State of Madras v. S. Padmanabhan Etc.

Grover, J. These appeals by special leave from a judgment of the Madras High Court involve the question of the validity of a notification No. 976 issued under the provisions of the Tamil Nadu General Sales Tax Act, 1959, hereinafter called the Act, which was to come into force on April 1, 1959.

The respondents are dealers in friuts in the State of Tamil Nadu. Originally under the Madras General S1les Tax Act, 1939 the sale of fruits was liable to tax. By means of a notification dated March 25, 1954 the sale of fruits among other commodities was exempted from payment of tax under s. 6 of that Act. The 1939 Act was repealed and re-enacted by fhe Act which was pub-lished in the Official Gazette on March 18, 1959 but which was to come into force, as stated before, on April .1, 1959. On March 28, 1959 the Government passed G.O. No. 976 which was as follows:-

"The Madras General Sales Tax Act, 1959, which will replace the Madras General Sales Tax Act 1939, will come into force from 1st April 1959. Th~ Gov-ernmeru Ji.live examined the question of continuing or withdrawing the exemption from sales tax or the re-ductions in rates of sales tax so far granted under the Madras General Sales Tax Act, 1939, and such of them as have been decided to be continued from 1st April 1959 are specified in the notifications annexed to this order:

¶2The notifications annexed to this order will be published in the Fort. St. George Gazette. The Control-ler of Stationery and Printing, Madras, is P~quested to publish in the notification in the Fort St. George Gazette, dated the 1st April 1959 without fail.

The notification itself may also be reproduced :

"In exercise of the powers conferred by Section 17 of the Madras General Sales Tax Act, 1959 (Madras II Act 1 of 1959) and in supersession of all the notifica-tions issued under s. 6 of the Madras General Sales Tax Act, 193 9 (Madras Act IX of 19 3 9) the Governor of

Madras hereby makes the exemption in respect of the tax payable, under .the said Madras General Sales Tax Act, 1959, o.n the sale or purchase of the goods or class of goods or by the class or persons or institutions in re-gard to the whole or part of their turnover specified in column ( 2) of the Schedule, below subject to the condi-tions and restrictions, if any, specified in the corres-ponding entry in column ( 3) thereof.

This notification shall come into force on the 1st day of April 1959."

In the Schedule which contained the exemptions fresh fruit was not one of the items which was exempted from tax. In other words. by virtue of this notification the respondents became liable to pay tax on the sale of fresh fruit with effect from April 1, 1959. It may be mentioned that the exemption with regard to fresh fruits was once again granted with effect from April 1, 1960. It was only during the assessment year 1959-60 that the respondents were liable to pay tax on the sale of fresh fruits under the provisions of the Act. It is unnecessary to refer to the course which the litiga-tion in the shape of writ petitions filed by the respondent took in the High Court. It would be sufficient to mention that by the judgment under appeal the High Court struck down. the notifica-tion No. 976 dated March 28, 1959 which was to take effect from April l, 1959. It was held that this notification had been issued before the Act came into force which amounted to an exercise of power which did not exist on the date on which the notification was promulgated. Ir was further held that the respondents were entitled by reason of the saving provision of s. 61 of the Act to invoke the ·exemption tliat had been granted under the earlier Act of 1939.

Section 3 provides for the levy of taxes on sale or purchase of goods. Under the first proviso to sub-s. (1) of that section it was expressly laid down that in case of goods specified therein which included fresh fruits ti)e rate of tax would be 1 % on the turnover of a de~ler whose 1total turnover for a year wa~ not less than Rs. 10,000/-. Under the second proviso the dealers dealing ex-clusively in one or more of the goods enumera'red in the first pro-viso except foodgrains, rice products, wheat products and milk whose total turnover for a year was not more than 30,000/- were· not to be liable to pay tax under sub-s. (1) Section 17 empowered the Government by notification to make an exemption or reduc-tion in rate in respect of any tax payable under the Act. Now what the GovernmPnt did w•~ thM it m•n~ "" orn•r on March 28, 1959 in anticipation of the coming into force of the Act "U April 1, 1959. It decided that a notification be published in the Fort. St. George Gazette on April 1, 1959 declaring the exemp-tions which would be granted under s. 17 of the Act in superses-sion of all the previoi.-s notifications issued under s. 6 of the Act of 1939. It is not disputed that the impugned notification was actually published in the Gazette on April 1, 1959. On that date the Act had come into force. We are wholly unable to compre-hend how the validity of the notification could be impugned when it was actually promulgated on the date on which the Act came into force. The mere fact that it bore an earlier elate was of no consequence. Section 53(4) of the Act expressly provided:

'(a) All rules made under this Act shall be published in the Fort. St. George Gazette, and unless, they are expressed to come into force on a particular day shall come into force on the day on which they are so pub-lished.

(b) All notifications issued under this· Act, shall, un-less they are expressed to come into force on a particular day, come into force on the day on wh'ch they are pub-lished.

The notification in question was stated to com'.: into force on April 1, 1959. Besides, it W<tS published on that very day. Therefore, in terms of clause (b) it came into force only on April l, 1959 and not earlier. No one has challenged nor indeed it can be disputed that on April l, 1959 a valid notification could be issued under s. 17 of the Act. For this reason alone the validity of the notification must be upheld.

On behalf of the re~pondents our attention has been invited to Boppanna Venka•eswa•aloo & Others v. Sup~rintendent, Cen-tral Jail, H,vderabad Sta 1e(1). The fac•s i1n that case were a'to-gether different and have been discussed in the jud2ment of the High Court. We consider it wholly unnecessary to refer to them as the point which arose there about the validity of certain orders made under the Preventive Detention (Second Amendment) Act 1952 was entirely of a different nature and is not apposite for the purpose of the present case.

In the result the appeals are allowed and the decision of the High Court is hereby reversed. The writ petitions shall stand dis-missed. In view of the entire circumstances the parties are left to bear their own costs .

CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 177 to 183 of 1967.

Appeals by special leave from the judgment and order <.lated December 28, 1964 of the Madras High Court in Writ Appeals Nos. 354 to 360 of 1963.

S. T. Desai and A. V. Rangam, for the appellants (in al! the appeals).

T. A. Ramachandran, for the responde,nts (in all the appeals).