judgement:
Civil Appeals Nos.
3296 67 of 1984.
Appeals by special leave from the Judgment and Order dated the 23rd January, 1981 of the Bombay High Court in F.A. Nos.
35 of 1978 & 139 of 1973.
B. Kanta Rao and Vijay Phadke for the Appellants.
Abaul Khader and R.N. Poddar for the Respondent.
The Judgment of the Court was delivered by VENKATARAMIAN, J.
Shri Navakesari Prakashan Ltd. and Nav Samaj Ltd., Nagpur are the appellants in the above two appeals by special leave filed under Article 136 of the Constitution.
The appellants respectively are printers and publishers of newspapers known as 'Tarun Bharat ' and 'Nagpur Times '.
Their case is that their employees working for wages in the administrative and editorial sections of their respective concerns were not 'employees ' as defined in section 2 (9) of the (hereinafter referred to as 'the Act ') prior to November 19, 1976 on which date by a notification issued under section 1 (5) of the Act the Government of the State of Maharashtra made the Act applicable to the said employees also and that therefore they were not liable to make any contributions under the Act in respect of the employees up to that date.
They however admit their liability to make contributions during that period in respect of persons employed by them for wages in the printing presses belonging to them.
The dispute regarding the liability of the appellants to make contributions under the Act in respect of the members of the administrative and editorial staff arose on the Assistant Regional Director of the Employees ' State Insurance Corporation calling upon them by notice issued on October 1, 1975 to make contributions in respect of the said members also with effect from January 28, 1968 on which date the amended definition of the expression 'employee ', in section 2 (9) of the Act as per the Amending Act No. 44 of 1966 came into force.
After the above demands were made, the appellants filed 965 applications before the Employees ' Insurance Court, Nagpur under section 75 of the Act questioning their liability to make contributions in respect of their employees working in the administrative and editorial sections of their presses during the period between January 28, 1968 and November 19, 1976.
They, however, did not dispute their liability in respect of the period subsequent to November 19, 1976 on which date the notification was issued under section 1(5) of the Act by the Maharashtra State Government.
The applications were contested by the Employees ' State Insurance Corporation The Employees Insurance Court allowed the applications holding that until the notification under section (5) of the Act was issued by the State Government making the Act applicable to the establishments of the appellants viz the administrative and editorial sections of their presses, the employees working in those sections could not be considered as 'employees ' as defined by section 2(9) of the Act.
Aggrieved by the judgment of the Employees ' Insurance Court, the Employees ' State Insurance Corporation filed appeals before the High Court of Bombay under section 82 ' of the Act.
The High Court allowed the said appeals holding that the employees concerned came within the definition given in section 2 (9) of the Act and, therefore the appellants were liable to make contributions during the relevant period in respect of them also under the Act.
The appellants have filed these appeals against the judgment of the High Court.
Before dealing with the contentions raised by the appellants, it has to be stated that the members of the administrative staff and the editorial staff of each of the printing presses are employed by the management concerned for the purpose of carrying on the business of printing and publishing the newspaper brought out by it.
The correctness of this finding of fact recorded to the above effect by the High Court is not assailed before us.
The main contention of the appellants however is that since during the relevant period they had maintained a distinction between the factory sections of their printing presses and the establishment sections which included the administrative and editorial sections of their presses, the employees in the establishment sections could not be treated as employees to whom the Act was applicable until the notification issued under section 1 (5) of the Act expressly brought the said establishment sections also within the scope of the Act.
Section 2 (9) of the Act which defines the expression 'employee ' during the period in question read thus: 966 "2(9)" employee" means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and (i) who is directly employed by the principal employer on any work of, or incidental or preliminary to or connected with the work of, the factory or establishment whether such work is done by the employee in the factory or establishment or elsewhere: or (ii) who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment; or (iii) whose service are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or let on hire has entered into a contract of service; and includes any person employed for wages on any work connected with the administration of the factory or establishment or any part, department or branch thereof or with the purchase of law materials for, or the distribution or sale of the products of, the factory or establishment; but does not include (a) any member of the Indian naval, military or air forces, or.
(b) any person so employed whose wages excluding remuneration for overtime work exceed five hundred rupees a month: Provided that an employee whose wages excluding remuneration for overtime work exceed five hundred rupees a month at any time after and not before the beginning of the contribution period, shall continue to be an employee until the end of that period.
" The object of the Act is to provide for certain benefits to 967 employees in case of sickness, maternity and employment injury and to make provisions for certain other matters in relation thereto.
Section 1(4) of the Act provides that it shall apply, in the first instance, to all factories (including factories belonging to the Government) other than seasonal factories.
The expression 'factory ' is defined by section 2 (12) of the Act as any premises including the precincts thereof whereon twenty or more persons are employed or n were employed for wages on any day of the preceding twelve months and in any part of which a manufacturing process is being carried on with the aid of power or is ordinarily so carried on but does not include a mine subject to the operation of the or a railway running shed.
It is admitted, as mentioned earlier, that the printing presses owned by the managements where the newspapers are printed and published are factories and are governed by the Act.
Section 1 (5) of the Act, however, provides that the appropriate Government, in consultation with the Employees ' State Insurance Corporation and where the appropriate Government is a State Government with the approval of the Central Government after giving six months ' notice of its intention of so doing by notification in the official Gazette, extend the provisions of the Act or any of them, to any other establishment or class of establishments, industrial, commercial, agricultural or otherwise.
The expression 'establishment is not defined in the Act.
It may be any industrial, commercial, agricultural or any other establishment where employees are engaged in connection with the business of the establishment.
Section 38 of the Act provides that subject to the provisions of the Act, all employees in factories or establishments to which the Act applies shall be insured in the manner provided by the Act.
Section 39 of the Act states that the contribution payable under it shall comprise contribution payable by the employer and contribution payable by the employee.
The contributions have to be paid at the rates specified in the First Schedule to the Act except where the employees concerned are excluded from some of the benefits under the Act in which case the Corporation is authorised to fix the rates of the contributions.
Now reverting to section 2 (9) of the Act it is seen that the expression 'employee ' means any person employed for wages in a factory or any person employed for wages in connection with the work of a factory, it also means any person employed for wages in or in connection with the work of an establishment to which the 968 Act applies.
If it is held in these cases that the employees in the administrative or editorial sections of the printing presses are employed in connection with the work of the printing presses which are admittedly factories, then they have to be treated as employees under section 2 (9) of the Act even though no notification is issued under section 1 (5) of the Act making the Act applicable to those sections.
The fact that such a notification has been issued, either as a matter of abundant caution or on a wrong understanding of the true implication of the definition in section 2 (9), becomes irrelevant.
The members of the administrative and editorial staff of the appellants are no doubt not working in the printing presses.
But the question is whether they are not working in connection with the work of the printing presses which are factories under section 2 (12) of the Act.
In Royal Talkies, Aydraboe & Ors.
vs Employees State Insurance Corp. employees working in a canteen and at the cycle stand attached to a cinema theatre were held to be persons employed in connection with the work of the cinema theatre.
The Court, however, observed that merely being employed in connection with the work of a factory or of an establishment in itself did not entitle a person to be an employee but it must be proved that he was not only employed in connection with the work k of the establishment but also be shown to be employed in one or other of the three categories mentioned in section 2 (9) of the Act.
At this stage, two decisions of this Court are required to be considered.
In Hydrabad Asbsets Cement Products Ltd. vs The Employees Insurance Court & Anr the appellant company which had a factory at Sanatnagar where it was manufacturing asbestos sheets contained that the employes working in its zonal offices situated at various other places who were doing the work of canvassing for the sale of products manufactured by it at Sanatnagar were not employees within the definition of section 2 (9) of the Act as the zonal offices were establishments and not factories.
Negativing the above contention, this Court held that any person employed for wages in the zonal offices for the purpose of purchase of raw materials or distribution or sale of the products of the factory or for 969 administrative purposes of the factory was a person employed in connection with the worker of the factory and hence was an employee as defined by section 2 (9) of the Act.
The Court in reaching the conclusion also relied on the amendment of section 2 (9) of the Act by Act No. 44 of 1966 which provided that the expression 'employee ' included 'any person employed for wages on any work connected with the administration of the factory '.
When the present appeals are considered in the light of the above decisions, the members of the administrative staff and of the editorial staff in each of the printing presses in question have to be treated as employees under section 2(9) of the Act.
These persons are directly employed by the management concerned on work incidental or preliminary or connected with the work of the factory.
The work of the factory in each case being printing and publication of a newspaper, its work cannot be carried on without the assistance of the members of the editorial staff who are engaged in preparing the material for printing the newspaper and of the administrative staff which is needed for managing the affairs of the factory.
It is a matter of common knowledge that the members of the editorial staff work almost round the clock at the premises where the printing press is situated or at the precincts thereof.
Their principal job is to pick up and select from out of the mass of information which flows in to the press, messages which have news value, trim them and make them fit for communication through newspaper.
Even though they may not be actually engaged in operating the printing machines, their presence at the spot is essential right upto the moment the 'strike order ' is given for the printing of the newspaper.
There are cases where changes in the matter to be printed are effected even a few minutes before the process of printing is begun and cases where even after a few copies of newspaper are printed, they are withheld and destroyed on the last minute advice of a responsible members of the editorial staff are not unknown.
The editors, news editors, sub editors, reporters etc.
who constitute the editorial staff at the press are the collectively referred to as the gate keepers ' of news because they determine what should be published and what should not be published.
A printing press established for the purpose of publishing a newspaper cannot effectively function at all without the services of the members of the editorial staff being made available almost till the time the newspaper comes out of the printing machine.
They virtually constitute an integral part of the newspaper press and they are employed in connection with the work done at the printing press.
The members of the editorial staff clearly fall under clause (i) 970 of section 2(9) of the Act.
It is so even in the case of the administrative staff.
They fall under the clause containing the words includes any person employed for wages on any work connected with the administration of the 'factory '.
It may be stated here that even without the amendment made by Act No. 44 of 1966 this Court in Nagpur Electric Light & Power Co. Ltd. vs Regional Director Employees State Insurance Corporation etc had taken the view that the clerical staff etc.
of a factory whether they worked within the factory or outside its premises would be employees under section 2(9) of the Act as it stood before its amendment.
The argument that since a person mainly employed in a managerial or administrative capacity cannot be treated as a working journalist under section 2(9) of the Working Journalists (Conditions of Service) and Miscellaneous Provisions Act, 1955, the members employed in the administrative staff should not be treated as employees in a printing press is an extremely Jenuous argument and it is not worth probing further.
The effect of on Act cannot be controlled by the provisions of another Act unless the provisions in one have bearing on the provisions of the other.
No such provision is brought to our notice.
The contention that since the Act is not expressly made applicable to newspaper establishments by the Working Journalists (Conditions of Service) Miscellaneous Provisions Act, 1955 as it has made certain laws applicable by sections 3, 14 and 15 thereof, the Act should not be applied to the editorial staff has also no merit.
We are satisfied that section 2(9) of the Act clearly brings them within the scope of the Act.
On an examination of the provisions of the Act, we are of the view that the persons employed for wages in the administrative section and the editorial section of each of the printing presses in question are employees as defined in section 2(9) of the Act and the demand made by the Employees ' State Insurance Corporation is a justified one.
In the result the appeals fail and they are dismissed with costs.

summary/full:
The appellants in the appeals were printers and publishers of newspapers.
The Assistant Regional Director of the Employee 's State Insurance Corporation issued a notice to the appellants on October 1, 1975 calling upon them to make contributions in respect of the administrative and editorial staff of the newspapers, with effect from January 28, 1968 on the ground that the aforesaid staff came within the definition of the expression 'employee ' in section 2(9) of the Employee ' a State Insurance Act 1948 as amended by the Amending Act No. 44 of 1966.
After the aforesaid demands were made, the appellants filed applications before the Employees ' State Insurance Court under section 75 of the Act questioning the liability to make contribution, in respect of the said employees during the period between January 28, 1968 and November 19, 1976.
They however did not dispute their liability in respect of the period subsequent to November 19.
1976 on which date the notification was issued under section 1 (5) by the State Government.
These applications were contested by the Employees ' State Insurance Corporation.
The Employees ' Insurance Court allowed the applications holding that until the notification under section 1(5) of the Act was issued by the State Government making the Act applicable to the establishments of the appellants viz the administrative and editorial sections of the presses, the said employees could not be considered as 'employees ' as defined by section 2(9) of the Act.
The Corporation thereupon filed appeals before the High Courts under section 32 of the Act, which were allowed, holding that the employees concerned came within the definition given in section 2(9) aud, therefore, the 963 appellants were liable to make contributions during the relevant period in respect of them also under the Act.
Dismissing the Appeals to this Court, ^ HELD: 1 An examination of the provisions of the indicates that the persons employed for wages in the administrative section and the editorial section of each of the printing presses are employees as defined in section 2(9) of the Act and the demand made by the Employees ' State Insurance Corporation is a justified one.
[970E] 2.
The object of the is to provide for certain benefits to employees in case of sickness, maternity and employment injury and to make provisions for certain other matters in relation thereto.
Section 1(4) of the Act provides that it shall apply in the first instance, to all factories (including factories belonging to the Government) other than seasonal factories.
Section 1(5) of the Act, however, provides that the appropriate Government, in consultation with the Employees ' State Insurance Corporation and where the appropriate Government is a State Government with the approval of the Central Government after giving six months ' notice of its intention of so doing by a notification in the official Gazette, extend the provisions of the Act or any of them to any other establishment or class of establishments, industrial, commercial, agricultural or otherwise.
The expression 'establishment ' however was not defined in the Act.
[967A E] 3.
Section 2(9) of the Act defines the expression 'employee ' to mean any person employed for wages in a factory or any person employed for wages in connection with the work of a factory.
It also means any person employed for wages in or in connection with the work of an establishment to which the Act applies.
[967H] In the instant cases, the members of the administrative staff and of the editorial staff in each of the printing presses have to be treated as employees under section 2(9).
They are directly employed by the management concerned on work incidental or preliminary or connected with the work of the factory.
The work of the factory in each case being printing and publication of a newspaper, its work cannot be carried on without the assistance of the members of the editorial staff who are engaged in preparing the material for printing the newspaper and of the administrative staff which is needed for managing the affairs of the factory.
[969C D] Hyderabad Asbestos Cement Products Ltd. vs The Employees Insurance Court and Anr., ; , Royal Tulkies, Hyderabad and Ors.
vs Employees State Insurance Corp., ; and Nagpur Electric Light and Power Co. Ltd. vs Regional Director Employees, State Insurance Corporation etc.
, , referred to.
The members of the editorial staff clearly fall under clause (i) of section 2(9) of the Act.
The administrative staff fall under the clause contain 964 ing the words 'includes any person employed for wages on any work connected with the administration of the factory '.
[969H; 970A] 5.
The effect of an Act cannot be controlled by the provisions of another Act unless the provisions in one have bearing on the provisions of the other.
[970D]


judgement:
tition (Civil) Nos.
4358 of 1978, 212 213, 760 of 1979 and 6449 of 1980.
Under article 32 of the Constitution of India S.N. Kacker and A.T.M. Sampath for the Petitioner in W.P. Nos.
212 213 of 1980.
A.K. Sen, A.T.M. Sampath and P.N. Ramalingam for the Petitioner in W.P. No. 760 of 1979.
A.T.M. Sampath and P.N. Ramalingam for the Petitioner in W.P. Nos.
4358 of 1978 and 6449 of 1980.
S.T. Desai and A.V. Rangam for the Respondent.
The Judgment of the Court was delivered by BALAKRISHNA ERADI, J.
in these Writ Petitions, the petitioners have challenged the constitutional validity of the provisions of Tamil Nadu Additional Sales Tax Act 1976 (Act 2 of 1976).
By the said Act section 2 of the Tamil Nadu Additional Sales Tax Act, 1970 was amended by substituting a new provision in the place of what existed before, section 3 was omitted and section 3A was newly introduced to the Act.
As the points raised in all these Writ Petitions are identical, they were heard together and are disposed of by this common judgment.
982 Before we proceed to set out the provisions of the impugned Act, it is necessary to narrate in brief the legislative history that preceded its enactment.
The basic statute providing for the levy of Sales tax in the State of Tamil Nadu is the Tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as "the Act of 1959") In the year 1970, the State Legislature enacted the Tamil Nadu Additional Sales Tax Act Act 14 of 1970 (hereinafter called the 1970 Act) which was brought into force with effect from May 28, 1970.
The said Act provides for the levy of an additional tax on the sale or purchase of goods.
Section 2 of the Act which is the charging section was in the following terms: "2.
Levy of additional tax in the case of certain dealers: (1) The tax payable under the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act of 1959) (thereafter in this section referred to as the said Act), shall in the case of a dealer whose total turnover for a year exceeds ten lakhs of rupees, be increased by an additional tax at the rate of (ten per cent) of the tax payable by that dealer for that year and the provision of the said Act shall apply in relation to the said additional tax as they apply in relation to the said tax payable under the said Act.
Provided that where in respect of declared goods as defending clause (h) of section of the said Act, the tax payable by such dealer under the said Act together with the additional tax payable under this sub section, exceeds (four percent) of the sale or purchase price thereof, the rate of additional tax in respect of such goods shall be reduced to such an extent that the tax and the additional tax together shall not exceed (four per cent) of the sale or purchase price of such goods.
" It will be noticed that the scheme of this section was to levy the additional tax by the process of increasing the tax payable under the Act of 1959 by ten per cent the said increase representing the quantum of the additional tax.
The proviso to the section stipulates for a concessional treatment in respect of the declared goods.
It is unnecessary for us to deal with the said proviso or with section 3 of the said Act as these provisions have no relevance to the determination of the point raised in the cases now before us.
983 In September, 1971, the State Legislature enacted the Tamil Nadu Sales Tax (Surcharge) Act, 1971 with retrospective effect from June, 1971.
Under section 3 of that Act, every dealer liable to pay tax under the Act of 1959 was subjected to a further liability to pay a surcharge at the rate of five per cent of such tax.
The first proviso to the said section states that in the city of Madras the rate of surcharge shall be ten per cent for the period commencing on the June 19, 1971 and ending with the June 28, 1971.
The second proviso extended certain concessions in the rate of surcharge in respect of declared goods.
Thereafter followed the impugned statute namely, the Tamil Nadu Additional Sales Tax (Act 2) of 1976, which was brought into force with effect from 1.4.1976.
Section 2 of the said Act amended section 2 of the Tamil Nadu Additional Sales Tax Act, 1970 by substituting the following provision in replacement of the original section: "2.
Levy of additional tax in the case of certain dealers 1.
(a) The tax payable under the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act I of 1959) (hereinafter in this section referred to as the said Act), shall, in the case of a dealer whose taxable turnover for a year exceeds three lakhs of rupees, be increased by an additional tax calculated at the following rates, namely: Rate of tax (i) Where the taxable turnover exceeds 0.4 per cent of three lakhs of rupees but does the taxable not exceed five lakhs of rupees.
turnover.
(ii) Where the taxable turnover exceeds 0.5 percent five lakhs of rupees but does not of the tax exceed seven lakhs of rupees.
able turnover.
(iii)Where the taxable turnover exceeds 0.6 percent seven lakhs of rupees but does not of the exceed ten lakhs of rupees.
taxable turnover.
(iv) Where the taxable turnover exceeds 0.7 percent ten lakhs of rupees of the taxable turnover.
984 Provided that where in respect of declared goods as defined in clause (h) of section 2 of the said Act, the tax payable by such dealer under this said Act, together with the additional tax payable under this sub section, exceeds four per cent of the sale or purchase price thereof, the rate of additional tax in respect of such goods shall be reduced to such an extent that the tax and the additional tax together shall not exceed four per cent of the sale or purchase price of such goods.
(b) The provisions of the said Act Shall apply in relation to the additional tax payable under clause (a) as they apply in relation to the tax payable under the said Act.
(2) Notwithstanding anything contained in the said Act no dealer referred to in sub section (1) shall be entitled to collect the additional tax payable under the said sub section.
(3) Any dealer who collects the additional tax payable under sub section (1) in contravention of the provisions of sub section (2) shall be punishable with fine which may extend to one thousand rupees, and no Court below the rank of a Presidency Magistrate or a Magistrate of the First Class shall try any such offence.
" While under the provisions of section 2 as they stood prior to the amendment, the additional sales tax was to be calculated and levied at a certain percentage of the tax assessed on the dealer under the Act of 1959, the scheme of the amended section is to adopt the taxable turnover of the dealer as the base for the levy of the additional tax, the rate or percentage to be applied for calculation of the additional tax depending upon the quantum of the taxable turnover and the slab into which the case of a particular dealer will fall on the basis of the specification of the slab limits indicated in the section.
On receipt of notices of demand issued consequent upon assessments to additional sales tax under the provisions of the section as amended by the impugned Act the petitioners have 985 come up to this Court challenging the constitutional validity of the impugned Act of 1976 and seeking to quash the assessment orders and the notices of demand issued to them.
The first contention urged on behalf of the petitioners is that since the State Legislature had already provided for the levy of a tax on sales by the Act of 1959 and had also enacted a further statute authorising the levy and collection of a surcharge which is in truth and substance the imposition of an additional sales tax, it could not legally go on legislating further enactments providing again for levy of additional sales tax.
On this basis it is contended that the provisions of the impugned Act, 1976 are ultra vires and devoid of legislative competence.
We see no substance in this contention.
The impugned enactment has merely amended the 1970 Act.
It has not introduced a new tax; what it has done is only to amend the 1970 Act by providing for a different method of computation of the additional tax leviable under that Act.
The validity of the 1970 Act has been upheld by a Constitution Bench of this Court in the case of section Kodar vs State of Kerala.
Hence there is no longer any scope for the petitioners to contend that the State Legislature had no competence to provide for the levy of additional sales tax.
The nature and identity of the additional sales tax imposed by the 1970 Act have not been in any way altered by the impugned Act.
As already pointed out what has been done by the impugned Act is only to provide for a different mode of computation of the additional sales tax by linking the rate of levy to the taxable turnover instead of to the amount of tax assessed under the Act of 1959.
The constitutional validity of the levy of additional tax is not in any manner affected by the said change brought about in the mode of levy and computation as a result of the amendments affected by the impugned Act.
It was strongly contended on behalf of the petitioners that the prescription of different rates of additional sales tax depending upon the quantum of turnover of the different assessees is totally repugnant to the concept of levy of tax on sales.
Another argument advanced by Counsel for the petitioners was that since under the amended provisions of section 2, two dealers selling the same commodity will be liable to pay additional tax at different rates depending upon their respective annual turnovers, there is a clear violation of Article 14 of the Constitution as dissimilar treatment similarly situated.
A further contention 986 urged on behalf of the petitioners was that the levy in its present from is really a tax on 'gross income ' and not a tax on 'sales ' and hence it is ultra vires the State Legislature as it has no competence to levy a tax on income other than agriculture income.
Another ground of attack pressed by Counsel was that the levy of additional sales tax under the impugned Act is confiscatory in nature, that it impose unreasonable restrictions on the petitioners right to carry on business and offends Article 19 of the Constitution, particularly in view of the prohibition contained in sub section (2) of section 2 against collection of additional tax from the consumers.
Yet another point taken in the Writ Petitions but not very seriously urged at the time of hearing is that the levy of additional tax under the impugned Act offends Article 301 of the Constitution since the imposition of the additional liability would seriously affect the business of the petitioners and on account of their inability to bear the heavy burden their right to carry on freely trade, commerce and intercourse within the territory of India will be adversely affected.
We are spared the necessity of dealing with any of the aforesaid points in depth because everyone of them is fully covered by pronouncement of a Constitution Bench of this Court in section Kodar vs State of Kerala afore cited.
The contention that the additional sales tax levied under the Tamil Nadu Additional Sales Tax Act, 1970 was not a tax on sales but was in reality a tax on the income of the dealers was rejected by the Constitution Bench which observed thus: " As regards the contention that the State Legislature has no power to pass the measures, we are of the view that additional tax is really a tax on the sale of goods.
The object of the Act, as is clear from its provisions, is to increase the tax on the sale or purchase of goods imposed by Tamil Nadu General Sales Tax Act, 1959 and the fact that quantum of the additional tax is determined with reference to the sales tax imposed would not alter its character it may be noted that additional tax is to be imposed only if the turnover of a dealer exceeds Rs. 10 lakhs.
It is in reality a tax on the aggregate of sales effected by a dealer during a year.
The additional tax, there 987 fore, is an enhancement in the rate of the sales tax when the turnover of a dealer exceeds Rs. 10 lakhs a year and it is a tax on the aggregate of the sales affected by the dealer during the year.
The decision in Ernakulam Radio Company vs State of Kerala which was affirmed by a Division Bench of the Kerala High Court in Kiliker vs Sales Tax Officer took that view.
The same view was taken by the Andhra Pradesh High Court in A.S. Ramachandra Rao vs State of Andra Pradesh.
This is the correct view.
Entry 54 in List II authorises the state legislature to impose a tax on the sale or purchase of goods.
So, the contention of the appellants that the additional sales tax is not a tax on sales but on the income of the dealer is without any basis.
The further plea that the levy of additional tax also was confiscatory in nature and the prohibition against passing on the burden to the consumers was an unreasonable restriction was also negatived by this Court by stating: "As regards the second contention that the provisions of the Act are violative of the fundamental rights of the appellants under article 19 (1) (f) and 19 (1) (g), as the tax is upon the sale of goods and is not shown to be confiscatory, it cannot be said that the provisions of the Act impose any unreasonable restrictions upon the appellants ' right to carry on trade.
It is, no doubt, true that every tax imposes some restriction upon the right to carry on a business; but it would not follow that the imposition of the tax in question is an unreasonable restriction upon the appellants fundamental right to carry on trade.
Generally speaking, the amount or rate of a tax is a matter exclusively within the legislative judgment and as long as a tax retains its avowed character and does not confiscate property to the State under the guise of tax, its reasonableness is outside the judicial ken.
But it was contended that as the dealer is prohibited from passing on the incidence of tax to the purchaser, 988 the additional tax, unlike sales tax, is a tax on income of the dealer which he must pay whether he makes any pro fit or not and is, therefore, an unreasonable restriction on his fundamental rights under article 19 (1) (g).
The legal incidence of tax on sale of goods under the Tamil Nadu General Sales Tax, 1959 falls squarely on the dealer.
It may be that he can add the tax to the price of the goods sold and thus pass it on to the purchaser.
But it is not necessary that the dealer should be enabled to pass on the incidence of the tax on sale to the purchaser in order that it might be a tax on sales of goods.
In J. K. lute Mills Co. vs State of U.P. this Court said, although it is true that sales tax is, according to accepted notions, intended to be passed on to the buyer, and provisions authorising and regulating the collection of sales tax by the seller from the purchaser are a usual feature of sales tax legislation, it is not an essential characteristic of a sales tax that the seller must have the right to pass it on to the consumer, not is the power of the legislature to impose a tax on sales conditional on its making a provision for sellers to collect the tax from the purchasers.
In Konduri Buchirajalingam vs State of Hyderabad this Court said: "It is then said that the sales tax is essentially an indirect tax and therefore it cannot be demanded of the appellant without allowing him to recoup himself by collecting the amount of the tax from the persons with whom he deals.
This Court has already decided in the case of Tata Iron and Steel Co. Limited vs State of Bihar (1958) 9 S.T.C. 267 that in law a sales tax need not be an indirect tax and that a tax can be a sales tax though the primary liability for it is put upon a person without giving him any power to recoup the amount of the tax pay able, from any other party.
" 989 As we said, the additional tax is a tax upon sales of goods and not upon the income of a dealer and so long as it is not made out that the tax is confiscatory, it is not possible to accept the contention that because the dealer is disabled from passing on the incidence of tax to the purchaser, the provisions of the Act impose an unreason able restriction upon the fundamental rights of the appellants under article 19 (1) (g) or 19 (1) (f).
Dealing with the contention that since the provisions of the Act imposed different rates of tax on different dealers depending upon their turnover there was a violation of Article 14 of the Constitution, Mathew J. who spoke for the Court observed: "The last contention namely that the provisions of the Act impose different rates of tax upon different dealers depending upon their turnover which in effect means that the rate of tax on the sale of goods would vary with the volume of the turnover of a dealer and are, therefore, violative of article 14 is also without any basis.
Classification of dealers on the basis of their respective turnover for the purpose of graded imposition so long as it is based on differential criteria relevant to the legislative object to be achieved is not unconstitutional.
A classification, depending upon the quantum of turnover for the purpose of exemption from tax has been upheld in several decided cases.
By parity of reasoning, it can be said that a legislative classification making the burden of the tax heavier in proportion to the increase in turnover would be reasonable.
The basis is that just as in taxes upon income or upon transfers at death, so also in imposts upon business, the little man, by reason of inferior capacity to pay, should bear a lighter load of taxes, relatively as well as absolutely, than is borne by the big one.
The flat rate is thought to be less efficient than the graded one as an instrument of social justice.
The large dealer occupies a position of economic superiority by reason of his greater volume of his business.
And to make his tax heavier, both absolutely and relatively, is not arbitrary discrimination, but an attempt to proportion the payment to capacity to pay and thus to arrive in the end at a more genuine equality.
The economic wisdom of a tax is within the exclusive province.
990 of legislature.
The only question for the court to consider is whether there is rationality in the belief the legislature that capacity to pay the tax increases, by and large, with an increase of receipts.
"Certain it is that merchants have faith in such a correspondence and act upon that faith.
If experience did not teach that economic advantage goes along with larger sales, there would be an end to the hot pursuit for wide and wider markets . .In brief, there is a relation of correspondence between capacity to pay and the amount of business done.
Exceptions, of course, there are.
The law builds upon the probables, and shapes the measure of the tax accordingly.
At the very least, an increase of gross sales carries with it an increase of opportunity for profit, which supplies a rational basis for division into classes, at all events when coupled with evidence of a high degree of probability that the opportunity will be fruitful".
(See the dissenting judgment of Justice Cardozo.
Justice Brandeis and Justice Stone) The reasoning of the minority in that case appeals to us as more in consonance with social justice in an egalitarian state than that of the majority.
As we said, large dealer occupies a position of economic superiority by reason of his volume of business and to make the tax heavier on him both absolutely and relatively is not arbitrary discrimination but an attempt to proportion the payment to capacity to pay and thus arrive in the end at a more genuine equality.
The capacity of a dealer, in particular circumstances, to pay tax is not an irrelevant factor in fixing the rate of tax and one index of capacity is the quantum of turnover.
The argument that while a dealer beyond certain limit is obliged to pay higher tax, when others bear a less tax, and it is consequently discriminatory, really misses the point namely that the former kind of dealers are in a position of economic superiority by reason of their volume of business and form a class by 991 themselves.
They cannot be treated as on a part with comparatively small dealers.
An attempt to proportion the payment to capacity to pay and thus bring about a real and factual equality cannot be ruled out as irrelevant in levy of tax on the sale or purchase of goods.
The object of a tax is not only to raise revenue but also to regulate the economic life of the society".
The same principles have been recently reiterated by a Three Judge Bench of this Court in the case of M/s Pharma Associates and others vs State of Bihar and Ors.
In the light of the aforesaid pronouncements, it is manifest that the contention put forward by the petitioners that the impugned enactment is devoid of legislative competence inasmuch as it imposes not a tax on sales but a tax on income, that the adoption of a slab system for determining tax liability is alien to the concept of sales tax and that the levy of additional tax under the impugned enactment violates Articles 14 and 19 of the Constitution are all totally devoid of merit.
We do not also see any substance in the plea raised in the Writ Petitions that the provisions of the impugned Act are violative of Article 301 of the Constitution.
In the result, all these Writ Petitions fail and are dismissed with costs.
S.R. Petition dismissed.

dataset_name: IN-Abs

summary/full:
In Tamil Nadu the levy of the Sales Tax is regulated by the Tamil Nadu General Sales Tax Act, 1959.
In the year 1970 the State Legislature enacted the Tamil Nadu Additional Sales Tax Act, (Act XIV of 1970) with effect from May 28, 1970.
The scheme of section 2 of the Act was to levy the Additional Tax by the process of increasing the tax payable under the Act of 1959 by 10 percent the said increase representing the quantum of the Additional Tax.
The proviso to Section stipulates for a concessional treatment in respect of the declared goods.
In September, 1971 the State Legislature enacted the Tamil Nadu Sales Tax (Surcharge) Act, 1971.
with retrospective effect from June, 1971.
Under Section 3 of that Act every dealer liable to pay tax under the Act of 1959 was subjected to a further liability to pay surcharge at the rate of 5 per cent of such tax.
In 1976 the Tamil Nadu Additional Sales Tax (Act II) of 1976 was passed amending and substituting Section 2 of the earlier Act providing for graded rates with a super added condition that the Additional Tax payable cannot be collected from the consumers, a contravention of which would attract penal action.
On receipt of notices of demand issued consequent upon the assessment to Additional Sales Tax under the provisions of the Section as amended by the 1976 Act the petitioners have come up to the Court challenging the constitutional validity of the Act, 1976 and seeking to quash the assessment orders and the notices of demand issued to them.
Dismissing the Writ Petitions, the Court ^ HELD: 1 The contentions that the amended Section 2 of the Tamil Nadu Additional Sales Tax Act 2 of 1976 is devoid of legislative competence in as much as it imposes not a tax on sales but a tax on income, that the adoption 981 of slab system for determining tax liability is alien to the concept of Sales Tax that the levy of Additional Tax under the impugned enactment violates Articles 14 and 19 of the Constitution and that the provisions of the Act are violative of Article 301 of the Constitution are all totally devoid of merit.
[991C D] M/s Pharma Associates and others vs State of Bihar, ; section Kodar vs State of Kerala followed.
The constitutional validity of the levy of Additional Tax is not in any manner affected by the change brought about in the mode of levy and as a result of the amendments effected by the impugned Act.
The impugned enactment has merely amended the 1970 Act.
It has not introduced a new tax; what it has done is only to amend the 1970 Act by providing for different method of computation of the Additional Tax leviable under that Act by linking the rate of levy to the taxable turnover instead or to the amount of tax assessed under the Act of 1959.
The nature and identity of the Additional Sales Tax imposed by the 1970 Act have not been in any way altered by the impugned Act.
[985F;C;E;D] section Kodar vs State of Kerala, referred to.


judgement:
Special Leave Petition (Criminal No. 3038 of 1983.
From the Judgment and order dated the 16th August, 1983 951 of the Madhya Pradesh High Court in Criminal Revision No. 260 of 1983.
S.K.Gambhir, Ashok Mahajan and S.S. Kirpalani for the petitioner.
The order of the Court was delivered by CHINNAPPA REDDY, 1.
On 17.8.1979 the Food Inspector, Sorar, purchased 375 grams of Soyabean oil from the shop of the petitioners, Tulsiram.
The Soyabean oil purchased was divided into three parts; each part was filled in a bottle; each bottle was sealed; and, one of the bottles was sent to the Public Analyst, Raipur for analysis.
The Public Analyst found that the sample was adulterated as it contained traces of cotton seed oil.
On 29.11.1979 a complaint was filed on the basis of the report of the Public Analyst, in the court of the Judicial First Class Magistrate, Balod.
On 17.12.1979 a copy of the report of the Public Analyst was forwarded to the petitioner as required by Rule 9 A of Prevention of Food Adulteration Rules.
The accused petitioner however made no application to the Trial Court to have one of the samples sent to the Central Food Laboratory for further analysis.
He was content merely to deny offence.
After due trial he was convicted by the Magistrate on 8.9.1982, under section 16(1)(a)(i) of the Prevention Food Adulteration Act and sentenced to suffer rigorous imprisonment for six months and to pay a fine of Rs. 1000.
The Appeal preferred by the petitioner to the Sessions Judge, Durg and the Revision Petition preferred thereafter to the High Court of Madhya Pradesh were rejected.
The petitioner now seeks special leave to appeal to this Court under Article 136 of the Constitution.
The learned counsel for the petitioner urged before us that Rule 9 A of the Prevention of Food Adulteration Rules, which has been substituted for Rule 9(j) in 1977, now prescribes that the Local (Health) Authority shall immediately after the institution of the prosecution forward a copy of the report of the Public Analyst by registered post or by hand to the person from whom the sample was taken by the Food Inspector, that the word 'immediately ' occurring in Rule 9 A showed that it brooked no delay and that as G there was a delay of 18 days, in the present case, in forwarding the report to the petitioner, the prosecution was vitiated and the petitioner was entitled to be acquitted.
He argued that the scheme of the Act was changed by the amendments introduced in 1976 and that in consonance with the revised scheme of the Act 952 the rules were also amended.
He invited our attention to the A departure in the language of the present Rule 9 A from the language of old Rule 9(j).
The learned counsel also argued that cotton seed oil was more nutritive and consumable than Soyabean oil and, therefore, a person mixing cotton seed oil with Soyabean oil could not be said to have adulterated soyabean oil.
He invited our attention to Dal Chand vs Municipal Corporation, Bhopal, Kashmiri Lal vs State of Haryana ; Kanda Swami vs Food Inspector: State of Maharashtra vs Tukaram Babu Rao Mane; Perumal vs Kumbakonam Municipality ; and Food Inspector vs Prabhkaran.
We have considered all of them and we do not think it necessary to launch into a discussion of the cases, one by one We would rather refer to and construe the relevant statutory provisions and rules ourselves.
Suffice to say here that we do not agree with the submissions of the learned counsel.
It is true, in 1976 important changes were made in some of the procedural provisions of the Prevention of Food Adulteration Act.
We are concerned in this case with some of the changes made in sections 11 and 13 of the Act and the new Rules made as a consequence.
Before the 1976 amendment, section 11 required the Food Inspector taking a sample for analysis to separate the sample into three parts, seal or fasten up each part and to deliver one of the parts to the person from whom the sample was taken, send another part for analysis to the Public Analyst and retain the third part for production in case legal proceedings were taken or for analysis by the Director of the Central Food Laboratory under sub section 2 of section 13 as the case might be.
Sub section (1) of old section 13 (as it stood before 1976) required the Public Analyst to deliver to the Food Inspector a report of the analysis of any article of food submitted to him for such analysis.
Sub section (2) enabled the accused vendor, after the institution of the prosecution under the Act, to apply to the Court to send the part given to him or the part retained with the Food Inspector for production in case of legal proceedings, to the Director of the Central Food Laboratory for a certificate specifying the result of the analysis to be made by him.
The certificate issued by the Director of the Central Food Labora 953 tory was to supersede the report given by the Public Analyst and was to be final and conclusive evidence of the facts stated therein.
A Rule 9 (j) of the 1955 Rules prescribed that it shall be the duty of the Food Inspector to send by registered post, a copy of the report of the Public Analyst to the person from whom the sample was taken within ten days of the receipt of the said report.
It is obvious that section 13 (2) was intended to secure to the accused vendor the right to have the report of the Public Analyst tested if he so wanted, by obtaining the final and conclusive report of the Director of the Central Food Laboratory.
In order to enable the accused vendor to exercise this right it was necessary to first make available to him the report of the Public Analyst.
So Rule 9 (j) provided that a copy of the report of the Public Analyst should be sent to the person from whom the sample was taken within ten days of the receipt of the report by the Food Inspector.
The mention of ten days as the period within which the Food Inspector was to send the report of the Public Analyst to the person from whom the sample was taken led to considerable controversy whether Rule 9 (j) was mandatory or directory.
Some High Courts took the view that Rule 9 (j) was mandatory and that failure to strictly comply with the rule was fatal to the prosecution.
The matter was finally set at rest by this Court in Dalchand vs Municipal Corporation Bhopal (supra) where it was held that Rule 9 (j) was directory.
It was observed : "There are no ready tests or invariable formulae to determine whether a provision is mandatory or directory.
The broad purpose of the statute is important.
The object of the particular provision must be considered.
The link between the two is most important.
The weighing of the consequence of holding a provision to be mandatory or directory is vital and, more often than not, determinative of the very question whether the provision is mandatory or directory.
Where the design of the statute is the avoidance or prevention of public mis chief, but the enforcement of a particular provision literally to its letter will tend to defeat that design, the provision must be held to be directory, so that proof of prejudice in addition to non compliance of the provision is necessary to invalidate the act complained of.
It is well to remember that quite often many rules, though couched in language which appears to be imperative, are no more than mere instructions to those entrusted 954 with the task of discharging statutory duties for public benefit.
The negligence of those to whom public duties are entrusted cannot by statutory interpretation be allowed to promote public mischief and cause public inconvenience and defeat the main object of the statute.
It is as well to realise that every prescription of a period within which an act must be done, is not the prescription of a period of limitation with painful consequences if the act is not done Within that period.
Rule 9 (j) of the Prevention of Food Adulteration Act, as it then stood, merely instructed the Food Inspector to send by registered post copy of the Public Analyst 's Report to the person from when the sample was taken within 10 days of the receipt of the Report.
Quite obviously the period of 10 days was not a period of limitation within which an action was to be initiated or on the expiry of Which a vested right accrued.
The period of 10 days was prescribed with a view to expedition and with the object of giving sufficient time to the person from whom the sample was taken to make such arrangements as he might like to challenge the Report of the Public Analyst; for example, by making a request to the Magistrate to send the other sample to the Director of the Central Food Laboratory for analysis.
Where the effect of non compliance with the rule was such as to wholly deprive the right of the person to challenge the Public Analyst 's Report by obtaining the report of the Director of the Central Food Laboratory, there might be just cause for complaint, as prejudice would then be writ large.
Where no prejudice was caused there could be no cause for complaint.
I am clearly of the view that R. 9 (j) of the Prevention of Food Adulteration Rules were directory and not mandatory".
As already mentioned by us, some High Courts had earlier taken the view that the Rule was mandatory and that non compliance with the Rule was fatal to the prosecution.
The working of the Act also revealed that often enough the accused vendor would adopt dilatory tactics by waiting till the last minute to exercise his right to apply to the Court to send the sample to the Director of Central Food Laboratory.
This statutory right could not be denied to the accused vendor even when made at the very last stages of the case.
The result was not merely undue and unnecessary delay in the disposal of the case but fairly frequently, it would be discovered 955 that the sample had disintegrated due to lapse of time, thus disabling the Director, Central Food Laboratory from analysing the sample.
With a view to overcome the difficulties encountered in the working of the Act, sections 11 and 13 were recast by the Amending Act of 1976 and new rules were made in 1977, new Rule 9 A replacing old Rule 9 (j).
Sub section (1) of amended section 11 and the whole of amended section 13 may be usefully extracted here.
Section 11 sub section (1) is as follows: "When a food inspector takes a sample of food for analysis, he shall: (a) give notice in writing then and there of his intention to have it so analysed to the person from whom he has taken the sample and to the person, if any, whose name, address and other particulars have been disclosed under section 14A. (b) except in special cases provided by rules under this Act, divide the sample then and there into; three parts and mark and seal or fasten up each part in such a manner as its nature permits and take the signature or thumb impression of the person from whom the sample has been taken in such place and in such manner as may be prescribed; Provided that where such person refuses to sign or put his thumb impression the food inspector shall call upon one or more witnesses and take his or their signature or thumb impressions, of such person: (a) (i) send one of the parts for analysis to the public analyst under intimation, to the Local (Health) Authority; and (ii) send the remaining two parts to the Local (Health) Authority: for the purposes of sub section (2) of this section and sub sections (2A) and (2E) of section 13".
Section 13 is as follows: "(1) The public analyst shall deliver, in such form as may be prescribed, a report to the Local (Health) Authority of the result of the analysis of any article of food submitted to him for analysis.
956 (2) On receipt of the report of the result of the analysis under sub section (1) to the effect that the article of food is adulterated, the local (Health) Authority shall, after the institution of prosecution against the person from whom the sample of the article of food was taken and the person, if any, whose name, address and particulars have been disclosed under section 14A, forward, in such manner as may be prescribed, a copy of the report of the result of the analysis to such person or persons, as the case may be, informing such person or persons that if it is so desired, either or both of them may make an application to the court within a period of ten days from the date of receipt of the copy of the report to get the sample of the article of food kept by the Local (Health) Authority analysed by the Central Food Laboratory.
(2A) When an application is made to the Court under sub section (2), the court shall require the Local (Health) Authority to forward the part or parts of the sample kept by the said Authority and upon such requisition being made, by said Authority shall forward the part or parts of sample to the court with in a period of five days from the date of receipt of such requisite on.
(2B) On receipt of the part or parts of the sample from the Local (Health) 'Authority under sub section (2A), the court shall first assertion that mark and seal or fastening as provided in clause (b) of sub section (1) of section 11 are intact and the signature or thumb impression, as the case may be, is not tampered with, and despatch the part or, as the case maybe, one of the parts of the sample under its own seal to the Director of the Central Food Laboratory who shall thereupon send a certificate to the court in the prescribed form within one month from the date of receipt of the part of the sample specifying the result of the analysis.
(2C) Where two parts of the sample have been sent to the court and only one part of the sample has been sent by the court to the Director of the Central Food Laboratory under sub section (2B), the court shall, as soon as 957 practicable, return the remaining part to the Local (Health) Authority and the Local (Health) Authority shall destroy that part after the certificate from the Director of the Central Food Laboratory has been received by the court; Provided that where the part of the sample sent by the court to the Director of Central Food Laboratory is lost or damaged, the court shall require the Local (Health) Authority to forward the part of the sample, if any, retained by it to the court and on receipt thereof the court shall proceed in the manner provided in sub section (2B).
(2D) Until the receipt of the certificate of the result of the analysis from the Director of Central Food Laboratory the court shall not continue with the proceedings pending before it in relation to the prosecution.
(2L) It after considering the report, if any, of the Food Inspector or otherwise, the Local (Health) Authority is of the opinion that the report delivered by the public analyst under sub section (1) is erroneous, the said Authority shall forward one of the parts of the sample kept by it to any other public analyst for analysis and if the report of the result of the analysis of that part of the sample by that public analyst is to the effect that the article of food is adulterated.
the provisions of sub section (2) to (2D) shall, so far as may be apply.
(3) The certificate issued by the Director of the Central Food Laboratory under sub section (2B) shall supersede the report given by the public analyst under sub section (1).
(4) Where a certificate obtained from the Director of the Central Food Laboratory under sub section (23) is produced in any proceeding under this Act, or under sections 272 to 276 of the Indian Penal Code, 45 of 1860 it shall not be necessary in such proceeding to produce any part of the sample of food taken for analysis.
(5) Any document purporting to be a report signed by a 958 public analyst, unless it has been supersede under sub section (3) or any document purporting to be a certificate signed by the Director of the Central Food Laboratory, may be used as evidence of the facts stated therein in any proceeding under this Act or under sections 272 to 276 of the Indian Penal Code 45 of 1980.
(Provided that any document purporting to be a certificate signed by the Director of the Central Food Laboratory) (not being a certificate with respect to the analysis of the part of the sample of any article of food referred to in the proviso to sub section (1A) of section (16) shall be final and conclusive evidence of the facts stated therein).
Explanation In this section, and in clause (f) of sub section (1) of section 16, "Director of the Central Food Laboratory ' shall include the officer for the time being in charge of any Food Laboratory (by whatever designation he is known) recognised by the Central Government for the purpose of this section)".
It will be noticed that amended section 11 does not require a part of the sample to be given to the person from whom the sample was taken.
While one part is required to be sent to the public Analyst for analysis, the other two parts are required to be sent to the Local (Health) Authority.
The amended section 13 requires the Public Analyst to deliver to the Local (Health) Authority a report of the result of his analysis.
Section 13(2) requires the Local (Health) Authority lo forward to the person from whom the sample was taken a copy of the report of the Public Analyst, if the report is to the effect that the article of food is adulterated.
The report is to be forwarded in such manner as maybe prescribed, after the institution of the prosecution.
Thereafter the person from whom the sample was taken is given the right to apply to the court within ten days of the receipt by him of the copy of the Public Analyst 's report to get the sample kept by the Local (Health) Authority analysed by the Central Food Laboratory.
It is no longer open to the accused vender to wait till the very last minute to apply to the court to have the sample analysed by the Central Laboratory.
If he wants to exercise the statutory right of having the sample analysed by the Central Food Laboratory he has to 959 exercise that right by applying to the court within ten days of receipt, by him of the Public Analyst 's Report.
It is also to be noticed that amended section 13(2) does not prescribe any point of time before which the report of the Public Analyst is to be forwarded to the accused vendor.
But, the very basis of a prosecution for adulteration of food is the report of the Public Analyst that the article of food is adulterated.
The accused is given the right to dispute the Public Analyst 's report by applying to the court for an analysis by the Central Food Laboratory.
If the report of the Central Food Laboratory is to the effect that the article of food is not adulterated the very basis of the prosecution will disappear.
In such an event the further pursuit of the prosecution will be needless and the accused will have to be discharged or acquitted as the case may be.
It is therefore to be assumed that the report of the Public Analyst is to be made available to the accused vender at the commencement of the prosecution, that is to say, before the prosecution starts leading evidence in the case, and in good and sufficient time to enable the accused to exercise his right of having the sample analysed by the Central Food Laboratory if he so desires it.
We have seen that section 13(2) provides that the Public Analyst 's Report, shall be forwarded to the person from whom the sample was taken 'in such manner as may be prescribed '.
Now, Rule 9 A of the Rules as amended in 1977 which replaces Rule 9(j) of the old Rules prescribes the manner in which the Public Analyst 's Report may be forwarded to the person from the sample was taken.
lt reads as follows: "The Local (Health) Authority shall immediately after the institution of prosecution forward a copy of the report of the result of analysis in Form III delivered to him under sub rule (3) of Rule 7, by registered post or by hand, as may be appropriate, to the person from whom the sample of the article was taken by the Food Inspector, and simultaneously also to the person, if any, whose name, address and other particulars has been disclosed under Section 14A of the Act; Provided that where the sample conforms to the pro visions of the Act of the Rules made thereunder, and no prosecution is intended under sub section (2), or no action is intended under sub section (2E) of section 13 of the Act, the Local (Health) Authority shall intimate the 960 result to the vendor from whom the sample has been taken and also to the person, whose name, address and other particulars have been disclosed under Section 14A of the Act, within 10 days from the receipt of the report from the Public Analyst.
" The first thing to be noticed is that Rule 9 A carefully refrains from mentioning any definite limit of time such as that found in old Rule 9(j) which gave rise to the controversy whether the Rule was mandatory or directory, and instead uses the general expression 'immediately. ' The Local (Health) Authority is now required to forward to the person from whom the sample was taken in the manner prescribed, a copy of the report of the Public Analyst immediately after the institution of the prosecution.
While prescribing the manner in which the Report may be forwarded the opening words of Rule 9 A "The Local (Health) Authority shall (immediately) after the institution of the prosecution forward ' ' (bracket in ours), are borrowed verbatim from section 13(2) with the word 'immediately ' inserted in between.
The Rule making authority could never have intended to amend the statute by super adding the word immediately ' as indeed it was not competent to do.
Rule 9 A has to be interpreted so as to keep it in tune with and within the bounds of section 13(2).
The departure from the previous rule by refraining from mentioning a definite period of time as was done in the old rule makes it evident that the expression 'immediately ' is used to convey a sense of continuity rather than a sense of urgency.
It is not to be understood to mean the very next instant, the very next hour, that very day or the very next day.
It must be construed in its setting.
It is no use turning to dictionaries.
Dictionaries give variegated meanings to words.
What meaning is to be adopted depends on the context.
Rule 9 A is made in the context of the amended section 13(2) which provides for the forwarding of the Public Analyst 's Report to the person from whom the sample was taken after the institution of prosecution and enables that person to apply to the court to have analysed by the Central Food Laboratory the sample kept with the Local (Health) Authority.
In the context the expression 'immediately ' is only meant to convey 'reasonable despatch and promptitude ' and no more.
The idea is to avoid dilatoriness on the part of officialdom and prevention of unnecessary harassment to the accused.
But the idea is not to penalise the prosecution and to provide a technical defence.
First to construe 'immediately ' as meaning 'at once ' or 961 'forthwith ' and next to hold delay to be fatal to the prosecution would perhaps be to make Rule 9 A ultra vires section 13(2).
We do not think it is permissible to interpret Rule 9 A in such a way.
The real question is, was the Public Analyst 's Report sent to the accused sufficiently early to enable him to properly defend himself by giving him an opportunity at the outset to apply to the court to send one of the samples to the Central Food Laboratory for analysis.
If after receiving the Public Analyst 's Report he never sought to apply to the court to have the sample sent to the Central Food Laboratory, as in the present case ' he may not be heard to complain of the delay in the receipt of the report by him, unless, of course, he is able to establish some other prejudice.
Our conclusions on this question are; The expression 'immediately ' in Rule 9 A is intended to convey a sense of continuity rather than urgency.
What must be done is to forward the report at the earliest opportunity, so as to facilitate the exercise of the statutory right under section 13(2) in good and sufficient time before the prosecution commences leading evidence.
Non compliance with Rule 9 A is not fatal.
It is a question of prejudice.
Applying these principles.
We find no merit in the submissions based on Rule 9 A.
The second submission of the learned counsel, namely, that mixing cotton seed oil with Soyabean oil cannot be considered to be adulteration of Soyabean oil and therefore the petitioner was not liable to be convicted under section 16 (1) (a) (i) is equally without any merit.
Section 16 (1) (a) (i) makes a person liable to punishment if whether by himself or by any other person on his behalf, he imports into India or manufactures for sale, or stores, sells or distributes any article of food which is adulterated within the meaning of sub clause (m) of clause (ia) of section (2) or misbranded within the meaning of clause (ix) of that section or the sale of which is prohibited under any provision of this Act or any rule made thereunder or by an order of the Food (Health) Authority.
It is therefore seen that the sale of an article of food the sale of which is prohibited by any rule made under the Act also renders the person selling the article of food liable to punishment under section (16) (1) (a) (i).
Rule 44 (e) prohibits the sale of a mixture of two or more edible oils as an edible oil.
A mixture of Soyabean oil and cotton seed oil cannot therefore be sold as Soyabean oil irrespective of whether the mixture has affected the Soyabean oil injuriously or not.
The special leave petition is therefore dismissed.
S.R. Petition dismissed.

summary/full:
On the basis of the report of the Public Analyst that the sample of soya.
bean oil purchased by the Food Inspector, Sorar on 17.11.79 from the shop of the accused petitioner was found adulterated, a complaint was filed on 29.11.79 in the Court of the Judicial Magistrate, Balod.
On 17.11.79 a copy of the report of the Public Analyst was forwarded to the petitioner as required by Rule 9A of the Prevention of Food Adulteration Rules.
The accused petitioner made no application to the trial Court to have one of the samples sent to the Central Food Laboratory for further analysis, but was content merely to deny offence.
After due trial, he was convicted by the Magistrate on 8.9.82 under section 16 (1) (a) (i) of the Prevention of Food Adulteration Act and sentenced to suffer rigorous imprisonment for six months and to pay a fine of Rs. 1000.
The appeal preferred by the petitioner to the Session Judge, Durg and the Revision Petition preferred thereafter to the High Court of Madhya Pradesh were dismissed, Hence the Special leave petition.
Dismissing the petition, the Court, ^ HELD: 1:1.
The expression "immediately" in Rule 9A is intended to convey a sense of continuity rather than urgency.
What must be done is to forward the report at the earliest opportunity, so as to facilitate the exercise of the statutory right under section 13(2) of the Prevention of Food Adulteration Act in Food and sufficient time before the prosecution commences leading evidence.
[961C D] 1:2.
Non compliance with Rule 9A is not fatal.
It is a question of prejudice.
Applying this principle.
in the instant case, the trial cannot be said to 950 be vitiated by the delay of eighteen days in forwarding the report of the Public Analyst to the Petitioner.
Rule 9A has to be interpreted so as to keep it in tune with, and within the bounds of section 13(2).
The amended section 13(2) does not prescribe any point of time before which the report of the Public Analyst is to be forwarded to the accused vendor.
But, the very basis of a prosecution for adulteration of food is the report of the Public Analyst that the article of food is adulterated The accused is given the right to dispute the Public Analyst 's report by applying to the court for an analysis by the Central Food Laboratory If the report of the Central Food Laboratory is to the effect that the article of food is not adulterated the very basis of the prosecution will disappear.
In such an event the further pursuit of the prosecution will be needless and the accused will have to be discharged or acquitted as the case may be.
It is therefore to be assumed that the report of the Public Analyst is to be made available to the accused vendor at the commencement of the prosecution, that is to say, before the prosecution starts leading evidence in the case, and in good and sufficient time to enable the accused to exercise his right of having the sample analysed by the Central Food Laboratory if he so desires it.
There fore Rule 9A carefully refrains from mentioning any definite limit of time and the expression "immediately" is not to be understood to mean the very next instant, the very next hour, that very day or the very next day.
Construed in its setting, the expression "immediately" is only meant to convey 'reasonable despatch and promptitude ' and no more.
The idea is to avoid dilatoriness on the part of official dom and prevention of unnecessary harassment to the accused.
But the idea is not to penalise the prosecution and to provide a technical defence.
If after receiving the Public Analyst 's report the accused never sought to apply to the court to have the sample sent to the Central Food Laboratory, as in the present case, he may not be heard to complain of the delay in the receipt of the report by him, unless, of course, he is able to establish some other prejudice.
[960E H; 961A B] Dal Chand vs Municipal Corporation, Bhopal AIR 1983 SC 303; Kashmiri Lal vs State of Haryana 1981 (2) AIPFC 167, Kanda Swami vs Food Inspector 1982 (1) AIPFAC 322, Perumal vs Kumbakonam Municipality 1982 (2) AIPFAC 106 and Food Inspector vs Prabhkaran 1983 (1) AIPFAC 84; considered.
The mixing of cotton seed oil with soyabean oil is adulteration of soyabean oil incurring liability to be convicted under section 16(1) (a) (i) of the Prevention of Food Adulteration Act.
The sale of an article of food the sale of which is prohibited by any rule made under the Act also renders the person selling the article of food liable to punishment under section 16 (l) (i).
Rule 44(e) prohibits the sale of a mixture of two or more edible oils as an edible oil.
A mixture of soyabean oil and cotton seed oil cannot therefore be sold as soyabean oil irrespective of whether the mixture has affected the soya bean oil injuriously or not.
[961E G]


judgement:
Civil Appeal Nos.
750 53 of 1982.
Appeal by special leave from the Judgment and order dated the 3rd September, 1981 of the Madhya Pradesh High Court in S.A. Nos. 249, 251 253 of 1980.
WlTH Civil Appeal No. 3357 of 1982.
Appeal by special leave from the Judgment and order dated the 24th August, 1982 of the Madhya Pradesh High Court in Second Appeal No. 311 of 1982.
A.K. Sen, R.P. Singh Suman Kapoor.
D.S. Mehra and R.K. Jain, tor the Appellants in C.A section 750 53 of 1982.
P.K. Jain, for the Appellants in CA.
3357/82.
U.R. Lalit.
Mrs. Suneeta Kriplani, Ashok Mahajan and S.K. Gambhir for the Respondent.
The Judgment of the court was delivered by VARDARAJAN, J.
These appeals by special leave are by the tenants whose eviction has been ordered by all the courts below under section 12 (1) (f) and (h) of the Madhya Pradesh Accommodation Control Act, 1961 on the ground that the respondent landlord requires the premises bonafide for the purpose of having his gold and silver ornaments factory after demolishing the present building and putting up a new building at the place.
The tenants were carrying on various kinds of business in the premises.
Their defence was that the landlord has other alternative accommodation where he could locate his proposed factory and that his requirement is not bonafide.
The courts below have found that the alternative accommodation alleged by the appellants to be available to the landlord is really a farm house which is used for the residential purpose, namely as accommodation for the farm servants of the 947 landlord and it is situated about these miles away from the town and near a burial ground in a lonely place and that it is also not a suitable place where a factory for the manufacture of gold and silver ornaments could be carried on without risk to life and property.
As regards the ground of bonafide requirement, the courts below have found that the requirement of the landlord is bonafide and they have ordered eviction of the appellants under section 12 (1) (f) (h) of the Act.
Mr. A.K. Sen, learned counsel for the appellants contended before us that alternative accommodation is available and that it is not possible to accept the finding of the courts below that it is not suitable.
After going through the judgment of the first Appellate Court which has dealt with this question in depth we agree with the courts below that the alternative accommodation alleged to be available to the landlord is really a farm house where the farm servants of the landlord are accommodated and that it is not suitable for the purpose for which the landlord requires accommodation.
Mr. Sen submitted that the eviction ordered is under section 12 (1) (h) of the Act and that section is of the Act is attracted and it is obligatory on the part of the landlord to provide accommodation of equal extent to the tenants in the new building to be constructed by him.
The first Appellate Court has observed in its judgment that the order of eviction is sought on the main ground of the bonafide requirement of the landlord.
Therefore there is no case for the application of section 18 to the facts of the present case.
Though the courts below have passed the order of eviction under section 12 (l) (f) and (h) we are of the opinion that the order of eviction is based really and substantially only under section 12 (1) (f) of the Act.
The fact that section 1 2(1) (h) is also mentioned in the orders of the courts below does not make the order of eviction purely one under that section, for the main ground of requirement of the landlord is bonafide personal requirement for locating his proposed factory for the manufacture of gold and silver ornaments.
A case more or less similar on facts had come up before this Court in Ramnilal P. Mehta vs Indradaman Amritlal Sheth which arose from proceedings taken under the Bombay Rents, Hotel and Lodging House, Rates Control Act (57 of 1947).
There the eviction was sought under section 13(1) (g) and 13 (1) (hh) of that Act.
948 Section 13(1) (g) of that Act corresponds to section 12 (1) (f) of the Madhya Pradesh Accommodation Control Act and Section 13(1) (hh) of that Act corresponds to section 12 (1) (g) namely that the building is required for effecting either repairs or alterations.
This Court has observed in that case that once the landlord establishes that he bonafide requires the premises for his occupation, he is entitled to recover possession of it from the tenant under the provisions of sub clause (g) of section (13) (1) irrespective of the fact whether he would occupy the premises without making any alterations or after making the necessary alterations.
Though the facts of that case are slightly different in that the requirement was for occupation after making some alterations where as in the present case the requirement is for locating the landlord 's factory after demolishing and re constructing the building, the principle deducible from that decision would apply to the facts of even these case.
We agree with Mr. U.R. Lalit, learned counsel for the respondent landlord that the order of eviction is based mainly under section 12(1) (f) of the Act and that from the mere fact that section 12(1)(h) also is added would not make the order of eviction only one under section 12(1)(h) of the Act and section 18 of the Act will not be attracted.
This fact was not raised in the courts.
below, perhaps due to proper undertaking of this position.
For these reasons the appeals fail and are dismissed but under the circumstances of the case without costs.
H.S.K. Appeal dismissed.

summary/full:
The respondent landlord sought eviction of the appellants tenants under section 12 (1) of the Madhya Pradesh Accommodation Control Act, 1961 on the main ground that the landlord bonafide required the premises for locating his gold and silver ornaments factory after demolishing and reconstructing the building.
The courts below found that the requirement of the landlord was bonafide and ordered eviction of the tenants under section 12 (l) (f) and (h) of the Act.
In these appeals the tenants contended that since the eviction ordered was under section 12 (l) (h), section 18 of the Act was attracted and it was obligatory on the part of the landlord to provide accommodation of equal extent to the tenants in the new building to be constructed by him.
Dismissing the appeals, ^ HELD: In Ramnilal P. Mehta vs Indradaman Amritlal this Court observed that once the landlord establishes that he bonafide requires the premises for his occupation, he is entitled to recover possession of it from the tenant under the provisions of sub clause (g) of section 13 (1) of the Bombay Rents, Hotel and Lodging House.
Rates Control Act, 1947 irrespective of the fact whether he would occupy the premises without making any alterations or after making tho necessary alterations.
[948B C] Ramnilal P. Mehta vs Indradaman Amritlal Sheth, ; , referred to.
Section 13 (1) (g) of the Bombay Rents, Hotel and Lodging House, Rates Control Act, 1947 corresponds to section 12 (1) (f) of tho Madhya Pradesh Accommodation Control Act.
[948A] Applying the above principle to the facts of the instant case, though the Courts below have passed the order of eviction under section 12 (1) (f) and (h) the Court is of the opinion that the order of eviction is based really and substan 946 tially only under section 12 (1) (f) of the Act.
The fact that section 12 (1) (h) is also mentioned in the order of the Court below does not make the order of eviction purely one under that section, for the main ground of requirement of the landlord is bonafide personal requirement for locating his proposed factory for the manufacture of gold or silver ornaments.
Therefore there is no case for the application of section 18 to the facts of the present case.
[947F G]