Delegated extension of sales tax law cannot alter legislative policy or waive mandatory notice before withdrawing exemption.

A delegated power to extend a State sales tax law to a Union territory under the Union Territories (Laws) Act permits only adaptations necessary to fit local conditions; it cannot alter the legislative policy or replace a mandatory notice safeguard. The modification of section 6(2) made while extending the Bengal Finance (Sales Tax) Act to Delhi was therefore ultra vires, and a later general amendment did not validate that defect. Because the original three months' notice requirement survived, the 1966 withdrawal of exemption from sales tax on durries and ghee without compliance was ineffective, while the earlier grant of exemption to durries remained valid.

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Issues: (i) whether the Central Government could validly modify section 6(2) of the Bengal Finance (Sales Tax) Act, 1941, while extending it to Delhi under section 2 of the Union Territories (Laws) Act, 1950; (ii) whether the modification could be made again after the original extension; (iii) whether the withdrawal of exemption from sales tax on durries and ghee without three months' notice was valid, and whether the original grant of exemption to durries was invalid for want of notice; (iv) whether the Bengal Finance (Sales Tax) (Delhi Amendment) Act, 1959 validated the impugned modification.

Issue (i): whether the Central Government could validly modify section 6(2) of the Bengal Finance (Sales Tax) Act, 1941, while extending it to Delhi under section 2 of the Union Territories (Laws) Act, 1950;

Analysis: The power under section 2 was confined to extending a State enactment to a Union territory with only such restrictions and modifications as were necessary to adapt it to the local and constitutional conditions of that territory. A modification unconnected with adaptation, and one that changed the legislative scheme itself, went beyond the delegated power. The change made in section 6(2) did not merely adapt the provision to Delhi: it replaced the Legislature's minimum three months' notice with a subjective standard of reasonable notice, thereby altering the statutory policy.

Conclusion: The modification of section 6(2) by Notification No. S.R.O. 3908 dated 7 December 1957 was ultra vires and void.

Issue (ii): whether the modification could be made again after the original extension;

Analysis: The power under section 2 was an ancillary power tied to the act of extension and could be exercised again only if later constitutional or structural changes in the Union territory made a fresh adaptation necessary. No such change had occurred. The repeated exercise of the power in 1957 was therefore not justified by section 2, and general provisions on recurring powers could not enlarge the special statutory limitation.

Conclusion: The Government had no authority to exercise the power of modification in 1957 in the circumstances of the case.

Issue (iii): whether the withdrawal of exemption from sales tax on durries and ghee without three months' notice was valid, and whether the original grant of exemption to durries was invalid for want of notice;

Analysis: Section 6(2) embodied a mandatory notice requirement before withdrawing an exemption, because withdrawal had the effect of imposing tax and affected dealers' rights and opportunity to object. The same provision was only directory when exemption was granted, since grant of exemption imposed no burden and caused no grievance. As the purported 1957 modification of section 6(2) was invalid, the original three months' notice requirement continued to operate. The 1966 notifications were issued without compliance with that requirement and were therefore ineffective. The 1957 grant of exemption to durries, though not preceded by the statutory notice, was not invalid.

Conclusion: The withdrawal of exemption in 1966 was invalid, while the grant of exemption in 1957 remained valid.

Issue (iv): whether the Bengal Finance (Sales Tax) (Delhi Amendment) Act, 1959 validated the impugned modification;

Analysis: The 1959 amendment merely substituted the words "Central Government" for "State Government" in the Act generally and was not directed to curing the invalid modification of section 6(2). An amendment validates an earlier defect only when it is aimed at the offending provision or clearly re-enacts the relevant law in substance. That was not the position here.

Conclusion: The 1959 amendment did not validate the 1957 modification.

Final Conclusion: The impugned modification of section 6(2) failed, the original notice requirement survived, and the later notifications withdrawing the exemption were quashed, leaving the petitioners entitled to relief.

Ratio Decidendi: A delegated power to "extend" a State law to a Union territory with "restrictions and modifications" permits only ancillary adaptation necessary to fit the law to the local set-up and cannot be used to alter the legislative policy or dispense with a mandatory statutory safeguard.

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