he could not question the right of the State transport authority to ply their stage carriages with or without permits.
Abdul Gafoor, Proprietor, Shaheen Motor Service vs State of Mysore, ; , applied.


judgement:
Civil Appeal No. 9 of 61.
Appeal from the judgment and order dated May 7, 1959, of the Punjab High Court in L.P.A. No. 86 of 1956.
M.C. Setalvad, Attorney General of India, S.N. Andley, Rameshwar Nath and P.L. Vohra, for the appellants.
section M. Sikri, Advocate General, Punjab, B.K. Khanna and P.D. Menon, for the respondents.
915 1961.
December, 5.
The Judgment of Sinha C.J., Hidayatullah, Shah and Mudholkar JJ., was delivered by Hidayatullah, J. Kapur, J., delivered a separate judgment.
HIDAYATULLAH, J.
The appellants are a firm of general merchants which sells, among other goods manufactured tobacco as defined in the Punjab Tobacco Vend Fees Act, 1954 (12 of 1954), which came into force in the State of Punjab from April 1, 1954.
The firm is also a registered dealer under section 7 of the East Punjab General Sales Tax Act, 1948 and till the end of March, 1954, was paying sales tax on manufactured tobacco also.
Indeed, the firm paid sales tax on manufactured tobacco, also for the next quarter ending on June 30, 1954, but did not pay in the succeeding quarter in view of certain events, to which a detailed reference will be made presently.
On September 27, 1954, the State Government issued a Notification (No. 4556 E & T (Ch) 54/957) by which the schedule of exemptions under section 6 of the Sales Tax Act was amended by the inclusion of item 51, which reads as follows: "51.
Manufactured tobacco as defined in the Punjab Tobacco Vend Fees Act, 1954.
" This Notification was preceded by a Notification of May 7, 1954 (No. 427 E & T (Ch) 54/369), by which the State Government had given notice, as required by law, of its intention to add the said item in the schedule of exemptions.
In June, 1954, the State Government issued a Press Note by which it was intended to convey to the dealers that though the Tobacco Vend Fees Act had come into force from April 1, 1954, it was not intended to levy both the sales tax as well as the fee for any period.
The Press Note reads as follows: "There is some misapprehension in the minds of dealers in manufactured tobacco as to whether sales tax is also chargeable in respect of manufactured tobacco after the 916 1st April, 1954, in addition to the license fees under the Tobacco Vend Fees Act.
Government would like to make it clear that although the Tobacco Vend Fees Act has come into force with effect from 1st April, 1954, no license fees for dealers have yet been prescribed under the Act.
Therefore, the levy of sales tax continues till the Vend Fee licences come into operation.
It is to be clearly understood that the Vend Fee will be proportionately reduced for the current financial year to adjust the period for which sales tax will have been charged.
Manufactured tobacco will be exempted from sales tax simultaneously with the enforcement of the Vend Fees." On August 2, 1954, the State Government issued another Press Note, in which the decision was altered.
The Press Note said: "Government recently announced through a press note that the levy of Sales Tax on manufactured tobacco would be continued till the Vend Fee Licences came into operation and that the Vend Fee would be proportionately reduced for the current financial year in respect of the period for which Sales Tax would have been charged.
In order to avoid double taxation, Government have since reconsidered the matter and have, in supersession of the previous decision, decided that the Sales Tax, if any, recovered from the dealers would be refunded and that no Sales Tax would be charged during the current financial year in respect of sales of tobacco which fall under the Tobacco Vend Fees Act.
Tobacco Vend Fees will be recovered at full rates for the whole year as and when rules under the Punjab Tobacco Vend Fees Act are finalised.
" It appears that the Rules under the Tobacco Vend Fees Act were not promulgated; nor were the forms 917 and licences prescribed during the financial year ending on March 31, 1955.
In the meantime, the appellants, as already stated, paid sales tax on sales of manufactured tobacco for the first quarter ending June 30, 1954, and the Notification exempting manufactured tobacco from sales tax was issued on September 27, 1954.
The appellants had made enquiries from the Excise and Taxation Commissioner, Punjab, about the Press Note of August 2, 1954, and had been assured that the Notification as printed in the Newspapers was accurate, and that Government intended implementing the Press Note.
On January 23, 1956, the appellants received a notice from the Excise and Taxation Officer, Rohtak, calling upon them to produce their account books.
The appellants as well as other dealers of manufactured tobacco similarly affected, made representations on the basis of the Press Note of August 2, 1954, but without success.
The appellants then filed on February 8, 1956 a petition under article 226 of the Constitution for substantially three reliefs.
They were: (a) a declaration that the levy of sales tax on manufactured tobacco upto September 26, 1954 was illegal; (b) refund of the sales tax paid by it for the quarter ending June 30, 1954; and (c) an order in the nature of a writ of Prohibition against the proposed levy of sales tax till September 26, 1954.
It remains to mention that the sales tax authorities were acting in conformity with a Press Note issued in August, 1955, by which the State Government went back upon the policy declared in August, 1954 and reaffirmed the policy stated in the Press Note of June, 1954.
The following extract from the Press Note of August, 1955 may be read here: "2.
In conformity with the press note issued in June, 1954, and in view of the facts explained above, Government have now decided that sales tax on tobacco shall be levied for the year 1954 55 before the 27th September, 1954 918 only, the date on which tobacco was included in the schedule of exemptions appended to the General Sales Tax Act.
This amounts to a handsome concession to the dealers and Government except that, in return, every cooperation shall be shown by the dealers of the assessing authorities in the matter of the assessment of the tax.
" The petition under article 226 was heard by a learned Single Judge of the Punjab High Court, who held that the orders of Government were entirely in accordance with law, that the East Punjab Sales Tax Act, in so far as it related to the sale of manufactured tobacco was not repealed by the Tobacco Vend Fees Act, and that sales tax on manufactured tobacco was payable from April 1, 1954 to September 26, 1954, in view of the fact that the exemption was made on September 27, 1954, and would operate from the latter date.
Against the decision of the learned Judge dismissing the writ petition, an appeal under Letters Patent was filed.
The Divisional Bench, which heard the appeal, agreed with the judgment appealed from, and dismissed the appeal.
A certificate was, however, granted to the appellants and the present appeal has been filed.
Two contentions were raised in the forefront before the High Court, by the appellants.
The first was that the Punjab Tobacco Vend Fees Act had pro tanto repealed the East Punjab General Sales Tax Act, and that sales tax on manufactured tobacco could not be levied after April 1, 1954.
The second was that the State Government by its assurance in the Press Note of August, 1954, had estopped itself from reversing its policy and claming the sales tax up to the date of the Notification.
These points were not seriously pressed upon us, because there can be two taxes on the same commodity or goods without the one law repealing the other.
No repeal can be implied, unless there 919 is an express repeal of an earlier Act by the later Act, or unless the two Acts cannot stand together.
The first argument was, therefore, rightly rejected in the High Court.
The second argument is also without force.
There can be no estoppel against a statute.
If the law requires that a certain tax be collected, it cannot be given up, and any assurance that it would not be collected, would not bind the State Government, whenever it choose to collect it.
The question which is now raised, and of which there is but a trace in the High Court is the real one to decide, and it may be formulated thus; Did the exemption in the Notification issued on September 27, 1954 have effect from that date, or from the beginning of the financial year ? We are not concerned with the question whether, in the absence of rules and forms, the Punjab Tobacco Vend Fees Act, 1954 could operate from April 1, 1954.
Whether it did or did not, can make no difference to the sale tax, because the Punjab Tobacco Vend Fees Act, 1954 did not abrogate the Sales Tax Act.
If sales Tax was not payable, it would be because of the exemption, and the only question thus is when the exemption began to operate.
The Notification does not say from what date the exemption operates.
Taking the Notification by itself, it cannot be said that it comes into force from an earlier date.
Both sides have thus called in aid provisions of the East Punjab General Sales Tax Act and the Rules to determine the date from which the exemption can be said to operate.
Reference was made by the appellants to a decision of this Court in The Commissioner of Sales Tax, U.P. vs The Modi Sugar Mills Ltd.(1), where a notification increasing sales tax on edible oils issued in the middle of the year 1948 was held not to apply to the assessee in that year, inasmuch as its liability to tax had become fixed on April 1, earlier, as it had elected to pay tax on the turnover of the previous 920 year.
The scheme of taxation under the U.P. Sales Tax Act, 1948 (15 of 1948) and the Rules under that Act is so vastly different from the East Punjab General Sales Tax Act and the Rules under it, that a detailed reference to that case may not be necessary.
The question thus must be viewed in the setting of the East Punjab Sales Tax Act and the Rules under it.
We shall refer to them shortly as the Act and the Rules in the rest of this judgment.
The Act was passed in 1948, and came into force on November 15, 1948.
Previous to this, sometimes licence fee under an earlier Tobacco Vend Fees Act and sometimes sales tax also under an earlier Sales Tax Act had been levied but not side by side in the Province.
The history of these earlier Acts was brought to our notice during the course of the argument, but nothing turns upon it.
The sales tax under the Act continued to be levied up to April 1, 1954, and none has disputed that it could be levied.
On that date, the Punjab Tobacco Vend Fees Act came into force.
We have already said that the latter Act did not repeal pro tanto the earlier.
The liability for sales tax in this appeal is for two quarters ending June 30, 1954, and September 30, 1954.
There is no dispute that after September 27, 1954 sales tax could not be levied, in view of the inclusion of item 51 in the schedule exempting manufactured tobacco from the operation of the Act.
We must now examine those provisions of the Act which are claimed by the rival parties to indicate the moment of time from which the exemption granted by the Notification began to operate.
"Turnover" has been defined in the Act to include the aggregate of the amounts of sales and parts of sales actually made by any dealer during the given period, less certain allowances, and "year" means the financial year.
Sections 4 and 5 read together are the charging sections, the first dealing with the incidence of the tax, and the second, with its rate.
Section 6 (1) provides for exemptions on the sale of 921 goods which are specified in schedule to the Act.
Under section 6 (2), the State Government has been given the power to add to or delete from that schedule.
Section 10 deals with the making of returns and payment of the tax.
Section 27 empowers the State Government to make rules for carrying out the purposes of the Act.
This is the general scheme of the Act, in so far as we are concerned; but a somewhat detailed examination of these sections is necessary to understand the rival contentions.
Section 4 consists of five sub sections.
Sub Section (1), which is a subject to the provisions of sections 5 and 6, says that every dealer, except one dealing exclusively in goods declared tax free under section 6, whose gross turnover during the year immediately preceding the commencement of the Act exceeded the taxable quantum, shall be liable to pay tax under the Act on all sales effected after the coming into force of this Act.
A proviso is added, which is not relevant.
Sub section (2) says that every dealer who is liable to pay tax under the first sub section shall be liable to pay it on the expiry of 30 days after the date on which his gross turnover first exceeds the taxable quantum.
Sub sections (3) and (4) deal with the continuance of the liability of the dealer under certain circumstances, and are not relevant here.
Sub section (5) then defines "taxable quantum" in relation to different kinds of dealers, and fixes a certain amount as the lowest limit.
Since, in the present case, the taxable quantum is above the limit applicable to the appellants and they are also admittedly dealers, a detailed reference to the provisions of sub section
(5) is unnecessary.
Section 5, which deals with the rate of tax, is made subject to the other provisions of the Act, and the first sub section says that there shall be levied on the taxable turnover every year of a dealer a tax at such rates (not exceeding two pice in a rupee) as the State Government may by notification direct.
"Taxable turnover" 922 is then defined by the second sub section to mean that part of a dealer 's gross turnover during any period which remains after deducting therefrom, inter alia his turnover during that period of tax free sales, sales to registered dealers, sales to any undertaking supplying electrical energy, sales to dealers outside Punjab and other sales, as may be prescribed.
With none of these deductions we are concerned in this case.
Now, the appellants emphasise the words "gross turnover during the year" in s.4 (1) and the words "taxable turnover every year of a dealer" in section 5 (1), and argue that the tax is computed year wise, and the exemption must, therefore, operate for the whole of the year in which it is made, irrespective of the date on which the Notification is made.
The respondents, on the other hand, emphasise the words "gross turnover during any period" and "his turnover during that period" occurring in section 5, and contend that the tax is not year wise but accrues, so to speak, from day to day or at least from period to period within a year, and the exemption thus operates not from the whole of the year, but for the period within which it is granted, and refer in aid of this argument, to sections 6 and 10.
Sections 4 (1) and 5 (1) are subject to section 6, section 5 (1), to other sections of the Act and so, section 10, and we have to see what they provide.
Section 6 (1) is brief, and may be quoted in extenso.
It reads: "6 (1).
No tax shall be payable under this Act on the sale of goods specified in the first column of the Schedule, subject to the conditions and exceptions, if any, set out in the corresponding entry in the second column there of and no dealer shall charge Sales Tax on the sale of goods which are declared tax free from time to time under this section.
" The respondents emphasise the words "from time to time" in the first sub section, and say that 923 they also show that exemptions may be given, withdrawn, or given again and again several times during the year in respect of the same goods, and the exemptions, therefore, begin to operate when they are given and cease, when they are withdrawn.
But, the appellants contend that these words merely indicate that the power may be exercised as often as needed, and do not indicate the time from which the operation of the exemption commences and the period during which it lasts.
Section 10 (1) provides that the tax payable under the Act shall be paid in the manner provided at such intervals, as may be prescribed.
Two Rules framed under section 27 provide for such intervals.
Rule 20 reads: "Every registered dealer other than those referred to in rules 17, 18 and 19, shall furnish returns in Form S.T.VIII or S.T. XXIII, if so permitted quarterly within thirty days from the expiry of each quarter." (words underlined were introduced on June 28, 1955).
Rule 23: "Notwithstanding the provisions of rules 20 and 21, the appropriate Assessing Authority may, for reasons to be recorded in writing, fix monthly returns for a dealer, who would otherwise be required to furnish quarterly or annually under these rules.
" Section 10 and Rules 20 and 23 clearly provide that returns may be made annually, quarterly or monthly.
The forms, section T. VIII and S.T. XXIII, also are forms of returns of sales tax payable for the year, quarterly or monthly.
It is thus possible that some dealers pay tax annually some, quarterly, and some, monthly.
The contention of the appellants is that s.10 read with Rules 20 and 23 merely provides for making of returns at prescribed intervals and the 924 collection of tax is for a period falling between those intervals, but the tax is the tax appropriate to the whole year 's result.
The respondents contend that the effect of the section and the two Rules is that the tax due for the period of the return is separate from any other tax for any other period.
Each period, according to them, must be viewed separately and not as part of a year.
Thus, if exemption is granted during the second quarter, according to the respondents it affects that quarter and subsequent quarters but not the first quarter, because tax is payable on the turnover of a period and at such intervals, as may be applicable to an assessee.
We cannot help saying that the Act and the Notification could have been framed to obviate such unnecessary questions by providing clearly in them the time from which such exemptions would begin to operate.
Similarly, if the rules under the Punjab Tobacco Vend Fees Act had been framed in time and the Tobacco Vend Fees Act together with the Rules under it and the exemptions under the Sales Tax Act were brought into force together, a considerable amount of time to the Department and the Courts would have been saved, as also trouble to the tax payer.
The Rules under the Punjab Tobacco Vend Fees Act were not framed during the whole of the financial year, 1954 55.
Contradictory Press Notes were issued, which showed that the State Government itself was not sure of the true legal position, thus causing great confusion and distrust in the minds of the tax payers.
There is no doubt that the tax is a yearly tax.
It was payable, in the first instance, by a dealer whose gross turnover during the financial year immediately preceding May 1, 1949, was above the taxable quantum.
The tax is to be levied on the taxable turnover of a dealer every year.
The difference between gross turnover and taxable turnover is this, that to arrive at the taxable turnover of 925 any period some deductions have to be made for the same period.
This clearly shows that the tax is for a year.
The method of collection allows collection of tax at intervals; in some cases, the tax is collected at the end of the year; in some others, the tax is collected quarterly and in still other cases, even monthly.
If the exemption can be said to operate for that period for which the tax is payable according as it is annually, quarterly or monthly, the tax would be different for different persons.
Those who are paying the tax annually would get exemption for the whole year; but those who are paying it quarterly or monthly would get benefit in the quarter or the month of the Notification but not for earlier quarters or months.
It could not have been intended that the exemption was to operate differently in the case of dealers with different intervals of assessment.
The exemption thus must operate either from the date of the Notification or from the commencement of the financial year.
Here, the nature of the tax, as disclosed in sections 4 and 5, is decisive.
In section (5), the tax is made leviable "on the taxable turnover every year of a dealer".
The divisions of the year and the taxable turnover into different parts are to make easy the collection of tax, and form part of the machinery sections.
If the tax is yearly and is to be paid on the taxable turnover of a dealer, then the exemption, whenever it comes in, in the year for which the tax is payable, would exempt sales of those goods throughout the year, unless the Act said that the Notification was not to have this effect, or the Notification fixed the date for the commencement of the exemption.
In the present case, the Notification did not fix the date from which the exemption was to operate, probably because the Act omitted to make such provision, enabling the State to do so, and the exemption must, therefore, operate for the whole year, during which it was granted.
926 The case of this Court, to which we have referred earlier, dealt with an Act under which the taxpayer could elect to pay the tax on the turnover of either the previous year or the year of assessment.
A notification in the middle of the assessment year was considered, and was held inapplicable in those cases where a dealer had elected to pay tax on the turnover of his previous year.
The majority view on that occasion pointed out that it was not possible to divide the assessment year in two portions, in which the tax was levied at one rate in one part and another rate in another part.
The case was confined to a dealer who had elected to pay the tax for a year different from that in which the exemption was granted.
Those facts do not exist here; but if the case is considered at all relevant, it supports the appellants rather than the respondents.
In the result, the appeal succeeds, and is allowed with costs.
KAPUR, J.
The facts of this case have been set out in the judgment of my learned brother Hidayatullah J., which I have had the advantage of reading and as I am unable to agree with the conclusion that the effect of the exemption given by Notification No. 34556 E & T. (CH)54/957 dated September 27, 1954, issued under s.6(2) of the Punjab General Sales Tax Act (Act 16 of 1948), hereinafter called the "Act", on unmanufactured tobacco becomes effective as from the beginning of the financial year, I proceed to give my reasons for the same.
The period in regard to which the disputed amount of sales tax is sought to be levied was from April. 1, 1954 to September 27, 1954.
Previous to the issuing of the notification of September 27, 1954, the Punjab Government issued a notification required under s.6(2) of the Act for the purpose of information of persons likely to be affected thereby 927 and to give them an opportunity to file any objections or suggestions in regard to the same.
A press note was issued on August 4, 1954 stating that no sales tax will be leviable on manufactured tobacco for the financial year 1954 55.
In order to resolve the controversy as to whether the exemption is effective from the commencement of the financial year or from the date of the notification it is necessary to refer to the scheme of the Act and the rules made thereunder.
The East Punjab General Sales Tax Act (Act 46 of 1948) as amended, made provision for the levy of general sales tax on the sale of goods in the Punjab and repealed the General Sales Tax Act of 1941.
Section 2 of the Act gives definitions and cl.(d) defines a "dealer" as a person. engaged in the business of selling or supplying goods.
In cl.(i) "Turnover" was defined to include "the aggregate of the amount of a sale and parts of the sale actually made by any dealer during the given period less any sum allowed as cash discount according to ordinary trade practice. " Sections 4 and 5 are the charging sections, the former makes the tax leviable prospectively and the latter prescribes the rate of tax.
The relevant portions of these sections when quoted are as follows: S.4(1) "Subject to the provisions of sections 5 and 6, every dealer except one dealing exclusively in goods declared tax free under section 6 whose gross turnover during the year immediately preceding the commencement of this Act exceeded the taxable quantum shall be liable to pay tax under this Act on all sales effected after the coming into force of this Act.
(2) Every dealer to whom sub section (1) does not apply or who does not deal exclusively in 928 goods declared to be tax free under section 6 shall be liable to pay tax under this Act on the expiry of 30 days after the date which his gross turnover first exceeds the taxable quantum." "Taxable quantum" mentioned in sub section (2) is defined in sub section (5) of section 4.
Thus a dealer is liable to sales tax if his sales in the year preceding the commencement of the Act are more than the taxable quantum (section 4.(1) or subsequently becomes so during any year.
section 5.(1) "Subject to the provisions of this Act, there shall be levied on the taxable turnover every year of a dealer a tax at such rates not exceeding two pice in a rupee as the State Government may by notification direct: Provided that Government may by notification in the Official Gazette declare that in respect of any goods or class of goods the dealer may pay such lump sum by way of composition of the tax payable under this Act as the Government may notify from time to time.
(2) In this Act the expression "taxable turnover" means that part of a dealer 's gross turnover during any period which remains after deducting therefrom.
(a) his turnover during that period on (i) the sale of goods declared tax free under section 6; (ii). . . . . .
(iii). . . . . " Section 6 which makes provision for giving exemption is as follows: S.6(1) "No tax shall be payable under this act on the sale of goods specified in the first column 929 of the Schedule subject to the conditions and exceptions, if any, set out in the corresponding entry in the second column thereof, and no dealer shall charge Sales Tax on the sale of goods which are declared tax free from time to time under this section.
(2) The State Government, after giving by notification not less than three months ' notice of its intention so to do, may by like notification add to or delete from the Schedule and thereupon the Schedule shall be deemed to be amended accordingly.
" Section 10 deals with payment of taxes of returns.
Clause (1) of section 10 provides: S.10 (1) "Tax payable under this Act shall be paid in the manner hereinafter provided at such intervals as may be prescribed.
" Section 11 is the section dealing with assessments.
It provides that if the Assessing Authority is satisfied that the returns furnished are correct and complete he shall assess the amount of tax due and if he is not so satisfied he can require the production of evidence which may be necessary and provision is also made for default in carrying out the notice issued.
Section 27 gives the Government the power to make rules.
The relevant portions of this section are clauses (h) and (i) which were as follows: (h) "the return to be furnished under sub section (3) of section 10, and dates by which and the authority to which, such returns shall be furnished; (i) the date by which returns for any period are to be furnished and the procedure to be followed for assessment under section 11." Under the rule making power rules have been framed by the Punjab Government and reference may be made to Rules 20 and 23.
Under the 930 former rule every registered dealer is required to furnish returns in Form ST VIII or ST XXIII if so permitted quarterly within thirty days from the expiry of each quarter.
Under the latter the Assessing Authority is given the power to tax the returns to be made monthly in the case of a dealer who would otherwise be required to furnish them quarterly or annually.
It was argued that the tax under s.5 was a yearly tax and therefore whenever the exemption may be given during a financial year the effect of the exemption will become operative as from the beginning of the financial year and emphasis was laid on the words "there shall be levied on the taxable turnover every year of a dealer a tax. " The argument was that it was a yearly tax on the turnover and not that every year a tax was to be levied on the taxable turnover i.e. aggregate of the sales made during a given period.
It was also argued that if the exemption of the turnover was to operate for the quarter in which the exemption was notified, the consequence will be absurd as those who pay the tax on quarterly returns or monthly returns will not be able to get the advantage of the exemption whereas those who pay on yearly returns will be so entitled.
I am unable to agree that the effect of the collection of the words in section 5 and particularly of the words "shall be levied on the taxable turnover every year. a tax" is what was argued by the appellants i.e. it was a yearly tax like the income tax.
Section 6 which provides for exemption specifically envisages the declaration from time to time of exemption of goods which are to be tax free.
The use of the words "tax free from time to time", in my opinion, means that the exemption may be given at any time during the year but it does not suggest that the exemption will operate from the beginning of the year and not from the time that the exemption is given.
If this were not so the the imposition of sales tax by excluding an 931 article exempt from tax from the schedule say about the end of the financial year would render the dealer liable to sales tax for the whole year even though he may not have collected any sales tax from his customers which under the law he would be entitled to do if the article is not in the schedule.
It will be an imposition which is not envisaged by the general scheme of the Sales Tax Act because the tax is exigible on taxable turnover in every return made monthly or quarterly or yearly as the case may be.
It appears that it is for that reason that in the definition of the word "turnover" the legislature has chosen the word "during the given period" i.e. the period for which the tax is leviable and is levied.
Similarly in subsection (2) of section 5 where sales tax is levied on the taxable turnover of a dealer the use of the word "during any period" is again repeated and in cl.(a) of that section reference is made to deduction from his turnover during that period of the sale of goods declared tax free under section 6 and that is for a good reason because section 6 itself mentions the declaration of tax free goods from time to time indicating that whenever during the year or at any time during the year when goods are notified to be tax free.
That the intention of the legislature was to give exemption from the date of the notification or such date as is mentioned in the notification is further supported by the provisions of sections 10 and 11 of the Act.
Under section 10 a dealer may be required to furnish his return at such intervals as may be prescribed and when he makes a return it must necessarily be of the goods on which during that period sales tax was exigible.
Under sub s.(4) of s.10 the dealer is required to pay into the Government treasury the full amount of tax according to his return.
Under section 11 the assessment of the tax either on the acceptance of the return or after production of such evidence as may be required is to be made.
From the provisions of a 11, it does 932 not appear that returns are to be scrutinised at the end of the year like in income tax cases and assessment made on the income of the year preceding the assessment year.
It is to be made in regard to each return whenever according to the rules the return has to be and is made.
The tax is also paid for that period i.e. on the taxable turnover for the period for which the return is made and which becomes the subject matter of assessment.
When the assessment has been made and the tax assessed is paid the assessment for that period is completed and all proceedings and liabilities and subjected to what is stated as to escaped periods.
This is further clear from the rules which have been made in regard to registration and furnishing of returns.
In the registration certificate it has to be mentioned as to what goods are free of tax.
Returns are required to be made in the Forms which are given i.e. Form VIII or Form XXIII.
A return under Form VIII may be monthly, quarterly or yearly.
A return to be made also provides for mentioning the turnover of tax free goods and goods which are exempted from sales tax.
If the contention of the appellants is correct, then after all the returns have been filed, the amount of sales tax according to the returns assessed and payments made, there will have to be proceedings for reassessment, remission or refund as the case may be in regard to those periods, if any goods are added to the schedule exempting them from sales tax after the assessment or any goods are deleted from the schedule thus making them liable for sales tax and that will be for the periods of which the assessment had already been completed and finished.
That does not seem to be the scheme of the Act.
It does not envisage reassessment for the purpose of refunding the tax assessed and paid on articles which were assessable at the time the assessment was made but became exempt later nor is it envisaged in the case of 933 articles excluded from the schedule.
Section 11(6) which deals with reassessments at the relevant time provided: "If upon information which has come into his possession the Assessing Authority is satisfied that any dealer has been liable to pay tax under this Act in respect of any period has failed to apply for registration, the Assessing Authority shall. . assess to the best of his judgment the amount of tax. .due from the dealer.
" The scheme of the Act and the rules made thereunder do not, in my opinion, show that the exemption becomes operative for the whole year whenever during the year the notification of exemption is issued even though it may be on the last day of the financial year.
I would therefore dismiss this appeal with costs.
By Court.
In accordance with the judgment of the majority, the appeal stands allowed with costs.

dataset_name: IN-Abs

summary:
Section 6(1) of the East Punjab General Sales Tax Act, 1948, provided that no tax shall be payable on the sale of goods specified in the Schedule to the Act and that no dealer shall charge sales tax on the sale of goods which were "declared tax free from time to time".
Sub section (2) of section 6 empowered the State Government by notification to add or to delete from the Schedule.
On September 27, 1954, the State Government issued a notification under section 6 (2) 914 adding item 51 relating to manufactured tobacco to the Schedule.
The appellant contended that sales tax was a yearly tax and hence the exemption, whenever given during the financial year, became operative as from the beginning thereof.
^ Held, (per Sinha, C. J., Hidayatullah, Shah and Mudholkar JJ., Kapur, J., dissenting) that the exemption operated for the entire financial year.
The tax was a yearly tax levied on the taxable turnover of a dealer every year though it was collected in some cases at the end of the year, in some cases quarterly and in other cases monthly.
If the exemption operated for the period for which the tax was payable according as it was annually, quarterly or monthly the tax would be different for different persons; those paying annually would get exemption for the whole year but those paying quarterly or monthly would get the benefit in the quarter or month of the notification and not for earlier quarters or months.
This could not have been intended.
The exemption whenever it came in, in the year for which the tax was payable, exempted sales throughout the year, unless the notification fixed the date for the commencement of the exemption.
Commissioner of Sales Tax, U. P. vs The Modi Sugar Mills Ltd., ; , referred to.
Per Kapur, J. The exemption became operative only from the date of the notification.
The tax was not a yearly tax.
The use of the words "tax free from time to time" in section 6 (1) showed that the exemption could be given at any time during the year and that it would operate from the date of the notification and not from the beginning of the financial year.
Otherwise, an exemption given or an imposition made near the end of the year will both operate from the beginning of the year.
This was never intended