JUDGMENT
Hemant Gupta, J.
1. This order shall dispose of C.W.P. No. 18227 and C.W.P. No. 18272 of 2002 as both the writ petitions raises similar questions of law on identical facts. For facility of reference the facts are taken from C.W.P. No. 18227 of 2002.
2. The petitioner is a registered dealer under the Punjab General Sales Tax Act, 1948 (herein after referred to as the Act) and is assessed to sales tax (including purchase tax), levied under the Act. The petitioner is a company incorporated under the Companies Act, 1956 engaged inter-alia in the manufacturing of various types of food products particularly products based on milk as raw material. The petitioner has a milk plant at Moga, Punjab. It is stated that the petitioner started milk collection in Moga in 1961 with a collection of 510 Kgs. of milk from 180 farmers and today has expanded its operations to include a collection from around 81,000 farmers in its own milk district. The petitioner is carrying out a large scale extension work along the milk producers in this area to help them to develop better cattle and better milk yields, by educating them in better farm practices and educate them generally to modernize their system so that they can supply large quantity of better milk and thereby earn better profits.
3. It is further stated that for the last many years there has been persistent demand from the milk producers and the farmers throughout Punjab to abolish purchase tax on milk as it imposes heavy burden on the farmers as it increases the cost of procurement of milk. The Governor of Punjab promulgated Punjab Ordinance No. 8 of 2000 w.e.f. 19.7.2000.The said ordinance was replaced by the Punjab Diary Development Board Act, 2000 (hereinafter referred to PDDB Act). The said Act provides for the operation of Punjab Dairy Development Board for Co-ordination between the organizations engaged in dairy sector to uplift professional standard of the dairy industry in the State and to development modern dairy farming technology system and to levy cess on the milk plants by abolishing tax on milk. The levy of cess under the PDDB Act was challenged by many milk plant owners. Said writ petition was allowed by a Division Bench of this Court on 20.11.2001 in a judgment reported in Health Aid Foods Specialist Pvt. Ltd v. State of Punjab and Ors., (2001-3)129 P.L.R. 821. In Special Leave Petition No. 2949-2961 of 2002 to appeal against the said judgment of the Division Bench, the Hon’ble Supreme Court stayed the operation of the judgment of the Division Bench on 25.2.2002 and granted leave to appeal. Consequently, the PDDB Act stood revived. The petitioner herein has also filed a separate writ petition challenging the levy of cess under the aforesaid PDDB Act which is pending consideration before this Court.
4. The State Government in exercise of its delegated legislative powers omitted Item No. 18 of the Category No. 4 in Schedule-A, Item No. 13 in Schedule-C and omitted certain words of Item No. 17 of Schedule-B vide notification dated 24.7.2000 in the Punjab General Sales Tax Act, 1948. The effect of such notifications was that no tax either on sales or purchase was payable on milk.
5. In the present writ petition, the petitioners have challenged the notification dated 12.9.2002 levying purchase tax on the purchase of milk used in the manufacture of any goods other than tax free goods for sale, after the State Government published a draft notification inviting objection/suggestions from the general public proposing amendment in Schedule-C to incorporate levy of purchase tax aforesaid. The petitioner has deposited purchase tax on milk under protest from 12.9.2002 to 30.9.2002 amounting to Rs. 47,88,625/-. It has been further stated that the petitioner has deposited cess of Rs. 73,75,000/- for the period from 1.10.2001 to 30.05.2002 and Rs. 69,00,000/- for the period from 1.10.2002 to 30.12.2002. The amount of cess paid thereafter was not accepted.
6. In the written statement filed on behalf of the respondents it has been pointed out by way of preliminary objections that the petitioners have not filed any objection against the draft notification dated 22.7.2002 within specific period of 20 days when the objections/suggestions from the persons likely to be affected were invited to amend Schedule-C. It was averred that PDDB Act by means of which cess had been imposed is a different enactment made by the State Legislature for the purpose of coordination between organizations engaged in the dairy sector to uplift the professional standard of the dairy industry in the State and to develop modern dairy farming technology system. The cess collected within the State of Punjab had to be deposited with the said fund created and established as per the provisions of Section 13 of the PDDB Act. The cess so collected did not go into the consolidated fund of the State but into the Punjab Dairy Development Fund. On the other hand the Act has been enacted for different purpose and with different objectives. The State Legislature is competent to tax the same item by two different enactments at the same time. As such milk can be subjected to cess under the PDDB Act as well as subject to tax under the Act at the same time. Since the cess has been abolished w.e.f. 11.9.2002 vide ordinance No. 3 of 2003 dated 10.3.2003 and subsequently by Punjab Ordinance No. 10 of 2003 dated 9.12.2003, therefore, purchase tax is leviable w.e.f. 12.9.2003. It has been stated that the effect of ordinance is that cess has to be paid by the petitioner till 11.9.2002 and thereafter purchase tax is to be paid in consonance to the provisions of the Act. On merits, it has been stated that the notification dated 12.9.2002 has been issued under the Act. Further it has been mentioned that ordinance No. 3 of 2003 dated 10.3.2003 could not be converted into an Act due to short spell of the Assembly Session therefore, the ordinance dated 9.12.2003 was promulgated. It has been stated by the respondents that since Section 12 of the PDDB Act has been omitted, the cess after the omission of Section 12 of the Act was not accepted. Section 12 of PDDB Act, as originally enacted reads as under:
12. (1) Subject to the rules made under this Act, there shall be levied for the purpose of this Act, a cess at the rate often paise per litre of the licenced capacity of a milk plaint by abolishing the purchase tax being charged on milk.
(2) The cess levied under Sub-section (1), shall be paid by the owner of the milk plaint in such manner and to such person or officer as may be prescribed.
(3) The arrears of the cess levied under Sub-section (1), shall be recoverable as arrears of land revenue.”
7. Section 4 of the Act relates to incident of taxation. It contemplated that subject to the provisions of Sections 5 and 6, every dealer except one dealing exclusively in goods declared tax free under Section 6 where gross turnover during the year immediately preceding the commencement of this Act exceeded the taxable quantum shall be liable to pay tax under this Act on all sales and purchases. Section 5 of the Act contemplates a tax not exceeding 20 per cent in a rupee subject to the provisions of the Act as the State Government may specify vide notifications from time to time provided that the rate of tax on the goods as categorised in Schedule-A as has been specified for those goods in the schedule. Section 6 contemplates that no tax shall be payable on the sale of goods specified in the first column of Schedule B subject to the conditions set out in the corresponding entry in the second column. Section 2(ff) of the Act defines “purchases” to mean the acquisition of goods specified in the Schedule-C or the goods on the purchase whereof tax is payable under all the provisions of the Act. Section 31 of the Act confers powers on the State Government to add or delete any goods from Schedule C. The relevant provisions of the Act as it existed on 18.7.2000 read as under:
Section 2. Definition
1. In this Act, unless there is anything repugnant in the subject or context:
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(ff) PURCHASE with all its grammatical or cognate expressions means the acquisition of goods specified in Schedule ‘C’ or of goods on the purchase whereof tax is payable under any provisions of this Act for cash or deferred payment or other valuable consideration otherwise than under a mortgage, hypothecation, charge or pledge:
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Section 4. Incident of Taxation
(i) Subject to the provisions of Section 5 and 6, every dealer except one dealing exclusively in goods declared tax-free under Section 6 whose gross turnover during the year immediately preceding the commencement of this Act exceeded the taxable quantum shall be liable to pay tax under this Act on all sales effected after the coming into force of this Act and purchases made after the commencement of the East Punjab General Sales Tax (Amendment) Act, 1958.
Provided that the tax shall not be payable on sales involved in the execution of a contract which is shown to the satisfaction of the Assessing authority to have been entered into before the commencement of this Act.
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Section 5 rate of Tax.
Subject to the provisions of this Act, there shall be levied on the taxable turnover of a dealer, a tax at the rate not exceeding twenty paise in a rupee, as the State Government may specify by notification from time to time:
Provided that the rate of tax on the goods as categorised in Schedule ‘A’ shall be such, as has been specified for those goods in this Schedule. The State Government after giving by notification, not less than ten days notice of its intention so to do, may by like notification, add to or delete from this Schedule, and thereupon the schedule shall be deemed to have been amended accordingly;
Provided further that if the State Government is satisfied that circumstances exist, which render it necessary to take immediate action, it may dispense with the condition of previous publication.”
Provided further that the rate of tax shall not exceed four paise in a rupee in respect of any declared goods.
Explanation: The amount of tax shall be calculated to the nearest rupee by ignoring fifty paise or less and counting more than fifty paise as one rupee”
Section 6 Tax free goods.
No tax shall be payable on the sale of goods specified in Schedule ‘B’ subject to the conditions specified therein.
Provided that the State Government after giving by notification, not less than ten days, notice of its intention so to do may by like notification, add to or delete from this Schedule, and thereupon the Schedule shall be deemed to have been amended accordingly:
Provided further that if the State Government is satisfied that circumstances exist, which render it necessary to take immediate action, it may dispense with the condition of previous publication.”
Section 31. Power to amend Schedule C
The State Government after giving by notification not less than twenty days notice of its intention so to do, may be notification add to or delete from, Schedule C any goods, and thereupon Schedule C shall be deemed to be amended accordingly.
(a) Schedule A, in Category-IV (Goods taxable at the rate of four percent): Entry 18. Milk when purchased for use in the manufacture of any goods other than tax free goods for sale.
(b) Schedule ‘B’ (Goods exempted from Tax):-
Entry 17. Fresh milk and pasteurized milk but not including condensed and dried milk or when purchased for use in the manufacture of any goods other than tax free goods for sale.
(c) Schedule ‘C’
Entry 13. Milk when purchased for use in the manufacture of any goods other than tax free goods for sale.
8. After promulgation of PDDB Act, the State Government issued notification on 24.7.2000 omitting Item No. 18 of the Category IV of Schedule A, Item No. 13 of Schedule C of the Act and the words “or when purchased for use in the manufacture of any goods other than tax free goods for sale” appearing in Category No. 17 of Schedule “B”.
9. Section 12 of the PDDB Act has been omitted vide Section 10 of the Ordinance No. 3 of 2003 promulgated on 10.3.2003 in exercise of powers conferred under Article 213(1) of the Constitution of India with retrospective effect i.e. w.e.f. 11.9.2002. This ordinance could not be replaced by an Act, in the session of Legislative Assembly which was summoned by the Governor to meet on 14.3.2003. The ordinance lapsed on the expiry of six weeks. Thereafter, another ordinance has been promulgated on 9.12.2003 (ordinance No. 10 of 2003) with retrospective effect i.e. from 11.9.2002, whereby Section 12 of PDDB Act has been omitted. The relevant provisions of ordinance 10 of 2003 reads as under:
“The Punjab Dairy Development Board (Second Amendment) Ordinance, 2003
(Pun Ordinance No. 10 of 2003)
1. (I) This ordinance may be called the Punjab Dairy Development Board (Second Amendment) Ordinance, 2003.
(2) It shall be deemed to have come into force on and with effect from the eleventh day of September, 2002.
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10. In the Principal Act, Section 12 shall be omitted.
10. The Financial Commissioner Taxation and Secretary to Government of Punjab in exercise of powers conferred under Section 5, 6 and 31 of the Act published draft notifications on 22.7.2002 notifying the intention of the State Government to impose purchase tax on milk when purchased for use in the manufacture of any goods other than tax free goods for sale. It will be relevant to reproduce the draft notification dated 22.7.2002 in respect of Schedule ‘C’ of the Act, which reads as under:
Notification
The 22nd July, 2002.
No. S.O.34/P.A.46/48/S.31/And/2002; The following draft of amendment, which the Governor of Punjab proposes to make in exercise of the powers conferred by Section 31 of the Punjab General Sales Tax Act, 1948 (Punjab Act No. 46 of 1948) and all other powers enabling him in this behalf, in Schedule ‘C’ appended to the said Act, is published, for the information of the persons likely to be affected thereby.
Notice is hereby given that the draft will be taken into consideration by the Government on or after the expiry of a period of twenty days from the date of publication of this notification in the Official Gazette, together with any objection or suggestion, which may be received by the Excise and Taxation Commissioner, Punjab Patiala from any person before the expiry of the period so specified with respect to the said draft, namely:-
DRAFT AMENDMENT
In the said Schedule, after item 12, the following item shall be added namely:
“13. Milk when purchased for use in the manufacture of any goods other than tax free goods for sale.”
11. Since no objection or suggestions were received, the Government published final notification on 12.9.2002. The effect of the notification amending Schedule ‘C’ is that purchase tax is leviable on milk purchased for use in the manufacture of any goods other than the tax free goods for sale.
On behalf of the petitioners, it has been vehemently argued that:
(1) Section 12 of the PDDB Act abolished levy of purchase tax on milk. Since PDDB Act is a later and special Act, the levy of purchase tax under the Act stood automatically abolished. The fact that the State Government have published notifications, abolishing purchase tax, by deleting entry No. 13 in Schedule ‘C’ is only recognition of statutory provisions,
(2) Section 12 of the PDDB Act is in force on 22.7.2002, therefore, no amendment in Schedule-C could be carried out as there was no legislative sanction to impose purchase tax on milk on that date. Reliance was placed on The Municipal Corporation Bhopal v. Misbahul Hasan and Ors. etc., A.I.R. 1972 S.C. 892, Manilal R.Pandya v. Chimanlal Parshottamdas and Anr. A.I.R. 1968 Gujrat 80 and K. Damodarasamy Naidu & Bros. v. State of Tamil Nadu and Anr., (2000) 117 S.T.C. 1.
(3) That the omission of Section 12 with retrospective effect has created unforeseen liability which is unreasonable and confiscatory in nature and therefore, such levy with retrospective effect cannot be given effect to. Reliance was placed upon Solvex Oil and Fertilisers v. State of Haryana and Anr., 1994(94) S.T.C. 383 Punjab.
(4) Since the final notification could not be issued on 22.7.2002 therefore, even the draft notification to amend the Schedule ‘C’ could not be issued for the said date;
(5) the successive use of powers of promulgation of ordinance under Article 213 of the Constitution of India is colourable exercise of the powers and such exercise of powers is illegal. The reasoning of short duration of assembly session given to promulgate the second ordinance is absurd. Reliance was placed upon Dr. D.C. Wadhwa and Ors. v. State of Bihar and Ors., 1987(1) S.C.C. 378 and A.K. Roy v. Union of India, 1982(1) S.C.C. 271.
12. On the other hand, the learned State Counsel vehemently argued that the Act and PDDB Act operate in different fields. The revenue collected by way of tax under the Act is credited to the consolidated fund of the State whereas the cess collected under PDDB Act prior to omission of Section 12 of the Act was to be credited to a fund constituted under Section 13 of the Act. The cess so collected has to be expanded for the purposes of coordination between the organisation engaged in the diary sector to uplift professional standard of the dairy industry and to develop modern dairy farming technology. The purchase tax abolished by virtue of Section 12 of the Act was only in respect of milk plants. The State Government in exercise of its delegated legislative function sought to amend Schedule-A, B and C vide notification dated 24.7.2000. State Government was competent to add, modify or delete such schedule so as not to levy purchase tax on milk in terms of powers conferred on State Govt. by virtue of Sections 5, 6 and 31 of the Act. The draft notifications were published on 22.7.2002 to impose tax on sale and purchase of milk in exercise of such statutory powers which were vested with the State Government.
13. It is further submitted that to rationalise the tax structure, the milk plants were not subjected to purchase tax and thus by omitting Section 12 of the PDDB Act with retrospective effect, the milk plants have been made liable to pay purchase tax under the Act by virtue of notification dated 12.9.2002. It is also submitted that the purchase tax on milk was payable prior to the commencement of PDDB Act and was being paid by the petitioners at the same rate at which the purchase tax is now being claimed and charged, therefore, except for interregnum period i.e. 19.7.2000 to 11.9.202, the petitioners are liable to pay purchase tax. Therefore, it cannot be said that the levy of purchase tax is unreasonable and confiscatory. Reliance was placed upon State of M.P. v. Kedia Leather & Liquor Ltd. and Ors., 2003(7) S.C.C. 389 and Municipal Corporation of Delhi v. Shiv Shanker, A.I.R. 1971 S.C. 815 to contend that the State Government is competent to levy purchase tax on the purchase of milk and cess on the capacity of the milk plants which are in exercise of two different fields. The question of implied repeal will only arise when the later legislation is identical with that of the earlier legislation and they cannot stand together. Reliance was placed upon Entertainment Tax Officer and Anr. v. Ambae Picture Palace, 1994(1) S.C.C. 209 to contend that Parliament or State Legislature are competent to legislate with retrospective effect. Reliance was placed upon A.I.R. 193 S.C. 75 and N. Nagaraj and Ors. etc. etc. v. State of Andhra Pradesh and Anr., A.I.R. 1985 S.C. 551 to contend that ordinance cannot be declared as invalid on the ground of non-application of mind.
14. In respect of first contention, it is necessary to examine the scope of the Punjab General Sales Tax Act as well as PDDB Act. Punjab General Sales Tax Act has been enacted by the State Government to collect tax as well as purchase tax on the goods as referable to entry No. 54 list II, 7th Schedule of the Constitution of India. The tax collected is credited to the consolidated fund of the State. On the other hand, PDDB Act is a legislation enacted to coordinate between the organisations engaged in dairy sector to uplift professional standard of the dairy industry and to develop modem dairy farming technology and to levy cess. The said Act is said to be within the legislative competence of the State Legislature referring to entries No. 15, 27, 32 and 66 of List II and entry 33 of List No. III of Seventh Schedule of the Constitution of India. The PDDB Act levied cess on the milk plants by abolishing purchase tax on milk. The question which has been raised by the learned counsel for the petitioner is that since PDDB Act is a later and Special Act and has abolished purchase tax on milk, therefore, the provisions of Punjab General Sales Tax Act has to give way to the later Act. It is contended that the later Act has the effect of implied repeal of the provisions of purchase tax on milk.
15. Where a later enactment or a subordinate legislation is so inconsistent with or repugnant to an earlier enactment or subordinate legislation that the two cannot coexist, then the later one would effect repeal of the former by implication. Repeal by implication is not ordinarily favoured by the courts but the principle on which the rule of implied repeal rests has been stated in Maxwell on Interpretation of Statutes (Twelfth Edition) at Page 193.
16. If, however, “the provisions of a latter enactment are so inconsistent with or repugnant to the provisions of an earlier one that the two cannot stand together”, the earlier is abrogated by the later.
17. In Municipal Corporation of Delhi v. Shiv Shakar, A.I.R. 1971 Supreme Court 815, the Hon’ble Supreme court was seized of the conflict between the Prevention of Food Adulteration Act with that of Fruit Products Order made under Essential Commodities Act. It was held that the object and purpose of the Adulteration Act is to eliminate the danger to human life and health from the sale of unwholesome articles of food. The Essential Commodities Act on the other hand has for its object the control of the production, supply and distribution of, and trade and commerce in, essential commodities. In spite of this difference, the two provisions may have conterminous fields of operation. The provisions of the Adulteration Act and of the Fruit Order are supplementary and cumulative in their operation and they can stand together. If the Adulteration Act or Rules impose some restrictions on the manufacturer, dealer and seller of vinegar then they have to comply with them irrespective of the fact that the Fruit Order imposes lesser number of restrictions in respect of these matters. Both the statutes can function with full vigour side by side in their own parallel channels. It was held to the following effect:
5…… The legislature, which may generally be presumed to know the existing law, is not expected to intend to create confusion by its omission to express its intent to repeal in clear terms. The Courts, therefore, as a rule, lean against implying a repeal unless the two provisions are so plainly repugnant to each other that they cannot stand together and it is not possible on any reasonable hypothesis to give effect to both at the same time. The repeal must, if not express, flow from necessary implication as the only intendment. The provisions must be wholly incompatible with each other so that the two provisions operating together would lead to absurd consequences, which intention could not reasonably be imputed to the legislature. It is only when a consistent body of law cannot be maintained without abrogation of the previous law that the plea of implied repeal should be sustained. To determine if a later statutory provisions repeals by implication an earlier one, it is accordingly necessary to closely scrutinise and consider the true meaning and effect both of the earlier and the later stature. Until this is done it cannot be satisfactorily ascertained if any fatal inconsistency exists between them. The meaning, scope and effect of the two statutes, discovered on scrutiny, determines the legislative intent as to whether the earlier law shall cease or shall only be supplemented. If the objects of the two statutory provisions are different and the language of each statute is restricted to its own objects or subject, then they are generally intended to run in parallel lines with out meeting and there would be no real conflict though apparently it may appear to be so on the surface. Statutes in pari materia although in apparent conflict, should also so far as reasonably possible, be construed to be in harmony with each other and it is only when there is an irreconcilable conflict between the new provision and the prior statute relating to the same subject-matter, that the former, being the later expression of the legislature, may be held to prevail, the prior law yeilding to the extent of the conflict.”
18. In Cantonment Board, Saugor and Anr. v. Rewa Transport Services, Rewa etc., A.I.R. 1997 Supreme Court 2013, the Hon’ble Supreme Court was seized of a dispute between Madhya Pradesh Motor Vehicles Taxation Act, 1947 and Madhya Pradesh Municipalities Act, 1961. Under the Taxation Act, tax should be imposed on the motor vehicles which are used of kept for use and there is no provision for imposition of tax on vehicles which is neither used nor kept for use but for mere entry into the Municipal limits. However, in the Municipality Act, Municipalities were authorised to impose tax on the vehicles entering the limits of Municipality. The Court held to the following effect:
“Since the Taxation Act does not provide for any imposition of tax on entry of the Motor Vehicles within Municipal Limits whereas the Municipal Act authorises for such levy under Section 127(i)(iii) there is no inconsistency or repugnancy between the two provisions. In other words while under the Motor Vehicles Taxation Act a tax could be imposed on Motor Vehicles used or kept for use by the registering authority, on such imposition can again be made by any local authority including the Municipalities under Section 127(i)(iii) of the Municipalities Act. But so far as the imposition of tax on Motor Vehicles entering into the Municipal limits is concerned, which is provided under Section 127(i)(iii), of the Municipalities Act the said provision cannot be said to be repugnant to the special statute in respect of Motor Vehicles, namely the Motor Vehicles Taxation Act.
If the Taxation Act would have contained a provision authorising imposition of Entry Tax on Motor Vehicle then certainly the later general Act, namely, the Municipalities Act even if by making a provision for imposition of entry tax on vehicles into the Municipal limits would not have operated. But since the special law, namely, the Taxation Act does not have any provision authorising imposition of tax on entry of Motor Vehicles and the later general provision, namely, the Municipalities Act provides for imposition of the entry tax on Motor Vehicles. The said provision would remain valid and would be applicable and there would be no bar for the Municipality to impose entry tax on all vehicles including Motor vehicles for entering into the limits of the Municipalities. This construction being the only harmonious construction by which both the provisions remain operative, it is the duty of the Court to adopt such construction.”
20. In a recent judgment State of M.P. v. Kedia Leather & Liquor Ltd. and Ors., (2003)7 S.C.C. 389 the Hon’ble Supreme Court has stated the reasons for and basis of doctrine of implied repeal. It has been held that there is a presumption against repeal by implication; and the reason of this rule is based on the theory that the legislature while enacting a law has complete knowledge of the existing laws on the same subject matter, and therefore, when it does not provide a repealing provision, the intention is clear not to repeal the existing legislation. The presumption of implied repeal can be rebutted. A repeal is inferred by necessary implication when the provisions of the later Act are so inconsistent with or repugnant to the provisions of the earlier Act that the two cannot stand together. But if the two can be read together and some application can be made of the words in the earlier Act, a repeal will not be inferred. The necessary questions to be asked are; (i) Whether there is direct conflict between the two provisions; (2) whether the legislature intended to lay down an exhaustive Code in respect of the subject matter replacing the earlier law and (iii) whether the two laws occupy the same field. The doctrine of implied repeal based upon the theory that the legislature, which is presumed to know the existing law, did not intend to create any confusion by retaining conflicting provisions and therefore, when the court applies the doctrine, it does no more than give effect to the intention of the legislature by examining the scope and the object of the two enactments and by a comparison of their provisions. The matter in each case is one of the construction and comparison of the two statutes. The Court leans against implying a repeal. Still further it has been held that to determine whether a later statute repeals by implication earlier statute, it is necessary to scrutinise the terms and consider the true meaning and effect of the earlier Act, Until this is done, it is impossible to ascertain whether any consistency exist between the two enactments. It was held by the Hon’ble Supreme Court as follows:-
“13. There is presumption against a repeal by implication; and the reason of this rule is based on the theory that the legislature while enacting a law has a complete knowledge of the existing laws on the same subject matter, and therefore when it does not provide a repealing provision, the intention is clear not to repeal the existing legislation, [See: Municipal Council, Palai v. J.J. Joseph, Northern India Caterers (P) Ltd. v. State of Punjab, Municipal Corporation of Delhi v. Shiv Shanker and Ratan Lal Adukia v. Union of India.] when the new Act contains a repealing section mentioning the Acts which it expressly repeals, the presumption against implied repeal of other laws is further strengthened on the principle expressio unius (persone vel rei) est exclusion alterius. (The express intention of one person or thing is the exclusion of another), as illuminatingly stated in Garnett v. Bradley, the continuance of the existing legislation, in the absence of an express provision of repeal by implication lies on the party asserting the same. The presumption is, however, rebutted and a repeal is inferred by necessary implication when the provisions of the later Act are so inconsistent with or repugnant to the provisions of the earlier Act and the two cannot stand together. But, if the two can be read together and some application can be made of the words in the earlier Act, a repeal will not be inferred. (See: A.G. v. Moore, Ratan Lal case and R.S. Raghunath v. State of Karnataka).
14. The necessary questions to be asked are:
(1) Whether there is direct conflict between the two provisions.
(2) Whether the legislature intended to lay down an exhaustive Code in respect of the sub matter replacing the earlier law.
(3) Whether the two laws occupy the same field.
(See: Pt. Rishikesh v. Salma Begum and A.B. Krishna v. State of Karnataka).
15. The doctrine of implied repeal is based on the theory that the legislature, which is presumed to know the existing law, did not intend to Create any confusion by retaining conflicting provisions and therefore, when the court applies the doctrine, it does not more than give effect to the intention of the legislature by examine the scope and the object of the two enactments and by a comparison of their provisions. The matter in each case is one of the construction and comparison of the two statues. The court leans against implying a repeal.
Unless two Acts are so plainly repugnant to each other that effect cannot be given to both at the same time, a repeal will not be implied, or that there is a necessary inconsistency in the two Acts standing together. (See: Craies on Statute Law 7th Edn. P.366, with reference to Berry, Re.)
To determine whether a later statute repeals by implication an earlier statute, it is necessary to scrutinise the terms and consider the true meaning and effect of the earlier Act. Until this is done, it is impossible to ascertain whether any inconsistency exists between the two enactments. The area of operation in the Code and the pollution laws in question are different with wholly different aims and objects, and though they alleviate nuisance, that is not of identical nature. They operate in their respective fields and there is no impediment for their existence side by side.”
21. Keeping in view the test laid down by the Hon’ble Supreme Court, I am of the opinion that both the statutes operate in different field. The subject matter of both the statutes is different. There is no direct conflict between the two provisions except for a limited extent discussed later. The legislature has laid down a exhaustive procedure for collection and utilisation of cess under PDDB Act. The funds are vested in the Board, which has been created as a nodal agency for coordinating, planning and organising the programmes of dairy development in consultation with the State Government so as to promote dairy sector on modern, scientific and commercially viable lines. The Board is to effect coordination between all organisations engaged in dairy such as Directorate of Dairy Development, Animal Husbandry, Punjab Milk Fed and milk plants in the joint sector as well as in the private sector. On the other hand, “the Act” imposes tax on sale and purchase of the goods. The amount of tax is being credited to the consolidated fund of the State. The PDDB Act has been enacted in terms of entry 15, 27, 32 and 66 of List II and entry 33 of list III of the 7th Schedule of the Constitution of India. The Act is now referable to entry 54, List II of Seventh Schedule of the Constitution of India.
22. Under Section 12 of the P.DDB Act, while imposing cess on milk plants, the purchase tax is abolished only to the extent of purchase tax payable by the milk plants. I am unable to agree with the argument raised by the learned counsel for the petitioner that the purchase tax on milk stands abolished by virtue of Section 12 of the Act. Such wide and sweeping effect is not contemplated under Section 12 of the Act. It is the milk plants alone who have been made liable to pay cess under PDDB Act and therefore, the only reasonable interpretation would be that purchase tax which was henceforth being paid by the milk plants would not be payable by the milk plants on the commencement of PDDB Act. The State Government had the independent power to add, modify or delete any of the goods so as to make part of Schedule A, B or C as the case may be in exercise of the powers conferred on the State Government under Section 5, 6 and 31 of the Act. The fact that the State Government in exercise of its powers conferred on it under Section 5, 6 and 31 of the Act have deleted entries levying sale tax in terms of entry 18 of Schedule A and purchase tax in terms of entry 13 of Schedule C and amending Schedule B is independent of the provisions of Section 12 of the Act. Thus I hold that Section 12 of the PDDB Act has not abolished the levy of purchase tax on milk. It has the effect of only abolishing purchase tax payable by the milk plants as the milk plants were made liable to pay cess in terms of Section 12 of the Act.
23. The second argument that the amendment in Schedule-C could not be initiated on 22.7.2002 as there was no legislative sanction to impose purchase tax on milk on that dale cannot be accepted. Since it has been held that the purchase tax is leviable and levied under the Act is an exercise of different and distinct legislative field then the cess being levied and claimed under PDDB Act, therefore, the State Government had the jurisdiction to amend Schedule ‘C’ so as to add or delete any goods from Schedule C in exercise of the powers conferred on the State Government under Section 31 of the Act.
24. The Municipal Corporation Bhopal v. Misbahul Hasan and Ors. etc., A.I.R. 1972 S.C. 892 was the case where the procedure to amend bye laws contemplated under Section 432 of the Madhdya Pradesh Municipal Corporation Act, 1956 was not complied with. The argument raised was that the amendment in the bye laws has been carried out by the State Government in exercise of the powers conferred under Section 438 of the Act. It was held that a condition precedent for an amendment of rule has not been followed and therefore, amendment is not legal.
25. In Mahilal R. Pandya v. Chimanlal Parshottamdas and Anr., A.I.R. 1968 Gujarat 80, the draft of the proposed rules was published by the State Government of Bombay when the City of Ahmedabad was also a part of the State of Bombay. However, the final notification was published by the State of Gujarat after the bifurcation of the State of Bombay into two states of Maharashtra and Gurarat. It was held that the draft notification is not required to be published by the State which was competent which has published the final notification. The question which is required to be examined is whether the authority publishing the rules at the time of publication have the power to make the rules.
26. In K. Damodarasamy Naidu & Bros. v. State of Tamil Nadu and Anr., (2000) S.T.C. 177 the Hon’ble Supreme Court has held that Section 6 of the Constitution of India (Forty Sixth Amendment) Act, 1982 providing for retrospective validation of sales tax levied prior to February 2, 1983 on the supply of food and drinks will apply only if the state law had contained a provision entitling the State to levy a tax on the supply of food and drink. Parliament, when exercising the power to amend the Constitution under Article 366, cannot and does not amend State Acts, Section 6 therefore, validates retrospectively the Sales Tax Acts of those States which had made provision for the levy of sales tax on the supply of good and drinks.
27. The said judgments referred to by the learned counsel for the petitioner are clearly distinguishable. None of the principles laid down by the aforesaid judgments arises for consideration in the present case. The draft notification proposing to add an entry in Schedule ‘C’ was published in the State Government Gazette. The objections or suggestions were invited from any person within the period of 20 days as contemplated under Section 31 of the Act. The State Government had the power to add or delete any good from Schedule ‘C’ from the said date, therefore, the State Government has legally and validly exercised the powers to add goods in Schedule ‘C’ of the Act.
28. In respect of the third argument, I am unable to agree that retrospective omission of Section 12 has created unforeseen liability which is unreasonable and confiscatory in nature.
29. In Entertainment Tax Officer and Anr. v. Ambae Picture Palace, (1994)I S.C.C. 209 it has been held that if the state legislature is competent to legislate it can do so prospectively as well as retrospectively. The taxation laws are no exception to this power. It has further been held that it is not for the State to justify or explain the necessity for the amendment even in relation to retrospective effect of the Act. But on the basis of object and reasons the court found that such retrospective amendment is on account of change of policy by the succeeding Government, it was held by the Hon’ble Supreme Court as under;
13. If the Parliament or the State legislatures have competence to legislate, they can do so prospectively as well as retrospectively and taxation laws are no exceptions to this power (Reference in this connection may be made to the decision of this Court in Union of India v. Madan Gopal Kabra. Again in Krishnamurthi & Co. v. State of Madras this Court held that the legislative power confered on the appropriate legislatures to enact laws in respect of topics converted by the several entries in the three lists can be exercised both prospectively and retrospectively.
14. Again in the case of Rai Ramkrishana v. State of Bihar a Constitution Bench of this Court observed thus;
“The power of taxing people and the property is an essential attribute of Government and the Government can legitimatity exercise the said power by reference to the objects to which it is applicable to the utmost extent to which Government thinks it expedient to do so. The object to be taxed so long as they happen to be within the legislative competence of the legislature, can be taxed by the legislature according to the exigencies of its needs, because there can be no doubt that the State is entitled to raise revenue by taxation. The quantum of tax levied by the taxing statute, the conditions subject to which it is levied the manner in which it is sought to be recovered, are all matters within the competence of the legislature.”
Again the Bench observed;
“Where the legislature can make a valid law, it may provide not only for the prospective operation of the material provisions of the said law, but it can also provide for the retrospective operation of the said provisions.”
16. Though it is not for the State to justly or explain the necessity for the amendment even in relation to retrospectively of the Act by obviously, on the face of it, there appeared to be a change of policy by a succeeding Government on the policy pursued by its predecessor, Surely the successor Government can have different rules from their predecessor including the matters relating to taxation or mode of taxation or basis of taxation or objects of taxation etc. No explanation was required from the State for the amending Act having retrospective effect.”
30. In Dharam Dutt and Ors. v. Union of India and Ors., (2004)I S.C.C. 712 it has been held that the doctrine of colourable legislation does not involve any question of bona fides or mala fides on the part of the legislature. The whole doctrine resolves itself into the question of the competency of a particular legislature to enact a particular law. It has not rightly been disputed that the State legislature has the power to enact taxation laws with retrospective effect. It was held by the Hon’ble Supreme Court as follows:
“16. Though the petition alleges the impugned Act (with the history of preceding ordinances; to be the outcome of political malice, no particulars thereof have been given by the writ petitioner. However, that aspect need not be deliberated upon any further in view of the two Constitution Bench decisions of this Court. It has been held in K.C. Cajapati Narayan Deo v. State of Orissa and in Board of Trustees, Ayurvedic and Unani Tibia College v. State of Delhi (now Delhi Admn.) that the doctrine of colourable legislation does not involve any question of bona fides or male fides on the part of the legislature. The whole doctrine resolves itself into the question of the competency of a particular legislature to enact a particular law. If the legislature is competent to pass a particular law, the motives which impelled it to act are reaily irrelevant. On the other hand, if the legislature lacks competency, the question of motive does not arise at all. We will, therefore, concentrate on the legislative competence of Parliament to enact the impugned legislation. If Parliament has the requisite competence to enact the impugned Act, the enquiry into the motive which persuaded Parliament into passing the Act would be of no use at all.”
31. In Solvex Oil and Fertilisers v. State of Haryana and Anr., (1994)94 S.F.C. 383 a Single Bench of this Court has held that where unreasonable or unforeseen liability has been imposed the legislation will have prospective effects. That was a case where it was found that totally unforeseen burden is sought to be imposed.
32. However, the petitioners in the present case were paying purchase tax prior on the promulgation of PDDB Act and are again made liable to pay purchase tax after the omission of Section 12 of the PDDB Act. The liability cannot be said to be unforeseen. Even during the interregnum period, the petitioners are liable to pay cess. There can be some dispute about the quantum of the liability but the fact remains that the petitioners are liable to pay cess as per the capacity of milk plant or the tax as per the quantum of purchase made. Mere fact that financial liability has been created by virtue of the amendment in the Act will not make the provisions of law as unreasonable or confiscatory in nature. It may be noticed that for the period prior to 19.7.2000, the petitioners were liable to pay purchase tax and they have discharged such liability. It is for the period w.e.f. 19.7.2000 to 11.9.2002 the petitioners were made liable to pay cess. Such levy of cess has been disputed by the petitioner in the writ petition which is pending before this Court, therefore, it cannot be said that retrospective omission of Section 12 has created unforeseen liability.
33. In respect of argument No. 4 that final notification dated 12.9.2002 could not be issued as the process of amendment was not initiated after the omission of Section 12 of the PDDB Act is again without any merit. The power to add or delete any good in Schedule ‘C’ is an independent power conferred on the State Government. Such power has been exercised by the State Government after inviting objections or suggestions in terms of draft notification dt. 22.7.2002 by giving 20 days period notice. It has been held that in lieu of cess payable by the milk plants by virtue of Section 12 of the PDDB Act the purchase tax was abolished. Section 12 has been omitted w.e.f. 11.9.2002. Thus, on 12.9.2002 when purchase tax became payable there was no restriction contemplated under Section 12 of the PDDB Act. Therefore, there is no illegality in initiation of the proceedings by the State Government to seek amendment of Schedule ‘C’ vide notification dated 22.7.2002.
34. The last argument that there is colorable exercise of the powers while promulgating successive ordinance in exercise of the powers conferred under Article 213 of the Constitution of India has also again no merit. Ordinance No. 3 of 2003 was promulgated on 10.3.2003 by omitting Section 12 of the PDDB Act with retrospective effect i.e. from 11.9.2002. The Legislatively Assembly of the State was summoned for its meeting on 14.3.2003. The said ordinance was placed before the Legislative Assembly but could not be replaced by an Act. It has been pointed out in an affidavit that due to paucity of time, the Department could not refer the matter for converting the ordinance into Bill to the Council of Ministers seeking its approval to replace the Ordinance into bill. It has been pointed out that the State assembly was summoned 4 days after the issuance of the ordinance. The ordinance was urgently required because the case regarding the levy of cess was fixed for hearing before the Hon’ble Supreme Court on 17.3.2003. The validity of the ordinance expired on 25.4.2003 and Ordinance No. 10 of 2003 was promulgated on 9.12.2003 by again omitting Section 12 with retrospective effect i.e., 11.9.2002.
35. Learned counsel for the petitioner has relied upon Dr. D.C. Wadhwa and Ors. v. State of Bihar and Ors., (1987)I S.C.C. 378 wherein it was found that it is settled practice of the Government of Bihar to deliberately go on repromulgating the ordinances from time to time on a massive scale in a routine manner. So it was held that Executive in a State has almost taken over the role of legislature in making laws not for a limited period but for years together. This was clearly contrary to the scheme and was improper and invalid. Still further, it has been held that repromulgation of the ordinance may not be open to attack when it is not possible for the Government to introduce and push through in the legislature a bill containing the same provisions as in the ordinance because of too much business or limited time at the disposal but otherwise it would be colorable exercise of the powers on the part of the Government to continue an ordinance. It was held as under:
“The Government cannot by pass the legislature and without enacting the provisions of the ordinance into an Act of the legislature repromulgate the ordinance as soon as the legislature is prorogued. Of course, there may be a situation where it may not be possible for the government to introduce and push through in the legislature a Bill containing the same provisions as in the ordinance, because the legislature may have too much legislative business in a particular session or the time at the disposal of the legislature in a particular Session may be short, and in that event, the Governor may legitimately find that it is necessary to repromulgate the ordinance, where such it is the case, the promulgation of the ordinance may not be open to attack. But otherwise, it would be colourable exercise of power on the part of the executive to continue an ordinance with substantially the same provisions beyond the period limited by the Constitution by adopting the methodology of repromulgation.”
36. In A.K. Roy v. Union of India and Ors., (1982)1 S.C.C. 271 the Court has held that an ordinance issued in exercise of the powers conferred under Article 123 and 213 is not totally unjustifiably. It has been held that judicial review is not totally excluded in regard to the question relating to the satisfaction of the President in promulgating the ordinance. Such is not a issue in the present case.
37. The mere fact that second ordinance has been issued does not render the same initiated on account of colourable exercise of power. The first Ordinance issued on 10.3.2003 was placed before the Legislative Assembly in its session convened on 14.3.2003 i.e. just after 4 days. However, it has been explained that it could not be replaced by an Act because of paucity of time. Such explanation satisfies the test laid down by the Hon’ble Supreme Court in Dr. D.C. Wadhwa’s case (supra). It is not repeated exercise of power but the ordinance could not be placed into Act for the good and sufficient reasons. Consequently, I am unable to agree with the argument raised by the learned counsel for the petitioners that ordinance No. 18 of 2003 was promulgated in colourable exercise.
38. In view of the discussion above, I do not find that notification dated 12.9.2002 amending Schedule ‘C’ by adding entry 13 to tax on purchase on milk for used in manufacture of goods other than tax free good for sale suffer from any illegality.
39. Consequently, no finding merit in the present writ petitions, the same are dismissed with no orders as to costs.