State of Punjab & Ors. v. Sukh Deb Sarup Gupta

Grove!, ;J. This is an appeal by special leave from a judg-ment of the Punjab High Court .holding that medicinal or toilet preparations containing alchohal were exempt from the payment of tax under the East Punjab General Sales Tax Act, hereinafter called "the Act".

The respondent is running a factory for manufacturing spiritu-ous and medicinal preparations containing alchohal at Jind in the district of Sangrur. Before the coming into force of the Constitu-tion of India on January 26, 1950 "meqicinal or toilet prepara-tions" fell within the definition of "excisable articles" on which the excise duty was payable under s. 3(6)(c) of the Punjab Excise Act 1914. The Act came into force Hi 1948. Under its provisions tax was levied on t)le sale of goods with the exception of articles exempted under s. 6' of the Act. These articles were given in Schedule B wherein F.ntry 37 was in these terms :

"All goods on which d~ty is or may be levied under the Punjab Excise Act, 19\4." · After the enforcement of the Constitution alcoholic preparations which under the Government of India Act 1935 was a provincial subject came to be dealt with in the Union List. Section 3 ( 6 )( c) of the Punjab Excise Act was, therefore, omitted by the Adapta-tion of Laws Order 1950. However, by virtue of Art. 277 of the Constitution the State Government continued ·to levy and collect the excise duty on the above articles even after January 26, 1950. In 1955 the Union Parliament enacted the Medicinal and Toilet Preparations (Excise Duties). Act, hereinafter referred to as the "Central Act". Section 21 of the Central Act provided :

"If, immediately before the commencement of this Aci, there is in force in any State any law correspond· . ing fo this Act, that law is hereby repealed."

The effect of the Central Act was to bring about uniformity in all States in the imposition of excise duty on alcoholic preparations. It is common ground that the collection of the duty leviable under the Central Act continued to be done by the State Government and the duty so callected went to the State Excheq11er. The res-pondent was assessed to -sales tax on alcohQlic preparations on which excise duty was being levied under the Central Act by the State authorities for the years 1959-60, 1960-61 and 1961-62. According to the appellant State it was entitled to levy sales tax on alcoholic preparations of the nature which were covered by the Central Act, for the reason that the respondent could no longer claim the benefit of the exemption contained in Entry 3 7 of Sche-dule B to the Act. The respondent filed a petition under Art. 226 of the Constitution challenging the levy of sales tax on the alcoho-lic preparations on which excise duty was being paid under the Central Act. This petition succeeded before a learned Single Judge of the High Court who held that by virtue of s. 8 of the General Clauses Act 1897 in Entry 37 reference to the · Punjab Excise Act must be taken to be a reference to the relevant provi· sions of the Central Act. According to him the State could not levy any sales tax under the Act on the preparations' in question. His judgment was affinned by a division bench and the appeal filed by the State was dismissed.

The short point which falls to be determined is whether &. 8 of the General Clauses Act 1897 would govern the case and whether the respondent could claim the benefit of the exemption in Entry 37 of Schedule B to the Act notwithstanding that the exemption relat.ed expressly only to goods on which duty could be levied under the Punjab Excise Act 1914. Section 8(1) of the General Clauses Act provides :

"8 ( 1) Where this Act, or any Central Act or Regula·

tion made after the commencement of this Act, repeals and re-enacts, with or without modifies· tion, any provision of a former enactment, then t references in any other enactment or in any instrument to the provision so repealed ~a!l, ur.less a different intention appears, be constru· ed as ref-.rences to the provision so re-enact· ed."

According to s. 3 (19) of that Act "enactment" shall include any provision contained in any Act. On behalf of the State it has been argued that the words "former enactment" in s. 8 can refer only to a Central Act or provisions contained therein and they cannot cover Acts passed by the State legislature. Such an argu-ment cannot be entertained because it goes against the express language of s. 3(19) which does not lay down any such limitation. The obvious meaning of that provision is that enactment would include any Act or provision contained therein passed by :he Union Parliament or the State Legislature. The limited meaning sought to be attributed to the word "enactment" cannot be given to it for another reason It could never be intended that when an Act passed by the Union Parliament repeals a State Act the principle underlying s. 8 should never become applicable. The High Court, in our opinion, was right in saying that there was nothing in s. 8 to indicate that the words "former enactment" meant only a Central enactment and not a State enactment and that the courts would not be justified to read in that section words which were not there and to place a narrow and limited consu-uc· tion on the words "former enactment." It has not been disputed on behalf of the appellant that if s. 8 is applicable the respondent would .be exempt from payment of tax under the Act on the alcoholic preparations on which excise duty is being levied under the provisions of the .Central Act.

The appeal fails and is dismissed with costs.