TaxTMI 
TaxTMI 
1989 (1) TMI 122
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....tify the consequences flowing from the classification, it is open to them to contend against the validity of the determination and they are not estopped from doing so. The processors are right in contending that the true principle should be followed in determining the assessable value. Then what is the true principle ? Section 4 of the Act deals with valuation of excisable goods for purposes of charging of duty of excise. Section 4(1)(a) of the Act stipulates that the value should be subject to other provisions of the section, the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal where the buyer is not a related person and the price is the sole consideration for the sale. For the present purpose, we are not concerned with the provisos nor the situation where the normal price of goods is not ascertainable for any reason. In Empire Industries Ltd. v. Union of India [1986] 162 ITR 846 [1985] Suppl. 1 SCR 292, it was held that where, for the purpose of calculating assessable value, a notional gum is laid down by the Legislature to be arrived....
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....stion, namely, what is the value of the processed fabrics liable to be assessed. Referring to the aforesaid decision of the Empire Industries' case [1986] 162 ITR 846 (SC), he illustrated the problem by reference to the example set out in the judgment (page 654 of 1986 suppl. SCC of the report at para 2). In that example illustrated by him, the value of the grey cloth in the hands of the processor was Rs. 20. The value of the job-work was Rs. 5. Trader's selling price inclusive of his selling profits, etc., was put at Rs. 30. Bhagwati C. J. at page 655 of the report observed that the assessable value of the processed fabric must obviously be taken to be the wholesale cash price of the processed fabric at the factory gate, that is, when the processed fabric leaves the factory of the processor and it cannot possibly include the selling profit of the trader who subsequently sells the processed fabrics. The learned Chief Justice reiterated that it is at the point when the processed fabric leaves the factory of the processor that its assessable value has to be determined and that assessable value cannot include the selling profit of the trader. Empire Industries' case [1986] 162 ITR 846....
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....85] Suppl. 3 SCR 165, it was held that the value of Nestle's trade marks could not be added to the wholesale price charged by the dealer to Nestle's for the purpose of computing the value of the goods manufactured. The goods in both these cases were manufactured independently of the addition of the trade marks. The price thereof at the factory gate was not after taking into account the value of the trade marks. If that was the position, the value of the trade marks cannot be added to the wholesale cash price charged by the dealer. Affixation of trade marks for enhancement of the value thereof is extraneous to and independent of the process of manufacture. The charges for the same are not part of the assessable value and cannot enter into the computation of the wholesale cash price on the basis of which excise duties are to be levied. In the aforesaid view of the law and for the reasons mentioned by my learned brother, I agree with his answer to this contention. The assessable value would, therefore, include the value of the grey cloth in the hands of the processors plus the value of the job-work done plus manufacturing profit and manufacturing expenses whatever would be included....
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....ch had declared the levy on such "processing" as illegal as, according to the High Court, the processing did not bring into being a new and commercially different article with a distinctive character and use and did not, therefore, constitute "manufacture" for purposes, and within the meaning of the charging section. The processors who carry out these operations on cotton fabrics or "man-made" fabrics which popularly go by the name "grey fabric" in the particular trade also challenged the levy of the additional duties of excise under the provisions of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 ("Additional Duties Act"), on the ground, first, that if the processes carried on by them do not amount to "manufacture" under section 2(f) as it originally stood, then, consistent with the impermissibility of the main impost, the levy of additional duties also fails and that, at an events, even after the amendment, the concept of "manufacture" under the said Additional Duties Act had not been correspondingly widened by an appropriate amendment. The present batch of appeals and writ petitions comprises a large number of cases. It is not, having regard to the....
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....ic but is only engaged in processing it for charges and that in many cases the grey fabric would have passed on from trader to trader with the attendant increase in the prices with each successive change of hands and is entrusted to the petitioner by the last purchaser for processing against stipulated processing charges on job work basis. It is contended that these job work processing operations do not amount to "manufacture" as the petitioners do not carry out any spinning or weaving operations ; that what they receive from their customers for processing is otherwise fully manufactured man-made fabric and that what is returned to the customers after processing continues to remain manmade fabric. The imposition of excise duty on the processor on the basis of the full value of the processed material, which reflects the value of grey fabrics, the processing charges, as well as the selling profits of the customers is at once unfair and anomalous, for, in conceivable cases, the duty itself might far exceed the processing charges that the processors stipulate and get. The batch of cases also includes cases where the grey fabric is also purchased by these processing houses and are....
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.... High Court. The Bombay High Court held that even under the concept of "manufacture" envisaged in section 2(f) even prior to its amendment, the operations carried on by the processors amounted to "manufacture" and that, at all events, the matter was placed beyond any controversy by the Amending Act, i.e., the Act of 1980. The aggrieved processors have come up in appeal by special leave in Civil Appeal No. 6396 of 1983. Some of the processors have, as stated earlier, filed writ petitions under article 32 directly in this court challenging the impost on grounds that commended themselves for acceptance to the Gujarat High Court. Before its amendment by the Amending Act (Central Act VI of 1980), section 2(f) of the Central Excises Act, defined "manufacture" in its well accepted legal sense-nomen juris-and not with reference to an artificial and statutorily expanded import. "2(f) 'manufacture' includes any process incidental or ancillary to the completion of a manufactured product ; and (i) ... [Omitted as unnecessary.] (ii) ..." The reasoning of the Gujarat High Court was on these lines (see [1980] Tax LR 1766, 1775) : "In the instant case, the excise duty claimed ....
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....bsp; Twenty per cent. ad valorem ; (b) cotton fabrics, subjected to the process of bleaching, mercerising, dyeing, printing, water-proofing, rubberising, shrink-proofing, organdie-processing or any other process or any two or more of these processes. Twenty per cent. ad valorem" "22(1) Man-made fabrics other than (i) embroidery in the piece, in strips or in motifs, and (ii) fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials- (a....
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....fabrics' subjected to any process, (ii) 'woollen fabrics' subjected to any process, (iii) 'rayon or artificial silk fabrics' and 'man-made fabrics' subjected to any process, under any such Central Act shall be deemed to be, and shall be deemed always to have been, as validly levied, assessed or collected as if the provisions of this section had been in force on and from the appointed day ; (b) no suit or other proceeding shall be maintained or continued in any court for the refund of, and no enforcement shall be made by any court of any decree or order directing the refund of, any such duties of excise which have been collected and which would have been validly collected if the provisions of this section had been in force on and from the appointed day: .. ." Indeed, the correctness of the judgment of the Gujarat High Court in the cases of Vijay Textile and Real Honest Textiles [1979] 4 ELT (J) 181 were considered by a Bench consisting of three judges of this court in Empire Industries v. Union of India [1985] Supp. 1 SCR 292 ; [1986] 162 ITR 846, by the judgment dated May 6, 1985, one of us (Sabyasachi Mukharji J.), speaking for the court, upheld the validity of the imp....
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.... to the amendment as also under the Act subsequent to the amendment and the processed fabrics are liable to be assessed to excise duty in the hands of what may be called 'jobbers'. Since this was a decision given by a Bench of three judges, the petitioners and appellants who are carrying on business of processing on job work basis could not contend that these processes do not amount to manufacture and that the processed fabrics are not liable to be assessed to excise duty in the hands of the jobbers. But, it was the second question which provoked serious controversy before us . . . " It is only on the second question touching on valuation that it expressed some doubts. Nevertheless, in paragraph 6 of the order, the referring Bench made a further observation to this effect : ". . . Of course, when these writ petitions and appeals are referred to the larger Bench, it will be open to the larger Bench to consider not only the question of determination of the assessable value but also the other question, namely, whether processing of grey fabric by a processor on jobwork basis constitutes manufacture, because the judgment in Empire Industries' case [1986] 162 ITR 846 (SC) which ha....
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....bsp; ----- Value of the finished cloth returned to trader (1+2) 25.00 ----- (3) Trader's selling price inclusive of his selling profits, etc. 30.00 The assessable value in the case given in this example would be taken by the excise authorities at Rs. 30 which was the sale price of the trader . . ." T....
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....ount to manufacture is wrongly decided and requires reconsideration ? (b) (i) Whether the amendment brought about by the Amending Act of 1980 of section 2(f) and to tariff items Nos. 19 and 22 of the Central Excises Act is ultra vires entry 84, List 1, and, therefore, beyond the competence of the Union Parliament ? (ii) Whether, at all events, even if the expanded concept of " manufacture" introduced by the amendment is beyond the scope of entry 84, List 1, the impost is, at all events, referable to and supportable by the residual entry 97 of List I ? (c) Whether, at all events, even if the amendments to the Central Excises Act are valid, the levy under the Additional Duties Act is unsupportable and without the authority of law as there is no corresponding enlargement of the definition of "manufacture" under the Additional Duties Act ? (d) Whether the retrospective operation of the Amending Act is an unreasonable restriction on the fundamental right of the "processors" under article 19(1)(g) of the Constitution ? (e) Whether, even if the levy is justified, at all events, the computation of the assessable value of the processed grey fabric on the basis of the wholesal....
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....d to with approval by this court in the case of Pio Food Packers' case [1980] 46 STC 63, 66 (SC), were relied upon: "At some point, processing and manufacturing will merge. But where the commodity retains a continuing substantial identity through the processing stage, we cannot say that it has been 'manufactured'." (Emphasis supplied). The following observations of Pathak J. in Pio Food Packers' case [1980] 46 STC 63 at 65 were cited: ". . . manufacture is the end result of one or more processes through which the original commodity is made to pass ... where there is no essential difference in identity between the original commodity and the processed article it is not possible to say that one commodity has been consumed in the manufacture of another. Although it has undergone degree of processing, it must be regarded as still retaining its original identity." (Emphasis supplied). The observations of this court in Kailash Nath v. State of U. P. [1957] 8 STC 358 at 364, made while repelling the contention of the Revenue urged in that case that when cloth is printed and coloured, it gets transformed to some other material and that, therefore, when such printed and coloured ....
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....re Industries' case [1986] 162 ITR 846, this court considered similar submissions in an almost identical context and situation. Learned judges referred to the observations of this court in CST v. Harbilas Rai and Sons [1968] 21 STC 17, in which the view expressed by the Division Bench of the Madhya Pradesh High Court in Hiralal Jitmal v. CST [1957] 8 STC 325, 326, was held supportable on the reasoning that (see [1986] 162 ITR 846, 862) ".... The decision of the Madhya Pradesh High Court might perhaps be justified on the ground that a printed or dyed cloth is commercially different article from the cloth which is purchased and printed or dyed." The Division Bench also referred to, with approval, the decision of the Bombay High Court in Kores (India) Ltd. v. Union of India [1982] 10 ELT (J) 253. The Division Bench noticed the question arising for decision (see [1986] 162 ITR 846, 862) : "Fabric itself means woven materials. It was contended that processing the manufactured fabric does not bring into existence any new woven material but the question is : do new and different goods emerge having distinctive name, use and character ?" Answering, the Bench said (see [1986] 16....
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....hat if the amending law is valid, this aspect becomes academic. We think, we should reject contention (a). Re : Contention (b) : The concept of "manufacture" embodied in entry 84 of List I, it is urged, should be construed not in an artificial sense, but in its recognised legal sense and so construed, artificial dimensions sought to be imparted to it by the amendment would be impermissible. Learned counsel drew attention to the following observations of this court in Diamond Sugar Mills Ltd. v. State of U. P. [1961] 3 SCR 242 at 248; AIR 1961 SC 652, 655: ". . . we have, on the one hand, to bear in mind the salutary rule that words conferring the right of legislation should be interpreted liberally and the powers conferred should be given the widest amplitude ; on the other hand, we have to guard ourselves against extending the meaning of the words beyond their reasonable connotation, in an anxiety to preserve the power of the Legislature." (Emphasis supplied). Though entries in the legislative lists are to be construed liberally and the widest possible amplitude given to them, however, no artificial or arbitrary extensions of the meaning of the words in the entry, i....
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.... activity of ,'manufacture" cannot be described as a levy of duties of excise under entry 84, List I. If it is a nondescript tax under entry 97, Parliament it is urged, has not chosen to enact any such law in this case. The charging section does not, it is urged, bring such a taxable event to charge. This argument was noticed in Empire Industries' case [1986] 162 ITR 846 thus (at p. 871 ) : ". . . It was then argued that if the legislation was sought to be defended on the ground that it is a tax on an activity like processing and would be covered by the powers enumerated under entry 97 of List I of the Seventh Schedule, then it was submitted that there was no charging section for such an activity and, as such, the charge must fail, and there cannot be any levy . . . " The contention was rejected. ". . . This argument proceeds on an entire misconception. The charging section is the charging section 3 of the Central Excises and Salt Act, 1944. It stipulates the levy and charge of duty of excise on all excisable goods produced or manufactured. 'Manufactured' under the Act after the amendment would be 'manufacture' as amended in section 2(f) and tariff items Nos. 19-1 and 22 a....
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.... entries in List I of the Seventh Schedule. Illustrations of such legislation are not wanting in our statute book, and the fact that one of such entries is the residuary entry does not also attract any disability . . . " So far as the exclusive competence of the Union Parliament to legislate is concerned, all that is necessary is to find out whether the particular topic of legislation is in List 11 or List 111. If it is not, it is not necessary to go any further or search for the field in List I ; Parliament has exclusive power to legislate upon that topic or field. Of course, it has concurrent power also in respect of the subjects in List 111. Contention (b) is, therefore, insubstantial. Re: Contention (c) : This pertains to the validity of levy of additional duties. The contention proceeds on the pre-supposition that processing does not amount to "manufacture" under section 3(1) of the Additional Duties Act. If it does, as has been held on contention (a), this argument does not survive at all. The point, however, sought to be put across is that, even if the concept of "manufacture" for purposes of levy of excise duty under the Central Excises Act is validly expande....
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....us consideration of the validity of the levy of additional duties. But, on a closer examination of the concept of, and the scheme for, levy and collection of the additional duties and the specific statutory provisions, the tensile strength of the argument breaks down. There are at least two circumstances which render the definition of "manufacture" under section 2(f) attracted to the additional levies. Section 3 (3) of the Additional Duties Act provides: "...levy and collection of the additional duties as they apply in relation to the levy and collection of the duties of excise on the goods specified in sub-section (1)." It is plain that the statute expressly makes the provisions in the Central Excises Act apply in relation to "levy and collection" of the additional duties. The question is whether this provision is sufficient to attract section 2(f) of the main Act as amended. This, in turn depends upon what the expression "levy" connotes and carries with it. The term "levy" it is held, is an expression of wide import. It includes both imposition of a tax as well as its quantification and assessment. In Assistant Collector of Central Excise v. National Tobacco Co. of India Lt....
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....eally no substance in the grievance that the retroactivity imparted to the amendments is violative of article 19(1)(g). A competent Legislature can always validate a law which has been declared by courts to be invalid, provided the infirmities and vitiating factors noticed in the declaratory-judgment are removed or cured. Such a validating law can also be made retrospective. If, in the light of such validating and curative exercise made by the Legislature granting legislative competence the earlier judgment becomes irrelevant and unenforceable, that cannot be called an impermissible legislative overruling of the judicial decision. All that the Legislature does is to usher in a valid law with retrospective effect in the light of which the earlier judgment becomes irrelevant. (See Shri Prithvi Cotton Mills Ltd. v. Broach Borough Municipality [1971] 79 ITR 136 (SC) ; [1970] 1 SCR 388. Such legislative expedience of validation of laws is of particular significance and utility and is quite often applied in taxing statutes. It is necessary that the Legislature should be able to cure defects in statutes. No individual can acquire a vested right from a defect in a statute and seek a win....
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....t clearly distinguished from both the extent of the power to impose and the stage at which the tax is imposed. Though the levy is on the production or manufacture of the goods, the imposition of the duty could be at the stage which the law considers most convenient to impose as long as a rational relationship with the nature of the tax is maintained. The processors contend that the assessable value could only be the job work charges received by them for the processing of "grey fabric" and cannot be the selling price at which the customer who entrusts the grey fabric for processing ultimately sells it in the market. Such a sale price, it is said, would, quite plainly, include the value of the grey fabric, the processing charges and also the selling profits of the customer. Even in regard to the price of the grey fabric itself which comes to the processing houses in fully manufactured condition, it would again depend upon how many hands it has changed before reaching the particular customer who brings them for processing. The determination of assessable value at the actual or hypothetical selling price of goods of like nature and quality in the wholesale market would include the p....
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....sactions . If excise were levied on the basis of second or subsequent wholesale price, it would load the price with a post-manufacturing element, namely, selling cost and selling profit of the wholesale dealer. That would be plainly contrary to the true nature of excise as explained in the Voltas' case [1973] 2 SCR 1089 ; AIR 1973 SC 225. Secondly, this would also violate the concept of the factory gate sale which is the basis of determination of value of the goods for the purpose of excise. There can, therefore, be no doubt that where a manufacturer sells the goods manufactured by him in wholesale to a wholesale dealer at arms length and in the usual course of business, the wholesale cash price charged by him to the wholesale dealer less trade discount would represent the value of the goods for the purpose of assessment of excise . . . Explaining what really is the idea of "post-manufacturing profit" referred to in Atic's case [1975] 3 SCR 563, this court in Union of India v. Bombay -Tyre International Ltd. [1986] 59 Comp Cas 460, 483 ;[1984] 1 SCR 347, 375 said: ". . . When it refers to post manufacturing profit arising from post-manufacturing operations, it clearly inte....
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....the levy should be uniform, uninfluenced by fortuitous considerations. The method of determination of the assessable value suggested by the processors would lead to the untenable position that while in one class of grey fabric processed by the same processor on bailment, the assessable value would have to be determined differently, dependent upon the consideration that the processing house had carried out the processing operations on job work basis, in the other class of cases, as it not unoften happens, the goods would have to be valued differently only for the reason that the same processing house has itself purchased the grey fabric and carried out the processing operations on its own. It is to solve the problem arising out of the circumstance that goods owned by one person are "manufactured" by another that at a certain stage under rule 174A, a notification was issued by the Central Government exempting from the operation of rule 174A : ". . . every manufacturer who gets his goods manufactured on his account from any other person, subject to the conditions that the said manufacturer authorises the person, who actually manufactures or fabricates the said goods to comply wi....
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....mount of duty payable at the time of the removal of the goods from the factory. The post-amendment section made certain changes in the concept of sale at the factory gate by excluding therefrom sales effected in favour of a category of persons defined as " related persons" with which we are not concerned here. The amendment also defined the "assessable value" so as to include packing charges but to exclude the amount of excise duty, sales tax and other taxes as well as trade discount. The question was whether this amendment precluded the deduction, from the wholesale factory gate price, of post-manufacturing expenses and profits. The question had been answered by several High Courts in the negative, principally on the ground that the duty sought to be levied under the Act was an excise duty, the very nature of which required a proximate connection with production or manufacture and that what had passed beyond this region and entered the domain of sale could not pass as excise duty. Counsel for the Union of India, with a view to overcome these decisions, had contended that since entry 97 of List I in the Seventh Schedule to the Constitution enabled Parliament to enact a legislation ....
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....ecisions. The question decided was not that the Legislature could not, but that it did not, make any radical change in the nature of the levy. The position considered in the Hindustan Milkfood Manufacturers Ltd.'s case [1980] ELT (J) 487 may be illustrated by an analogy. Entry 82 in List I of the Seventh Schedule to the Constitution permits the enactment, by the Union Legislature, of a law relating to taxation of "income". The entry does not restrict such laws only to the income of a "previous year", though this was the pattern of the prevalent Income-tax Acts activated by annual Finance Acts. Between 1948 and 1955, however, the Finance Acts purported to impose a tax on "excess dividends" which, in brief, was a tax on dividends declared out of profits of past years. The effect of these enactments was considered by the Bombay High Court as well as this court. In CIT v. Elphinstone Spinning and Weaving Mills Co. Ltd. [1960] 40 ITR 142 ; [1960] 3 SCR 953, this court held that the language of the relevant provision in the Finance Acts was so framed that it could not be read as an independent charging section. It will be appreciated that the Finance Acts were also enactments of the U....
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....definition of "manufacture" cannot be sustained by reference to entry 97 of List I in the Seventh Schedule to the Constitution of India, if it cannot be upheld as falling under the purview of entry 84. The second point on which I feel inclined to add a few words is in regard to the contention on behalf of the petitioners that the definition of the term "manufacture" enacted in the Central Excises and Salt Act, 1944, as enlarged by Amendment Act No. 6 of 1980, cannot be read into the provisions of the Additional Duties of Excise Act, 1957 (No 58 of 1957). The argument is in three phases and runs thus : (i) Section 3 of the 1957 Act, which is the charging section, fastens the charge of duty at the stage of "manufacture" but this expression is deliberately left undefined, though the statute takes special care in section 2 to adopt, for its purposes, the definition of "specified goods" as contained in the 1944 Act. This excludes the definition of "manufacture" enacted in section 2 (f) of the 1944 Act and enlarged from time to time. (ii) Section 3(3) cannot help the Revenue in this regard, as its only purpose and effect is to avoid a repetition, in this Act, of the procedural p....
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....uses the same words "levied and collected". These are the same as the words used in article 265 of the Constitution which have been interpreted as comprehending the entire process of taxation commencing from the imposition of the tax by enacting a statute to the actual taking away of money from the pocket of the citizen. They take in every stage in the entire process of taxation. The word "levied" is a wide and generic expression. One can say with as much appropriateness that the Income-tax Act levies a tax on income as that the Income-tax Officer levies the tax in accordance with the provisions of the Act. It is an expression of wide import and takes in all the stages of charge, quantification and recovery of duty, though in certain contexts, it may have a restricted meaning. In the context of sub-section (1), the word "levied" admittedly means "charged" as well as "assessed". The words "levy and collection" in subsection (3) cannot be construed differently from the words "levied and collected" used in sub-section (1). Section 3(3), therefore, also covers the entire gamut of section 3(1) and cannot be construed as becoming operative at a somewhat later stage. Its operation cannot ....
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....tral Excises and Salt Act". The question was whether the tax credit could also be given in respect of the amount of the special duty of excise levied and collected under the Finance Act. This court held that, obviously, the special duty levied under section 80 could not be regarded as having been levied under the Central Excises Act. It said (at p. 325 of 153 ITR) : It is true that the expression 'leviable' is an expression of wide import and includes stages of quantification and recovery of the duty but in the context in which that expression has been used in clause (b) of sub-section (6) of section 280ZD, it is clear that it has been used in the sense of chargeability of the duty. In other words, the duty of excise in respect whereof tax credit is available would be in respect of such duty of excise as is chargeable under the Excise Act and clearly the special excise duty in respect whereof additional tax credit is sought by the appellant company is not chargeable under the Excise Act but chargeable under the Finance Act." Having said this, the court added (at p. 325 of 153 ITR) "Sub-clauses (3) and (4) of section 80 of the Finance Act on which reliance has been placed b....
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.... the Finance Act. In like manner, I think, the content of aspect (a) cannot be understood differently from, or independently of, the definition in the main enactment. Having regard to the nature and content of the levy indicated in section 3(1), it is obvious that section 3(3) has to have the effect of attracting not only the purely procedural and machinery provisions of the 1944 Act but also some of its charging provisions. It is, therefore, difficult to consider section 3(1) of the 1957 Act in contrast to the Finance Act of 1965-as covering the entire ambit of the charge imposed. In short, the language of section 3(3) has to be given wider meaning than under the Finance Act, 1965. I have referred to the fact that a provision similar to that in section 80 of the Finance Act, 1965, is also found in other Finance Acts. On a perusal of these provisions, it will be found that a like position exists there also. These provisions are all self-contained and completely specify the scope of the charge either as a percentage of the excise duty normally chargeable under the Central Excises and Salt, Act, 1944, or as a percentage of the "assessable value determined under section 4 of the 1944 ....
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....iii), (ix), (x) and (xi). Thus, it was always clear that "specified goods" have to be understood in the way they were defined in the Central Excises and Salt Act, 1944. The idea in 1956 was to restrict the powers of the States to levy sales tax in respect of such goods and other goods. In 1958, the idea was conceived of the Centre levying an additional excise duty on these goods and distributing the same to the States subject to the condition specified in Schedule 11 that such States did not impose any sale or purchase tax on these commodities. Subsequently perhaps, it was realised that section 7 served no specific purpose under the Act except those of the definitions which were an aspect already covered by section 2(c). In these circumstances, not much significance need be attached to section 2(c) much less can it be construed as negativing the import of other definitions from the 1944 Act. The next question that arises for consideration is, whether, even assuming that the terms of section 3(3) are applicable, its terms are wide enough, to take in not merely the provisions of the Central Excises and Salt Act, 1944, and, in particular, its definition clauses, as they stood in 19....
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....slation are to be seen in Collector of Customs v. Nathella Sampathu Chetty [1962] 3 SCR 786, New Central jute Mills Co. Ltd. v. Assistant Collector [1971] 2 SCR 92 and Special Land Acquisition Officer, City Improvement Trust Board v. P. Govindan [1977] 1 SCR 549. Whether a particular statute falls into the first or second category is always a question of construction. In the present case, in my view, the legislation falls into the second category. Section 3(3) of the 1957 Act does not incorporate into the 1957 Act any specific provisions of the 1944 Act. It only declares generally that the provisions of the 1944 Act shall apply "so far as may be", that is, to the extent necessary and practical, for the purposes of the 1957 Act as well. That apart, it has been held, even when a specific provision is incorporated and the case apparently falls in the first of the above categories, that the rule that repeals, modifications or amendments of the earlier Act will have to be ignored is not adhered to in certain situations. These have been set out in State of Madhya Pradesh v. M. V. Narasimhan [1976] 1 SCR 6. In that case, the Supreme Court was considering the question whether the amendm....
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....ontained in themselves all the elements of charge of duty. The goods were mentioned and the duty has to be levied either at a percentage of the normal excise duty payable under the 1944 Act or at a percentage of the value of the assessable goods as determined under the 1944 Act. All that was further needed was the applicability of the procedural provisions of the 1944 Act. Here, however, the 1957 Act is incomplete as to the basis of the charge and its provisions would become totally unworkable unless the concepts of "manufacture" and "assessable value" as determined under the 1944 Act are carried into it. In the circumstances, I agree that we should give full and literal effect to the language of section 3(3) and hold that it has the effect not only of attracting the procedural provisions of the 1944 Act but also all its other provisions including those containing the definition. ORDER BY THE COURT (January 27, 1989) : In respect of the civil miscellaneous petition for clarification of this court's judgment dated November 4, 1988, it is made clear that the assessable value of the processed fabric would be the value of the grey cloth in the hands of the processor plus the v....