PETITIONER:
BHAIYALAL SHUKLA
Vs.
RESPONDENT:
STATE OF MADHYA PRADESH
DATE OF JUDGMENT:
31/12/1961
BENCH:
HIDAYATULLAH, M.
BENCH:
HIDAYATULLAH, M.
SINHA, BHUVNESHWAR P.(CJ)
KAPUR, J.L.
SHAH, J.C.
MUDHOLKAR, J.R.
CITATION:
1962 AIR 981 1962 SCR Supl. (2) 257
CITATOR INFO :
R 1963 SC 222 (27)
APL 1963 SC 853 (15)
R 1964 SC1179 (4)
R 1978 SC 747 (32)
F 1980 SC 1 (21,22,23,29)
E 1984 SC 121 (16)
ACT:
Sales Tax-C p and Berar Act extended to
Vindhya Pradesh-Validity-C.P. & Berar Sales Tax
Act, 1947 (21 of 1947), as extended to Vindhya
Pradesh-Part C States (Laws) Act, 1950, s, 2-
Government of Part C States Act (49 of 1951) ss.
21, 22-Part C State (Miscellaneous Laws) Repealing
Act (66 of 1951)-Vindhya Pradesh Laws (Validating)
Act (6 of 1952) s. 7-Vindhya Pradesh Sales Tax
Ordinance (2 of 1949) Constitution of India Art.
14.
HEADNOTE:
The appellant was doing business of
construction as contractor under Public Works
Department in Vindhya Pradesh, now Madhya Pradesh.
He challenged the levy of Sales Tax on building
materials supplied by him for the year 1953-54 to
1958-59. The contention of the Petitioner was that
the tax was not leviable in view of the decision
of the Supreme Court in Gannon Dunkerley's case
and Pandit Banarsi Das's case. The respondents
claimed that the tax was leviable because the case
fell within the derision in Mithan Lal's case. The
Rajpramukh of the United State of Vindhya Pradesh
promulgated the Vindhya Pradesh sales Tax
Ordinance 2 of 1949. On Vindhya Pradesh becoming
Part C State of India the said ordinance of
Rajpramukh was applied to the whole of it with
effect from April 1, 1950, by notification No. 7
of March 28, 1951. Under s. 2 of the Part C States
(Laws) Act, 1950, by notification No. S.R.O. 6
dated December 29, 1950, the Central Provinces &
Berar Sales Tax Act 1947, was extended to Vindhya
Pradesh. The notification also added s. 29 to the
Madhya Pradesh Act so extended, by which ordinance
2 of 1949 was repealed. By reason of the decision
of this Court in the Delhi Laws Act case the
addition of s. 29 was unconstitutional. Parliament
then enacted the Part C States (Misc. Laws)
Repealing Act (66 of 1951). By s. 2 of the Act the
Vindhya Pradesh Sales Tax ordinance, 1949, was
deemed to have been repealed from December 29,
1950. The Vindhya Pradesh Laws (Validity) Act,
1952, also provided and declared that Central
Provinces & Berar Sales Tax Act, 1947, which was
extended to Vindhya Pradesh under s. 2 of the Part
C States Laws Act, 1950, has been and shall be
deemed to be in force in Vindhya Pradesh from
April 1, 1951. The said C. P. & Berar Sales Tax
Act defined contract, goods, sales etc, and by
these definition the materials used or supplied by
258
a building contractor in the constructions etc,
were made liable to Sales Tax in accordance with
the schedule rates. The question is, whether C. P.
JUDGMENT:
been extended for the first time by the Vindhya
Pradesh legislature in 1952, when it passed the
Vindhya Pradesh Laws (Validating) Act, 1952, to
the exclusion of the order contained in the
notification No. S.R.O. 6 or whether the Act
continued to be in force in Vindhya Pradesh even
before and all that the Vindhya Pradesh Act did as
to remove any doubts about its validity.
The rival contentions of the appellant and
the respondents are reduced to the proposition
that if the State Legislature of Vindhya Pradesh
extended the Central Province and Berar Sales Tax
Act, the extended Act would suffer from disability
pointed out in Gannon Dunkerley’s case, but if the
said Act was extended by the notification under
Part C States (Laws) Act, 1950, then it must be
treated as incorporated in the Act and to have the
authority of Parliament which, in relation to Part
C States, had no limitation whatever.
^
Held, that the extended law in the C. P. &
Berar Sales Tax Act, 1947, did not depend on the
repeal of the earlier law for its validity. It
would have been operative, even if the earlier law
was not repealed, but the earlier law was in fact
repealed from December 29, 1950, and no question
of conflict between the new and the old law ever
arose.
Held, further, that the Vindhya Pradesh
Amending Act made only verbal changes, but did not
alter the structure of the tax. No doubt, that Act
contained certain provisions under which sales of
building materials are taxable, and if the
authority to tax the so-called sales emanated from
a State Legislature, then the law would fail. The
law was first extended to the Vindhya Pradesh by
the Central Government acting under the authority
of Parliament legislating for a Part C State.
Parliament and the Central Government were not
subject to the disabilities pointed out in Gannon
Dunkerley’s case, and the matter was covered by
Mithan Lal’s case. Even if the notification S.R.O.
No. 6 failed to repeal ordinance 2 of 1949
Parliament by its own law effaced that ordinance
in Vindhya Pradesh from December 29, 1950, and
enacted that ordinance shall be deemed to be
repealed from that day. The ordinance 2 of 1949
did not continue in Vindhya Pradesh down to
January 8, 1953 because by fiction the ordinance
was repealed from December 29, 1950.
Held, also, that the laws in different
portions of new State of Madhya Pradesh were
enacted by different legislatures and under s. 119
of the States Reorganisation Act, all
259
laws in force in a state were to continue until
repealed or altered by the appropriate
Legislature. The different sales tax laws in
different parts of Madhya Pradesh are valid on the
ground that the differentiation arises from
historical reasons, and a geographical
classification based on historical reasons is not
affected by Art. 14 of the Constitution.
State of Madras v. Gannon Dunkerley & Co.
[1959] S.C.R. 379, Pandit Banarsidas v. State of
Madhya Pradesh, [1959] S.C.R. 427, Mithan Lal v.
State of Delhi, [1959] S.C.R. 445 In re the Delhi
Laws Act, 1912, [1951] S.C.R. 747, Gannon
Dunkerley v. State of Madras, [1954] 1 S.C.R. 216,
Behram Khurshed Pesikaka v. The State of Bombay,
[1955] 1 S.C.R. 613, Deepchand v. State of Uttar
Pradesh, [1959] Supp. 2 S.C.R. S, John M.
Wilkerson v. Charles A. Rahrer, (1891) 140 U. S.
545, M. K. Prithi Rajji v. State of Rajasthan C.
A. No. 327/56 decided on 2-11-60 and State of
Madhya Pradesh v. The Gwalior Sugar Co. Ltd. C. A.
Nos. 98 and 99 of 1957 decided on 30-11-1960,
referred to.
&
ORIGINAL JURISDICTION: Petitions Nos. 110 to
115 of 1960.
(Under Article 32 of the Constitution of
India for enforcement of Fundamental Rights)
A. V. Viswanatha Sastri, R. K. Garg, D. P.
Singh, S. C. Aggarwal and M. K. Ramamurthi, for
the Petitioner.
B. Sen, B. K. B. Naidu and I. N. Shroff, for
the Respondents.
1961. December 21. The Judgment of the Court
was delivered by
HIDAYATULLAH, J.-These six petitions under
Art. 32 of the Constitution have been filed by one
Bhaiyalal Shukla, who was doing business of
construction of buildings, roads, bridges etc. as
contractor for the Public Works Department in Rewa
Circle of the former Vindhya Pradesh State, now a
part of the State of Madhya Pradesh. By these
petitions, he challenges the levy of sales tax on
building materials supplied by him in the
construction of buildings, roads and bridges for
the years, 1953-54 to 1958-59. For the first year
in question, sales tax amounting to Rs. 1,840-5-0
has
260
already been charged and paid. He seeks refund of
this amount. For the remaining years except the
last two, proceedings for assessment have been
completed, but the amounts have not been paid. For
the remaining two years, proceedings are pending
for assessment of the tax. The respondents in the
case are the State of Madhya Pradesh, which stands
substituted for the State of Vindhya Pradesh, and
diverse officers connected with the assessment and
levy of the tax. The contention of the petitioner
is that the tax is not leviable in view of the
decisions of this Court in two cases reported in
The State of Madras v. Gannon Dunkerley and Co.
(Madras) Ltd.(1) and Pandit Banarsidas v. The
State of Madhya Pradesh (2). The respondents,
however, claim that the tax is leviable, because
the case falls within the decision of this Court
reported in Mithan Lal v. The State of Delhi (3).
The United State of Vindhya Pradesh was
formed by the Rulers of the States in Baghelkhand
and Bundhelkhand, who agreed to unite into a
common State, with the Maharaja of Rewa as the
Rajpramukh. By the Covenant which was entered into
by them at that time, it was provided that until a
Constitution for the United State would vest in
the Rajpramukh, and he was authorised to make and
promulgate Ordinances for the peace and good
government of the United State of any part
thereof, and any Ordinance made by him had the
force of an Act passed by the legislature of the
United State.
The Rajpramukh, in exercise of his powers
drawn from the Covenant, promulgated the Vindhya
Pradesh Sales Tax Ordinance 2 of 1949 for the levy
of a tax on the sale of goods in Vindhya Pradesh.
On the inauguration of the present Constitution of
261
India, Vindhya Pradesh became, at first, a part B
State but later by the Constitution (Amendment of
the First and Fourth Schedules) Order, 1950, it
was transferred from Part B to Part C of the
Constitution. The ordinance of the Rajpramukh was
applied to the whole of Vindhya Pradesh with
effect from April 1, 1950 by Notification No. 7 of
March 28, 1950 by the Chief Commissioner, Vindhya
Pradesh, acting under s. 1(2) of the ordinance.
Parliament then passed the Part C States
(Laws) Act, 1950. Section 2 of that Act provided:
“Power to extend enactments to certain
Part C States:-The Central Government may, by
notification in the Official Gazette extend
to any Part C State…… or to any part of
such State, with such restrictions and
modifications as it thinks fit, any enactment
which is in force in a Part A State at the
date of the notification and provision may be
made in any enactment so extended for the
repeal or amendment of any corresponding
law(other than a Central Act) which is for
the time being applicable to that Part C
State,”
In exercise of the power conferred by the above
section, the Central Government by Notification
No. S.R.O. 6 dated December 29, 1950, extended to
the State of Vindhya Pradesh the Central Provinces
and Berar Sales Tax Act, 1947 (21 of 1947) as in
force for the time being in the State of Madhya
Pradesh, subject to certain modifications
necessitated by the application of the Act to this
new area. By the same Notification, a new section
was added to the Madhya Pradesh Act, which read as
follows:
“29. Repeal and Saving: The Vindhya
Pradesh Sales Tax Ordinance 2 of 1949 is here
by repealed, provided that……..”
and here follow certain provisions saving the
previous operation of the Ordinance.
262
On March 20, 1951, the Central Government
issued Notification No. 52/ECON. in exercise of
the powers conferred by sub-s. (3) of s. 1 of the
Central Provinces and Berar Sales Tax Act, 1947,
as extended to the State of Vindhya Pradesh by
Notification No. S.R.O. 6, ordering that from
April 1, 1951 the extended Act would come into
force in the State of Vindhya Pradesh. On May 23,
1951, this Court rendered its judgment in In re
the Delhi Laws Act 1912(1). It was held by
majority by this Court that s. 2 of the Part C
States (Laws) Act, 1950 was intra vires, except
for the concluding sentence, “provision may be
made in any enactment so extended for the repeal
or amendment of any corresponding law (other than
a Central Act) which is for the time being
applicable to that Part C State”, inasmuch as it
was ultra vires the Indian Parliament.
Parliament then passed the Government of Part
C States Act, 1951 (49 of 1951) on September 6,
1951. Under that Act, Legislative Assemblies were
set up, and under s. 21, they were invested,
subject to certain limitations, with Powers of
legislation with respect to any of the matters
enumerated in the State List or in the Concurrent
List. Section 22 of that Act provided:
“If any provision of a law made by the
Legislative Assembly of a State is repugnant
to any provision of a law made by Parliament,
then the law made by Parliament whether
passed before or after the law made by the
Legislative Assembly of the State, shall
prevail and the law made by the Legislative
Assembly of the State shall, to the extent of
the repugnancy, be void.
Explanation: For the purposes of this
section, the expression ‘law made by
Parliament’ shall not include any law which
provides
263
for the extension to the State of any law in
force in any other part of the territory of
India.”
In view of the decision of this Court in the Delhi
Laws Act case(1) the Part C States (Miscellaneous
Law) Repealing Act, 1951 (66 of 1951) was enacted
by Parliament on October 31, 1951. By s. 2 of that
Act, laws described in Column 2 of its Schedule
were repealed or were deemed to have been repealed
with effect from the dates specified in the
corresponding entry in column 3 of that Schedule.
In the Schedule, the Vindhya Pradesh Sales Tax
Ordinance, 1949 (2 of 1949) was repealed from
December 29, 1950. The Vindhya Pradesh Legislative
Assembly, which was set up, then passed the
Vindhya Pradesh Laws (Validating) Act, 1952 (6 of
1952). By that Act, which was to extend to the
whole of Vindhya Pradesh and to come into force on
January 8,1953, it was provided as follows:
“2. For the removal of all doubts it is
hereby declared that…….. Central
Provinces and Berar Sales Tax Act, 1947 as
extended to Vindhya Pradesh under section 2
of the Part C States Laws Act, 1950 (has
been) and shall be deemed to be in force in
Vindhya Pradesh from April 1, 1951.
7. Repeal and savings:-As from the dates
of the actual enforcement of the Acts
specified in section 2 of this Act the
corresponding laws in force in Vindhya
Pradesh immediately before the said dates
shall be deemed to have been repealed without
prejudice to anything done or suffered
thereunder or any right, privilege,
obligation or liability acquired, accrued or
incurred thereunder before the aforesaid
dates.”
Section 2 of the Central Provinces and Berar
Sales Tax Act, 1947, which was extended to
264
Vindhya Pradesh, defined “contract” to mean any
agreement for the carrying out for cash or
deferred payment or other valuable consideration,
the construction, fitting out, improvement or
repair of any building, road, bridge or other
immovable property, and further defined “goods” to
mean all kinds of property including all
materials, articles and commodities, whether or
not to be used in the construction, fitting out,
improvement or repair of immovable property, and
finally defined “sale” as including transfer of
property in goods made in the course of the
execution of a contract. By these definitions, the
materials used or supplied by a building
contractor in the construction of buildings,
roads, bridges, etc. were made liable to sales tax
in accordance with a schedule of rates to which
reference seems unnecessary.
The legality of these and similar provisions
of law purporting to impose sales tax on building
materials in State Acts came up for consideration
before High Courts in India, and two well-defined
views were expressed, one holding that the power
to disentangle in a building contract the sale of
materials from the execution of works with a view
to taxing such a sale, was not beyond the
legislative power of the States acting under Entry
48, List II, Seventh Schedule of the Government of
India Act, 1935, corresponding to Entry 54 of the
like List in the Constitution. It was held in
those cases that a building contract, though
entire, involved labour plus materials and in
respect of the materials there was a sale
involving transfer of property for consideration,
and that the legislature had the power to frame a
definition of “sale” to separate the two. The
other view was that building contracts were
entire, and that there was no sale of goods as
contemplated by the Indian Sale of Goods Act,
which was the sense in which the Entry was framed,
a sense which had a well-recognised legal import.
265
This Court in Gannon Dunkerley’s case (1) approved
the latter view, which is found in the decision of
the Madras High Court in sub nom Gannon Dunkerley
v. State of Madras(2), and disapproved the
contrary view. It was pointed out that though in a
popular sense there was a sale of the materials,
there was none in the sense in which the
expression “sale of goods” is used in the Indian
Sale of Goods Act, since there was no agreement to
sell or sale of materials as such, nor did the
property pass therein as movables. In Pandit
Banarsi Das’s case (3), which was a case from the
State of Madhya Pradesh and which was heard
simultaneously, it was held that if the parties
entered into distinct and separate contracts, one
for transfer of materials for money consideration
and the other, for payment of remuneration for
services or works done, then there was a sale
within the meaning of the Sale of Goods Act and
the levy of tax was valid; but that if the
contract was an entire one, the levy was without
competence. The sections of the Central Provinces
and Berar Sales Tax Act making such a division and
taxing the so-called sales of materials were
declared to be beyond the powers of the State
Legislature.
The petitioner contends that the impugned
sections of the Central Provinces and Berar Sales
Tax Act, as applied to Vindhya Pradesh, fell
within these two rulings, and must also be
declared ultra vires the Vindhya Pradesh State
Legislature, when the latter enacted the Vindhya
Pradesh Laws (Validating) Act, 1952.
As against this, the respondents contend that
the Notification S.R.O. No. 6, which added s. 29
repealing the Vindhya Pradesh Sales Tax Ordinance
2 of 1949, the Part C States (Miscellaneous Laws)
Repealing Act, 1951 and the Vindhya Pradesh Laws
(Validating) Act, 1952 all concurred in repealing
266
Ordinance 2 of 1949 from December 29, 1950, but
left intact the operation of the Central Provinces
and Berar Sales Tax Act as extended to Vindhya
Pradesh by S. R. O. No. 6 of 1950. The Vindhya
Pradesh Laws (Validating) Act, 1952 merely removed
the doubts by stating again that the Central
Provinces and Berar Sales Tax Act had been and
“shall be deemed to be in force in Vindhya Pradesh
from April 1, 1951”, but did not re-enact that
Act. According to the respondents, the Central
Provinces and Berar Sales Tax Act was in force in
Vindhya Pradesh as a result of its extension by
Notification S. R. O. 6 and Notification No. 52
(Econ), the repeal of Ordinance 2 of 1949 being
achieved by the Part C States (Miscellaneous Laws)
Repealing Act, 1951 from December 29, 1950. The
respondents, therefore, seek to uphold the
impugned provisions on the basis of the ruling of
this Court in Mithan Lal’s case(1), where it was
pointed out that whatever might be said of the
State Legislatures operating under List II did not
hold good in the case of Parliament which derived
its powers in relation to legislation in Part C
States, not only from all the Lists but also from
the residuary powers of taxation mentioned in Art.
248(2). It was also held that s. 2 of the Part C
States (Laws) Act, 1950 was not repugnant to Art.
248(2), that the extended law became incorporated
by reference in the Part C States (Laws) Act, and
that the tax was thus one imposed by Parliament
itself. The respondents, therefore, contend that,
as held in Mithan Lal’s case(1) when parliament
enacted the Part C States (Laws) Act, 1950 and
conferred power on the Central Government to
extend any Act of a Part A State to any Part C
State, that power of extension carried with it the
plenary powers of Parliament, and even though the
law so extended might have been outside the
competence of the State Legislature which enacted
it, when extended under the
267
authority of Parliament was a valid piece of law
in Part C State.
The rival contentions may be reduced to the
proposition that if the State Legislature of
Vindhya Pradesh extended the Central Provinces and
Berar Sales Tax Act, then the extended Act would
suffer from the disability pointed out in Gannon
Dunkerley’s case (1), but if the Central Provinces
and Berar Act was extended by the Notification
under the Part States (Laws) Act, 1950, then it
must be treated as incorporated in that Act and to
have the authority of Parliament which, in
relation to Part C States, had no limitations
whatever. We have, therefore, to see whether the
Central Provinces and Berar Sales Tax Act, 1947
can be said to have been extended for the first
time by the Vindhya Pradesh Legislature in 1952
when it passed the Vindhya Pradesh Laws
(Validating) Act, 1952 to the exclusion of the
order contained in the Notification No. S. R. O.
6, or whether the Act continued to be in force in
Vindhya Pradesh even before, and all that the
Vindhya Pradesh Act did was to remove any doubts
about its validity.
The contention on behalf of the petitioner is
that the Notification dated December 29, 1950 was
invalid in its latter part, as decided by this
Court in the Delhi Laws Act case (2). That portion
dealt with the repeal of Ordinance 2 of 1949, and
if the Notification was invalid in that part, then
the Central Provinces and Berar Sales Tax Act,
which was extended by the opening part, never came
into force. Mr. Viswanatha Sastri contended that
the notification must be looked at compendiously,
and that it was impossible to think that the
Central Government would have extended the Central
Provinces and Berar Sales Tax Act, if the earlier
Ordinance still continued to operate. He relied in
this connection upon the observations of this
Court in Pesikaka’s case (3) to urge that the
268
Notification which was beyond the powers of the
Central Government in its latter part must be
regarded as a nullity, and contended that if the
invalid portion of the Notification was
fundamental to the operation of the valid, then
the valid portion also must equally fail because
it could not have been intended that two laws on
the same topic were to operate simultaneously in
Vindhya Pradesh. According to him, the extension
of the Central Provinces and Berar Act could not
and would not have been made, if the Ordinance had
not been first repealed. Section 29 which was
added, though composed of two parts, was,
according to him, really a part of a single scheme
and the repeal of the Ordinance and the extension
of the Central Provinces and Berar Act could stand
or fall together, and since the Ordinance was
never validly repealed, it continued to operate in
Vindhya Pradesh till its repeal on October 31,
1951, by the Part C States (Miscellaneous Laws)
Repealing Act, 1951, and when the Act repealed it
from December 29, 1950, the effect was that there
was no sales tax law in operation in Vindhya
Pradesh, because the Part C States (Miscellaneous
Laws) Repealing Act, 1951, did not enact or extend
any law on the subject of sales tax in or to
Vindhya Pradesh. According to him, till the
enactment of the Vindhya Pradesh Laws (Validating)
Act 6 of 1952 on January, 8, 1953 there was no law
imposing sales tax in Vindhya Pradesh, and the law
was then made by the Legislature of Vindhya
Pradesh by extending the Central Provinces and
Berar Sales Tax Act from April 1, 1951. He
therefore, contended that since the powers of the
Vindhya Pradesh Legislature did not include the
power of imposing sales tax on building materials,
this Act of the Vindhya Pradesh Legislature, if it
sought to impose sales tax on building materials,
fell within the ruling in Gannon Dunkerley’s case
(1) and must be declared as of no effect. He also
referred to Act 9 of 1953
269
passed by the Vindhya Pradesh State Legislature,
by which the Act was further amended, and stated
that the extended Act, as amended, owed its
existence neither to Parliament nor to the Central
Government acting under the Part C States (Laws)
Act but to the Vindhya Pradesh Laws (Validating)
Act, 1952 (6 to 1952) and the Vindhya Pradesh
Amendment Act, 1953 (9 of 1953).
There is a fundamental fallacy involved in
this reasoning. We are considering the
applicability of the Central Provinces and Berar
Sales Tax Act as extended to Vindhya Pradesh. The
Vindhya Pradesh Amending Act made only verbal
changes, but did not alter the structure of the
tax. No doubt, that Act, contained certain
provisions under which sales of building materials
are taxable, and if the authority to tax the so-
called sales emanated from a State Legislature,
then the law would fail. But we have to remember,
in this connection, that the law was first
extended to Vindhya Pradesh by the Central
Government acting under the authority of
Parliament legislating for a Part C State.
Parliament and the Central Government were not
subject to the disabilities pointed out in Gannon
Dunkerley’s case (1), and the matter was covered
by the decision of this Court in Mithan Lal’s case
(2). Even if the Notification, S. R. O. No. 6,
failed to repeal ordinance 2 of 1949, Parliament
by its own law effaced that Ordinance in Vindhya
Pradesh from December 29, 1950, and enacted that
the Ordinance shall be deemed to be repealed from
that day. After the passing of the Repealing Act
by parliament, it is impossible to argue that
Ordinance 2 of 1949 continued in Vindhya Pradesh
down to January 8, 1953, because by fiction the
Ordinance was repealed from December 29, 1950.
Parliamentary legislation, therefore, came to the
rescue, so to speak, of the Notification by making
room for the extension of the Central Provinces
and
270
Berar Act by repealing Ordinance 2 of 1949 which
the Notification proprio vigore was unable to
achieve as laid down in the Delhi Laws Act
case(1). The Notification of the Central
Government (S. R. O. No. 6) and Act 66 of 1951,
therefore concurred in removing the Ordinance on
December 29, 1950 and in extending the Central
Provinces and Berar Sales Tax Act in its place on
the same date.
Mr. Viswanatha Sastri argued, on the strength
of ruling of this Court in Deepchand v. State of
Uttar Pradesh (2) that the validity of a law must
be judged as on the date on which it was passed,
and if the law was invalid on that date, then the
law must be deemed not to have existed at all,
unless it was later re-enacted. The passage relied
upon is as follows:
“The validity of a statute is to be
tested by the constitutional power of a
legislature at the time of its enactment by
that legislature and, if thus tested, it is
beyond the legislative power, it is not
rendered valid without re-enactment if later,
by constitutional amendment, the necessary
legislative power is granted. An after
acquired power cannot, ex proprio vigore,
validate a statute void when enacted.” (p.
24).
This argument would be applicable if we were to
consider that Notification No. S. R. O. 6 in
isolation, and the question was one of validation
of that Notification. The Notification is being
questioned, because it sought to repeal Ordinance
2 of 1949, which it could not do. But, today we
are not in a position to say that Ordinance 2 of
1949 continued in Vindhya Pradesh, because
Parliament by the Part C States (Miscellaneous
Laws) Repealing Act, 1951 has enacted that the
said ordinance must be deemed to have been
repealed from December 29, 1950. Indeed, in the
ruling
271
of this Court at the same page are cited passages
from Willoughby on Constitution of the United
States (2nd Edn.) Vol. 1, p. 10 based on the
decision in John M. Wilkerson v. Charles A. Rahrer
(1) to the effect that if the cause of the
unconstitutionality is removed then the law does
not need to be re-enacted. The facts of this case
are entirely different from those in Deepchand’s
case (2). The extended law did not depend on the
repeal of the earlier law for its validity. It
would have been operative, even if the earlier law
was not repealed; but the earlier law was, in
fact, repealed from December, 29,1950, and no
question of conflict between the new and the old
law ever arose. Parliament by repealing the
ordinance rendered the ineffective portion of the
Notification a mere surplusage. The necessary
result thus was that its operative part survived
and the Central Provinces and Berar Sales Tax Act,
1947 was validly extended to Vindhya Pradesh, and
was valid law as laid down in Mithanlal’s case
(3). It did not suffer from the defects pointed
out by the this Court in Gannon Dunkerley’s case
(4), as it was not enacted or extended by the
State Legislature.
It remains to consider the last argument on
this point, and it is that the Central Provinces
and Berar Sales Tax Act was re-extended to Vindhya
Pradesh by Act 6 of 1952, and thus owed its
existence to a law made by a State Legislature
which was incompetent to enact a law that building
materials in a works contract, which was entire,
were liable to sales tax. The preamble of the Act
shows that it was enacted to remove certain doubts
which were entertained as to whether the extended
Sales Tax Act became operative only from October
31, 1951 when Act 66 of 1951 was passed, or from
an earlier date, viz., April 1, 1951, from which
date it was brought into force in
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Vindhya Pradesh by Notification No. 52 (Econ.),
dated March 20, 1951. To remove these doubts, the
Vindhya Pradesh Laws (Validating) Act, 1952,
enacted with the assent of the President, declared
by s. 2 (already quoted) that the Central
Provinces and Berar Sales Tax Act had been and
“shall be deemed to be in force in Vindhya Pradesh
from April 1, 1951.” This declaration did not
extend prorio vigore the Central Provinces and
Berar Sales Tax Act, but only declared that it
must be deemed to be validly in force from April
1, 1951. Section 7, on which much reliance has
been placed, may be quoted again:
“Repeal and savings:-As from the dates
of the actual enforcement of the Acts
specified in Section 2 of this Act the
corresponding laws in force in Vindhya
Pradesh immediately before the said dates
shall be deemed to have been repealed without
prejudice to anything done or suffered
thereunder or any right, privilege,
obligation or liability acquired, accrued or
incurred thereunder before the aforesaid
dates”
It is said that, if the two sections are read
together they mean that the Central Provinces and
Berar Sales Tax Act was freshly extended from
April 1, 1951 by the Vindhya Pradesh Act and any
law made by any authority earlier was freshly
repealed to make room for the extension. This
argument, in our opinion, is erroneous.
To begin with, the powers of the Vindhya
Pradesh Legislature were circumscribed by s. 22 of
the Government of part C States Act, 1951, quoted
earlier. Under that section, the powers of the
State Legislatures did not extend to making laws
repugnant to any law made by Parliament. The
Explanation defines the expression “law made by
Parliament”, and excludes a law which provides for
the extension to the State of any law in force
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in any other part of the territory of India. The
Vindhya Pradesh Legislature, however, did not
repeal either s. 2 of the Part C States (Laws) Act
or the Notification, and all that the Legislature
did was to add its own authority by a declaration,
to the laws earlier extended. The law was extended
first by Notification S.R.O. No. 6 on December 29,
1950, but it was brought into force only by
Notification No. 52 (Econ.) dated March 20, 1950
from April 1, 1951. The Notification, S. R. O. No.
6 had substituted for sub-s.(3) of s. 1 of the
Central Provinces and Berar Sales Tax Act, the
following:
“(3) It shall come into force on such
date as may be notified by the Central
Government in the Official Gazette.”
Till the Notification No. 52 (Econ.) was made, the
Act was extended but was not in force in Vindhya
Pradesh. There is a difference between the
extension of a law subject to its being brought
into force latter and its coming into force on a
later date. Section 7 of Act 6 of 1952 repealed
only the laws in force prior to the date on which
the Central Provinces and Berar Sales Tax Act was
brought into force. It speaks of “laws in force in
Vindhya Pradesh immediately before April 1, 1951”,
and the law which was in force immediately before
that date was not the Central Provinces and Berar
Sales Tax Act which had not been brought into
force, but might be Ordinance 2 of 1949, if it had
not been successfully repealed earlier. The former
Act was extended on December 29, 1950, but was not
brought into force till April 1, 1951, and the
section speaks of “laws in force”. The section,
therefore, refers to Ordinance 2 of 1949, which
would be in force immediately before April 1,
1951, if not successfully repealed, but not to the
Central Provinces and Berar Sales Tax Act which
was only extended before that date but had not
been brought into force. In other words, s. 7 of
the Act does no more than replea
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from April 1, 1951 (if repeal was at all
necessary) Ordinance 2 of 1949, which might be
supposed to have continued as law till October 31,
1951, when it was repealed by Act 66 of 1951. In
point of fact and also in law, it was really
repealed from December 29, 1950 under the
Repealing Act 66 of 1951. The Vindhya Pradesh Act
6 of 1952 cannot, therefore, be said to have
enacted for the first time that the Central
Provinces and Berar Sales Tax Act shall come into
force from April 1, 1951 in Vindhya Pradesh. It
only declared what was a legal fact even without
this declaration. Nor did the Central Provinces
and Berar Sales Tax Act owe its existence to Act 6
of 1952. Act 6 of 1952 only declared what the
result of the earlier laws was, and added the
authority of the Vindhya Pradesh Legislature to
remove doubts and to save the law from any attack
on the ground that the wrong Legislature had
repealed the Ordinance or extended the Central
Provinces and Berar Sales Tax Act. In our opinion,
this argument cannot be accepted.
One further argument was advanced to which we
have not referred so far, and which may now be
noticed. It is that after the reorganisation of
the States, Madhya Pradesh has as many as four
Sales Tax Acts. It is contended that a person
belonging to the area of the former State of
Madhya Pradesh is not liable to sales tax on
building materials in a works contract under the
Central Provinces and Berar Sales Tax Act because
of the decision in Pandit Banarsi Das’s case(1),
but another person living in the area forming part
of the former Vindhya Pradesh is liable to sales
tax under the same Act, as extended to Vindhya
Pradesh. This, it is said, is patently contrary to
the spirit of the equal protection clause in Art.
14.
The laws in different portions of the new
State of Madhya Pradesh were enacted by different
Legislatures, and under s. 119 of the States
Reorganisation
275
Act, all laws in force are to continue until
repealed or altered by the appropriate
Legislature. We have already held that the sale
tax law in Vindhya Pradesh was validly enacted,
and it brought its validity with it under s. 119
of the States Reorganisation Act, when it became a
part of the State of Madhya Pradesh. Thereafter,
the different laws in different parts of Madhya
Pradesh can be sustained on the ground that the
differentiation arises from historical reasons,
and a geographical classification based on
historical reasons has been upheld by this Court
in M. K. Prithi Rajji v. The State of Rajasthan(1)
and again in The State of Madhya Pradesh v. The
Gwalior Sugar Co. Ltd.(2). The latter case is
important, because the sugarcane cess levied in
the former Gwalior State but not in the rest of
Madhya Bharat of which it formed a part, was
challenged on the same ground as here, but was
upheld as not affected by Art. 14. We, therefore,
reject this argument.
In the result, the Writ Petitions fail, and
are dismissed; but in the circumstances of the
case we make no order about costs.
Petitions dismissed
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