judgement:
No. 120 of 1959.
Writ Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights.
Bhagirath Das and, B. P. Maheshwari, for the petitioner.
N. section Bindra and D. Gupta, for the respondent.
April 7.
The Judgment of the Court was delivered by 824 SARKAR, J.
The petitioner is a dealer registered under the Punjab General Sales Tax Act.
He filed returns of his sale turnovers for the four quarters of the financial year ending on March 31, 1955, and likewise, for the four quarters of the financial year ending on March 31, 1956.
In respect of each year the Sales Tax Assessing Officer served three successive notices on him on March 7, 1958, April 4, 1958, and August 18, 1959, requiring him to attend with the documents and other evidence in support of his returns.
In the last of the notices mentioned above it was stated that on failure to produce the documents and other evidence mentioned, the case would be decided "on best judgment assessment basis".
The petitioner did not comply with any of the notices, but after the receipt of the last notice he presented this petition under article 32 of the Constitution challenging the right of the authorities to make a best judgment assessment.
The question raised by the petitioner turns on section 11 of the Punjab General Sales Tax Act, relevant provisions of which are set out below.
section 11.
(1) If the Assessing Authority is satisfied without requiring the presence of registered dealer or the production by him of any evidence that the returns furnished in respect of any period are correct and complete, he shall assess the amount of tax due from the dealer on the basis of such returns.
(2)If the Assessing Authority is not satisfied without requiring the presence of a registered dealer who furnished the returns or production of evidence that the returns furnished in respect of any period are correct and complete, he shall serve on such dealer a notice in the prescribed manner requiring him, on a date and at a place specified therein, either to attend in person or to produce or to cause to be produced any evidence on which such dealer may rely in support of such returns.
. . . . . . . . . . . . . . . (4) If a registered dealer, having furnished returns in respect of a period, fails to comply with the terms of a notice issued under sub section (2), the 825 Assessing Authority shall within three years after the expiry of such period, proceed to assess to the best of his judgment the amount of the tax due from the dealer.
The contention of the petitioner is that at the date of the notice last mentioned the Sales Tax authorities had no right to proceed to make any beat judgment assessment as the three years within which only such assessment could be made had expired before then.
It seems to us that the contention of the petitioner is well founded.
The learned counsel for the respondent, the assessing authority, also frankly conceded that he 'found it difficult to contend to the contrary.
Sub section (4) of section 11 deals with the case of a dealer who has furnished returns in respect of a period and has thereafter been asked to produce evidence to support the returns but has failed to do so.
The subsection provides that in such a case the assessing authority may proceed to make an assessment which to the best of his.
judgment should be made irrespective of the returns.
The reason for this provision is that the correctness of the returns having been doubted by the assessing authority, the dealer has not availed himself of the opportunity afforded to him to remove these doubts.
The sub section however provides that the power can be exercised within the three years mentioned in it.
Quite plainly, the power cannot be exercised after these three years have gone by.
The question is, how to compute the three years? The sub section 'says "within three years after the expiry of such period".
So the three years have to be counted from the expiry of the period mentioned.
What then is that period? The words are "such period".
The period referred therefore is the period mentioned earlier.
in the sub section, and that is the period in respect of which returns had been furnished by the dealer.
This is also made clear by sub section
(1) of section 11.
That deals with a case where the returns are accepted.
Both sub sections
(1) and (4) deal with returns for the same period.
Now section 10(3) provides that 104 826 every registered dealer shall furnish such returns by such dates and to such authority as may be prescribed" "Prescribed" means prescribed by rules framed under the Act.
Under r. 20 of these rules, a registered dealer like the petitioner, had to furnish returns quarrerly.
The rules define "return period" as "the period for which returns are prescribed to be furnished by a dealer".
It would therefore appear that when sub sec.
(4) of section 11 talks of "returns in respect of a period", that refers in the case of the petitioner to the quarters in respect of which he submitted the returns.
We when come to this that the three years within which the authority could proceed to make the best judgment assessment had to be counted from the end of each quarter in respect of which returns had been filed.
Now the last of the quarters in respect of which the petitioner filed his returns ended on March 31, 1956.
So the assessing authority could not proceed to make a best judgment assessment in respect of this quarter after March 31, 1959.
In the case of the earlier quarters, of course, the three years had expired even prior to this date.
It is not in dispute that the assessing officer had not proceeded to make any assessment on the petitioner at the date of any of the notices.
In the present case therefore the notices given on August 18, 1959, that best judgment assessments would be made in respect of the quarters constituting the financial years 1955 and 1956, the last of which expired on March 31, 1956, were futile.
No such assessments could be made in respect of any of these quarters after March 31, 1959.
The petition must, therefore, be allowed.
A writ will issue restraining the respondent from making any best judgment assessment on the petitioner for sales tax for any quarter of the financial years 1955 and 1956.
The petitioner will get the costs of this petition.
Petition allowed.

summary:
Under the Punjab General Sales Tax Act, 1948, a dealer had to furnish his return every quarter according to the Rules and was also required to furnish evidence in support of the return if called for, and if he failed to do so the assessing authority could proceed to make an assessment to the best of his judgment, but this power could he exercised "within three years after the expiry of the period".
Held, that three years within which the authority could proceed to make the best judgment assessment had to be com puted from the end of such quarter in respect of which return had been filed.


judgement:
Appeal No. 209 of 1959.
Appeal from the judgment and order dated October 5, 1956, of the Patna High Court in Miscellaneous Appeal No. 367 of 1953.
L. K. Jha and R. C. Prasad, for the Appellant.
M. C. Setalvad, Attorney General for India, N. De and P. K. Mukherjee, for the respondents.
April 7.
The Judgment of the Court was delivered by VENKATARAMA AIYAR, J.
This is an appeal against the Judgment of the High Court of Patna in an appeal under the .
The appellant is the State of Bihar, and the respondents are a company registered under the Indian Companies Act, doing business as building contractors.
They entered into three contracts for the construction of aerodrome, hangarettes, buildings, stores and other works at Ranchi, the first of them being contract No. 21 of 1942 dated November 5, 1942, and the other two being contracts Nos. 6 and 8 dated April 5, 1943.
After the above works were completed, disputes arose between the parties over the bills and eventually by an agreement dated February 6, 1948, they were referred to the arbitration of one Col. A. W. section Smith.
The arbitrator made his award on June 4, 1948, and sent a copy thereof to the parties.
The respondents thereupon filed a petition under sections 17 and 20 of the Indian , for a decree in terms of the award.
The appellant filed objections thereto, and the petition was then registered as Title Suit No. 53 of 1951.
While this suit was pending, the arbitrator who had meantime left for Hong Kong sent to the court of the Additional Subordinate Judge of 829 Ranchi before whom the suit was pending a copy of the award duly signed by him, for being filed as provided in the Act.
Notices were issued by the court under section 14(2) of the Act, and, in answer thereto, the appellant filed an application to set aside the award on various grounds.
To this, the respondents filed their reply statement.
In view of this application, the respondents did not press their petition tinder sections 17 and 20 of the , which was in consequence dismissed, and the proceedings which commenced with the receipt of the award from the arbitrator were continued as Title Suit No. 53 of 1951.
After an elaborate trial the Additional Subordinate Judge, Ranchi, passed a decree in terms of the award except as to a part which he held to be in excess of the claim.
The appellant took the matter in appeal to the High Court of Patna which confirmed the decree of the Subordinate Judge but granted a certifi cate under articles 132 and 133(1) of the Constitution, and hence this appeal.
Though the controversy between the parties ranged in the courts below over a wide area,, before us, it was restricted to two questions whether there was a valid agreement of reference to arbitration binding on the Government and whether a decree could be passed on the unstamped copy of the award filed in the court.
On the first question, the appellant contends that the agreement for reference to arbitration does not comply with the requirements of section 175(3) of the Government of India Act, 1935, which was the Constitutional provision in force at the relevant date, and it is therefore void, that the award passed in proceedings founded thereon is a nullity and that no decree should be passed in terms thereof.
Section 175(3) is as follows: "Subject to the provisions of this Act.
with, respect to the Federal Railway authority, all contracts made in the exercise of the executive authority of the Federation or of a province shall be expressed to be made by the Governor General, or by the Governor of the Province, as the case may be, and all such contracts and all assurances of property 830 made in the exercise of that authority shall be executed on behalf of the Governor General or Governor by such persons and in such manner as he may direct or authorise.
" Under this section, a contract entered into by the Governor of a Province must satisfy three conditions.
It must be expressed to be made by the Governor; it must be executed; and the execution should be by such persons and in such manner as the Governor might direct or authorise.
We have now to examine whether the agreement to refer to arbitration dated February 6, 1948, satisfies the above conditions.
It expressed to be made between the Governor of Bihar and the respondents.
It is also a formal document executed by one Y. K. Lall, Executive, Engineer, Ranchi Division, and by the respondents.
So the only point that remains for consideration is whether the Executive Engineer was a person who was directed or authorised by the Governor to execute the agreement in question.
The appellant contends that he as not, and relies in support of his contention on a notification dated April 1, 1937, issued by the Government of Bihar.
That notification, in so far as it is material, is as follows: "In exercise of the powers conferred by sub section (3) of section 175 of the Government of India Act, 1935, the Governor of Bihar is pleased, in supersession of all existing orders, to direct that the undermentioned classes of deeds, contracts and other instrument may be executed on his behalf as follows: A.In the case of the Public Works Department (subject to any limit fixed by.
Departmental orders) 2.
All instruments relating to the execution of works of all kinds connected with buildings, bridges, roads, canals, tanks, reservoirs, docks and harbours and embankments, and also instrumets relating By Secretaries to Government, Chief Engineers, Superin tending Engineers, Divisional Officers, Sub divisional Offi cers, Assistant or Assistant Executive 831 to the construction of water Engineers, and the works, sewage works, the n Electric Inspector.
erection of machinery, and the working of coal mines.
. . . . . . . . 12.
All deeds and in By Secretaries and struments relating to any ' Joint Secretaries to matters other than those Government".
specified in heads 1 to 11.
There was a discussion in the courts below as to whether the present agreement fell within item 2 or item 12.
If the agreement could be held to be an instrument relating to the execution of works, it would fall within item 2, and the Executive Engineer would be a person authorised under this notification to enter into this contract, but if it does not fall within that item, it must fall within entry 12, in which case he would not be competent to execute the agreement.
Both the courts below have held that the agreement to refer to arbitration was not one relating to execution of works as that had been completed and the dispute related only to payment of the bills, and that further the essential feature of an arbitration agreement was the constitution of a private Tribunal and it could not therefore be brought within item 2 and that accordingly it fell within item 12.
But the learned Judges of the High Court were also of the opinion that Y. K Lall, the Executive Engineer had in fact been specifically authorised to execute the arbitration agreement, and that that was sufficient for the purpose of section 175(3).
The appellant impugns the correctness of this conclusion and contends that it is not warranted by the record.
It becomes, therefore, necessary to refer in some detail to the correspondence bearing on this point.
On July 26, 1947, Mr. Murrel, Secretary to the Government, wrote to Col. Smith as follows: "I am directed to say that the Government of Bihar propose to appoint you as Arbitrator for the settlement of a claim put forth by Messrs. Karam Chand Thapar and Brothers Limited in connection with the construction of the Hinoo Aerodrome at Ranchi Job 108 If You agree to undertake the 832 work. . the necessary forms of acceptance of appointment of Arbitrator etc.
may please be for warded to this Department for completion by the Government of Bihar and, by the Contractor.
" To this, Col. Smith sent a reply agreeing to act as arbitrator.
In that letter he also suggested that the contract between the parties might be suitably amended so as to permit arbitration.
This is significant, because under cl. 23 of the contract, all disputes between the parties had to be referred to the Superintending Engineer whose decision was to be final, and if that had been amended as suggested, the arbitration clause would have become part of the original contract and there would have been no occasion for the present contention.
Referring to the above suggestion for amending the agreement, the Secretary, Mr. Murrel, wrote on September 5, 1947, to Col. Smith that the opinion of the Legal Remembrancer would have to be got.
On January 19, 1948, Col. Smith wrote to the Secretary that he was ready to take up his duties as arbitrator and again desired that the contract should be amended so as to provide for arbitration.
On January 27, 1948, the Secretary to the Government informed Col. Smith that opinion had been received from the Legal Remembrancer that an agreement for arbitration should be executed in accordance with the provisions of the and that a "draft agreement (copy enclosed) has been drawn up accordingly and steps are being taken to execute it, as quickly as possible" On the same date, the Executive Engineer wrote to the respondents as follows: "It has since been decided by Government to determine your claims in connection with the above through arbitration conducted in accordance with the provisions of the 1 of 1940.
You are therefore requested to please attend the Divisional Office immediately to execute necessary agreement for the purpose." Pursuant to this letter, the respondents joined in the execution of the agreement dated February 6, 1948, along with the Executive Engineer for referring the 833 dispute to arbitration.
On February 25, 1948 the Secretary informed the arbitrator that the draft agreement had been slightly modified in consultation with the Government Pleader, and he also wrote to the Executive Engineer that certain formal corrections should be made in the agreement and signed by both the parties.
And that was done.
Having carefully gone through the correspondence, we agree with the learned Judges of the High Court that the Executive Engineer had been authorised by the Governor acting through his Secretary to execute the agreement for reference to arbitration.
It will be seen that it was the Secretary who from the very inception took the leading part in arranging for arbitration.
He was throughout speaking in the name of and on behalf of the Government and he did so "as directed".
The subject matter of the arbitration was a claim which concerned the Government.
The proposal at the earlier stages to amend cl.
23 of the original contract so as to include an arbitration shows that the intention of the parties was to treat the agreement for arbitration as part and parcel of that contract.
Even after the agreement was executed, the Secretary made corrections and modifications in the agreement on the basis that it was the Government that was a party thereto.
The conclusion from all this is, in our judgment, irresistible that Y. K. Lall, the Executive Engineer had been authorised to execute the agreement dated February 6, 1948.
It was suggested that the Secretary was possibly labouring under a mistaken notion that the agreement to refer to arbitration was covered by item 2 and acting under that misconception he directed Y. K. Lall to execute the agreement.
Even if that were so, that would not make any difference in the position, because the Secretary undoubtedly did intend that Y. K. Lall should execute the agreement and that is all that is required under section 175(3).
It was further argued for the appellant that there being a Government notification of a formal character, 834 we should not travel outside it and find authority in a person who is not authorised thereunder.
But section 175(3) does not prescribe any particular mode in which authority must be conferred.
Normally, no doubt, such conferment will be by notification in the Official Gazette, but there is nothing in the section itself to preclude authorisation being conferred ad hoc on any person, and when that is established the requirements of the section must be held to be satisfied.
In the result, we hold that the agreement dated February 6, 1948, was executed by a person who was authorised to do so by the Governor, and in consequence there was a valid reference to arbitration.
It is next contended that as the copy of the award in court was unstamped, no decree could have been passed thereon.
The facts are that the arbitrator ,sent to each of the parties a copy of the award signed by him and a third copy also signed by him was sent to the court.
The copy of the award which was sent to the Government would appear to have been insufficiently stamped.
If that had been produced in court, it could have been validated on payment of the deficiency and penalty under section 35 of the Indian Stamp Act, 1899.
But the Government has failed to produce the same.
The copy of the award which was sent to the respondents is said to have been seized by the police along with other papers and is not now available.
When the third copy was received in court, tile respondents paid the requisite stamp duty under section 35 of the Stamp Act and had it validated.
Now the contention of the appellant is that the instrument actually before the court, is, what it purports to be, "a certified copy", and that under section 35 of the Stamp Act there can be validation only of the original, when it is unstamped or insufficiently stamped, that the document in court which is a copy cannot be validated and "acted upon" and that in consequence no decree could be passed thereon.
The law is no doubt well settled that the copy of an instrument cannot be validated: That was held in The Rajah of, Bobbili vs Inuganti China Sitaramasani Garu (1), where it was observed: 835 "The provisions of this section (section 35) which allow a document to be admitted in evidence on payment of penalty, have no application when the original document, which was unstamped or was insufficiently stamped, has not been produced and, accordingly, secondary evidence of its contents cannot be given.
To hold otherwise would be to add to the Act a provision which it does not contain.
Payment of penalty will not render secondary evidence admissible, for under the stamp law penalty is leviable only on an unstamped or insufficiently stamped document actually produced in Court and that law does not provide for the levy of any penalty on lost documents", Therefore the question is whether the award which was sent by the arbitrator to the court is the original instrument or a copy thereof.
There cannot, in our opinion, be any doubt that it is the original and not a copy of the award.
What the arbitrator did was to prepare the award in triplicate, sign all of them and send one each to the party and the third to the court.
This would be an original instrument, and the words, "certified copy" appearing thereon are a mis description and cannot have the effect of altering the true character of the instrument.
There is no substance in this contention of the appellant either.
In the result, the appeal fails and is dismissed with costs.
Appeal dismissed.

dataset_name: IN-Abs

summary:
A dispute between the respondent company and the Government of Bihar over the bills for the amount payable to tile company in respect of the construction works carried out by it for the Government was referred to arbitration.
The agreement to refer to arbitration was executed on behalf of the Governor by L, an executive engineer, who had been specifically authorised to do so by a Secretary to the Government.
The arbitrator made his award and sent copies thereof to the parties.
The respondent applied to the Court under the provisions of the , for a decree in terms of the award.
The State filed objections thereto and the matter was registered as a suit.
While the suit was pending the arbitrator sent to the court a copy of the award duly signed by him for being filed as provided in the Act, and on the receipt thereof the respondent bad it validated on payment of the requisite stamp duty under section 35 of the Indian Stamp Act, 1899.
The appellant, the State of Bihar, contended that no decree could be passed on the basis of the award on the grounds (1) that the agreement for reference to arbitration did not comply with the requirements of section 175(3) of the Government of India Act, 1935, inasmuch as it was not signed by the person authorised to do so under the notification issued by the Government of Bihar on April 1, 1937, in exercise of the powers conferred by section 175(3), and (2) that the instrument before the court was a certified copy and that under section 35 of the Indian Stamp Act, 1899, a copy Could not be validated or acted upon.
Held, that section 175(3) of the Government of India Act, 1935, does not prescribe any particular mode in which authority must be conferred and that where authorisation is conferred ad hoc on any person, the requirements of the section must be held to be satisfied.
828 Held, further, that the award sent by the arbitrator to the court was the original and not a copy of the award and by applying the provisions of section 35 of the Indian Stamp Act, 1899, it was effectively validated.
The Rajah of Bobbili vs Inuganti China Sitaramasami Garu (1899) L.R. 26 I.A. 262, referred to.


judgement:
No. 65 of 1959.
Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights.
B. D. Sharma, for the petitioners.
H. N. Sanyal, Additional Solicitor General of India, B. Ganapathy Iyer and P. M. Sen, for the respondents.
April 10.
The Judgment of the Court was delivered by DAS GUPTA, J.
This application under article 32 of the Constitution is for the protection of fundamental rights under article 19(1)(f) and (g), article 31 and article 14 of the Constitution.
The second and the third applicants are merchants who used to import considerable quantities of glass chatons upto 1957.
The first applicant is an Association of merchants, some of whom were importers and some the actual users of glass chatons.
Import of glass chatons which form an important part of the raw materials for the manufacture of glass bangles and other similar articles of wear could, be made only on licences granted by licensing authorities.
Since 1955 the matter has been regu lated by the Imports (Control) Order, 1955.
This Order which was made by the Central Government in exercise of powers conferred by sections 3 and 4 A of the Import and Export Control Act, 1947, prohibited the import of a large number of goods including inter alia glass chatons, except under and, in accordance with a licence, granted on application by the licensing 864 authorities under the Act.
Policy statements are made from time to time by the Government of India, indicating the policy for the issue of Import licences.
The policy as regards the import of glass chatons for the period January, 1957 to the end of March, 1958 was that the import was totally prohibited. ' Since April 1958, the policy as laid down is that import was permitted only under the Export Promotion Scheme.
It appears that in ' view of this policy statement no application was made at all by the second or third applicants or other merchants for the import of glass chatons, in 1957 or thereafter and no licence was issued to them.
Licences were however issued in favour of the State Trading Corporation, for the import of glass chatons of the value of five lakhs of Rupees, for the period April September, 1958,and again, for the import of these goods of the value of Rs. 1,25,000 for the period October, 1958 to March, 1959.
The present application was made on April 27, 1959.
The prayer is that respondents 1 and 2 i.e.
, the Union of India and the Chief Controller, Imports, should be directed (i) to "forbear from giving the State Trading Corporation any preference over the petitioners, in the grant of permits", (ii) not to create a monopoly in favour of the State Trading Corporation, (iii) to cancel the import permits already granted in favour of respondent No. 3 the State Trading Corporation and the petitioners also prayed that the.
respondent No. 3 should be directed not to import on the basis of import licences already granted.
It has to be mentioned at once that the periods of the import permit "already granted" as referred to in the petition has already expired and consequently, the last two prayers mentioned above cannot possibly be granted.
There was no application at all by the second and the third applicants, or any of the merchants who form the association, the 1st appellant for the issue of any import licences; there can be no question therefore of respondents 1 and 2 being given any preference over the petitioners in the grant of permits Nor is there, as far as can be made out, any scheme to issue fresh licences in favour of the 865 State Trading Corporation so that apart from what has already happened there is no question of any future action "to create a monopoly in favour of the State Trading Corporation".
Therefore the petitioners cannot be given any relief on the present application.
Learned Counsel however submitted that so long as Para. 6(h) of the Imports (Control) Order, 1955, remains it will be useless for his clients to make any application for licences.
6 lays down a number of grounds on which the Central Government or the Chief Controller of Imports and Exports may refuse to grant a licence or direct any other licensing authority not to grant a licence.
The ground mentioned in the clause (h) is "if the licensing authority decide to canalise imports and the distribution thereof through special or specialised agencies or channels".
Learned Counsel has argued that this provision in clause (h) of Para.
6 is void being in contravention of article 19(1)(f) and (g), and article 31 of the Constitution.
He also urged that to the extent section 3 of the Imports and Exports Control Act, 1947, permits the Central Government to make an order as in Para.
6(h) section 3 itself is bad.
In view of these submissions the learned Counsel was permitted to urge his contentions against the validity of Para.
6(h) of the Imports (Control) Order, 1955, and also his limited attack against the validity of section 3 of the Imports and Exports Control Act, 1947.
The requirement as regards any goods that they cannot be imported except and in accordance with a licence is undoubtedly a restriction on the right to carry on trade in such goods and also on the right to acquire property.
Learned Counsel does not however contend that by itself this requirement of section 3 of the Imports and Exports Control Act is an unreasonable restriction.
His attack is only against the further restriction which follows from the provisions in section 6(h) of the Order that the Central Government or the Chief Controller of Imports and Exports may refuse to grant a licence or direct any licensing authority not to grant licences "if the licensing authority decides to canalise imports and the distribution thereof 866 through special or specialised agencies or channels".
The argument is that the further restriction.
on the right to carry on trade and the right to acquire property that results from this provision is totally unreasonable.
It is obvious that if a decision has been made that imports shall be by particular agencies or channels the granting of licence to any applicant outside the agency or channel would frustrate the implementation of that decision.
If therefore a canalization of imports is in the interests of the general public the refusal of imports licences to applicants outside the agencies or channels decided upon must necessarily be held also in the interests of the general public.
The real question therefore is: Is the canalization through special or specialized agencies or channels in the interests of the general public.
A policy as regards imports forms an integral part of the general economic policy of a country which is to have due regard not only to its impact on the internal or international trade of the country but also on monetary policy, the development of agriculture and industries and even on the political policies of the country involving questions of friendship, neutrality or hostility with other countries It may be difficult for any court to have adequate materials to come to a proper decision whether a particular policy as regards imports is, on a consideration of all the various factors involved, in the general interests of the public.
Even if the necessary materials were available it is possible that in many cases more than one view can be taken whether a particular policy as regards imports whether one of heavy customs barrier or of total prohibition or of entrustment of imports to selected agencies or channels is in the general interests of the public.
In this state of things the burden on the person challenging that the government of the country is not right in its estimate of the effects of a policy as regards imports in the general interests of the public will be very heavy indeed and when the Government decides in respect of any particular commodity that its import should be by a selected.
867 channel or through selected agencies the Court would proceed on the assumption that that decision is in the interests of the general public unless the contrary.
is clearly shown.
Consequently, we are unable to accept the argument that a decision that imports shall be canalised, is per se not a reasonable restriction in the interests of the general public.
We wish to make it clear that while the decision that import of a particular commodity will be canalised may be difficult to challenge, the selection of the particular channel or agency decided upon in implementing the decision of canalisation may well be Challenged on the ground that it infringes article 14 of the Constitution or some other fundamental rights.
No such question has how.
ever been raised in the present case.
The attack on the validity of Para. 6(h) of the Imports Control Order, 1955, therefore, fails.
The contention that section 3 of the Imports and Exports Control Act, 1947, is bad to the extent that it permits the government to make an order as in Para.
6(h) of the Imports Control Order, 1955, consequently also fails.
The attack on this provision in Para. 6(h) of the order that it contravenes article 31 is not even plausible.
Assuming for the purpose of this case that the right to carry on trade is itself property, it is obvious that there is no question here of the acquisition of that right.
What happens if a licence is refused to an applicant under Para.
6(h) is that the applicant can no longer carry on trade in these goods.
When licence is granted to the agencies or channels through which imports have been decided to be canalised, these agencies or channels 'can carry on trade but this is not because of an acquisition by these agencies or channels of the right to carry on trade which the unsuccessful applicants for licence had.
Article 31 of the Constitution has therefore no application.
It was next urged that the grant of licences to the third respondent, the State Trading Corporation of India while none has been granted to the second and the third petitioners has resulted in a denial of equal protection of laws guaranteed by article 14 of the Constitution.
If these petitioners had applied for licences 868 trader the Export Promotion Scheme and still the State Trading Corporation had been preferred it would perhaps have been necessary to consider whether the preference accorded to the Corporation was based on reasonable and rational grounds.
It is clear however that though it was open to these petitioners to apply for licences under the Export Promotion Scheme they made no application for licence thereunder.
There is to scope therefore for the argument that they have en discriminated against.
In the result, we are of opinion that the petitioners are not entitled Iwo any relief under article 32 of the Con. stitution.
The petition is accordingly dismissed with costs.
Petition dismissed.

summary:
The appellants were importers and users of glass chatons the import of which was prohibited except under a licence granted by the licensing authorities under the Import and Export Control Act, 1947, and the Imports (Control) Order, 1955.
The import was totally prohibited for some time but afterwards it was permitted under the Export Promotion Scheme and licence was issued in favour of the State Trading Corporation.
The appellants who made no application for licence contended inter alia that the provisions of para.
6(h) of the Imports (Control) Order, 1955, that the Central Government or the Chief Controller of Imports and Exports may refuse to grant a licence or direct any licensing authority not to grant licence if the licensing authority decided to canalise imports and the distribution thereof through special or specialised agencies or channels are unreasonable restrictions on the right to carry on trade 863 and to acquire property and as such contravene articles 14, 19(1) (f) & (g) and 31 of the Constitution.
Held, that the decision that import of a particular commodity shall be canalised by a selected channel or through selected agencies is a reasonable restriction in the interest of the general public.
The provisions of para.
6(h) of the Imports (Control) Order, 1955 and section 3 of the Imports and Exports Control Act, 1947, are valid and do not contravene articles 14, 19(1)(f) and (g).
Nor do they contravene article 31 of the Constitution as no question of acquisition of any right arises by the refusal of a licence.


judgement:
No. 164 01 1958.
Writ Petition under article 32 of the Constitution of India for the enforcement of Fundamental Rights.
N. C. Chatterjee and Naunit Lal, for the petitioners.
N. section Bindra and D. Gupta, for the respondent.
April 10.
The Judgment of the Court was delivered by AYYANGAR, J.
The constitutional validity of the Ay.
operative provisions of the Punjab Shops and Commercial Establishments Act, 1958 (Punjab Act 15 of 1958), which we shall hereafter refer to as the Act, is challenged in this writ petition filed under article 32 of the Constitution, seeking reliefs appropriate to such a challenge.
There are two petitioners and the nature of the business carried on by, them, which is set out in the 854 petition, indicates that they have combined with a view to bring up before the Court the implications of the enactment with reference to different types of business which trades in the Punjab might be ' carrying on and which would be impeded or restricted by the provisions of the Act.
The first petitioner states that he has a shop at Mandi Dabwali in Hissar District where he carries on business in the purchase and sale of grains, etc.
in wholesale.
The relevant averment in regard to the nature of his business is that the customers who supply him with goods bring them loaded in carts drawn by camels or bullocks and that these vehicles arrive at his godowns at all hours of the day and night.
He also states that for the purpose of the purchases or sales effected by him, he receives messages by telephone and telegram both during the day and the night.
These, according to him, render necessary, if he has to carry on business as he has been doing all along, that his place of business should be kept open practically the whole of the day and night, i.e., for all the 24 hours.
The second petitioner states that he is carrying on a retail business on a small scale, and that he employs no outsider but attends to all the work in the shop himself, with the assistance, if necessary, of the members of his family.
In this case also it is stated that the goods purchased are brought to him at all hours of the day and night and similarly he has to receive messages during the entire period.
It is in this background that the petitioners desire that the Court should view the restrictions imposed upon them by those provisions of the Act which are challenged in the petition.
We shall now proceed to set out he impugned provisions of the Act with a view to determine whether for all or any of the reasons set out in the petition,any of them could be said to constitute an unreasonable restriction on the right to carry on trade or business so as not to be protected by article 19(6) of the Constitution which is the gravamen of the complaint formulated in the petition.
The Act received the assent of the President on April 25, 1958, and was published in the Punjab 855 Gazette on May 1, 1958.
According to the preamble, it is an Act to provide for the regulation of conditions of work and employment in shops and commercial establishments.
The Act repealed and re enacted, with modifications, the Punjab Trade Employees Act, 1940, to which enactment also it would be necessary to advert in its proper place.
Section 1(3) of the Act provides that the Act shall come into force on such date as Government may, by notification appoint in this behalf and by a notification under this provision the Act was directed to come into force from June 1, 1958.
The Act, however,, did not of its own force apply to the entirety of the Punjab State, for section 1(4) enacted: "1(4).
It shall apply in the first instance to the areas specified in the Schedule, but Government may by notification direct that it shall also apply to such other area and on such date as may be specified in the notification." Mandi Dabwali where the petitioners carry on business is one of the local areas in the district of Hissar set out in the Schedule annexed.
We might here note that the main grievance of the petitioners appears to, be that it has not been brought into force in neighbouring local areas and that this disparity in the regulations is acting to the disadvantage of people carrying on business in the areas set out in the Schedule.
This, however, cannot obviously be a ground of constitutional grievance and learned Counsel therefore very properly did not rely on it except merely to draw our attention to this fact.
Section 2(iv) defines a 'a commercial establishment ' to which the Act applies as meaning "any premises wherein any business, trade or profession is carried on for profit", omitting the unnecessary words.
Section 2(v) defines 'day ' as meaning "the period of twenty four hours beginning at midnight", again omitting what is immaterial.
The operative provisions of the Act which were attacked in the petition are sections 7 and 9 and it would be convenient to set out their material terms: "7.
Hours of employment. (1) Subject to the 856 provisions of this Act, no person shall be employed about the business of an establishment for more than forty eight hours in any one week, and nine hours in any one day.
(2). . . . . . (3). . . . . . (4). . . . . . (5). . . . . . 9.
Opening and closing hours.
No establishment shall, save as otherwise provided by this Act, open earlier than ten o 'clock in the morning or close later than eight o 'clock in the evening; Provided that any customer who was in the establishment before the closing hour may be served during the period of fifteen minutes immediately following such hour; Provided further that the State Government may, by order and for reasons to be recorded in writing, allow an establishment attached to a factory to open at eight o 'clock in the morning and close at six o 'clock in the evening.
Provided further that the State Government may, by notification in the official Gazette, fix such other opening and closing hours in respect of any establishment or class of establishments, for such period and on such conditions, as may be specified in such notification.
" For the sake of completeness and to understand the scheme of the enactment we would set out the terms of section 10 also, which reads: "10.
Close day. (1) Save as otherwise provided by this Act, every establishment shall remain close on every Sunday: Provided that, in the case of an establishment attached to a factory, the employer may substitute the close day of such establishment so as to correspond to the substituted close day of the factory in the same manner and subject to the same conditions as are laid down in this behalf in the .
(2) (i) The employer of an establishment shall in the prescribed form intimate to the prescribed 857 authority the working hours and the period of interval of the employed persons within fifteen days of the date of registration of the establishment.
(ii)The employer of an establishment may change, the working hours and the period of interval once in a quarter of the year by giving intimation in the prescribed form to the prescribed authority at least fifteen days before the change is to take place.
(3) Notwithstanding anything contained in subsection (1), the employer of an establishment may open his establishment on the close day if (a) such day happens to coincide with.
a festival; and (b) employees required to work on that day are paid remuneration at double the rate of their normal wages calculated by the hour".
It is urged by Mr. Chatterji learned Counsel for the petitioners that having regard to the nature of the petitioners ' business, whose features we have set out earlier, it would be impossible for them to carry it on in the manner in which they have been doing up to now, unless the Act permitted the first petitioner to work without regard to the restrictions imposed by the limitation as to hours of work of employees imposed by section 7(1) of the Act, and both the petitioners without regard to the hours for the opening and closing of the "establishments" under section 9.
Before entering on a discussion of the constitutional propriety of the restrictions imposed we may point out that the provisions of the Act contemplate that establishments might fall under three categories:. (1) where it is necessary in the public interest, and having regard to the service which they render to the community, that the normal hours of working should not be subject to the restrictions imposed by sections 9 or 10, (2) those in which there is no need for complete freedom from these restrictions, but in which an adjustment merely as regards the hours set out in section 9 is sufficient, (3) those in which neither the requirements of the trade nor, of course, the interest of the general public 858 would suffer if the establishment adjusted its operations in conformity with the Act.
The first head is dealt with by section 4 of the Act which reads: "4.
Provisions of sections 9 and 10 not applicable to certain establishments.
Nothing in sections 9 and 10 shall apply to (a) clubs, hotels, boarding houses, stalls and refreshment rooms at the railway stations; (b) shops of barbers and hair dressers; (c) shops dealing mainly in meat, fish, poultry, eggs, dairy produce (except ghee), bread, confectionery, sweets, chocolates, ice, ice cream, cooked food, fruit, flowers, vegetables or green fodder; (d) shops dealing mainly in medicines or medical or surgical requisites or appliances and establishments for the treatment or care of the sick, infirm, destitute or mentally unfit; (e) shops dealing in articles required for funerals, burials or cremations; (f) shops dealing in pans (betel leaves), biris or cigarettes, or liquid refreshments sold retail for con sumption on the premises; (g) shops dealing in newspapers or periodicals, editing and despatching sections of the newspaper offices and offices of the news agencies; (h) cinemas, theatres and other places of public entertainment; (i) establishments for the retail sale of petrol and petroleum products used for transport; (j) shops in regimental institutes, garrison shops and troop canteens in cantonments; (k) tanneries; (1) retail trade carried on at an exhibition or show, if such retail trade is subsidiary or ancillary only to the main purpose of the exhibition or show; (m) oil mills not registered under the ; (n) brick and lime kilns; (o) commercial establishments engaged in the manufacture of bronze and brass utensils so far as 859 it is confined to the process of melting in furnaces; and (p) saltpetre refineries." Similarly by notification of the State Government State dated June 1, 1958, the following classes of establishments wer e exempted from the provisions of SS. 9 and 10: "(1) establishments dealing in the retail sale of Phullian, Murmura, sugar coated grams and Reoris; (2) commercial colleges of shorthand and type writing.
(vide Punjab Government notification No. 6567.
S Lab.
58/1737 RA, dated June 1, 1958.) (3)all booking offices of the Transport (vide Punjab Government notification No. 6147/ 5815 C Lab 58/1741 RA, dated June 1, 1958).
" (2)The second category of cases are those covered by the second and third provisos to section 9.
Action has been taken under the third proviso to section 9, by a notification which was issued at the same time as when the Act was brought into force which runs in the following terms: "The following categories of establishments in the State of Punjab shall not open earlier than eight o 'clock in the morning or close later than six o 'clock in the evening during the period from 1st May to thirty first August every year: (1)establishments dealing in timber, manufacture of furniture, tents, supply of furniture or tents on hire, cycles or their repairs or painting or dyeing; (2)establishments, other than tailoring establishments, which include 'workshops ' or other establishments where articles are produced, adapted or manufactured, with a view to their use, transport or sale; and (3) establishments dealing in agricultural produce brought for sale by producers.(vide Notification No. 6567.
S Lab 58/1735 RA, dated June 1, 1958)." (3) Those outside section 4 and which are not covered by notifications under the provisos to section 9 have, of 860 course, to adjust their business in accordance with the requirements of the Act.
It is in the context of these exceptions and the elasticity for which provision is made to meet the imperative requirements of particular types of business, that the constitutional objection has to be considered.
The constitutional objection is that, the impugned provisions impose unreasonable restrictions on the fundamental right of the petitioners "to carry on their trade or business".
The regulation of contracts of labour so as to ameliorate their conditions of work is in reality a problem of human relationship and social control for the advancement of the community.
The public and social interest in the health and efficiency of the worker is, at the present day, beyond challenge.
Our Constitution does not protect or guarantee any fundamental right in the nature of the provision in article 1, section 10(1), of the U. section Constitution against "impairment of the obligation of contracts".
The only test of constitutional validity therefore is whether the provision in the impugned law, which is enacted to avoid physical overstrain of the worker, and so as to afford him better conditions of work, and more regulated hours, thus ensuring to him a reasonable amount of leisure factors which would render the restrictions in the interest of the general public, is unreasonable from the point of view of the employer.
For answering this question it would be necessary to ask are the restrictions necessary, or do they go beyond what is reasonably needed to protect the worker? Judged by this test, neither the 48 hour week, nor the specification of the opening and closing hours can be said to have gone beyond what by modern standards are necessary for ensuring the health and efficiency of the employee.
It might also be added that the concept of what is necessary to secure the welfare of labour, or indeed of the elements which determine its content are neither of them fixed or static, but are dynamic, being merely the manifestation or index of the social conscience as it grows and develops from time to time.
Besides, this point regarding restrictions of this 861 nature being unreasonable is concluded against the petitioners by the decision of this Court in Manohar Lal vs The State of Punjab (1) judgment on which was delivered on November 11, 1960.
The provision there impugned was section 7 of the Punjab Trade Employees Act, 1940, (which, as stated earlier, had been repealed and re enacted with modifications by the Act) which directed that the shops and establishments to which it applied should remain closed on one day in the week (corresponding to section 10 of the Act of 1958).
The appellant before this Court was a small trader who did not employ any person under him but who, like the second petitioner before us, himself with the members of his family attended to all the requirements of his shop.
Basing himself on this feature he challenged the validity of the provision which restricted his right to carry on his business in such manner as he chose on all the seven days in the week.
In repelling these objections this Court said: "The ratio of the legislation is social interest in the health of the worker who forms an essential part of the community and in whose welfare, therefore, the community is vitally interested.
It is in the light of this purpose that the provisions of the Act have to be scrutinized. .
The learned Judges of the High Court have rested their decision on this part of the case on the reasoning that the terms of the impugned section might be justified on the ground that it is designed in the interest of the owner of the shop or establishment himself and that his health and welfare is a matter of interest not only to himself but to the general public.
A restriction imposed, with a view to secure thi s purpose would, in our opinion, be clearly saved by article 19(6).
Apart from this, the constitutionality of the impugned provision might be sustained on another ground also, viz., with a view to avoid evasion of provisions specifically designed for the protection of workmen employed.
It may be pointed out that acts innocent in themselves may be prohibited and the restrictions in that regard would (1) ; 862 be reasonable, if the same were necessary to secure the efficient enforcement of valid provisions.
The inclusion of a reasonable margin to ensure effective enforcement will not stamp a law otherwise valid as within legislative competence with the character of unconstitutionality as being unreasonable." These observations, in our opinion, clearly apply and suffice to support the validity of the related provisions here impugned.
The petition fails and is dismissed with costs.
Petition dismissed.

summary:
Section 7 of the Punjab Shops and Commercial Establishments Act, 1958, provided that no person shall be employed about the business of an establishment for more than forty eight hours in any week and nine hours in any one day.
Under section 9 of the Act no establishment shall save otherwise provided by the Act,open earlier than ten o 'clock in the morning or close later than eight o 'clock in the evening.
The petitioners challenged the constitutional validity of the aforesaid provisions of the Act on the ground that having,, regard to the nature of their business, it would be impossible for them to carry it on in the manner in which they were doing unless the Act permitted them to work without regard to the restrictions imposed by the limitation as to hours of work of employees under section 7(1) or the hours for the opening and closing of the establishments under section 9, and that, 853 consequently, these provisions imposed unreasonable restric tions on their fundamental right to carry on their trade or business under article 19(1)(e) of the Constitution of India.
The petitioners ' case was that their business was such that the customers who supplied them with goods brought them in vehicles which arrived at their godowns at all hours of the day and night and that they received messages by telephone and telegram similarly both during day and night.
These according to them rendered it necessary that their place of business should be kept open practically for all the 24 hours of the day.
Held, that ss.7 and 9 of the Punjab Shops and Commercial Establishments Act, 1958 are intra vires the Constitution of India.
The test of constitutional validity is whether the impugned provisions of the Act which were enacted to afford the worker better conditions of work and more regulated hours so as to avoid physical overstrain and ensure to him a reasonable amount of leisure in the interest of the general public, are unreasonable restrictions from the point of view of the employer and go beyond what is reasonably needed to protect the worker.
judged by this test, neither the 48 hour week, nor the specification of the opening and closing hours could be said to have gone beyond what by modern standards are necessary for ensuring the health and efficiency of the employee.
Manohar Lal vs The State of Punjab, ; , followed.


judgement:
Appeal No. 90 of 1956.
Appeal by special leave from the judgment and decree dated August 5, 1953, of the Bombay High Court in Appeal from the Appellate Decree No. 915 of 1951.
M. section K. Sastri, for the appellant.
A. G. Ratnaparkhi, for respondent No. 1. 1961.
April 12.
The Judgment of the Court was delivered by RAGHUBAR DAYAL, J.
This appeal, by special leave, is against the judgment and decree of the High Court of Bombay, dismissing the suit of the plaintiff appellant.
The plaintiff sued for a declaration that the property in suit which is situate at Mouje Digvale, a village held by khots in the district of Ratnagiri, was owned by him, was under his management and that the defendants had no right or interest therein.
He claimed title to the property on the basis of the sale of occupancy rights under the sale deed executed in his favour by Sitabai on February 10, 1945.
Sitabai was the widow of Vishram Anna Shirsat, who succeeded Ram Raghu Shirsat, the occupancy tenant of the land in suit.
Ram Raghu Shirsat sold the occupancy rights in the land in suit to Laxman Chandba Raut by a deed dated March 8, 1892.
By a compromise in a civil suit between the heirs of Laxman Chandba Raut and Tanu Daulat Gavade Sakaram, the heir of Laxman Raut got 3/5ths share and Tanu Daulat got 2/5ths share in these occupancy rights.
Dattatraya Bhikaji Khot Kulkarni, a paternal uncle of respondent No. 1, purchased.
the shares of these persons by 907 the sale deeds dated December 14,1903, and February 13, 1904.
On Kulkarni 's death, respondent No. 1 became the owner of the property.
Respondents nos.
2 to 4 are the tenants of respondent No. 1.
The land in suit is khoti land as defined in el.
(10) of section 3 of the Khoti Settlement Act, 1880 (Bom.
Act 1 of 1880), hereinafter called the Act.
It is not disputed that Ram Raghu Shirsat was the occupancy tenant of the land in suit and that he could not transfer his tenancy right without the consent of the khot, which, according to cl.
(2) of section 3, includes a mortgagee lawfully in possession of khotki and all co sharers in a khotki.
It is also admitted that the transferors of the afore mentioned sale deeds of 1892 in favour of the predecesror in interest of respondent No. 1, or of the sale deed of 1945 in favour of the appellant, did not obtain the consent of the khot before executing the deed of transfer.
The plaintiff alleged that the sale deed in favour of respondent No. 1 was void and that therefore he had title to the suit land on the basis of the sale deed in his favour.
Respondent No. 1 contended that Ram Raghu Shirsat lost his rights in the property in suit after he had executed the sale deed on March 8, 1892, and that, therefore the plaintiff obtained no title on the basis of the sale deed in his favour.
The trial Court held the sale deed of 1892 to be good sale deed and binding on the plaintiff and dismissed the suit.
On appeal, the Assistant Judge reversed the decree and decreed the suit holding that a transfer of the occupancy rights in the suit lands by Ram Raghu Sirsat in favour of Laxman Raut was void and that the plaintiff obtained good title under the sale deed in his favour in view of the amendment of section 9 of the Act by section 31 of the Bombay Tenancy Act, 1939 (Act XXIX of 1939), by which no consent of the khot was ,necessary for executing the sale deed in 1945.
Respondent No. 1 preferred a second appeal to the High Court which set aside the decree of the Assistant Judge and restoring the decree of the trial Court, dismissed the suit.
It held that the sale deed in favour 908 of the plaintiff too would be hit by the provisions of s.9 of the Act.
It further held that the provisions of s.9 indicate that there was no absolute prohibition against a transfer of the occupancy right.
A transfer by an occupancy tenant without the consent of the khot cannot be held to be void for all purposes and it would be invalid only in so far as it would be contrary to the right of the khot and not otherwise.
It therefore held the transfer in favour of the respondent No. 1 's predecessor in interest in 1892 not to be void.
It is the correctness of this order that is challenged in this appeal.
This appeal has no force.
Section 31 of the Bombay Tenancy Act, 1939, made amendments to section 9 of ado.
the Act and the section after amendment reads: "The rights of khots and privileged occupants shall be heritable and transferable". 'Privileged occupant ' included a permanent tenant under cl.
(5) of section 3 of the Act.
The Bombay Tenancy Act received assent of the Governor of Bombay on April 2, 1940, but it came into force in April 1946 when the Government issued the necessary notification in exercise of the powers conferred under subs.
(3) of section 1 of that Act.
It is clear therefore that section 9, as it stood on February 10, 1945, when Sitabai executed the sale deed in favour of the appellant, made the rights of permanent tenants nontransferable without the consent of the khot, and that therefore the sale in favour of the appellant was as much hit adversely by the provisions of section 9 of the Act as the sale of the land in suit in favour of the predecessor in interest of respondent No. 1.
It is therefore not necessary to determine the question whether the sale was absolutely void or voidable as held by the Court below, as neither of the two sales has been challenged by the khot whose consent for the transfer was necessary.
The plaintiff has no title whether a transfer by a permanent tenant without the consent of the khot be void or voidable.
If such a transfer is void, the sale in favour of the appellant did not convey any title to him.
If such a sale was merely voidable at the instance of the khot, the first sale in favour of the 909 respondent No. 1 's predecessor in interest was not avoided by the khot, and therefore validly conveyed title to him.
Consequently no title passed to the plaintiff under the sale deed in his favour as his transferor had no title.
In either case the plaintiff fails to prove his title to the land in suit.
The dismissal of his suit is therefore correct.
We accordingly dismiss this appeal with costs.
Appeal dismissed.

summary:
The land in suit was Khoti land land section 9 of the Khoti Settlement Act, 1880, prior to its amendment prohibited the. transfer of the occupancy right without the consent of the Khot.
Section 31 of the Bombay Tenancy Act, 1939, which came into force from April 1946, amended section 9 of the Khoti Settlement Act by which no consent of the Khot was necessary for transferring the occupancy rights in the land.
In 1892, R sold his occupancy right without the consent of tile Khot to L, the predecessor in interest of respondent No. 1.
In 1945, R 's successor again sold the same occupancy right to the appellant also without the consent of the Khot.
The appellant 's case was that the sale deed in 1892 in favour of the predecessor in interest of respondent No. 1 was void as the transfer of the occupancy right was made without consent of the Khot; whereas respondent No. 1 contended that R by the sale deed in 1892 had already lost his right to the property in suit and therefore R 's successors had no title to pass in 1945 in favour of the appellant.
Held, that the occupancy right in a Khoti land could not be transferred without consent of the Khot prior to April 1946, when the Bombay Tenancy Act, 1939, came into force 114 906 Held, further, that in the present case as both the sales of 1892 and 1945 were without the consent of the Khot, it was not necessary to determine whether such a transfer was void or voidable, If void, the plaintiff had no title.
If voidable, the first sale in 1892, validly conveyed title to respondent No 1 's predecessor in interest, and consequently no title passed to the plaintiff under the sale deed in 1945, as the transferor had no title.


judgement:
Civil Appeal No. 282 of 1955.
Appeal by special leave from the judgment and order dated March 20, 1953, of the Bombay High Court in Income tax Reference No. 31 of 1951.
A. V. Viswanatha Sastri and I. N. Shroff, for the appellants.
K. N. Rajagopal Sastri and D. Gupta, for the respondent.
April 12.
The Judgment of the Court was delivered by KAPUR, J.
This is an appeal against the judgment and order of the High Court of Bombay in a reference under section 8(5) of the Taxation on Income (Investigation Commission) Act, 1947 (Act XXX of 1947), hereinafter termed the 'Act '.
The assessee company was the applicant before the High Court and is the appellant 919 before us and the Commissioner of Income tax, Bombay City, was the respondent in the High Court and is the respondent here also.
Being a reference under section 8(5) of the Act, it was heard and decided by three judges of the High Court.
The assessee company is a private limited company which was incorporated on May 6, 1943, with a paid up capital of Rs. 20 lacs.
It was promoted by two groups of persons who for the sake of convenience may be called the 'Morarka Group ' and the 'Bubna Group '.
The Apollo Mills Co., Ltd. of Bombay with a capital of Rs. 50 lacs divided into 25 lacs shares of Rs. 2 each, had as its Managing Agents M/s. E. D. Sassoon & Co. Ltd., who for the sake of brevity, will be referred to in this judgment as the Sassoons '.
They held 19,76,000 shares out of the 25 lacs.
The promoters of the assessee company entered into an agreement with the Sassoons on April 27, 1943, by which the Sassoons agreed to transfer their Managing Agency in the Mill Co. for Rs. 12 1/2 lacs to the promoters of the assessee company and the whole of their holding of 19,76,000 shares at Rs. 4 4 0 per share, i.e., for Rs. 83,98,000.
These shares were to be transferred to the promoters or to the company which they were proposing to float.
By clause (3) of this agreement the sale of the Managing Agency and the transfer of the shares was to be simultaneously completed and neither party could require the completion of the one without the other.
On November 1, 1943, a tripartite agreement was entered into between the Sassoons as Assignors, the promoters of the company as Confirming Parties and the assessee company as Assignees.
By that agreement the Managing Agency rights were for .ally transferred to the assessee company so also the Share Certificates for the whole of holding of the Sassoons in the Mill Co. and the necessary blank transfer deeds went) Before the agreement of April 27, 1943, and during the course of negotiations with the Sassoons the promoters of the assessee company entered into an arrangement with some share brokers for the sale of a large portion of the total holding of 19,76,000 shares 920 of the Mill Co. The price of these shares varied from Rs. 5 8 0 to Rs. 5 13 0.
In all 10,00,000 shares out of the total holding of the Mill Co. were sold to these brokers and: they in turn sold these block of shares in smaller lots to a number of purchasers.
Some shares were sold later; 1,20,000 shares were transferred to 13 nominees of the Morarka Group at cost price.
As a result of sale of all these 13,74,000 shares the assessee company received a sum of Rs. 16,52,600 as excess over the purchase price.
The remaining shares the assessee company retained.
The assessee company submitted that the profits of the entire holding of the shares had not been worked out and had therefore not been transferred to the profit and loss account.
The assessee company was taxed by the Income tax Officer but the sum of Rs. 16,52,600 which was the excess of the sale price over the purchase price of 13,74,000 shares was held not to be profit and therefore not taxable.
When the Act came into force the case of the assessee company was referred to the Investigation Commission by the Central Government and the Investigation Commission made its report on November 9, 1949, in Case No. 406A.
By this report the Commission directed that appropriate assessment be made under the Indian Income tax Act for the assessment year 1945 46 and the Excess Profits Tax Act for the corresponding chargeable accounting period.
At the instance of the assessee company the Commissioner of Income tax, Bombay City, by his order dated May 1, 1951, referred the following question to the High Court: "Whether on the facts found by the Commission the sum of Rs. 16,52,600 being the excess price realised by the sale of 13,74,000 shares of the Mill Company, was 'profit ' and as such taxable or whether it was either of the nature of a capital appreciation or a casual and non recurring receipt and as such exempt from taxation under Section 4(3)(vii) of the Income tax Act." The High Court reformulated the question as follows: 921 "Whether there were materials to justify the finding of the Tribunal that the transaction of purchase and sale of 13,74,000 shares was an adventure in the nature of trade?" and answered the question so formulated in the affirmative and therefore against the assessee company.
In its application for reference under section 8(5) of the Act the assessee company wanted some other questions also to be referred but the Investigation Commission only referred the question which has been set out above.
The assessee company therefore took out a Notice of Motion on November 8, 1952, which was dismissed by the High Court on the ground that either the questions which were sought to be raised did not arise out of the finding of the Commission or they were included in the question which had been referred and answered by the High Court.
Although the High Court did not so hold, the Notice of Motion was barred by time, being filed after more than six months allowed under section 66(2) of the Indian Income tax Act.
Against this judgment and order of the High Court the assessee company has come in appeal to this Court by special leave.
This appeal is brought against the judgment of the High Court answering the question referred and therefore in its advisory jurisdiction.
The jurisdiction which this Court exercises in appeal is of the same character and therefore any question which was not referred to the High Court cannot be allowed to be raised at this stage.
Consequently the constitutional question in regard to discrimination under article 14 of the Constitution which is now sought to be raised cannot be raised.
The main question which would then survive for decision is the nature of transaction relating to the sale of 13 lacs odd shares and whether or not the sale was an adventure in the nature of trade and therefore the amount of Rs. 16,52,600 the excess of sale price over the purchase price of the share is a Revenue Receipt and therefore taxable profits or is it a Capital Receipt and therefore not liable to tax.
The Investigation Commission by their order dated May 1, 1949, found: 922 (1) that a distinction should be made between the 6 lacs shares which the assessee company intended to and did retain and the 13 lacs odd shares which it intended to and did sell; the former was kept in order to enable the assessee company to make their Managing Agency rights effective.
(2) During the negotiations between the Sassoons and the promoters of the.
assessee company, the promoters of the assessee company had started negotiations with certain brokers for the transfer of 13 lacs odd shares soon after the arrangement between the Sassoons and the assessee company was completed.
(3) From the very beginning the intention of the promoters of the assessee company was to sell all the 13 lacs odd shares and in pursuance thereof they were sold.
(4) The paid up capital of the assessee company was Rs. 20 lacs only and according to the agreement they had to take the whole block of shares belonging to the Sassoons and pay for the shares as well as for the Managing Agency both of which were separately valued in the agreement.
It was therefore necessary and it was intended to sell the 13 lacs odd shares in order to pay off the Sassoons both for the Managing Agency and the shares.
The inference drawn from this by the Commission was that a distinction had to be drawn between the 6 lacs shares which the assessee company intended to retain and did in fact retain and the 13 lacs odd shares which they intended to sell and did sell.
(5) that the intention to sell which the assessee company entertained from the very outset was a complete answer to the argument that the acquisition was in the nature of an investment.
In giving its finding the Commission said: "Aggregating the 121 lakhs paid for the Manag ing Agency right and the full price of 6 lakhs and odd shares at Rs. 4 4 0 per share, the capital investment must amount to 121 lakhs and 251 lakhs, i.e., 38 lacs and odd.
By deducting therefrom the profits of Rs. 16,52,600, the Company showed a capital investment of Rs. 21,54,200 and with the addition 923 of a few sundry items, it was brought up to Rs. 22,06,408 (see para 7 supra).
" From this finding the inference drawn by the Commission was that the sale of 13 lacs odd shares was an adventure in the nature of trade.
The High Court reformulated the question which has already been quoted and it was contended that the High Court was in error in narrowing down the scope of the question referred by the Commission.
It is not necessary to adjudicate upon this argument because in our opinion taking the question as referred to be a proper question arising out of the report of the Investigation Commission the answer to the first part thereof would,still be in the affirmative.
Inconsidering the question whether the transaction is or is not an adventure in the nature of trade we have to take into consideration the intention of the assessee keeping in view the "legal requirements which are associated with the concept of trade or business".
The inference from the facts found by the Investigation Commission, i.e., whether the assessee company 's transaction in purchasing and selling 13 lacs odd shares is or is not an adventure in the nature of trade is a mixed question of law and fact and the legal effect of the facts found by the Investigation Tribunal is a question of law.
See M/s. Ramnarain Sons (Pr.) Ltd. vs Commissioner of Income tax, Bombay (1).
It was argued on behalf of the assessee company that: (1) that the dominant idea with which the whole transaction was entered into was to obtain the Managing Agency of the Apollo Mills; (2) that the assessee company was forced to buy the whole block of shares, i.e., 19,76,000 shares by the Sassoons because they were not prepared to part with the Managing Agency without the whole of their stock in the mill company; (3) that as the assessee company did not not have sufficient amount of money, their capital being only Rs. 20 lacs, it was to implement the tripartite agreement dated November 1, 1943, that the sale was made; and (1) (1961] 2 S.C.R. 904, 908. 924 (4) that the Memorandum of Association of the assessee company showed that it was a holding company and dealing in shares was not one of its objects.
The agreement shows that the Sassoons had separately evaluated the Managing Agency and the shares held in the Apollo Mills Co.
As the Investigation Commission has found, it was never the intention of the assessee company to retain the whole block of shares.
Before the agreement was entered into they had made arrangement for the sale of the bulk of shares which were to be transferred by the Sassoons and therefore division of the shares into two sets was made by the promoters of the assessee company and the assessee company themselves and was not the result of anything done by the Investigation Commission.
In; support of his contention that the amount of Rs. 16,52,600 was in the nature of Capital Receipt, reliance was placed on the judgment of this Court in M/s. Ramnarain 's case (1) but there are certain features and details which distinguish that case from the present case.
It was held in that case that the question had to be decided in the light of the intention of the assessee and the assessee in that case bad purchased the shares of the Dawn Mills not as a business transaction.
That was clear from the fact that the assessee bad purchased the shares at Rs. 2,321 8 0 per share and the market price was only Rs. 1,610, and the purpose of acquisition of such a large block of shares at a price exceeding the market price by a million rupees was the acquisition of the Managing Agency, which yielded the inference that the intention of purchasing the shares in that case was not to acquire them as a part of the trade of the assessee in shares but for obtaining the Managing Agency of the Mills.
There was no separate price paid for the Managing Agency and the shares purchased and the Managing Agency acquired were both assets of a capital nature and the shares did not constitute stock in trade of a trading venture.
In the present case the facts as shown were entirely different.
(1) ; , 908. 925 Counsel for the assessee company also relied on Kishan Prasad & Co. Ltd. vs Commissioner of Income tax, Punjab (1).
In that case the Managing Director of the company which was formed for the purpose of carrying on general business and trade of commercial undertaking and dealing in bills, hundis and other securities, entered into an agreement with a sugar syndicate by which the company was to be given the Managing Agency of a Mill of the sugar syndicate when such mill was erected in lieu of the company subscribing shares worth 3 lacs, and undertaking to sell shares worth 2 lacs.
It was further provided that if the mill was not erected the assessee company was to be paid a commission on the amount invested by them.
The Managing Director died and the assessee company sold the shares and thus received Rs. 2 lacs more than they had expended.
The question was whether Rs. 2 lacs were receipts from business and not a mere appreciation in capital.
It was held that that amount was not a result of an adventure in the nature of trade but was merely the result of an investment.
It was found as a fact that the object of the company was merely to obtain the Managing Agency of the mill which would have been an asset of an enduring nature bringing profits but there was from the very inception no intention on the part of the company to resell the shares either at profit or otherwise.
It appears that it was not contested that the conclusion to be drawn from those facts was that the investment in the purchase of shares in the circumstances of the case of a capital nature, and profits arising therefrom were an accretion to the capital.
In that ease the court was trying to find out the intention of the assessee (the company) and taking all the circumstances into consideration it, came to the conclusion that it was a case not of profits arising out of an adventure in the nature of trade but the, intention of the assessee company was to invest its monies and therefore the excess arising out of sale of the shares was an accretion to the capital.
That case must be taken to have been decided on its facts as (1) 926 indeed was the decision in M/s. Ramnarain Son 's case (1).
Counsel for the assessee company referred to other cases: Tata Hydro Electric Agencies, Bombay vs The Commissioner of Income tax, Bombay Presidency & Aden (2); Commissioner of Income tax, Central and United Provinces, Lucknow vs Messrs. Motiram Nandram (3), Jones vs Leeming (4) and Commissioner of Inland Revenue vs Reinhold (5).
It is unnecessary to re view these cases in any detail because they are clearly distinguishable in material respects and were decided on their own special facts.
In Tata Hydro Electric Agencies ' case (2) the question for decision was whether 25% of the commission earned which was paid to the two financiers was expenditure deductible under section 10(2)(ix) and it was held that it was not because the obligation to make the payment was in consideration of acquiring the Managing Agency and the right to conduct business and not for the purpose of producing profits in the conduct of business.
Similarly in Commissioner of Income tax vs Messrs. Motiram Nandram (3) the expenditure was for securing the agency which was to carry on business.
Sir George Rankin said at p. 81: "The question in such a case a,% the present must be "what is the object of the expenditure?" and it must be answered from the standpoint of the assessees at the time they made it that is, when they were embarking upon the business of organizing agents for the company." Jones vs Leeming (4) was a case of an isolated transaction.
The finding was that it was not in the nature of trade.
Commissioner of Inland Revenue vs Reinhold(5) was ' decided on its own facts.
Another case decided by this court upon which counsel for the appellant relied was Saroj Kumar Mazumdar vs Commissioner of Income tax, West Bengal, Calcutta (6) but that case was also decided on its own facts and it was held that there was no clear evidence in support of (1) [1961] 2.C.R. 004, 908 (3) (1939) L. R. 67 I. A. 71 (5) (1953) 34 T C. 389.
(2) (1937) L. R. 64 I. A. 215.
(4) (6) [1959] SUPP.
2 S C.R. 846.
927 the inference of the Appellate Tribunal that the land was purchased with the sole intention of selling it later at a profit.
The English and Scottish cases on which the appellant relied were considered by the House of Lords in Edwards vs Bairstow (1).In that case the assessees who were the respondents embarked on a joint venture to purchase and complete a spinning plant agreeing between themselves not to hold it but to make a quick resale.
With that object in view they approached and there were diverse negotiations and the whole plant was sold in about two years ' time at a profit of about pound 18,000 and for that purpose incurred commission for help in effecting sales, for insurance and other expenses.
The General Commissioners found that it was not an adventure in the nature of trade to justify an assessment to income tax under Case 1 of Schedule D to the Income tax Act, 1918.
It was held that the facts led inevitably to the conclusion that the transaction was an adventure in the nature of trade and that the Commissioner 's inference to the contrary should be set aside.
Counsel for the respondent next relied on a Judgment of this Court in G. Venkataswami Naidu & Co. vs The Commissioner of Income tax (2) in which it was held that the presence of all the relevant factors may help the Court to draw the inference that the transaction is in the nature of trade but it is not a matter of counting the number of facts and circumstances for and against.
What is important is to consider the distinctive character and it is the total effect of all the relevant factors that determines the character of the transaction.
All these cases are illustrative.
As was said by Gajendragadkar, J., in the above mentioned case the totality of circumstances of a case and the pros and cons have to be considered and inference drawn from those facts whether a particular transaction was in the nature of trade or was merely an investment and the resulting excess from the transaction was therefore profit which was taxable or was merely an accretion to the capital.
In the instant case (1) ; (2) [1959] SUPP.
1 S.C.R. 646.
928 the pi of its from the transaction that consisted of buying the Managing Agency of the Mill Company and the block of shares held by the Sassoons were in our view the profits of an adventure in the nature of trade.
The two groups, Morarka and Bubnas, put Rs. 20 lacs into the assessee company which was floated for the acquisition of the Managing Agency and shares of the Mill Company which were beyond the holding capacity of the assessee company.
That company never intended to hold the whole block of shares.
It or its promoters before even entering into the agreement of purchase and during the course of negotiations for the purchase had entered into arrangements with different brokers for the sale of shares or at least of a bulk of those shares which were subsequently sold at a profit and but for that sale the transact ion could not have been completed by the assessee company.
The purchase of shares was not with the intention of holding them, the intention of the assessee was just the contrary and by the sale at a profit of the shares actually sold the assessee company expected to and did finance the completion of the transaction and thus was enabled to secure the Managing Agency and keep 6 lacs shares.
This inescapably was a transaction of a commercial nature.
It had all the attributes of an adventure in the nature of trade.
The contention that dealing in buying and selling of shares was not one of its objects is without substance.
The Investigation Commission found that dealing in shares was within the objects of the assessee company and this is one circumstance in the totality of the circumstances which must be considered, though by itself it is not determinative of the question.
All the circumstances lead to the inference which was rightly drawn by the Investigation Commission and by the High Court.
The answer to the first part of the question referred by the Investigation Commission must therefore be in the affirmative.
It was contended that the question should not have been reframed and we have therefore proceeded to answer the question as framed by the Investigation Commission.
In our opinion the question even as framed must be answered in the affirmative.
929 The Notice of Motion to raise other questions in the High Court was rightly dismissed.
Apart from the fact that the Notice of Motion was barred by time and there was no application for condonation of delay, the questions which were sought to be raised were rightly held either to be covered by the question answered or they did not arise at all.
The constitutional question under article 14 of the Constitution cannot be raised in these proceedings because as we have said above this Court is exercising its advisory jurisdiction and its power is confined to the questions which arise in an appeal.
This appeal must therefore be dismissed with costs.
Appeal dismissed.

summary:
The assessee company was promoted with the idea of obtaining the Managing Agency of the Appollo Mills from M/s. Sassoon total of 25 lakhs shares of RS.
2 each.
According to the agreement the assessee company bad to take the whole of the block of shares belonging to the Sassoons and pay at Rs. 4 4 0 per share Rs. 12 1/2 lakhs for the managing agency.
As the assessee company had only RS.
20 lakhs as its paid up capital, it was necessary to sell 13 lakhs odd shares in order to pay off the Sassoons both for the Managing Agency and the shares.
Therefore during the course of negotiations the promoters of the assessee company entered into an agreement with some brokers for the sale of Rs. 19,76,000 shares.
As a result of the sale of shares the assessee company received a sum of Rs. 16,52.600 as excess over the purchase price which amount on taxation was held by the Income tax Officer not to be profits and therefore not taxable.
The case of the assessee company was referred to the Investigation Commission.
The Commission found that it was not the intention of the assessee company to retain the whole block of shares and that the sale of 13 lakhs odd shares was an adventure in the nature of trade, and directed that appropriate assessment be made, under the Indian Income tax Act and Excess Profits Tax Act.
At the instance of the assessee company the question was referred to the High Court under section 8(5) of the Taxation on Income (Investigation Commission) Act, 1947, which held that there were materials to justify the finding of the Commission that the purchase and sale of about 13 lakhs odd shares was an adventure in the nature of trade.
An appeal was taken to the Supreme Court against this order.
Held, that in considering the question whether the transac tion was or was not an adventure in the nature of trade, the court had to take into consideration the intention of the assessee 918 keeping in view the "legal requirements which are associated with the concept of trade or business" In the present case, the transaction that consisted of buy ing the managing agency of the Mill Company and the block of shares held by Sassoons was inescapably one of a commercial nature and had all the attributes of an adventure in the nature If of trade.
Held, further, that the jurisdiction which this Court would exercise in appeal was of the same character that a High Court would exercise.
Thus the question under article 14 of the Constitution could not be raised in these proceedings because this Court like the High Court was exercising its advisory jurisdiction and its power was confined to the question which arose before the High Court.
M/s. Ramnarain Sons (Pr.) Ltd. vs Commissioner of Income tax, Bombay; , , Tata Hydro Electric Agencies, Bombay vs The Commissioner of Income tax, Bombay Presidency & Aden, (1037) L.R. 64 I.A. 215, Commissioner of, Income tax, Central and United Provinces, Lucknow vs M/s. Motiram Nandram, (1939) L.R. 67 I.A. 71, Jones vs Leeming, [1930) A.C. 415, Commissioner of Inland Revenue vs Reinhold, and Saroj Kumar Mazumdar vs Commissioner of Income tax, West Bengal, Calcutta, [1959] SUPP.
2 S.C.R. 846, distinguished.
Kishan Prasad & Co. vs Commissioner of Income tax, Punjab, , Edwards vs Bairstow, ; and G. Venkataswami Naidu & Co. vs The Commissioner of Income tax, [1959] SUPP.
1 S.C.R. 646, discussed.


judgement:
Appeal No. 294 of 1955.
Appeal by special leave from the Judgment and Order dated the 7th September, 1955, of the Nagpur High Court, in Civil Revision No. 833 of 1954.
B.B. Tawakley, (K. P. Gupta, with him for the appellant.
R. section Dabir and R. A. Govind, for respondent No. 1. 1955.
December 2.
The Judgment of the Court was delivered by BOSE J.
The appellant was a candidate for the office of President of the Municipal Committee of Damoh.
The respondents (seven of them) were also candidates.
The nominations were made on forms supplied by the Municipal Committee but it turned out that the forms were old ones that had not been brought up to date.
Under the old rules candidates were required to give their caste, but on 23 7 1949 this was changed and instead of caste their occupation had to be entered.
The only person who kept himself abreast of the law was the first respondent.
He struck out the word "caste" in the printed form and wrote in "occupation" instead and then gave his occupation, as the new rule required, and not his 1031 caste.
All the other candidates, including the appellant, filled in their forms as they stood and entered their caste and not their occupation.
The first respondent raised an objection before the Supervising Officer and contended that all the other nominations were s; invalid and claimed that he should be elected as his was the only valid nomination paper.
The objection was overruled and the election proceeded.
The appellant secured the highest number of votes and was declared to be elected.
The first respondent thereupon filed the election petition out of which this appeal arises.
He failed in the trial Court.
The learned Judge held that the defect was not substantial and so held that it was curable.
This was reversed by the High Court on revision.
The learned High Court Judges referred to a decision of this Court in Rattan Anmol Singh vs Atma Ram(1) and held that any failure to comply with any of the provisions set out in the various rules is fatal and that in such cases the nomination paper must be rejected.
We do not think that is right and we deprecate this tendency towards technicality; it is the substance that counts and must take precedence over mere form.
Some rules are vital and go to the root of the matter: they cannot be broken; others are only directory and a breach of them can be overlooked provided there is substantial compliance with the rules read as whole and provided no prejudice ensues; and when the legislature does not itself state which is which judges must determine the matter and, exercising a nice discrimination, sort out one class from the other along broad based, commonsense lines.
This principle was enunciated by Viscount Maugham in Punjab Co operative Bank Ltd., Amritsar vs Incometax Officer, Lahore(2) and was quoted by the learned High Court judges ' "It is a well settled general rule that an absolute enactment must be obeyed or fulfilled exactly, but it is sufficient if a directory enactment be obeyed or fulfilled substantially".
(1) ; (2) [1940] L.R. 07 I.A. 464, 476, 1032 But apart from that, this is to be found in the Act itself.
The learned High Court Judges were of opinion that the directions here about the occupation were mandatory.
That, we think, is wrong.
The present matter is governed by section 18 of the Central Provinces and Berar Municipalities Act (II) of 1922.
Among other things, the section empowers the State Government to "make rules under this Act regulating the mode. . of election of presidents. ." and section 175(1) directs that "all rules for which provision is made in this Act shall be made by the State Government and shall be consistent with this Act", Now one of the provisions of the Act, the one that directly concerns us, is set out in section 23: "Anything done or any proceeding taken under this Act shall not be questioned on account of any defect or irregularity not affecting the merits of the case".
The rules have therefore to be construed in the light of that provision.
Rule 9 (1)(i) states that " each candidate shall. .deliver to the Supervising Officer a nomination paper completed in the form appended and subscribed by the candidate himself as assenting to the nomination and by two duly qualified electors as proposer and seconder".
The amended form requires the candidate to give, among other things, his name, father 's name, age, address and occupation; and rule 9(1)(iii) directs that the Supervising Officer "shall examine the nomination papers and shall decide all objections which may be made to any nomination and may either on such objection or on his own motion, after such summary enquiry, if any, as he thinks necessary, refuse any nomination on any of the following grounds: * * * * 1o33 (C) that there has been any failure to comply with any of the provisions of clause (i). . " It was contended that the word "may" which we have underlined above has the force of "shall" in that context because clause (a) of the rule reads "(a) that the candidate is ineligible for election under section 14 or section 15 of the Act".
It was argued that if the candidate 's ineligibility under those sections is established, then the Supervising Officer has no option but to refuse the nomination and it was said that if that is the force of the word "may" in a case under clause (a) it cannot be given a different meaning when clause (c) is attracted.
We need not stop to consider whether this argument would be valid if section 23 had not been there because the rules cannot travel beyond the Act and must be read subject to its provisions.
Reading rule 9(1) (iii) (c) in the light of section 23, all that we have to see is whether an omission to set out a candidate 's occupation can be said to affect "the merits of the case".
We are clear it does not.
Take the case of a man who has no occupation.
What difference would it make whether be entered the word "nil" there, or struck out the word "occupation" or placed a line against it, or just left it blank? How is the case any different, so far as the merits are concerned, when a man who has a occupation does not disclose it or misnames it, especially as a man 's occupation is not one of the qualifications for the office of President.
We are clear that this part of the form is only directory and is part of the description of the candidate;, it does not go to the root of the matter so long as there is enough material in the paper to enable him to be identified beyond doubt.
It was also argued that there was a reason for requiring the occupation to be stated, namely, because section 15(k) of the Act disqualified any person who "holds any office of profit" under the Committee.
But disclosure of a candidate 's occupation would not necessarily reveal this because the occupation need only be stated in general terms such as "service" or 1034 "agriculture" and need not be particularised; also, in any 'event, section 15 sets out other grounds of dis qualification which are not required to be shown in the form.
As regards our earlier decision.
That was a case in which the law required the satisfaction of a particular official at a particular time about the identity of an illiterate candidate.
That, we held, was the substance and said in effect that if the law states that A must be satisfied about a particular matter, A 's satisfaction cannot be replaced by that of B; still less can it be dispensed with altogether.
The law we were dealing with there also required that the satisfaction should be endorsed on the nomination paper.
That we indicated was mere form and said at page 488 "If the Returning Officer had omitted the attestation because of some slip on his part and it could be proved that he was satisfied at the proper time, the matter might be different because the element of his satisfaction at the proper time, which is of the substance, would be there, and the omission formally to record the satisfaction could probably, in a case like that, be regarded as an unsubstantial technicality".
A number of English cases were cited before us but it will be idle to examine them because we are concerned with the terms of section 23 of our Act and we can derive no assistance from decisions that deal with other laws made in other countries to deal with situations that do not necessarily arise in India.
The appeal succeeds and is allowed with costs here and in the High Court.
The order of the High Court is set aside and that of the Civil Judge restored.

summary:
The appellant was a candidate for the office of President of the Municipal Committee, Damoh.
The nomination was made in an old form under the old rules which required a candidate to enter his caste.
Under the new rules this was changed and occupation had to be stated instead, which none except the respondent No. I had done.
Objection to the validity of the appellant 's nomination paper was overruled by the Supervising Officer.
The appellant secured the highest number of votes and was declared elected.
The respondent No. 1, thereupon, filed the election petition.
He failed in the Election Tribunal which held that the defect was not substantial and was curable.
The High Court, however, reversed this decision in revision, holding that failure to comply 'with any of the provisions set out in the rules was fatal and in such cases the nomination paper should be rejected.
1030 Held, that the rule requiring the occupation of the candidate to be stated in the nomination form was directory and not mandatory In character and as the failure to comply with it did not affect the merits of the case as laid down in section 23 of the Act, the election could not be set aside on that ground.
Rattan Anmol Singh vs Atma Ram ([1955] 1 S.C.R. 481), dis tinguished.
Courts should not go by mere technicalities but look to the substance.
Some rules may be vital, while others are merely directory, and a breach of these may be overlooked, provided there is substantial compliance with the rules read as a whole and no prejudice ensues.
When the Act does not make a clear distinction, it is the duty of the court to sort out one class from the other along broad based commonsense lines.
Punjab Co operative Bank Ltd., Amritsar vs Income Tax Office? , Lahore ([1940] L.R. 67 I.A. 464), referred to.