Full Judgment Text
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PETITIONER:
RAM BHAROSEY LAL KRISHAN KUMAR
Vs.
RESPONDENT:
STATE OF U.P. & ORS.
DATE OF JUDGMENT21/10/1971
BENCH:
ACT:
Uttar Pradesh Sales Tax Act, 1948--Ss. 3AA, 3D--Notification
under s. 3D imposing purchase tax on goods covered by s.
3AA--Validity--Scope of s. 3-D.
HEADNOTE:
Under s. 3AA of the Uttar Pradesh Sales Tax Act, 1948 "not
withstanding anything contained in s. 3 or 3A" tax on the
turnover of the goods specified therein was not leviable
except at the point of sale by a dealer to the consumer.
Section 3D, incorporated into the Act later, authorised the
imposition of a tax on the turnover of first purchase and on
the issue of a notification under the section no tax could
be levied under any other section in respect of the goods so
notified. On the question whether the notification dated
October 1, 1964 imposing a purchase tax on oil seeds was
invalid for the reason that it contravened s. 3AA of the
Act,
HELD : It is open to the State Government to levy purchase
tax, in exercise of its powers under s. 3D, in respect of
goods covered by s. 3AA. At the time the legislature
incorporated into the Act s. 3D it must have been aware of
the existence of s. 3AA, yet, in sub-s. (4) of s. 3D it
declared that on the issue of a notification under the
section, no tax shall be levied under any other section in
respect of the goods so notified. The ambit of this
provision is very wide and it clearly takes in goods
mentioned in s. 3AA. Further, the non-obstante clause does
not take in s. 3D, and if the legislature intended to
exclude the operation of s. 3D, in respect of matters
covered by s. 3AA nothing would have been easier than to say
so. Therefore, there are no grounds to cut down the
amplitude of the power conferred on the State Government
under sub-s. (4) of s. 3-D. [150 H-151 D]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 240 and 241
of 1969.
Appeals from the judgment and decree dated December 18,
1968 of the Allahabad High Court in Civil Misc. Writ No.
4697 of 1968.
J. P. Goyal and Sobhag Mal Jain, for the appellant (in both
the appeals).
L. M. Singhvi and O. P. Rana, for the respondents ( in both
the appeals).
The Judgment of the Court was delivered by
Hegde, J. These are appeals by certificate. They are by the
same appellant and they raise common question of law. Hence
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they are considered together.
Two questions of law were urged on behalf of the appellant
in support of the appeals. The first contention urged was
that
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Section 3-D(1) of the U.P. Sales Tax Act, 1948 (to be
hereinafter referred to as the Act) is ultra vires the
Constitution, firstly because that under that section
excessive legislative power had been delegated to the State
Government and secondly on the. ground that it discriminates
between the registered dealers who made their purchases
through licensed dealers and the registered-. dealers who
made their purchases through dealers who are not licensed.
The second contention taken was that-notification No. ST-
7122/X-900(16)64 dated October 1, 1964 issued under S. 3-
D(1) of the Act imposing purchase tax on oil seeds is
invalidas it contravenes S. 3AA of the Act.
We have considered the first ground of attack in Civil
Appeals, Nos. 362 and 1692 of 1969 (Mls. Sita Ram
Bishambhar Dayal etc. v. State of U.P.) in which we have
delivered judgment just now. For the reasons mentioned
therein, the contention that S. 3-D(1) is ultra vires the
Constitution fails.
The only surviving question is whether the notification re-
ferred to earlier is violative of s. 3AA of the Act.
Before examining that contention, it is necessary to set out
the, relevant facts.
The appellant is a partnership firm. It carries on business
as dealers in roundnuts, oil seeds and Arhar. For the
assessment years 1965-66, 1966-67, the Sales-tax Officer,
Rampur assessed’ the appellant to sales-tax on the turnover
of the groundnuts oil manufactured by the appellant and to
purchase tax on the turnover of the oil seeds and
foodgrains. The appellant unsuccessfully appealed against
the assessment orders. Thereafter it took up the matter in
revision before the revising authority. There, again it
substantially failed. Aggrieved by that decision, he moved’
the High Court of Allahabad for a writ of certiorari
quashing the levy of purchase tax imposed on him in respect
of his purchases of oil seeds. The High Court rejected
those petitions. Hence these appeals.
We shall now extract the impugned notification to the
extent,: it is material for the purpose of this appeal.
It reads thus:
"Not. No. ST-7122/X-99(16)64 dated October 1, 1964.
In exercise of the powers under sub-section (1) of section
3-D of the Uttar Pradesh Sales Tax Act, 1948 (U.P. Act No.
XV of 1948), the Governor of Uttar Pradesh is pleased to
notify that with effect from October 1, 1964, the turnover
of first purchases in respect
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of goods mentioned below shall be liable to tax under
Section 3-D of the said Act.
------------------------------------------------------------
SI. Name of goods Rate of tax.
NO.
-------------------------------------------------------------
1. Foodgrains including cereals and pulses1 .5 paisa
per rupee
2. Gur 3 paisa per rupee
3. Oilseeds 2 paisa per rupee
------------------------------------------------------------
As per this notification a purchase tax of 2 paise per rupee
,,on the turnover of the first purchase of oil seeds is
leviable. It is contended that this notification violates
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s. 3AA of the Act. Section 3AA says:
"Notwithstanding anything contained in section
3 or 3A, the turnover in respect of the
following goods shall not be liable to tax
except at the point of sale by a dealer to the
consumer, and the rate of tax shall be such,
not exceeding the maximum rate for the time
being specified in section 15 of the Central
Sales Tax Act, 1956, as may be declared by the
State Government by notification in the
Official Gazette:
(i).........
(ii)........
(iii).......
(iv)........
(v)........
(vi) oil seeds, that is to say, seeds
yielding non-volatile oils used for human
consumption, or in industry, or in the
manufacture of varnishes, soap and the like,
or in lubrication, and volatile oils used
chiefly in medicines, perfumes, cosmetics and
the like.
2. Unless the dealer proves otherwise, every
sale ’by a dealer shall, for the purposes of
sub-section (1) be presumed to be to a
consumer.
Explanation.--A sale of any of the goods
specified in sub-s. (1) to a registered dealer
who does not purchase them for resale in the
same condition in which he has purchased them,
or to an unregistered dealer shall, for pur-
poses of this section, be deemed to be a sale
to the consumer."
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This section was incorporated into the Act on April 1, 1956.
Under this section, on the goods specified therein, sales
tax not, exceeding the maximum rate for the time being
specified in s. 15 of the Central Sales Tax Act, 1956 can be
levied by the StateGovernment on the turnover in respect of
sales by dealers to the consumers. From an analysis of this
provision, we get the following:
1. that tax to be levied is a sales-tax;
2. levy in question is a single point levy;
3. the point of levy is the sale by the
dealer to the consumer and
4. the rate to be fixed by the State
Government is not to exceed the maxi
mum rate
for the time being specified in s. 15 of the
Central Sales Tax Act, 1956.
If we hold that provisions contained in s. 3AA continue to
be in force in respect of dealing in oil seeds then the
appellant’s. contention that the impugned levy is an invalid
levy succeeds, But the question is whether that contention
is correct.
This takes us to s. 3-D. That section reads:
"1. Except as provided in sub-section (2),
there shall be levied and paid, food each
assessment year or part thereof, a tax on the
turnover, to be determined in such manner as
may be prescribed, of first purchases made by
a dealer or through a dealer, acting as a pur-
chasing agent in respect of such goods or
class of goods, and at such rates, not
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exceeding two paisa per rupee in the case of
foodgrains, including cereals and pulses, and
pulses, and five paisa per rupee in the case
of other goods and with effect from such date,
as may, from time to time, be notified by the
State Government in this behalf.
Explanation.-In the case of a purchase made by
a registered dealer through the agency of a
licensed dealer, the registered dealer shall
be deemed to be the first purchaser, and in
every other case of a first purchase, made
through the, agency of a dealer, the dealer
who is the agent shall be deemed to be the
first purchaser.
2. x x x x
3. x x x x
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4. On the issue of a notification under this
section no tax shall be levied under any other
section in respect of the goods so notified.
5. The provisions of the second and third
proviso to Section 3 and of Section 18, shall
mutatis mutandis apply in relation to the tax
payable under this Section.
6. x x x x
7. Unless the dealer proves otherwise to the
satisfaction of the assessing authority, every
purchase by or through a dealer shall, for the
purposes of sub-section (1), be presumed to be
the first purchase by such dealer and every
sale through a dealer shall, for the purposes
of sub-section (2), be presumed to be sale to
a first purchaser."
For our present purpose, it is not necessary to refer to the
second and third provisos to S. 3 and S. 18. It may be
noted that S. 3-D was incorporated into the, Act on August
1, 1958.
The contention on behalf of the appellant was that s. 3AA is
a special provision regarding certain specified class of
goods including oil seeds whereas S. 3-D is a general
provision. Hence dealings in respect of oil seeds must be
held to be governed exclusively by s. 3AA. In support of
his contention, the learned ,Counsel for the appellant
called into, aid the rule of construction that a special
provision excludes the application of a general provision.
On the other hand, it was contended on behalf of the Revenue
that power was conferred on the State Government to levy
purchase tax in place of sales-tax in respect of any goods’
that may be notified under s. 3-D(1) subject only to the
conditions mentioned therein. According to Dr. Singhvi,
learned ’Counsel for the Revenue, the legislature left the
questions whether in respect of a class of goods, the
appropriate levy is
sales tax or purchase tax as well as what is the appropriate
point of levy, to the State Government because a decision on
that question has to be taken on an assessment of various
factors, some of which are not constant. According to him
in view of the language employed in sub-s. (4) of S. 3-D, it
is not possible to apply the rule of construction that
special legislation in respect of any particular topic
should exclude the application of general legislation.
It may be noted that S. 3-D was incorporated into the Act
much later than S. 3AA. As seen earlier S. 3AA was incorpo-
rated into the Act on April 1, 1956 whereas S. 3-D was added
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on August 1, 1958. At the time the legislature incorporated
into the Act S. 3-D, it must have been aware of the
existence of S. 3AA but yet in sub-s. (4) of S. 3-D, it
declared that on the issue of a notification under that
section, no tax shall be levied under any other section in
respect of the goods so notified. The ambit of this
provision is very wide and it clearly takes in goods
mentioned in s. 3AA.
Now turning to S. 3AA, it is important to note that it
begins by saying "notwithstanding anything contained in
section 3 or 3-A". The non-obstante clause does not take in
S. 3-D. If the legislature intended to exclude the
operation of S. 3-D, in respect of matters covered by S.
3AA, nothing would have been easier than to say so. It
could have said "notwithstanding anything contained in s. 3,
3-A and S. 3-D". But it did not choose to do that.
Therefore there are no grounds to cut down the amplitude of
the power conferred on the State Government under sub-s. (4)
of S. 3-D.
The High Court of Allahabad has consistently taken the view
that it is open to the State Government to levy purchase tax
in exercise of its powers under S. 3-D even in respect of
goods covered by S. 3AA. We are in agreement with that
view.
In the result these appeals fail and they are dismissed with
costs. One set.
K.B.N. Appeals dismissed.
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