JUDGMENT
Satish Chandra, J.
1. These writ petitions challenge the validity of two assessment orders dated 16th March, 1973, passed under Section 21 of the U.P. Sales Tax Act for the assessment years 1967-68 and 1968-69.
2. For the assessment year 1967-68 the petitioner was, by an assessment order dated 16th August, 1969, assessed to a sales tax of Rs, 8,071.16 on a turnover of Rs. 3,58,254.18. This turnover consisted of the following commodities:
rate of tax
1. Purchase of rab 6,319.24 5 per cent 315.95
2. Sale of khand 2,80,283.94 2 per cent 5,605.68
3. Sale of molasses 71,651.00 3 per cent 2,149.53
3,58,254.18 8,071.16
3. For the assessment year 1968-69 the petitioner was by another assessment order of the same date assessed to a sales tax of Rs. 5,913.58 on a turnover of Rs. 2,70,246.29. This turnover consisted of the following commodities:
rate of tax
1. Purchase of rab 2,19,382.79 5 per cent 4,387.66
2. Sale of molasses 50,863.50 3 per cent 1,525.92
2,70,246.29 5,913.58
In these assessment orders the Sales Tax Officer had rejected the petitioner’s contention that the sale of molasses was totally exempt from sales tax and that he was not liable to pay any sales tax on the turnover of molasses. Feeling aggrieved the petitioner filed these writ petitions in this court. At the hearing of the writ petition the sole point urged was that gur-lauta and molasses were one and the same commodity and as such molasses were completely exempt from sales tax under Section 3-A of the U.P. Sales Tax Act. A Division Bench of this Court had in Commissioner of Sales Tax v. Sethu Prasad Lalta Prasad (Special Appeal No. 627 of 1963 decided on 24th January, 1969) held that gur-lauta is only a hardened form of molasses and is not a new kind of commodity. In view of this decision a Bench of this Court allowed the writ petition on 11th March, 1970, by holding that since khandsari molasses and gur-lauta were the same commodity, and since gur-lauta has been subjected to purchase tax under Section 3-D, the turnover of molasses would be exempt from sales tax. It was observed that in view of this decision the view taken by the assessing authority cannot be upheld and in the result the impugned assessment orders dated 16th August, 1969, were quashed.
4. This order of the Division Bench allowing the writ petitions became final inter-parties.
By the U.P. Taxation Laws (Amendment) Act, 1972 (Act 11 of 1972), Section 3-D of the U.P. Sales Tax Act was amended. The explanation added to Sub-clause (e) of Clause (7) of Section 3-D of the Act provided that for the purposes of this Act, the following goods shall be deemed to be different from each other, namely:
(a) khandsari molasses including sheera-sayar, sheera galawat and sheera-salawat;
(b) rab, including rab-sayar, rab-galawat and rab-salawat;
(c) gur-lauta and gur-raskat.
The Act continued to provide:
and accordingly, nothing in this section shall be construed to prevent the imposition, levy or collection of tax under Section 3-A in respect of any one of the said goods merely because tax has been imposed, levied or collected under this section in respect of any other of them, or vice versa.
5. Clause (e) of Section 6 of the amending Act expressly provided that the explanation shall be inserted and shall be deemed always to have been inserted. It is clear that the explanation as it stands after its amendment by this Act of 1972 shall be deemed to have been on the statute book ever since the original explanation came in. This explanation is to Sub-section (7) of Section 3-D of the U.P. Sales Tax Act. Sub-section (7) was added to Section 3-D by U.P. Act No. 22 of 1964. In law the position would be that by virtue of this deeming provision the explanation would be deemed to have been on the statute book ever since the coming into force of the 1964 amending Act. The explanation will be deemed in law to be in force in the assessment years 1967-68 and 1968-69 with which we are concerned.
6. After the coming into force of amending Act No. 11 of 1972, the Sales Tax Officer on 18th March, 1972, issued a notice under Section 21 of the U.P. Sales Tax Act calling upon the petitioner to show cause why his turnover of molasses be not treated as having escaped assessment and be not assessed to tax. The petitioner filed an objection stating that the original assessment order having been quashed by the High Court and the High Court decision having become final inter-parties it was binding on the department, and the Sales Tax Officer had no jurisdiction to initiate proceedings again in respect of the same turnover of molasses. The Sales Tax Officer repelled this submission and assessed the originally computed turnover of molasses to sales tax of Rs. 2,149.53 at the rate of 3 per cent for the year 1967-68 and of Rs. 1,525.92 for the year 1968-69. By the present petitions the assessment orders under Section 21 have been challenged.
7. At the threshold, learned counsel for the petitioner challenged the view of the Sales Tax Officer that the amending Act of 1972 was retrospective. But this submission was based upon a misreading of the amending Act. Clause (e) of Section 6 expressly makes the amendment retrospective. The amended explanation was in law in force in the assessment year in question, namely, 1967-68. The legal consequence of retrospective amendment of a law was recently explained by a Division Bench in Ram Niranjan Singh v. Ram Awadh Singh 1973 A.W.R. 547. The Division Bench relied on another decision of this court in Deep Chand Jain v. Board of Revenue 1966 A.L.J. 113, where it was held:
The courts while deciding cases do not make law. When the courts interpret any law they only explain what the pre-existing law is. They do not create or impose it. The courts do not possess the power to say that its view of the law will hold good from a date of its choice or for a period of time set by itself. That will in substance amount to amending the law from time to time. That is a power which vests exclusively In the law-making authority and not in the courts.
The true rule appears to be that the court’s declaration is co-extensive with the life of the law. It is effective for the whole of the time that that law remains in force.
8. The Division Bench in Ram Niranjan Singh’s case 1973 A.W.R. 547 then held that it necessarily follows from this principle that if a law is repealed then the declaration of law made by a court construing it lapses. The Bench held that it is true that normally a judgment which has become final operates as res judicata between the parties to the litigation on the points already decided. But this rule does not hold good when the Legislature alters the law retrospectively. Retrospective alteration has the necessary consequence that the law which was construed by the court before its amendment ceases to exist. In such a situation, the declaration of the law made by the court loses its value and efficacy and such a declaration cannot operate as res judicata between the parties after the law itself has been amended. No judgment of a court can take away the power of the Legislature to make law with retrospective effect. If there is any conflict between the declaration of law made by a court and the exercise of legislative power, the declaration of law made by the court will yield to the legislative enactment. In Mathura Prasad Sarjoo Jaiswal and Ors. v. Dossibai A.I.R. 1971 S.C. 2355, the Supreme Court held that where the law is altered since the earlier decision, the earlier decision will not operate as res judicata between the same parties. It is obvious that the matter in issue in a subsequent proceeding is not the same as in the previous proceeding because the law interpreted is different.
10. Accordingly, with the amendment of the explanation, the construction placed upon the relevant provision by the High Court on the previous occasion ceased to exit or lapsed. That decision will no longer operate as res judicata between the parties or even as a precedent in respect of other cases. In the present case, the High Court on a construction of the relevant provisions held that molasses and gur-lauta were the same commodity and, as such, molasses were exempt from sales tax. By the amending Act of 1972 the Legislature clarified that these two are different commodities with the result that molasses would not be exempt from sales tax on the ground that gur-lauta was liable to purchase tax. This retrospective legislative change in the law has the effect of nullifying the previous decision of the High Court to the contrary. With the result that in law the petitioner’s turnover of the sale of molasses which was liable to sales tax remained un-taxed or, in other words, escaped assessment to tax. In this situation, Section 21 of the U.P. Sales Tax Act was attracted and the Sales Tax Officer had jurisdiction to bring the turnover of molasses to tax under that provision.
11. For the petitioner it was urged that on the previous occasion the High Court only quashed the assessment order. It did not quash the assessment proceedings. Consequently, assessment proceedings initiated under Section 7 revived and could be closed by passing a fresh assessment order. So long as the original assessment proceedings were pending, it could not in law be said that the turnover of molasses escaped assessment because it could be brought to tax in those very proceedings. In this view Section 21 was inapplicable. It may be noticed that in the previous writ petition the only point urged was that the turnover of molasses was exempt from sales tax. The necessary implication in this plea was that the Sales Tax Officer had no jurisdiction to initiate assessment proceedings in order to bring the turnover of molasses to sales tax. This plea having succeeded, the quashing of the assessment order was, in our opinion, tantamount to quashing the assessment proceedings themselves in regard to the turnover of molasses. When the High Court had held that the turnover of molasses was exempt from tax, the Sales Tax Officer could not have passed a fresh assessment order assessing the turnover of molasses to tax, because he would then be expressly defying the order of the High Court.
12. For the petitioner reliance was placed upon the decision of a Division Bench of this Court in Writ Petition No. 1370 of 1968 decided on 13th February, 1969 (Madanlal Kashinath v. Sales Tax Officer). In that case it was provided:
When a proceeding terminates in an order, and the order is assailed in a petition for certiorari and the court quashes that order, it is the order alone which is removed from the record. The proceedings revive as if there was no order terminating it. The authority which took the proceeding and made the order will now take it that the proceeding was revived before it and it is open to it within the limitations set by law to dispose it of afresh. It is not correct to say that if the order is quashed the entire proceeding must be considered as having been taken off the record. That result follows only where certiorari is issued quashing not merely the order but the entire proceeding concluding in that order. Such a case may arise where the validity of the order alone is not challenged but the jurisdiction of the officer to initiate and take the entire proceeding is assailed. In the instant case, the petitioner did not challenge the jurisdiction of the Sales Tax Officer to take the assessment proceeding. He attacked the validity of the assessment order alone on the ground that the rate of tax applied by the Sales Tax Officer had been levied under an invalid notification.
13. The Division Bench then referred to the Supreme Court’s decision in Chatturam Horilram v. Commissioner of Income-tax [1955] 27 I.T.R. 709 (S.C.), and observed:
In that case, however, the assessment for the year 1939-40 made on the assessee was quashed by the Income-tax Appellate Tribunal on the ground that the Indian Finance Act, 1939, was not in force during the assessment year in Chhota Nagpur where the assessee was carrying on the business. Subsequently, Bihar Regulation IV of 1942 was promulgated by which the Indian Finance Act, 1939, was brought into force in Chhota Nagpur retrospectively from 30th March, 1939. The Income-tax Officer took the view that the income of the assessee had escaped assessment for the year 1939-40 and issued a notice under Section 34 of the Indian Income-tax Act, 1922. The Supreme Court held that the income of the assessee was chargeable to tax for the year 1939-40, that it had escaped assessment within the meaning of Section 34 and that the notice under Section 34 was valid.
After giving this statement of facts of Chatturam Horilram’s case [1955] 27 I.T.R. 709 (S.C.), the Division Bench distinguished it by observing:
Upon the facts in that case, it is clear that when the Income-tax Appellate Tribunal set aside the original assessment it was on the ground that the Indian Finance Act, 1939, was not in force in Chhota Nagpur and, therefore, the Income-tax Officer had no jurisdiction to take any assessment proceeding for the year 1939-40 in respect of the business in Chhota Nagpur. It was not a case where the correctness of the assessment order alone was in question. The validity of the entire proceeding was in dispute.
14. As seen above, the petitioner in substance attacked the validity of the assessment proceedings themselves in regard to molasses. He was not challenging merely the correctness of the assessment order in relation to the turnover of molasses. The present case is completely covered by the Supreme Court’s decision in Chatturam’s case [1955] 27 I.T.R. 709 (S.C.). The decision of the Division Bench of this Court relied upon by the petitioner is distinguishable because in that case it was held that the petitioner had attacked the validity of the assessment order alone on the ground that the rate of tax applied was illegal.
15. Since in the present case the High Court’s decision resulted in the legal position that the Sales Tax Officer had no jurisdiction to initiate proceedings in regard to the turnover of molasses, it cannot be said that the assessment proceedings revived by the quashing of the assessment order. The entire assessment proceedings must in law be treated as having been quashed.
16. By now it is well-settled that if a turnover has escaped assessment, the Sales Tax Officer can take proceedings either under Section 7(3) or under Section 21 of the U.P. Sales Tax Act depending upon the circumstances of each case: see Commissioner of Sales Tax v. Sugan Chand Shyam Lal 1970 A.L.J. 895 (F.B.) and Commissioner of Sales Tax, U.P. v. Jagmohan Nath Aga 1972 U.P.T.C. 237 (F.B.).
17. For the petitioner reliance was placed upon the Supreme Court’s decision in Additional Assistant Commissioner of Sales Tax v. Firm Jagmohandas Vijay Kumar [1970] 25 S.T.C. 74 (S.C.). In that case, the Sales Tax Officer passed an assessment order to the best of his judgment. In revision the Commissioner set aside the assessment order and remanded the case for fresh assessment after giving the assessee an opportunity of being heard. On these facts, the Supreme Court held that the result of the quashing of the assessment order by the Commissioner was that the original assessment proceedings (sic) be passed. The case is clearly distinguishable because there the Commissioner had not merely quashed the assessment order but remanded the case back for fresh assessment.
18. The Supreme Court’s decision in Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax [1963] 14 S.T.C. 976 (S.C.) is not very material. In that case, it was held that a turnover cannot be said to escape assessment if proceedings in respect of the first assessment are pending and no final order of assessment is made therein. On facts, such a situation does not obtain in the present case.
19. Learned counsel for the petitioner in the end urged that by the original order the petitioner had been taxed on the turnover of rob, khand and molasses for the year 1967-68 and of rob and molasses for the year 1968-69. The High Court had quashed the assessment order as such and not only in respect of molasses. Assuming for the sake of argument that this is the correct effect of the High Court’s decision, the petitioner cannot gain any advantage because the order under Section 21 merely brings the turnover of molasses to tax afresh. This order under Section 21 therefore, cannot be held illegal on any such ground.
20. In our judgment the petitions are without merit and are accordingly dismissed with costs.
