judgement:
Civil Appeal No. 207 of 1956.
Appeal from the judgment and decree dated November 5, 1952, of the Madras High Court in Appeal No. 852 of 1948.
R. Thiagarajan and G. Gopalakrishnan, for the appellant.
Ganapathy Iyer, for respondent No. 3. 1962.
January 11.
The Judgment of the Court was delivered by VENKATARAMA AIYAR, J.
This is an appeal against the Judgment of the High Court of Madras, dismissing the suit filed by the appellant, as Muthavalli of the Jumma Masjid, Mercara for possession of a half share in the properties specified in the plaint.
The facts are not in dispute.
There was a joint family consisting of three brothers, Santhappa, Nanjundappa and Basappa.
Of these, Santhappa died unmarried, Basappa died in 1901, leaving behind a widow Gangamma, and Najundappa died in 1907 leaving him surviving his widow Ammakka, who succeeded to all the family properties as his heir.
On the death of Ammakka, which took place in 1910, the estate devolved on Basappa, Mallappa and Santhappa, the sister 's grandsons of 557 Nanjundappa as his next reversioners.
The relationship of the parties is shown in the following genealogical table.
Basappa | | | | | Santhappa Nanjundappa Basappa Mallammal d. 1907 d. 1901 | =Ammakka =Gangamma | d.1910 | | Ramegowda Mallegowda | | | | | | Basappa Mallappa Santhappa On August 5, 1900, Nanjundappa and Basappa executed a usufructuary mortgage over the properties which form the subject matter of this litigation, and one Appanna Shetty, having obtained an assignment thereof, filed a suit to enforce it, O.S. 9 of 1903, in the court of the Subordinate Judge, Coorg.
That ended in a compromise decree, which provided that Appanna Shetty was to enjoy the usufruct from the hypotheca till August, 1920, in full satisfaction of all his claims under the mortgage, and that the properties were thereafter to revert to the family of the mortgagors.
By a sale deed dated November 18, 1920, exhibit III, the three reversioners, Basappa, Nallappa and Santhappa, sold the suit properties to one Ganapathi, under whom the respondents claim, for a consideration of Rs. 2,000.
Therein the vendors recite that the properties in question belonged to the joint family of Nanjundappa and his brother Basappa, that on the death of Nanjundappa, Ammakka inherited them as his widow, and on her death, they had devolved on them as the next reversioners of the last male 558 owner.
On March 12, 1921, the vendors executed another deed, exhibit IV, by which exhibit III was rectified by inclusion of certain items of properties, which were stated to have been left out by oversight.
It is on these documents that the title of the respondents rests.
On the strength of these two deeds, Ganapathi sued to recover possession of the properties comprised therein.
The suit was contested by Gangamma, who claimed that the properties in question were the self acquisitions of her husband Basappa, and that she, as his heir, was entitled to them.
The Subordinate Judge of Coorg who tried the suit accepted this contention, and his finding was affirmed by the District Judge on appeal, and by the, Judicial Commissioner in second appeal.
But before the second appeal was finally disposed of, Gangamma died on February 17, 1933.
Thereupon Ganapathi applied to the revenue authorities to transfer the patta for the lands standing in the name of Gangamma to his own name, in accordance with the sale deed exhibit III.
The appellant intervened in these proceedings and claimed that the Jumma Masjid, Mercara, had become entitled to the properties held by Gangamma, firstly, under a Sadakah or gift alleged to have been made by her on September 5, 1932, and, secondly, under a deed of release executed on March 3, 1933, by Santhappa, one of the reversioners, relinquishing his half share in the properties to the mosque for a consideration of Rs. 300.
By an order dated September 9, 1933, exhibit II, the revenue authorities declined to accept the title of the appellant and directed that the name of Ganapathi should be entered as the owner of the properties.
Pursuant to this order, Ganapathi got into possession of the properties.
The suit out of which the present appeal arises was instituted by the appellant on January 2, 1945, for recovery of a half share in the properties that 559 had been held by Gangamma and for mesne profits.
In the plaint, the title of the appellant to the properties is based both on the gift which Gangamma is alleged to have made on September 5, 1932, and on the release deed executed by Santhappa, the reversioner, on March 3, 1933.
With reference to the title put forward by the respondents on the basis of exhibit III and exhibit IV, the claim made in the plaint is that as the vendors had only a spes succession is in the properties during the lifetime of Gangamma, the transfer was void and conferred no title.
The defence of the respondents to the suit was that as Santhappa had sold the properties to Ganapathi on a representation that he had become entitled to them as reversioner of Nanjundappa, on the death of Ammakka in 1910, he was estopped from asserting that they were in fact the self acquisitions of Basappa, and that he had, in consequence, no title at the dates of exhibit III and exhibit IV.
The appellant, it was contended, could, therefore, get no title as against them under the release deed exhibit A, dated March 3, 1933.
The District Judge of Coorg who heard the action held that the alleged gift by Gangamma on September 5, 1932, had not been established, and as this ground of title was abandoned by the appellant in the High Court, no further notice will be taken of it.
Dealing next with the title claimed by the appellant under the release deed, exhibit A executed by Santhappa, the District Judge held that as Ganapathi had purchased the properties under exhibit III on the faith of the representation contained therein that the vendors had become entitled to them on the death of Ammakka in 1910, he acquired a good title under section 43 of the , and that exhibit A could not prevail as against it.
He accordingly dismissed the suit.
The plaintiff took the matter in appeal to the High Court, Madras, and in view of the conflict of authorities on the question in that Court, the case was refer 560 red for the decision of a Full Bench.
The learned Judges who heard the reference agreed with the court below that the purchaser under exhibit III had, in taking the sale, acted on the representation as to title contained therein, and held that as the sale by the vendors was of properties in which they claimed a present interest and not of a mere right to succeed in future, section 43 of the applied, and the sale became operative when the vendors acquired title to the properties on the death of Gangamma on February 17, 1933.
In the result, the appeal was dismissed.
The appellant then applied for leave to appeal to this Court under article 133(1)(c), and the same was granted by the High Court of Mysore to which the matter had become transferred under section 4 of Act 72 of 1952.
That is how the appeal comes before us.
The sole point for determination in this appeal is, whether a transfer of property for consideration made by a person who represents that he has a present and transferable interest therein, while he possesses, in fact, only a spes successionis, is within the protection of section 43 of the .
If it is, then on the facts found by the courts below, the title of the respondents under exhibit III and exhibit IV must prevail over that of the appellant under exhibit A.
If it is not, then the appellant succeeds on the basis of Ex A. Section 43 of the runs as follows: "Where a person fraudulently or erroneously represents that he is authorised to transfer certain immovable property and professes to transfer such property for consideration such transfer shall, at the option of the transferee, operate on any interest which the transferor may acquire in such property at any time during which the contact of transfer subsists.
561 Nothing in this section shall impair the right of transferees in good faith for consideration without notice of the existence of the said option.
" Considering the scope of the section on its terms, it clearly applies whenever a person transfers property to which he has no title on a representation that he has a present and transferable interes therein, and acting on that representation, the transferee takes a transfer for consideration.
When these conditions are satisfied, the section enacts that if the transferor subsequently acquires the property, the transferee becomes entitled to it, if the transfer has not meantime been thrown up or cancelled and is subsisting.
There is an exception in favour of transferees for consideration in good faith and without notice of the rights under the prior transfer.
But apart from that, the section is absolute and unqualified in its operation.
It applies to all transfers which fulfil the conditions prescribed therein, and it makes 1.
O difference in its application, whether the defect of title in the transferor arises by reason of his having no interest whatsoever in the property, or of his interest therein being that of an expectant heir.
The contention on behalf of the appellant is that section 43 must be read subject to section 6 (a) of the which enacts that, "The chance of an heir apparent succeeding to an estate, the chance of a relation obtaining a legacy on the death of a kinsman or any other mere possibility of a like nature, cannot be transferred.
" The argument is that if section 43 is to be interpreted as having application to Cases of what are in fact transfers of spes successionis, that will have the effect of nullifying section 6 (a), and that therefore it would be proper to construe section 43 as limited to cases of transfers other than those falling within .
In effect, this argument involves importing 562 into the section a new exception to the following effect; "Nothing in this section shall operate to confer on the transferee any title, if the transferor had at the date of the transfer an interest of the kind mentioned in section 6 (a).
" If we accede.
to this contention we will not be construing s.43.
but rewriting it.
"We are not entitled", observed Lord Loreburn L. C., in Vickers vs Evans (1), "to read words into an Act of Parliament unless clear reason for it is to be found within the four corners of the Act itself." Now the compelling reason urged by the appellant for reading a further exception in section 43 is that if it is construed as applicable to transfers by persons who have only spes successionis at the date of transfer, it would have the effect of nullifying section 6(a).
But section 6(a) and section 4 relate to two different, subjects, and there is no necessary conflict between them; Section 6 (a) deals with certain kinds of interests in property mentioned therein, and prohibits a transfer simpliciter of those interests.
Section 43 deals with representations as to title made by a transferor who had no title at the time of transfer, and provides that the transfer shall fasten itself on the title which the transferor subsequently acquires.
Section 6 (a) enacts a rule of substantive law, while section 43 enacts a rule of estoppel which is one of evidence.
The two provisions operate on different fields, and under different conditions, and we see no ground for reading a conflict between them or for outing down the ambit of the one by reference to the other.
In our opinion, both of them can he given full effect on their own terms, in their respective spheres.
To hold that transfers by persons who have only a spes successionis at the date of transfer are not within the protection afforded by section 43 would destroy its utility to a large extent.
It is also contended that as under the law there can be no estoppel against a statute transfers 563 which are prohibited by section (6a) could not be held to be protected by section 43.
There would have been considerable force in this argument if the question The fell to be decided solely on the terms of section 6 (a).
Rules of estoppel are not to be resorted to for defeating or circumventing prohibitions enacted by Statutes on grounds of public policy.
But here the matter does not rest only on section 6 (a).
We have in addition, section 43, which enacts a special provision for the protection of transferees for consideration from persons who represent that they have present title, which, in fact, they have not.
And the point for decision is simply whether on then facts the respondents are entitled to the benefit of this section.
If they are, as found by the courts below, then the plea of estoppel raised by them on the terms of the section is one pleaded under, and not against the statute, The appellant also sought to rely on the decisions wherein it has been held that a plea of estoppel could not be raised against a millor who had transferred property on a representation that he was of age, and that section 43 was inapplicable to such transfers, vide Sadiq Ali Khan vs Jai Kishori Gadigeppa vs Balanagauda (2) Ajudhia Prasad vs Chandan Lal(3)But the short answer to this contention is that section 43 deals with transfers which fail forwant of title in the transferor and not want of capacity in him at the time of transfer.
It may further be observed in this connection that the doctrine of estoppel has been held to have no application to persons who have no contractual capacity where the claim is based on contract, vide Mahomed Syedol Ariffin, vs Yeoh Oai Gark (4); Levine vs Brougham (5), Leslie Ltd. section Sheil); Khan Gul vs Lakha Singh (7).
Decisions on transfers by minors therefore are of no assistance in ascertaining the true scope of section 43.
564 So far we have discussed the question on the language of the section and on the principles applicable thereto.
There is an illustration appended.to section 43, and we have deferred consideration thereof to the last as there has been a controversy as to how far it is admissible in construing the section.
It is as follows: "A, a Hindu, who has separated from his father B, sells to C three fields, X, Y and Z, representing that A is authorized to transfer the same.
Of these fields Z does not belong to A, it having been retained by B on the partition; but on B 's dying A as heir obtains Z. C, not having rescinded the contract of sale, may require A to deliver Z to him.
In this illustration, when A sold the field Z to C, he had only a spes successionis.
But he having subsequently inherited it, became entitled to it.
This would appear to conclude the question against the appellant.
But it is argued that the illustration is repugnant to the section and must be rejected.
If the language of the section clearly excluded from its purview transfers in which the transferor had only such interest as is specified in section 6(a), then it would undoubtedly not be legitimate to use the illustration to enlarge it.
But far from being restricted in its scope as contended for by the appellant, the section is, in our view, general in its terms and of sufficient amplitude to take in the class of transfers now in question.
Its is not to be readily assumed that all illustration to a section is repugnant to it and rejected.
Reference may, in this connection, be made to the following observations of the judicial Committee in Mahomed Shedol Ariffin vs Yeoh Ooi Gark (1) as to the value to given to illustrations appended to a section, in ascertaining its true scope: 565 "It is the duty of a court of law to accept, if that can be done, the illustrations given as being both of relevance and value in the construction of the text.
The illustrations should in no case be rejected because they do not square with ideas possibly derived from an other system of jurisprudence as to the law with which they are the sections deal And it would require a very special case to warrant their rejection on the ground of their assumed repugnancy to the sections themselves.
It would be the very last resort of construction to make any such assumption.
The great usefulness of the illustrations, which have, although no part of the sections, been expressly furnished by the Legislature as helpful in the working and application of the statute, should not be thus impaired.
" We shall now proceed to consider the more important cases wherein the present question has been considered.
One of the earliest of them is the decision of the Madras High court in Alamanaya Kunigari Nabi Sab vs Murukuti Papiah (1).
That arose out of a suit to enforce a mortgage executed by the son over properties belonging to the father while he was alive.
The father died pending the suit, and the properties devolved on the son as his heir.
The point for decision was whether the mortgagee could claim the protection of section 43 of the .
The argument against is was that "section 43 could not be so construed as to nullify section 6(a) of the , by validating a transfer initially void under s 6(a)".
In rejecting this contention, the Court observed: "This argument, however, neglects the distinction between purporting to transfer `the chance of an heir apparent, ' and `erroneously representing that he (the transferor) is 566 authorised to transfer certain immoveable property.
" It is the latter course that was followed in the present case.
It was represented to the transferee that the transferor was in praesenti entitled to and thus authorise to transfer the property." (p. 736) On this reasoning if a transfer is statedly of an interest of the character mentioned in section 6(a), it would be void, whereas, if it purports to be of an interest in praesenti, it is within the protection afforded by section 43 Then we come to the decision in The official Assignee, Madras vs Sampath Naidu (1), where a different view was taken.
The facts were that one vs Chetti had executed two mortgages over properties in respect of which he had only spes successionis.
Then he succeeded to those properties as heir and then sold them to one Ananda Mohan.
A mortgagee claiming under Ananda Mohan filed a suit for a declaration that the two mortgages created by Chetty before he had become entitled to them as heir, were void as offending section 6(a) of the .
The mortgagee contended that in the events that had happened the mortgages had become enforceable under section 43 of the Act.
The Court negatived this contention and held that as the mortgages, when executed, contravened section 6(a), they could not become valid under section 43.
Referring to the decision in Alamanaya Kunigari Nabi Sab vs Murkuti Papiah (2), the Court observed that no distinction could be drawn between a transfer of what is on the face of it spes successionis, and what purports to be an interest in praesenti.
"If such a distinction were allowed", observed Bardswell, J., delivering the Judgment of the Court, "the effect would be that by a clever description of the property dealt with in a deed of transfer one would be allowed to conceal the real nature of the transaction and evade a clear statutory prohibition.
" 567 This reasoning is open to the criticism that it ignores the principle underlying section 43.
That section embodies, as already stated, a rule of estoppel and enacts that a person who makes a representation shall not be heard to allege the contrary as against a person who acts on that representation.
It is immaterial whether the transferor acts bona fide or fraudulently in making the representation.
It is only material to find out whether in fact the transferee has been misled.
It is to be noted that when the decision under consideration was given, the relevant word of section 43 were, "where a person erroneously represents", and now, a amended by Act 20 of 1929, they are "where a person fraudulently or erroneously represents", and that emphasises that for the purpose of the section it matters not whether the transferor act fraudulently or innocently in making the representation, and that what is material is that he did made representation and the transferee has acted on it.
Where the transferee knew as a fact that the transferor did not possess the title which he represents he has, then he cannot be said to have acted on it when taking a transfer.
Section 43 would then have no application, and the transfer will fail under section 6(a).
But where the transferee does act on the representation, there is no reason why he should not have the benefit of the equitable doctrine embodied in section 43, however fraudulent the act of the transferor might have been.
The learned Judges were further of the opinion that in view of the decision of the Privy Council in Ananda Mohan Roy vs Gour Mohan Mullick (1) and the decision in Sri Jagannada Raju vs Sri Rajah Prasada Rao (2), which was approved therein, the illustration to section 43 must be rejected as repugnant to it.
In Sri Jagannada Raju 's case (2), the question was whether a contract entered into by certain 568 presumptive reversioners to sell the estate which was then held by a widow as heir could be specifically enforced, after the succession had opened.
It was held that as section 6(a) forbade transfers of spes successionis, contracts to make such transfers would be void under section 23 of the contract Act, and could not be enforced.
This decision was approved by the Privy Council in Ananda Mohan Roy vs Gour Mohan Mullick(1), where also the question was whether a contract by the nearest reversioner to sell property which was in the possession of a widow as heir was valid and enforceable, and it was held that the prohibition under section 6(a) would became futile, if agreements to transfer could be enforced.
These decisions have no bearing on the question now under consideration, as to the right of a person who for consideration takes a transfer of what is represented to be an interest in praesenti.
The decision in The Official Assinee, Madras vs Sampatha Naidu (2) is, in our view, erroneous, and was rightly over ruled in the decision now under appeal.
Proceeding on to the decisions of the other High Courts, the point under discussion arose directly for decision in Shyam Narain vs Mangal Prasad (3).
The facts were similar to those in The official Assignee, Madras section Sampath Naidu(2) One Ram Narayan, who was the daughter 's son of the last male owner sold the properties in 1910 to the respondents, while they were vested in the daughter Akashi.
On her death in 1926, he succeeded to the properties as heir and sold them in 1927 to the appellants.
The appellants claimed the estate on the ground that the sale in 1910 conferred no title on the respondents as Ram Narayan had then only a spes successionis.
The respondents contended that they became entitled to the properties when Ram Narayan acquired them as heir in 1926.
The learned Judge, Sir section M. Sulaiman, C. J., and Rachhpal, J., held, agreeing with 569 the decision in Alamanaya Kunigari, Nabi Sab vs Murukuti Papiah (1),and deffering from The official Assignee, Madras vs Sampath Naidu (2),and Bindeshwari Singh vs Har Narain Singh (3), that s.43 applied and that the respondents, had acquired a good title.
In coming to this, conclusion, they relied on the illustration to section 43 as, indicating its, true scope, and observed: "Section 6 (a) would, therefore, apply to cases, where professedly there is, a transfer of a mere spes successionis, the parties knowing that the transferor has, no more right than that of a mere expectant heir.
The result, of course, would be the same where the parties, knowing the full facts, fraudulently clothe the transaction in the garb of a an out and out sale of the property, and there is, no erroneous representation made by the transferor to the transferor as, to his, ownership. "But where an erroneous, representation is, made by the transferor to the transferee that he is, the full owner of the property transferred and is authorized to transfer it and the property transferred is not a mere chance of succession but immovable property itself, and the transferee acts, upon such erroneous representation, then if the transferor happens, later, before the contract of transfer comes, to an end, to acquire an interest in that property, no matter whether by private purchase, gift, legacy or by inheritance or otherwise, the previous transfer can at the option of the transferee operate on the interest which has, been subsequently acquired, although it did not exit at the time of the transfer." (pp. 478,479).
This decision was followed by the Bombay High Court in Vithabai vs Malhar Shankar (4) and by the 570 Patna High Court in Ram Japan vs Jagesara Kuer(1).
A similar view had been taken by the Nagpur High Court in Syed, Bismilla vs Manulal Chabildas(2).
The preponderance of judicial opinion is in favour of the view taken by the Madras High Court in Alamanaya Kunigari Nabi Sab vs Murukuti Papiah (3), and approved by the Full Bench in the decision now under appeal.
In our judgment, the interpretation placed on section 43 in those decisions correct and the contrary opinion is erroneous.
We accordingly hold that when a person transfers property representing that he has a present interest therein, whereas he has, in fact, only a spes successionis, the transferee is entitled to the benefit of section 43, if he has taken the transfer on the faith of that representation and for consideration.
In the present case, Santhappa, the vendor in exhibit III, represented that he was entitled to the property in praesenti, and it has been found that the purchaser entered into the transaction acting on that representation.
He therefore acquired title to the properties under section 44 of the , when Santhappa became in titulo on the death of Gangamma on February 17, 1933, and the subsequent dealing with them by Santhappa by way of release under exhibit A did not operate to vest any title in the appellant.
The Courts below were right in upholding the title of the respondents, and this appeal must be dismissed with costs of the third respondent, who alone appears.
Appeal dismissed.

dataset_name: IN-Abs

summary:
M and S claiming to be reversioners to the estate of N sold the property in dispute to G predecessor in interest of the respondents.
The sale deed recited that the property belonged to the joint family of two brothers N and B, and on the death of N it was inherited by his widow and on her death it had devolved upon them as reversioners to the state.
G sued to recover possession of the properties.
The suit was contested by the widow of B(brother of N) claiming that the property was the self acquired property of her husband.
During the pendency of the litigation the widow died, and G applied to the revenue authorities to transfer the 'pattas ' in his name.
The appellants intervened alleging that the property was gifted to them by the widow, and S one of the reversioners had also executed a release of the said property for a consideration.
This objection was rejected.
The appellants then sued for possession of a half share in the properties held by the widow of B, relying upon the gift by the widow, and the deed of surrender by S one of the two reversioners to the estate of N.
They contended that the Vendors of the property to G had 555 only a spes successionis during the life time of the widow of B, and the transfer was on that account void and conferred no title.
The heirs of contended that the property was sold to by M and S on a representation that the Vendor had become entitled thereto, and the appellants as transferees from S were estopped from asserting that it was in fact the self acquisition of and that in consequence he had no title at the date of the sale.
^ Held, that where a person transfers property representing that he has a present interest therein, whereas he has, in fact, only a spes successions, the transferee is entitled to the benefit of section 43 of the , if he has taken the transfer for consideration and on the faith of the representation.
Held, further, that apart from the exception in favour of transferees for consideration in good faith and without notice of the rights under the prior transfer section 43 of the is absolute and unqualified in its operation.
It applies to all transfers which fulfil the conditions prescribed therein, and it makes no difference in its application whether the defect of title in the transferor arises by reason of his having no interest in the property, or of his interest therein being that of an expectant heir.
The section deals with transfers which fail for want of title in the transferor and not want of capacity in him at the time of transfer.
It embodies a rule of estoppel and enacts that a person who makes a representation shall not be heard to allege the contrary as against a person who acts on the representation.
It is immaterial whether the transferor acts bona fide or fraudulently in making the representation.
It is only material to find out whether in fact the transferee has been misled.
In view of the specific provision of section 43 the principle of estoppel against a statute does not apply to transfers prohibited by section 6 (a) of the Act.
The two provisions operate in different fields and under different conditions.
There is no necessary conflict between them, and the ambit of one cannot be cut down by reference to the other.
Section 6(a) enacts a rule of substantive law, while section 43 enacts a rule of estoppel which is one of evidence.
Held, also, that if the language of the section clearly excludes from its purview certain matters, it would not be legitimate to use the illustration to the section to enlarge it.
It is not to be readily assumed that an illustration to a section is repugnant to it and rejected.
Vickers vs Evans, (1910)79 L.J.K.B. 955, relied on.
556 Sadiq Ali Khan vs Jai Kishori, A.I.R. 1928 P.C. 152, Gadigeppa vs Balangauda, (1931) I.L.R. , Ajudhia Prasad vs Chandan Lal, I.L.R. (1937) All.
860 F.B.; Mohomed Syedol Ariffin vs Yeoh Ooi Gark; (1916) L.R. 43 I.A. 256; Levine vs Brougham, ; Leslie Ltd. vs Sheill, and Khan Gul vs Lakha Singh Lah.
701(F.B.), referred to.
Alamanaya Kunigari Nabi Sab vs Murukuti Papiah, , Shyam Narain vs Mangal Prasad, All. 474, Vithabai vs Mathar Shankar, I.L.R. , Ram Japan vs Jagesara Kuer, A.I.R. 1939 Pat. 116 and Syed Bismilla vs Munulal Chabildas, A.I R. , approved.
Official Assignee, Madras vs Sampath Naidu, and Bindeshwari Singh vs Har Narain Singh, Luck.
622, disapproved.


judgement:
titions Nos. 110 to 115 of 1960.
(Under Article 32 of the Constitution of India for enforcement of Fundamental Rights) A. V. Viswanatha Sastri, R. K. Garg, D. P. Singh, section C. Aggarwal and M. K. Ramamurthi, for the Petitioner.
B. Sen, B. K. B. Naidu and I. N. Shroff, for the Respondents.
December 21.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
These six petitions under article 32 of the Constitution have been filed by one Bhaiyalal Shukla, who was doing business of construction of buildings, roads, bridges etc.
as contractor for the Public Works Department in Rewa Circle of the former Vindhya Pradesh State, now a part of the State of Madhya Pradesh.
By these petitions, he challenges the levy of sales tax on building materials supplied by him in the construction of buildings, roads and bridges for the years, 1953 54 to 1958 59.
For the first year in question, sales tax amounting to Rs. 1,840 5 0 has 260 already been charged and paid.
He seeks refund of this amount.
For the remaining years except the last two, proceedings for assessment have been completed, but the amounts have not been paid.
For the remaining two years, proceedings are pending for assessment of the tax.
The respondents in the case are the State of Madhya Pradesh, which stands substituted for the State of Vindhya Pradesh, and diverse officers connected with the assessment and levy of the tax.
The contention of the petitioner is that the tax is not leviable in view of the decisions of this Court in two cases reported in The State of Madras vs Gannon Dunkerley and Co. (Madras) Ltd.(1) and Pandit Banarsidas vs The State of Madhya Pradesh (2).
The respondents, however, claim that the tax is leviable, because the case falls within the decision of this Court reported in Mithan Lal vs The State of Delhi (3).
The United State of Vindhya Pradesh was formed by the Rulers of the States in Baghelkhand and Bundhelkhand, who agreed to unite into a common State, with the Maharaja of Rewa as the Rajpramukh.
By the Covenant which was entered into by them at that time, it was provided that until a Constitution for the United State would vest in the Rajpramukh, and he was authorised to make and promulgate Ordinances for the peace and good government of the United State of any part thereof, and any Ordinance made by him had the force of an Act passed by the legislature of the United State.
The Rajpramukh, in exercise of his powers drawn from the Covenant, promulgated the Vindhya Pradesh Sales Tax Ordinance 2 of 1949 for the levy of a tax on the sale of goods in Vindhya Pradesh.
On the inauguration of the present Constitution of 261 India, Vindhya Pradesh became, at first, a part B State but later by the Constitution (Amendment of the First and Fourth Schedules) Order, 1950, it was transferred from Part B to Part C of the Constitution.
The ordinance of the Rajpramukh was applied to the whole of Vindhya Pradesh with effect from April 1, 1950 by Notification No. 7 of March 28, 1950 by the Chief Commissioner, Vindhya Pradesh, acting under section 1(2) of the ordinance.
Parliament then passed the Part C States (Laws) Act, 1950.
Section 2 of that Act provided: "Power to extend enactments to certain Part C States: The Central Government may, by notification in the Official Gazette extend to any Part C State. or to any part of such State, with such restrictions and modifications as it thinks fit, any enactment which is in force in a Part A State at the date of the notification and provision may be made in any enactment so extended for the repeal or amendment of any corresponding law(other than a Central Act) which is for the time being applicable to that Part C State," In exercise of the power conferred by the above section, the Central Government by Notification No. S.R.O. 6 dated December 29, 1950, extended to the State of Vindhya Pradesh the Central Provinces and Berar Sales Tax Act, 1947 (21 of 1947) as in force for the time being in the State of Madhya Pradesh, subject to certain modifications necessitated by the application of the Act to this new area.
By the same Notification, a new section was added to the Madhya Pradesh Act, which read as follows: "29.
Repeal and Saving: The Vindhya Pradesh Sales Tax Ordinance 2 of 1949 is here by repealed, provided that. . " and here follow certain provisions saving the previous operation of the Ordinance.
262 On March 20, 1951, the Central Government issued Notification No. 52/ECON.
in exercise of the powers conferred by sub section
(3) of section 1 of the Central Provinces and Berar Sales Tax Act, 1947, as extended to the State of Vindhya Pradesh by Notification No. S.R.O. 6, ordering that from April 1, 1951 the extended Act would come into force in the State of Vindhya Pradesh.
On May 23, 1951, this Court rendered its judgment in In re the Delhi Laws Act 1912(1).
It was held by majority by this Court that section 2 of the Part C States (Laws) Act, 1950 was intra vires, except for the concluding sentence, "provision may be made in any enactment so extended for the repeal or amendment of any corresponding law (other than a Central Act) which is for the time being applicable to that Part C State", inasmuch as it was ultra vires the Indian Parliament.
Parliament then passed the (49 of 1951) on September 6, 1951.
Under that Act, Legislative Assemblies were set up, and under section 21, they were invested, subject to certain limitations, with Powers of legislation with respect to any of the matters enumerated in the State List or in the Concurrent List.
Section 22 of that Act provided: "If any provision of a law made by the Legislative Assembly of a State is repugnant to any provision of a law made by Parliament, then the law made by Parliament whether passed before or after the law made by the Legislative Assembly of the State, shall prevail and the law made by the Legislative Assembly of the State shall, to the extent of the repugnancy, be void.
Explanation: For the purposes of this section, the expression 'law made by Parliament ' shall not include any law which provides 263 for the extension to the State of any law in force in any other part of the territory of India.
" In view of the decision of this Court in the case(1) the States (Miscellaneous Law) Repealing Act, 1951 (66 of 1951) was enacted by Parliament on October 31, 1951.
By section 2 of that Act, laws described in Column 2 of its Schedule were repealed or were deemed to have been repealed with effect from the dates specified in the corresponding entry in column 3 of that Schedule.
In the Schedule, the Vindhya Pradesh Sales Tax Ordinance, 1949 (2 of 1949) was repealed from December 29, 1950.
The Vindhya Pradesh Legislative Assembly, which was set up, then passed the Vindhya Pradesh Laws (Validating) Act, 1952 (6 of 1952).
By that Act, which was to extend to the whole of Vindhya Pradesh and to come into force on January 8,1953, it was provided as follows: "2.
For the removal of all doubts it is hereby declared that. .
Central Provinces and Berar Sales Tax Act, 1947 as extended to Vindhya Pradesh under section 2 of the Part C States Laws Act, 1950 (has been) and shall be deemed to be in force in Vindhya Pradesh from April 1, 1951.
Repeal and savings: As from the dates of the actual enforcement of the Acts specified in section 2 of this Act the corresponding laws in force in Vindhya Pradesh immediately before the said dates shall be deemed to have been repealed without prejudice to anything done or suffered thereunder or any right, privilege, obligation or liability acquired, accrued or incurred thereunder before the aforesaid dates.
" Section 2 of the Central Provinces and Berar Sales Tax Act, 1947, which was extended to 264 Vindhya Pradesh, defined "contract" to mean any agreement for the carrying out for cash or deferred payment or other valuable consideration, the construction, fitting out, improvement or repair of any building, road, bridge or other immovable property, and further defined "goods" to mean all kinds of property including all materials, articles and commodities, whether or not to be used in the construction, fitting out, improvement or repair of immovable property, and finally defined "sale" as including transfer of property in goods made in the course of the execution of a contract.
By these definitions, the materials used or supplied by a building contractor in the construction of buildings, roads, bridges, etc. were made liable to sales tax in accordance with a schedule of rates to which reference seems unnecessary.
The legality of these and similar provisions of law purporting to impose sales tax on building materials in State Acts came up for consideration before High Courts in India, and two well defined views were expressed, one holding that the power to disentangle in a building contract the sale of materials from the execution of works with a view to taxing such a sale, was not beyond the legislative power of the States acting under Entry 48, List II, Seventh Schedule of the Government of India Act, 1935, corresponding to Entry 54 of the like List in the Constitution.
It was held in those cases that a building contract, though entire, involved labour plus materials and in respect of the materials there was a sale involving transfer of property for consideration, and that the legislature had the power to frame a definition of "sale" to separate the two.
The other view was that building contracts were entire, and that there was no sale of goods as contemplated by the Indian Sale of Goods Act, which was the sense in which the Entry was framed, a sense which had a well recognised legal import.
265 This Court in Gannon Dunkerley 's case (1) approved the latter view, which is found in the decision of the Madras High Court in sub nom Gannon Dunkerley vs State of Madras(2), and disapproved the contrary view.
It was pointed out that though in a popular sense there was a sale of the materials, there was none in the sense in which the expression "sale of goods" is used in the Indian Sale of Goods Act, since there was no agreement to sell or sale of materials as such, nor did the property pass therein as movables.
In Pandit Banarsi Das 's case (3), which was a case from the State of Madhya Pradesh and which was heard simultaneously, it was held that if the parties entered into distinct and separate contracts, one for transfer of materials for money consideration and the other, for payment of remuneration for services or works done, then there was a sale within the meaning of the Sale of Goods Act and the levy of tax was valid; but that if the contract was an entire one, the levy was without competence.
The sections of the Central Provinces and Berar Sales Tax Act making such a division and taxing the so called sales of materials were declared to be beyond the powers of the State Legislature.
The petitioner contends that the impugned sections of the Central Provinces and Berar Sales Tax Act, as applied to Vindhya Pradesh, fell within these two rulings, and must also be declared ultra vires the Vindhya Pradesh State Legislature, when the latter enacted the Vindhya Pradesh Laws (Validating) Act, 1952.
As against this, the respondents contend that the Notification S.R.O. No. 6, which added section 29 repealing the Vindhya Pradesh Sales Tax Ordinance 2 of 1949, the Part C States (Miscellaneous Laws) Repealing Act, 1951 and the Vindhya Pradesh Laws (Validating) Act, 1952 all concurred in repealing 266 Ordinance 2 of 1949 from December 29, 1950, but left intact the operation of the Central Provinces and Berar Sales Tax Act as extended to Vindhya Pradesh by section R. O. No. 6 of 1950.
The Vindhya Pradesh Laws (Validating) Act, 1952 merely removed the doubts by stating again that the Central Provinces and Berar Sales Tax Act had been and "shall be deemed to be in force in Vindhya Pradesh from April 1, 1951", but did not re enact that Act.
According to the respondents, the Central Provinces and Berar Sales Tax Act was in force in Vindhya Pradesh as a result of its extension by Notification section R. O. 6 and Notification No. 52 (Econ), the repeal of Ordinance 2 of 1949 being achieved by the Part C States (Miscellaneous Laws) Repealing Act, 1951 from December 29, 1950.
The respondents, therefore, seek to uphold the impugned provisions on the basis of the ruling of this Court in Mithan Lal 's case(1), where it was pointed out that whatever might be said of the State Legislatures operating under List II did not hold good in the case of Parliament which derived its powers in relation to legislation in Part C States, not only from all the Lists but also from the residuary powers of taxation mentioned in article 248(2).
It was also held that section 2 of the Part C States (Laws) Act, 1950 was not repugnant to article 248(2), that the extended law became incorporated by reference in the Part C States (Laws) Act, and that the tax was thus one imposed by Parliament itself.
The respondents, therefore, contend that, as held in Mithan Lal 's case(1) when parliament enacted the Part C States (Laws) Act, 1950 and conferred power on the Central Government to extend any Act of a Part A State to any Part C State, that power of extension carried with it the plenary powers of Parliament, and even though the law so extended might have been outside the competence of the State Legislature which enacted it, when extended under the 267 authority of Parliament was a valid piece of law in Part C State.
The rival contentions may be reduced to the proposition that if the State Legislature of Vindhya Pradesh extended the Central Provinces and Berar Sales Tax Act, then the extended Act would suffer from the disability pointed out in Gannon Dunkerley 's case (1), but if the Central Provinces and Berar Act was extended by the Notification under the Part States (Laws) Act, 1950, then it must be treated as incorporated in that Act and to have the authority of Parliament which, in relation to Part C States, had no limitations whatever.
We have, therefore, to see whether the Central Provinces and Berar Sales Tax Act, 1947 can be said to have been extended for the first time by the Vindhya Pradesh Legislature in 1952 when it passed the Vindhya Pradesh Laws (Validating) Act, 1952 to the exclusion of the order contained in the Notification No. section R. O. 6, or whether the Act continued to be in force in Vindhya Pradesh even before, and all that the Vindhya Pradesh Act did was to remove any doubts about its validity.
The contention on behalf of the petitioner is that the Notification dated December 29, 1950 was invalid in its latter part, as decided by this Court in the case (2).
That portion dealt with the repeal of Ordinance 2 of 1949, and if the Notification was invalid in that part, then the Central Provinces and Berar Sales Tax Act, which was extended by the opening part, never came into force.
Mr. Viswanatha Sastri contended that the notification must be looked at compendiously, and that it was impossible to think that the Central Government would have extended the Central Provinces and Berar Sales Tax Act, if the earlier Ordinance still continued to operate.
He relied in this connection upon the observations of this Court in Pesikaka 's case (3) to urge that the 268 Notification which was beyond the powers of the Central Government in its latter part must be regarded as a nullity, and contended that if the invalid portion of the Notification was fundamental to the operation of the valid, then the valid portion also must equally fail because it could not have been intended that two laws on the same topic were to operate simultaneously in Vindhya Pradesh.
According to him, the extension of the Central Provinces and Berar Act could not and would not have been made, if the Ordinance had not been first repealed.
Section 29 which was added, though composed of two parts, was, according to him, really a part of a single scheme and the repeal of the Ordinance and the extension of the Central Provinces and Berar Act could stand or fall together, and since the Ordinance was never validly repealed, it continued to operate in Vindhya Pradesh till its repeal on October 31, 1951, by the Part C States (Miscellaneous Laws) Repealing Act, 1951, and when the Act repealed it from December 29, 1950, the effect was that there was no sales tax law in operation in Vindhya Pradesh, because the Part C States (Miscellaneous Laws) Repealing Act, 1951, did not enact or extend any law on the subject of sales tax in or to Vindhya Pradesh.
According to him, till the enactment of the Vindhya Pradesh Laws (Validating) Act 6 of 1952 on January, 8, 1953 there was no law imposing sales tax in Vindhya Pradesh, and the law was then made by the Legislature of Vindhya Pradesh by extending the Central Provinces and Berar Sales Tax Act from April 1, 1951.
He therefore, contended that since the powers of the Vindhya Pradesh Legislature did not include the power of imposing sales tax on building materials, this Act of the Vindhya Pradesh Legislature, if it sought to impose sales tax on building materials, fell within the ruling in Gannon Dunkerley 's case (1) and must be declared as of no effect.
He also referred to Act 9 of 1953 269 passed by the Vindhya Pradesh State Legislature, by which the Act was further amended, and stated that the extended Act, as amended, owed its existence neither to Parliament nor to the Central Government acting under the Part C States (Laws) Act but to the Vindhya Pradesh Laws (Validating) Act, 1952 (6 to 1952) and the Vindhya Pradesh Amendment Act, 1953 (9 of 1953).
There is a fundamental fallacy involved in this reasoning.
We are considering the applicability of the Central Provinces and Berar Sales Tax Act as extended to Vindhya Pradesh.
The Vindhya Pradesh Amending Act made only verbal changes, but did not alter the structure of the tax.
No doubt, that Act, contained certain provisions under which sales of building materials are taxable, and if the authority to tax the so called sales emanated from a State Legislature, then the law would fail.
But we have to remember, in this connection, that the law was first extended to Vindhya Pradesh by the Central Government acting under the authority of Parliament legislating for a Part C State.
Parliament and the Central Government were not subject to the disabilities pointed out in Gannon Dunkerley 's case (1), and the matter was covered by the decision of this Court in Mithan Lal 's case (2).
Even if the Notification, section R. O. No. 6, failed to repeal ordinance 2 of 1949, Parliament by its own law effaced that Ordinance in Vindhya Pradesh from December 29, 1950, and enacted that the Ordinance shall be deemed to be repealed from that day.
After the passing of the Repealing Act by parliament, it is impossible to argue that Ordinance 2 of 1949 continued in Vindhya Pradesh down to January 8, 1953, because by fiction the Ordinance was repealed from December 29, 1950.
Parliamentary legislation, therefore, came to the rescue, so to speak, of the Notification by making room for the extension of the Central Provinces and 270 Berar Act by repealing Ordinance 2 of 1949 which the Notification proprio vigore was unable to achieve as laid down in the case(1).
The Notification of the Central Government (section R. O. No. 6) and Act 66 of 1951, therefore concurred in removing the Ordinance on December 29, 1950 and in extending the Central Provinces and Berar Sales Tax Act in its place on the same date.
Mr. Viswanatha Sastri argued, on the strength of ruling of this Court in Deepchand vs State of Uttar Pradesh (2) that the validity of a law must be judged as on the date on which it was passed, and if the law was invalid on that date, then the law must be deemed not to have existed at all, unless it was later re enacted.
The passage relied upon is as follows: "The validity of a statute is to be tested by the constitutional power of a legislature at the time of its enactment by that legislature and, if thus tested, it is beyond the legislative power, it is not rendered valid without re enactment if later, by constitutional amendment, the necessary legislative power is granted.
An after acquired power cannot, ex proprio vigore, validate a statute void when enacted." (p. 24).
This argument would be applicable if we were to consider that Notification No. section R. O. 6 in isolation, and the question was one of validation of that Notification.
The Notification is being questioned, because it sought to repeal Ordinance 2 of 1949, which it could not do.
But, today we are not in a position to say that Ordinance 2 of 1949 continued in Vindhya Pradesh, because Parliament by the Part C States (Miscellaneous Laws) Repealing Act, 1951 has enacted that the said ordinance must be deemed to have been repealed from December 29, 1950.
Indeed, in the ruling 271 of this Court at the same page are cited passages from Willoughby on Constitution of the United States (2nd Edn.) Vol. 1, p. 10 based on the decision in John M. Wilkerson vs Charles A. Rahrer (1) to the effect that if the cause of the unconstitutionality is removed then the law does not need to be re enacted.
The facts of this case are entirely different from those in Deepchand 's case (2).
The extended law did not depend on the repeal of the earlier law for its validity.
It would have been operative, even if the earlier law was not repealed; but the earlier law was, in fact, repealed from December, 29,1950, and no question of conflict between the new and the old law ever arose.
Parliament by repealing the ordinance rendered the ineffective portion of the Notification a mere surplusage.
The necessary result thus was that its operative part survived and the Central Provinces and Berar Sales Tax Act, 1947 was validly extended to Vindhya Pradesh, and was valid law as laid down in Mithanlal 's case (3).
It did not suffer from the defects pointed out by the this Court in Gannon Dunkerley 's case (4), as it was not enacted or extended by the State Legislature.
It remains to consider the last argument on this point, and it is that the Central Provinces and Berar Sales Tax Act was re extended to Vindhya Pradesh by Act 6 of 1952, and thus owed its existence to a law made by a State Legislature which was incompetent to enact a law that building materials in a works contract, which was entire, were liable to sales tax.
The preamble of the Act shows that it was enacted to remove certain doubts which were entertained as to whether the extended Sales Tax Act became operative only from October 31, 1951 when Act 66 of 1951 was passed, or from an earlier date, viz., April 1, 1951, from which date it was brought into force in 272 Vindhya Pradesh by Notification No. 52 (Econ.), dated March 20, 1951.
To remove these doubts, the Vindhya Pradesh Laws (Validating) Act, 1952, enacted with the assent of the President, declared by section 2 (already quoted) that the Central Provinces and Berar Sales Tax Act had been and "shall be deemed to be in force in Vindhya Pradesh from April 1, 1951.
" This declaration did not extend prorio vigore the Central Provinces and Berar Sales Tax Act, but only declared that it must be deemed to be validly in force from April 1, 1951.
Section 7, on which much reliance has been placed, may be quoted again: "Repeal and savings: As from the dates of the actual enforcement of the Acts specified in Section 2 of this Act the corresponding laws in force in Vindhya Pradesh immediately before the said dates shall be deemed to have been repealed without prejudice to anything done or suffered thereunder or any right, privilege, obligation or liability acquired, accrued or incurred thereunder before the aforesaid dates" It is said that, if the two sections are read together they mean that the Central Provinces and Berar Sales Tax Act was freshly extended from April 1, 1951 by the Vindhya Pradesh Act and any law made by any authority earlier was freshly repealed to make room for the extension.
This argument, in our opinion, is erroneous.
To begin with, the powers of the Vindhya Pradesh Legislature were circumscribed by section 22 of the Government of part C States Act, 1951, quoted earlier.
Under that section, the powers of the State Legislatures did not extend to making laws repugnant to any law made by Parliament.
The Explanation defines the expression "law made by Parliament", and excludes a law which provides for the extension to the State of any law in force 273 in any other part of the territory of India.
The Vindhya Pradesh Legislature, however, did not repeal either section 2 of the Part C States (Laws) Act or the Notification, and all that the Legislature did was to add its own authority by a declaration, to the laws earlier extended.
The law was extended first by Notification S.R.O. No. 6 on December 29, 1950, but it was brought into force only by Notification No. 52 (Econ.) dated March 20, 1950 from April 1, 1951.
The Notification, section R. O. No. 6 had substituted for sub s.(3) of section 1 of the Central Provinces and Berar Sales Tax Act, the following: "(3) It shall come into force on such date as may be notified by the Central Government in the Official Gazette.
" Till the Notification No. 52 (Econ.) was made, the Act was extended but was not in force in Vindhya Pradesh.
There is a difference between the extension of a law subject to its being brought into force latter and its coming into force on a later date.
Section 7 of Act 6 of 1952 repealed only the laws in force prior to the date on which the Central Provinces and Berar Sales Tax Act was brought into force.
It speaks of "laws in force in Vindhya Pradesh immediately before April 1, 1951", and the law which was in force immediately before that date was not the Central Provinces and Berar Sales Tax Act which had not been brought into force, but might be Ordinance 2 of 1949, if it had not been successfully repealed earlier.
The former Act was extended on December 29, 1950, but was not brought into force till April 1, 1951, and the section speaks of "laws in force".
The section, therefore, refers to Ordinance 2 of 1949, which would be in force immediately before April 1, 1951, if not successfully repealed, but not to the Central Provinces and Berar Sales Tax Act which was only extended before that date but had not been brought into force.
In other words, section 7 of the Act does no more than replea 274 from April 1, 1951 (if repeal was at all necessary) Ordinance 2 of 1949, which might be supposed to have continued as law till October 31, 1951, when it was repealed by Act 66 of 1951.
In point of fact and also in law, it was really repealed from December 29, 1950 under the Repealing Act 66 of 1951.
The Vindhya Pradesh Act 6 of 1952 cannot, therefore, be said to have enacted for the first time that the Central Provinces and Berar Sales Tax Act shall come into force from April 1, 1951 in Vindhya Pradesh.
It only declared what was a legal fact even without this declaration.
Nor did the Central Provinces and Berar Sales Tax Act owe its existence to Act 6 of of 1952 only declared what the result of the earlier laws was, and added the authority of the Vindhya Pradesh Legislature to remove doubts and to save the law from any attack on the ground that the wrong Legislature had repealed the Ordinance or extended the Central Provinces and Berar Sales Tax Act.
In our opinion, this argument cannot be accepted.
One further argument was advanced to which we have not referred so far, and which may now be noticed.
It is that after the reorganisation of the States, Madhya Pradesh has as many as four Sales Tax Acts.
It is contended that a person belonging to the area of the former State of Madhya Pradesh is not liable to sales tax on building materials in a works contract under the Central Provinces and Berar Sales Tax Act because of the decision in Pandit Banarsi Das 's case(1), but another person living in the area forming part of the former Vindhya Pradesh is liable to sales tax under the same Act, as extended to Vindhya Pradesh.
This, it is said, is patently contrary to the spirit of the equal protection clause in article 14.
The laws in different portions of the new State of Madhya Pradesh were enacted by different Legislatures, and under section 119 of the States Reorganisation 275 Act, all laws in force are to continue until repealed or altered by the appropriate Legislature.
We have already held that the sale tax law in Vindhya Pradesh was validly enacted, and it brought its validity with it under section 119 of the States Reorganisation Act, when it became a part of the State of Madhya Pradesh.
Thereafter, the different laws in different parts of Madhya Pradesh can be sustained on the ground that the differentiation arises from historical reasons, and a geographical classification based on historical reasons has been upheld by this Court in M. K. Prithi Rajji vs The State of Rajasthan(1) and again in The State of Madhya Pradesh vs The Gwalior Sugar Co. Ltd.(2).
The latter case is important, because the sugarcane cess levied in the former Gwalior State but not in the rest of Madhya Bharat of which it formed a part, was challenged on the same ground as here, but was upheld as not affected by article 14.
We, therefore, reject this argument.
In the result, the Writ Petitions fail, and are dismissed; but in the circumstances of the case we make no order about costs.

summary:
The appellant was doing business of construction as contractor under Public Works Department in Vindhya Pradesh, now Madhya Pradesh.
He challenged the levy of Sales Tax on building materials supplied by him for the year 1953 54 to 1958 59.
The contention of the Petitioner was that the tax was not leviable in view of the decision of the Supreme Court in Gannon Dunkerley 's case and Pandit Banarsi Das 's case.
The respondents claimed that the tax was leviable because the case fell within the derision in Mithan Lal 's case.
The Rajpramukh of the United State of Vindhya Pradesh promulgated the Vindhya Pradesh sales Tax Ordinance 2 of 1949.
On Vindhya Pradesh becoming Part C State of India the said ordinance of Rajpramukh was applied to the whole of it with effect from April 1, 1950, by notification No. 7 of March 28, 1951.
Under section 2 of the Part C States (Laws) Act, 1950, by notification No. S.R.O. 6 dated December 29, 1950, the Central Provinces & Berar Sales Tax Act 1947, was extended to Vindhya Pradesh.
The notification also added section 29 to the Madhya Pradesh Act so extended, by which ordinance 2 of 1949 was repealed.
By reason of the decision of this Court in the Delhi Laws Act case the addition of section 29 was unconstitutional.
Parliament then enacted the Part C States (Misc.
Laws) Repealing Act (66 of 1951).
By section 2 of the Act the Vindhya Pradesh Sales Tax ordinance, 1949, was deemed to have been repealed from December 29, 1950.
The Vindhya Pradesh Laws (Validity) Act, 1952, also provided and declared that Central Provinces & Berar Sales Tax Act, 1947, which was extended to Vindhya Pradesh under section 2 of the Part C States Laws Act, 1950, has been and shall be deemed to be in force in Vindhya Pradesh from April 1, 1951.
The said C. P. & Berar Sales Tax Act defined contract, goods, sales etc, and by these definition the materials used or supplied by 258 a building contractor in the constructions etc, were made liable to Sales Tax in accordance with the schedule rates.
The question is, whether C. P. been extended for the first time by the Vindhya Pradesh legislature in 1952, when it passed the Vindhya Pradesh Laws (Validating) Act, 1952, to the exclusion of the order contained in the notification No. S.R.O. 6 or whether the Act continued to be in force in Vindhya Pradesh even before and all that the Vindhya Pradesh Act did as to remove any doubts about its validity.
The rival contentions of the appellant and the respondents are reduced to the proposition that if the State Legislature of Vindhya Pradesh extended the Central Province and Berar Sales Tax Act, the extended Act would suffer from disability pointed out in Gannon Dunkerley 's case, but if the said Act was extended by the notification under Part C States (Laws) Act, 1950, then it must be treated as incorporated in the Act and to have the authority of Parliament which, in relation to Part C States, had no limitation whatever.
^ Held, that the extended law in the C. P. & Berar Sales Tax Act, 1947, did not depend on the repeal of the earlier law for its validity.
It would have been operative, even if the earlier law was not repealed, but the earlier law was in fact repealed from December 29, 1950, and no question of conflict between the new and the old law ever arose.
Held, further, that the Vindhya Pradesh Amending Act made only verbal changes, but did not alter the structure of the tax.
No doubt, that Act contained certain provisions under which sales of building materials are taxable, and if the authority to tax the so called sales emanated from a State Legislature, then the law would fail.
The law was first extended to the Vindhya Pradesh by the Central Government acting under the authority of Parliament legislating for a Part C State.
Parliament and the Central Government were not subject to the disabilities pointed out in Gannon Dunkerley 's case, and the matter was covered by Mithan Lal 's case.
Even if the notification S.R.O. No. 6 failed to repeal ordinance 2 of 1949 Parliament by its own law effaced that ordinance in Vindhya Pradesh from December 29, 1950, and enacted that ordinance shall be deemed to be repealed from that day.
The ordinance 2 of 1949 did not continue in Vindhya Pradesh down to January 8, 1953 because by fiction the ordinance was repealed from December 29, 1950.
Held, also, that the laws in different portions of new State of Madhya Pradesh were enacted by different legislatures and under section 119 of the States Reorganisation Act, all 259 laws in force in a state were to continue until repealed or altered by the appropriate Legislature.
The different sales tax laws in different parts of Madhya Pradesh are valid on the ground that the differentiation arises from historical reasons, and a geographical classification based on historical reasons is not affected by article 14 of the Constitution.
State of Madras vs Gannon Dunkerley & Co. ; , Pandit Banarsidas vs State of Madhya Pradesh, ; , Mithan Lal vs State of Delhi; , In re the ; , , Gannon Dunkerley vs State of Madras, , Behram Khurshed Pesikaka vs The State of Bombay, , Deepchand vs State of Uttar Pradesh, [1959] Supp. 2 S.C.R. S, John M. Wilkerson vs Charles A. Rahrer, (1891) 140 U. section 545, M. K. Prithi Rajji vs State of Rajasthan C. A. No. 327/56 decided on 2 11 60 and State of Madhya Pradesh vs The Gwalior Sugar Co. Ltd. C. A. Nos. 98 and 99 of 1957 decided on 30 11 1960, referred to.