Plenary parliamentary power under Article 246(4) upheld extension of sales tax law to Delhi for building contracts.

Parliament's power under Article 246(4) in relation to Part C States was held plenary, so the limitation that sales tax must be confined to a sale within the Sale of Goods Act did not restrict extension of the Bengal Finance (Sales Tax) Act, 1941, to Delhi. Section 2 of the Part C States (Laws) Act, 1950 was construed as permitting extension of an enactment already in force in a Part A State, with restrictions and modifications, and the notification was valid. The delegation to the Central Government was upheld because the extension did not involve an impermissible change in legislative policy. The challenge to applying the taxing provisions to building contracts therefore failed.

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Issues: Whether the provisions of the Bengal Finance (Sales Tax) Act, 1941, as extended to Delhi by notification under section 2 of the Part C States (Laws) Act, 1950, were validly applied to building contracts, and whether Parliament or the Central Government lacked competence to bring such transactions within the taxing net.

Analysis: The challenge turned on the nature of the power conferred by Article 246(4) of the Constitution in relation to Part C States and the effect of section 2 of the Part C States (Laws) Act, 1950. The Court held that, unlike State legislatures acting under the relevant constitutional entries, Parliament's power for Part C States was plenary and not restricted by the limitation that a sales tax must be confined to a sale as understood in the Sale of Goods Act, 1930. The expression "enactment which is in force" in section 2 was construed as meaning a statute in operation in a Part A State, not each provision separately tested for vires, and the notification could validly extend the Act with restrictions and modifications. The delegation to the Central Government was also upheld, because the extension of the Bengal Act to Delhi did not amount to an impermissible change of policy.

Conclusion: The impugned provisions and the notification extending them to Delhi were held valid, and the petitioners' constitutional challenge failed.

Final Conclusion: The taxing provisions as applied to works contracts in Delhi were sustained, and the petitions failed on merits.

Ratio Decidendi: Parliament's power under Article 246(4) in relation to Part C States is plenary, and a law extended under section 2 of the Part C States (Laws) Act, 1950, derives its force from Parliament; therefore, the extended enactment cannot be invalidated merely because the original State-law provisions would have been beyond a State legislature's competence under the sales-tax entry.

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