Delegated tax scheduling power upheld: paddy and rice could be brought into purchase tax, and the dealer exemption claim failed.

Section 31 of the Punjab General Sales Tax Act, 1948 validly empowered the State Government to add or delete goods in Schedule C, because the Act itself fixed the basic tax policy and the delegation was confined to implementing details. The notification of 15 January 1968 including paddy and rice in Schedule C was therefore within statutory competence and effective. On the dealer issue, a person purchasing paddy and manufacturing rice in the course of business fell within the statutory definition of dealer, and the claimed exemption or deduction for such purchases was not available on the wording of the Act. Purchase tax was accordingly payable.

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Issues: (i) Whether section 31 of the Punjab General Sales Tax Act, 1948, empowering the State Government to add to or delete from Schedule C, amounted to excessive delegation of legislative power; (ii) whether the notification dated 15 January 1968 including paddy and rice in Schedule C was invalid as contrary to the Act and the legislative scheme; and (iii) whether the petitioner was a dealer liable to purchase tax and entitled to exemption or deduction in respect of paddy purchased for manufacture of rice.

Issue (i): Whether section 31 of the Punjab General Sales Tax Act, 1948, empowering the State Government to add to or delete from Schedule C, amounted to excessive delegation of legislative power.

Analysis: The legislative history showed that the Act itself laid down the basic tax policy and had already authorised tax on both sales and purchases, while leaving to the Government the selection of goods to be brought within or taken out of the purchase-tax schedule. The power under section 31 was treated as analogous to the well-accepted power to amend tax schedules for working out the details of taxation, not as a power to alter the essential policy of the statute. The delegation was confined to a subsidiary field and did not permit repeal or amendment of the Act's basic legislative choice.

Conclusion: Section 31 was held to be intra vires and not an instance of excessive delegation.

Issue (ii): Whether the notification dated 15 January 1968 including paddy and rice in Schedule C was invalid as contrary to the Act and the legislative scheme.

Analysis: Once section 31 was held valid, the notification issued after notice and in exercise of the statutory power was within the Government's competence. The inclusion of goods in Schedule C was only the mechanism by which the legislature's policy of levying purchase tax on selected goods was given effect. The Court also held that the scheme of the Act distinguished between exemptions from sales tax under Schedule B and liability to purchase tax under Schedule C, and the notification did not nullify any statutory provision.

Conclusion: The notification was held to be valid and legally effective.

Issue (iii): Whether the petitioner was a dealer liable to purchase tax and entitled to exemption or deduction in respect of paddy purchased for manufacture of rice.

Analysis: The definition of dealer under the Act covered a person who, in the normal course of trade, purchases goods, and the definition of trade included manufacture and ancillary transactions irrespective of profit motive. The petitioner's activity of purchasing paddy and manufacturing rice was carried on as a commercial business, and the fact that a large portion of the rice was procured by the Government at a fixed price did not take the petitioner outside the definition. The claimed exemption under section 5(2)(a) was not available because the relevant deduction provisions did not apply to the petitioner's purchases from agriculturists and the statutory language did not extend the manufacturing exemption in the manner contended.

Conclusion: The petitioner was held to be a dealer and not entitled to the claimed exemption or deduction; purchase tax was payable.

Final Conclusion: The writ petitions failed on the merits because the delegated power under section 31 was valid, the impugned notification stood sustained, and the petitioner remained liable as a dealer under the Act.

Ratio Decidendi: In a tax statute, the legislature may validly delegate to the executive the power to select the goods liable to tax through schedules, so long as the statute itself declares the basic policy and the delegation is confined to working out details of implementation.

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