TaxTMI 
TaxTMI 
TaxTMI 
1961 (12) TMI 65
X X X X Extracts X X X X
X X X X Extracts X X X X
....materials supplied by him in the construction of buildings, roads and bridges for the years 1953-54 to 1958-59. For the first year in question, sales tax amounting to Rs. 1,840-5-0 has already been charged and paid. He seeks refund of this amount. For the remaining years except the last two, proceedings for assessment have been completed, but the amounts have not been paid. For the remaining two years, proceedings are pending for assessment of the tax. The respondents in the case are the State of Madhya Pradesh, which stands substituted for the State of Vindhya Pradesh, and diverse officers connected with the assessment and levy of the tax. The contention of the petitioner is that the tax is not leviable in view of the decisions of this Court in two cases reported in The State of Madras v. Gannon Dunkerley and Co. (Madras) Ltd. [1959] S.C.R. 379; 9 S.T.C. 353., and Pandit Banarsidas v. The State of Madhya Pradesh [1959] S.C.R. 427; 9 S.T.C. 388. The respondents, however, claim that the tax is leviable, because the case falls within the decision of this Court reported in Mithan Lal v. The State of Delhi [1959] S.C.R. 445; 9 S.T.C. 417. The United State of Vindhya Pradesh was ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lows: "29. Repeal and saving: The Vindhya Pradesh Sales Tax Ordinance 2 of 1949 is hereby repealed, provided that......... ," and here follow certain provisions saving the previous operation of the Ordinance. On March 20, 1951, the Central Government issued Notification No. 52/ECON. in exercise of the powers conferred by sub-section (3) of section 1 of the Central Provinces and Berar Sales Tax Act, 1947, as extended to the State of Vindhya Pradesh by Notification No. S.R.O. 6, ordering that from April 1, 1951, the extended Act would come into force in the State of Vindhya Pradesh. On May 23, 1951, this Court rendered its judgment in In re the Delhi Laws Act, 1912. It was held by majority by this Court that section 2 of the Part C States (Laws) Act, 1950, was intra vires, except for the concluding sentence, "provision may be made in any enactment so extended for the repeal or amendment of any corresponding law (other than a Central Act) which is for the time being applicable to that Part C State", inasmuch as it was ultra vires the Indian Parliament. Parliament then passed the Government of Part C States Act, 1951 (49 of 1951) on September 6, 1951. Under that Act, Legislative Ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Act, 1947, which was extended to Vindhya Pradesh, defined "contract" to mean any agreement for the carrying out for cash or deferred payment or other valuable consideration, the construction, fitting out, improvement or repair of any building, road, bridge or other immovable property, and further defined "goods" to mean all kinds of property including all materials, articles and commodities, whether or not to be used in the construction, fitting out, improvement or repair of immovable property, and finally defined "sale" as including a transfer of property of goods made in the course of the execution of contract. By these definitions, the materials used or supplied by a building contractor in the construction of buildings, roads, bridges, etc. were made liable to sales tax in accordance with a schedule of rates, to which reference seems unnecessary. The legality of these and similar provisions of law purporting to impose sales tax on building materials in State Acts came up for consideration before High Courts in India, and two well-defined views were expressed, one holding that the power to disentangle in a building contract the sale of materials from the execution of works with ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nts contend that the Notification S.R.O. No. 6, which added section 29 repealing the Vindhya Pradesh Sales Tax Ordinance. 2 of 1949, the Part C States (Miscellaneous Laws) Repealing Act, 1951, and the Vindhya Pradesh Laws (Validating) Act, 1952, all concurred in repealing Ordinance 2 of 1949 from December 29, 1950, but left intact the operation of the Central Provinces and Berar Sales Tax Act as extended to Vindhya Pradesh by S.R.O. No. 6 of 1950. The Vindhya Pradesh Laws (Validating) Act, 1952, merely removed the doubts by stating again that the Central Provinces and Berar Sales Tax Act had been and "shall be deemed to be in force in Vindhya Pradesh from April 1, 1951", but did not re-enact that Act. According to the respondents, the Central Provinces and Berar Sales Tax Act was in force in Vindhya Pradesh as a result of its extension by Notification S R.O. No. 6 and Notification No. 52 (Econ.) the repeal of Ordinance 2 of 1949 being achieved by the Part C States (Miscellaneous Laws) Repealing Act, 1951, from December 29, 1950. The respondents, there- fore, seek to uphold the impugned provisions on the basis of the ruling of this Court in Mithan Lal's case, where it was pointed ou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce 2 of 1949, and if the Notification was invalid in that part, then the Central Provinces and Berar Sales Tax Act, which was extended by the opening part, never came into force. Mr. Viswanatha Sastri contended that the Notification must be looked at compendiously, and that it was impossible to think that the Central Government would have extended the Central Provinces and Berar Sales Tax Act, if the earlier Ordinance still continued to operate. He relied in this connection upon the observations of this Court in Pesikaka's case [1955] 1 S.C.R. 613, 638. to urge that the Notification, which was beyond the powers of the Central Government in its latter part, must be regarded as a nullity, and contended that if the invalid portion of the Notification was fundamental to the operation of the valid portion, then the valid portion also must equally fail, because it could not have been intended that two laws on the same topic were to operate simultaneously in Vindhya Pradesh. According to him, the extension of the Central Provinces and Berar Act could not and would not have been made, if the Ordinance had not been first repealed. Section 29 which was added, though composed of two parts, wa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gislating for a Part C State, Parliament and the Central Government were not subject to the disabi- lities pointed out in Gannon Dunkerley's case [1959] S.C.R. 379; 9 S.T.C. 353., and the matter was covered by the decision of this Court in Mithan Lal's case [1959] S.C.R. 445; 9 S.T.C. 417. Even if the Notification, S.R.O. No. 6, failed to repeal Ordinance 2 of 1949, Parliament by its own law effaced that Ordinance in Vindhya Pradesh from December 29, 1950, and enacted that the Ordinance shall be deemed to be repealed from that day. After the passing of the Repealing Act by Parliament, it is impossible to argue that Ordinance 2 of 1949 continued in Vindhya Pradesh down to January 8, 1953, because by fiction the Ordinance was repealed from December 29, 1950. Parliamentary legistion, therefore, came to the rescue; so to speak, of the Notification by making room for the extension of the Central Provinces and Berar Act by repealing Ordinance 2 of 1949 which the Notification proprio vigore was unable to achieve, as laid down in the Delhi Laws Act case [1951] S.C.R. 747. The Notification of the Central Government (S.R.O. No. 6) and Act 66 of 1951, therefore, concurred in removing the Ordi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....its operative part survived and the Central Provinces and Berar Sales Tax Act, 1947, was validly extended to Vindhya Pradesh, and was valid law as laid down in Mithan Lal's case [1959] S.C.R. 445; 9 S.T.C. 417. It did not suffer from the defects pointed out by this Court in Gannon Dunkerley's case [1959] S.C.R. 379; 9 S.T.C 353., as it was not enacted or extended by the State Legislature. It remains to consider the last argument on this point, and it is that the Central Provinces and Berar Sales Tax Act was re-extended to Vindhya Pradesh by Act 6 of 1952, and thus owed its existence to a law made by a State Legislature which was incompetent to enact a law that building materials in a works contract, which was entire, were liable to sales tax. The preamble of the Act shows that it was enacted to remove certain doubts which were entertained as to whether the extended Sales Tax Act became operative only from October 31, 1951, when Act 66 of 1951 was passed, or from an earlier date, viz., April 1, 1951, from which date it was brought into force in Vindhya Pradesh by Notification No. 52 (Econ.), dated March 20, 1951. To remove these doubts, the Vindhya Pradesh Laws (Validating) Act, 19....
X X X X Extracts X X X X
X X X X Extracts X X X X
....No. 52 (Econ.) was made, the Act was extended but was not force in Vindhya Pradesh. There is a difference between the extension of a law subject to its being brought into force later and its coming into force on a later date. Section 7 of Act 6 of 1952 repealed only the laws in force prior to the date on which the Central Provinces and Berar Sales Tax Act was brought into force. It speaks of "laws in force in Vindhya Pradesh immediately before April 1. 1951", and the law which was in force immediately before that date was not the Central Provinces and Berar Sales Tax Act which had not been brought into force, but might be Ordinance 2 of 1949, if it had not been success- fully repealed earlier. The former Act was extended on December 29, 1950, but was not brought into force till April 1, 1951, and the section speaks of "laws in force". The section, therefore, refers to Ordinance 2 of 1949, which would be in force immediately before April 1, 1951, if not successfully repealed, but not to the Central Provinces and Berar Sales Tax Act, which was only extended before that date but had not been brought into force. In other words, section 7 of the Act does no more than repeal from April 1....