Validity of sales tax enforcement and mandatory notice procedure: Ordinance upheld, but Schedule II amendments struck down.

An Ordinance was treated as law in force from publication, even if its actual operation could begin later on the prescribed administrative step, and the Chief Commissioner was competent to bring it into operation under the Ordinance and the continuing-laws order, so the sales tax levy was sustained. By contrast, amendments to Schedule II were invalid because the statutory scheme required prior notice of proposed amendments and reconsideration after the notice period, and those mandatory steps were not followed. The court treated that procedure as essential to protect assessees and allow objections before finalisation, so the original Schedule II remained operative and only partial relief was granted.

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Issues: (i) Whether the Sales Tax Ordinance was in force and validly brought into operation so as to sustain the levy of sales tax; (ii) Whether the amendments made to Schedule II were valid despite non-compliance with the prescribed notice procedure.

Issue (i): Whether the Sales Tax Ordinance was in force and validly brought into operation so as to sustain the levy of sales tax.

Analysis: The Ordinance was held to be law in force from its publication, although its actual operation could be deferred until the prescribed administrative step. The distinction between an enactment coming into existence and its coming into operation was recognised, and the constitutional expressions "law in force" and "existing law" were treated as interchangeable in this context. The Chief Commissioner was competent to bring the Ordinance into operation under the terms of the Ordinance and the Central Government order continuing existing laws.

Conclusion: The levy of sales tax was upheld and the challenge to the competence to enforce the Ordinance failed.

Issue (ii): Whether the amendments made to Schedule II were valid despite non-compliance with the prescribed notice procedure.

Analysis: The governing provision required prior notification of proposed amendments and a further notification after reconsideration following the notice period. The admitted amendments to Schedule II were made without the mandated notice and without the required reconsideration. The statutory procedure was treated as mandatory because it protected assessees and enabled public objection before finalisation.

Conclusion: The amendments to Schedule II were invalid and the original Schedule II had to be given effect to.

Final Conclusion: The sales tax levy itself was sustained, but the impugned amendments to the exemption schedule were struck down for non-compliance with the prescribed statutory procedure, resulting in only partial relief to the applicants.

Ratio Decidendi: An enactment may be treated as law in force before it is brought into actual operation, but amendments made under a statutory scheme requiring prior notice and reconsideration are invalid if that mandatory procedure is not followed.

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