PETITIONER:
CHIEF COMMISSIONER UNION TERRITORY, CHANDIGARH
Vs.
RESPONDENT:
SIALKOT SILK STORES, CHANDIGARH
DATE OF JUDGMENT23/10/1978
BENCH:
UNTWALIA, N.L.
BENCH:
UNTWALIA, N.L.
CHANDRACHUD, Y.V. ((CJ)
SHINGAL, P.N.
CITATION:
1979 AIR 435 1979 SCR (2) 134
1979 SCC (1) 255
ACT:
Punjab General Sales Tax Act, 1948-S. 6-State
Government issued a notification of its intention to amend
Schedule but did not issue a second notification amending
the Schedule as required by s. 6-State reorganised in the
meanwhile and the Union Territory of Chandigarh formed-
Earlier notification if "law in force"-Newly formed Union
Territory-If could avail of the earlier notification and
amend the schedule.
HEADNOTE:
Section 6 of the Punjab General Sales Tax Act, 1948
provides that the State Government, after giving by
notification, not less than three months' notice of its
intention so to do, may, by like notification add or delete
from Schedule and thereupon Schedule shall be deemed to be
amended accordingly.
The State Government of the composite State of Punjab
issued a notification under s. 6 giving its intention to
delete from Schedule pure silken fabrics from the list of
tax-free goods. Before the issue of any further
notification, however, the composite State was reorganised
and the Union Territory of Chandigarh was formed. The
Government of the Union Territory of Chandigarh issued a
notification amending item 30 of Schedule as intended to be
amended by the notification issued by the former government.
In a writ petition filed before the High Court the
respondent challenged the notification as invalid on the
ground that the earlier notification could not be availed of
by the new Government for amending Schedule B. The appellant
claimed that the earlier notification was "law in force".
But the High Court repelled this argumenet It allowed the
respondent's writ
Dismissing the appeal,
^
HELD: 1. There was no "law in force" enabling the newly
formed Union 'Territory of Chandigarh to levy any sales tax
on pure silken fabrics.
2. The notification merely notifying the intention of
the State Government to add or delete from Schedule any
article by itself had no force of law until and unless, on
the expiry of the period of three months, a like
notification was issued amending the Schedule. The erstwhile
State Government of Punjab could not issue the second
notification in respect of the Union Territory after it
ceased to be a part of the State of Punjab. Sales Tax could
not be charged on pure silken fabrics by the said State
Government merely by virtue of the notification. It was
therefore not a law in force when the composite State was
reorganised. [136D-E]
135
3. No provision is to be found in the Act to show that
by a legal fiction the A first notification of intention
issued by the erstwhile State Government could be deemed to
be a notification issued by the new Government. [137 B]
M/s. Rattan Lal and Co. and another etc. v. The
Assessing Authority, Patiala and another, etc. AIR 1970 S.C
1742 held inapplicable.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 364 of
1969.
From the Judgment and order dated 7-8-1968 of the
Punjab and Haryana High Court in Civil Writ No. 2199/68.
S. N. Anand and R. N. Sachthey for the Appellant.
Arvind Minocha for the Respondent.
The Judgment of the Court was delivered by
UNTWALIA, J. The Chief Commissioner, Union Territory,
Chandigarh, has preferred this appeal by certificate from
the decision of the High Court of Punjab & Haryana allowing
the Writ Petition of the respondent and declaring the
amendment of item 30 in Schedule to the Punjab General Sales
Tax Act, 1948, hereinafter referred to as the Act, invalid.
The composite and the then existing State of Punjab was
re-organised by the Punjab Re-organisation Act, 1966,
Central Act 31 of 1966. The Union Territory of Chandigarh
was carved out as one of the States on and from November 1,
1966. Under section 6 of the Act no tax was payable on the
sale of goods specified in Schedule B. The State Government
could amend this Schedule and at the relevant time the power
so conferred on the State Government was in the following
terms:-
“The State Government after giving by notification
not less than three months’ notice of its intention so
to do may, by like notification add or delete from
Schedule and there upon Schedule shall be deemed to be
amended accordingly.”
Item 30 of Schedule exempted from sales tax:
“All varieties of cotton, woollen or silken
textiles, including rayon, artificial silk or nylon,
whether manufactured by handloom or powerloom or
otherwise, but not including car pets, druggets,
woollen durees and cotton floor durees.”
On August 24, 1966 the State Government of the
composite State of Punjab issued a notification giving three
months’ notice of its intention to amend Schedule to exclude
pure silken fabrics from the list of tax; free goods. But
before the expiry of three months and before
136
any further notification could be issued by the State
Government as required by section 6 of the Act, the Union
Territory of Chandigarh came into existence on November 1,
1966. The Government of the Union Territory issued a
notification dated January 4, 1968 amending item 30 as
intended to be amended by the notification dated August
24,1966 issued by the State Government of the composite
State of Punjab. The respondent filed a writ petition in the
High Court challenging this notification as being invalid on
the ground that the earlier notification could not be
availed of by the new Government for amending Schedule B.
The stand taken on behalf of the appellant was that the
earlier notification was a “law in force” within the meaning
of section 88 of Central Act 31 of 1966. The High Court
repelled this argument, and in our opinion, rightly.
It is plain on the wordings of section 6 of the Act,
extracted above, that a notification merely notifying the
intention of the State Government to add or delete from
Schedule any article, by itself, had no force of law until
and unless on the expiry of the period of three months a
like notification was issued amending the Schedule. The
erstwhile State Government of Punjab could not issue a
second notification in respect of the Union Territory after
it ceased to be a part of the State of Punjab. Sales tax
could not be charged on pure silken fabrics by the said
State Government on October 31, 1966 merely by virtue of the
notification dated August 24, 1966. It was, therefore, not a
law in force when the composite State was re-organised.
Section 88 of the Punjab Re-organisation Act, 1966 runs as
follows:-
“The- provisions of Part II shall not be deemed to
have f effected any change in the territories to which
any law in force immediately before the appointed day
extends or applies, and territorial references in any
such law to the State of Punjab shall, until otherwise
provided by a competent . Legislature or other
competent authority, be construed as meaning the
territories within that State immediately before the
appointed day.”
It is clear that there was no law in force on November 1,
1966, which could enable the Union Territory to levy any
sales tax on pure silken fabrics.
Mr. S. N. Anand endeavoured to attack the judgment of
the High Court by taking a new stand in this Court that the
notification dated August 24, 1966 could enure to the
benefit of and be availed by the Union Territory
Government. But he failed to point out any provision L in
Act 31 of 1966 or any other law to substantiate this
argument. No
137
“deeming” provision could be brought to our notice, as there
is none, to show that the notification issued by the
erstwhile State Government of Punjab could be deemed to be
one issued by the new Government of the Union Territory. For
many other purposes there are “deeming” provisions in
Central Act 31 of 1966 e.g. sections 59(1), 74(1) and 92.
But no provision is to be found to show that by a legal
fiction the first notification of intention issued by the
erstwhile State Government could be deemed to be a
notification issued by the new Government. ‘The argument
thus presented by Mr. Anand must be rejected.
Learned counsel for the appellant placed reliance upon
the principle of law enunciated in paragraph 12 at page 1749
in the decision of this Court in M/s. Ratan Lal and Co. and
another etc., v. The Assessing Authority, Patiala and
another, etc.(1). The principle stated therein is that the
new legislature of the new State after the re-organisation
of the composite State could amend the existing law
retrospectively from a date anterior to the date of
reorganisation. Obviously the view expressed in the decision
aforesaid is so very different that it cannot be of any help
to the appellant in this case.
For the reasons stated above, we dismiss the appeal
with costs.
P.B.R. Appeal dismissed.
(1) A.I.R. 1970 S.C., 1742
10-817SCI/78
138