Appeal No 1694 of 1971
From the Judgment and Decree dt 11 2 70 of the Allaha bad High Court in Civil Misc
Writ No 973 of 69
SC Manchanda and OP Rana for the Appellants
K Sen JP Goyal and Shreepal Singh for the Re spondent
The Judgment of the Court was delivered by SHINGHAL J
This appeal by the State of Uttar Pradesh and three sales tax officers is directed against the judgment of the Allahabad High Court dated February 11 1970
The High Court has granted a certificate of fitness under clause c of article 1331 of the Constitution
Respondent Modi Industries Limited
hereinafter referred to as the dealer was known earlier as the Modi Sugar Mills Ltd It manufactured various articles like sugar oil vanaspati and soap
It exercised the option under section 7 as it stood prior to its amendment by section 7 of UP Act XIX of 1956 of the UP Sales Tax Act 1948 hereinaf ter referred to as the Act to submit its returns of sales tax on the basis of its turnover of the previous yearns and filed the returns accordingly
The assessment years for which the returns were filed were 1948 49 and 1949 50 and the corresponding previous years were November 1 1946 to October 31 1947 and November 1 1947 to October 31 1948 respectively
The rate of sales tax for certain commodities was enhanced during the assessment year 1948 49 with effect from June 9 1948 and for some other commodities with effect from July 1 1948
The dealer contended that sales tax on its entire turnover of the two previous years should be assessed at the old rate of 3 pies per rupee and not at the enhanced rate of 6 pies per rupee because the enhancement was made after both the previous years had ex pired
The Sales Tax Officers rejected that contention and assessed the sales tax at the enhanced rates
The appel late authority however upheld the dealer s contention and the matter went up in revision to the Judge Revisions
He upheld the order of the Sales Tax Officer
The dealer applied for a reference under section 11 1 and the fol lowing two questions of law were referred to the High Court 1 Whether the enhanced rate under notifica tions dated 8th Jane 1948 and 30th June 1948 issued under section 3 A of the UP Sales Tax Act
1948 are ap plicable to the sales of goods mentioned in paragraph 2 above which took place before 8th June 1948 and 30th June 1948
2 Whether sub section ii of section 3 A of the UP Sales Tax Act 1948 empowers Provincial Government to fix the rate of sales tax in respect of an assessment year or in respect of certain specified sales only  550 By its judgment dated July 24 1961 the High Court answered question No 1 in favour of the dealer but declined to answer the other question
The High Court took the view that the dealer who had chosen to be assessed on the basis of its turnover of the previous year was liable to assess ment on the entire turnover of the previous year at the rate prevailing on the first day of the relevant assessment year and that any change in the rate of the sales tax during the course of the assessment year could not be applied to that assessment
The dealer filed an application under section 118 of the Act for a direction for the payment of interest on the amount which had become refundable as a result of the judgment of the High Court
The High Court held in its order dated February 22 1966 that the dealer was entitled to interest at the rate of two per cent on the refundable amount
The dealer accordingly made an application to the Revising Authority on October 11 1968 to pass an order under sub section 6 of section 11 for a refund of Rs 34842013 with interest at two percent per annum
The Additional Judge Revisions Sales Tax however dismissed the application by his order dated December 28 1968 as he took the view that that was not permissible because of the insertion of section 31 in the Act by the Uttar Pradesh Bikri Kar Sanshodhan Adhiniyam 1962 UP Act III of 1963 hereinafter referred to as the Amending Act
The dealer felt aggrieved and filed a writ petition under article 226 of the Constitution
It is that petition which has been allowed by the impugned judgment of the High Court dated February 11 1970 by which the order of the Additional Judge Revisions Sales Tax Meerut dated Decem ber 28 1968 has been quashed and a direction has been given to him to pass an appropriate order under section 11 6 of the Act in accordance with the law and in the light of the observations made by the High Court
This is why the State of Uttar Pradesh and others have come up to this Court in appeal
We have made a mention of the facts bearing on the controversy and we may as well refer to the relevant provi sions of the law
The Act came into force on April 1 1948
It provided for payment of the sales tax on several commodities at a uniform rate of 3 pies in the rupee
Section 3 A was in serted by Act XXV of 1948 conferring certain powers on the Provincial Government
The provincial Government issued a notification under that section declaring
inter alia that with effect from June 9 1948 the rate of sales tax in respect of the turnover of the goods specified in the noti fication shall be as stated in the schedule to the notifica tion
The rate of tax was thus enhanced to 6 pies per rupee
The enhancement of the tax was challenged on the ground that it was not permissible in the case of an asses see who had taken the option to submit his return on the basis of the turnover of the sales in the previous year as he was liable to pay the tax according to the rates pre vailing during the assessment year
That case came up to this Court at the instance of the present respondent which was then known as the Modi Sugar Mills Limited
and it was held in Commissioner of Sales Tax Uttar Pradesh vs The Modi Sugar Mills Ltd 1 that the assessee who had 1  551 elected to submit his return on the turnover of the previous year was liable to be assessed to sales tax at the rate force on the first day of the year of assessment because the liability arose on that date and any subsequent enhance ment of the rate by the notification under section 3 A did not alter the liability The Legislature however passed the Amending Act and inserted the following as section 31 311 Where any dealer has in accord ance with the provisions of Section 7 as it stood prior to its amendment by Section 7 of UP Act XIX of 1956 opted to be assessed to tax on the basis of his turnover of the previ ous year he shall be assessed to tax at such rates as are prevalent during the year for which the assessment is being made and if the rates of tax on any goods or class of goods are altered during such assessment year the dealer in respect of the turnover of such goods shall be liable to pay tax at the altered rates as if the altered rates were in force during the previous year also propor tionately for the same number of days as they are in force during the assessment year
2 Notwithstanding any judgment decree or order of any court all assessments or orders made actions or proceedings taken directions issued jurisdictions exercised or tax levied or collected by any officer or authority purporting to act under the provi sions of sub section 1 of Section 7 as it stood prior to its amendment by Section 7 of UP Act XIX of 1956 shall be deemed to be good and valid in law as if such assessments orders actions proceedings directions jurisdictions and tax have been duly made taken issued exercised levied or collected as the case may be under or in accordance with the said provisions of this Act as amend ed by the Uttar Pradesh Bikri Kar Sanshodhan Adhiniyam 1962 and as if the amendment so made had been in force on all material dates
Explanation For the purposes of this section the expression previous year shall have the meaning assigned to it in sub clause ii of clause j of Section 2 of this Act as it stood prior to its amendment by Section 2 of the UP Act XIX of 1956
 The validity of the aforesaid section 31 of the Act came up for consideration in this Court in Commissioner of Sales Tax UP vs Bijli Cotton Mills Hathras1 and was upheld
It was held that as the Legislature had amended the Act and declared that notwithstanding the option exer cised by the assessee the tax would have to be computed in the light of the rates prevailing in 1948 49 as if they were projected upon the turnover of the previous year the Legislature had expressly stated that that rule would pre vail as if it were in force during the assessment year and all assessments would be made in the light of the amended provision
It was observed that in taking that view this Court was seeking to apply a legislative provision which was by express enactment in force at the time when the liability 1 19647 SCR 363
552 arose for section 31 incorporated by the Amending Act was to be deemed to have been in operation at all material times in supersession of the previous rule declared by this Court
It was held further that this would be the position even if the laws were amended with retroactive operation during the pendency of a reference to the High Court
It was accordingly held that if the law which the Tribunal seeks to apply to the dispute is amended so as to make the law applicable to the transaction in dispute it would be bound to decide the question in the light of the law so amended
 The validity and the retroactive operation of section 31 have therefore been placed beyond challenge by the aforesaid decision in Bijli Cotton Mills  case and have in fact not been challenged by counsel for the dealer
It may be mentioned that in its judgment in Bijli Cotton Mills  case this Court took notice of its earlier decision in the Modi Sugar Mills  case supra so that it is well settled that the amendment made by section 31 is retroac tive and applies to assessments pending or closed as if the Amending Act had been in force at material times
The question is whether the judgment of the High Court dated July 24 1961 answering question No 1 of the afore said reference by stating that the sales tax had to be charged from the dealer for the assessment year 1948 49 at the rate applicable to the various commodities on April 1 1948 and for the assessment year 1949 50 at the rate applicable on April 1 1949 was binding on the Additional Judge Revisions in spite of the amendment made by the Amending Act by insertion of section 31 in the Act  The High Court has taken the view in its impugned judgment dated February 11 1970 that the Revising Authority was not free to take a different view from the one expressed by it High Court on any ground whatsoever including the ground of any subsequent amendment in the law and that it was bound to decide the case in conformity with the judgment of the High Court
The High Court has expressed its view as follows  The judgment of the High Court may be said to have become erroneous as a result of the amendment but so long as the judgment stands it is binding upon the parties and the revising authority has no option except to give effect to it in its c order passed under section 116
 The High Court further made the following observation We however express no opinion as to the course
which the department should
adopt in a situation like this but we have no doubt in our mind that the amendment brought about by section 31 of the Act does not make the judgement of the High Court a nullity and the Judge Revisions was not free to ignore it for any reason whatsoever
 The question is whether lifts view of the High Court is correct  The answer to the question depends on the answer to the further question whether the proceedings for the assessment of the sales tax had become final after the High Court s judgment dated July 24 553 1961 or whether after that judgment something remained to be done by the Additional Judge Revisions  Sub section 6 of section 11 of the Act provides that the High Court upon hearing the reference shall decide the questions of law and shall deliver its judgment thereon and shall send its copy to the Revising Authority and the Commissioner of Sales Tax and the Revising Authority shall thereupon pass such orders as are necessary to dispose of the case in conformity with such judgment
 So while the Additional Judge Revisions was in seisin of the case for the Limited purpose for passing such orders as were neces sary to dispose it of in conformity with the judgment of the High Court it cannot be gain said that he was in such seisin and was required in the facts and circumstances of this case to make an order which would make the assessment order final and binding in all respects
It was at that stage that section 31 which was inserted by section 7 of the Amending Act was sought to be applied to the controver sy
According to sub section 2 of that section the assessments made at the enhanced rates in accordance with the notification dated April 9 1948 were to be deemed to be good and valid as if they had been duly made and as if the amendment made by the insertion of section 31 had been in force on all material dates
It was expressly provided by the sub section that that was to be so notwithstanding any judgment decree or order of any court
The order of the Additional Judge Revisions dated December 28 1968 had therefore the effect of recognising the restoration of the orders of assessment which were made by the Sales Tax Officer at the enhanced ratesand sub section 2 of section 31 had the effect of making them good and valid in law
It cannot be said that the Additional Judge Revisions erred in taking that view and in not passing an order for giving effect to the judgment of the High Court dated July 24 1961 which had become unenforceable by the aforesaid section 31
It has to be appreciated that even if the Additional Judge Revisions had passed an order under sub section C6 of section 11 of the Act as directed by the High Court that would have been of no consequence and would have been inoperative because of the specific provi sions of subsection 2 of section 31 so that the position would have been the same as if no such order had been passed at all
The High Court has expressed the view that if its judgment dated July 24 1961 was considered by the depart ment to be erroneous it could have filed an appeal against it to this Court
under article 136 of the Constitution to have it set set aside or modified
It is not clear to us how that would have been possible when the Amending Act had not been passed till then and was enacted some 1 12 years thereafter
The other suggestion of the High Court that it may have been open to the department to ask for a fresh reference to it against the order of the Revising Authority under section 11 6 on the ground that by the amendment a fresh question of law had arisen is also untenable because that order dated December 28 1968 was in favour of the department
In fact any suggestion or observation of the High Court for seeking any other mode of redress is beside the point for the State felt aggrieved against the impugned 554 judgment of the High Court dated February 11 1970 and has come up in appeal against it
And now that this Court is in seisin of the case it would be a work of supererogation to require the parties or any of them to go back to the Additional Judge Revisions or the High Court for an order
It has next been argued that the amendment made in the Act by insertion of section 31 can not possibly be implemented as no machinery has been provided to give effect to it and that it should therefore have been ignored altogether
This argument has been made with reference to this Court s decision in Modi Sugar Mills  case supra but it is futile because no question regarding any such machinery could possibly be said to arise for the purpose of giving effect to section 31 of the Act in the facts and circumstances of this case
So when section 31 of the Act is dearly valid and is retoractive and the Legislature has shown the intention of restoring the assessments and orders made under the provi sions of sub section 1 of section 7 as it stood prior to its amendment by section 7 of UP Act XIX of 1956 as good and valid assessments in law as if they had been duly made that was enough to set the controversy at rest and there is nothing wrong with the view which has been taken by the Additional Judge Revisions in his order dated December 28 1968
The appeal is allowed and the impugned judgment of the High Court dated February 11 1970 is set aside
In the circumstances of the case the parties shall pay and bear their own costs
PBR Appeal allowed


Summary:
The respondent filed its sales tax returns for the assessment years 1948 49 and 1949 50 on the basis of its turnover of two previous years
In respect of certain commodities the rate of sales tax was enhanced with effect from certain dates falling within the assessment years
The High Court on reference took the view that the dealer who had chosen to be assessed on the basis of its turnover of the previous year of assessment was liable to be assessed at the rule prevailing on the first day of the relevant assessment year and that any change in the rate during the assessment year could not be applied to that assessment
The assessee who had paid tax at the enhanced rate applied for refund of the excess tax together with interest thereon under section 116 of the UP Sales Tax Act 1948
The Additional Judge Revisions however rejected the applica tion holding that refund was not permissible in view of section 31 introduced by the Amending Act UP Act 3 of 1963
That section provided that where a dealer opted to be as sessed to tax on the basis of his turnover of the previous year he shall be assessed to tax at suchrates as are prevalent during the year for which the assessment is being made and if the rates of tax are altered during such as sessment year the dealer in respect of the turnover of such goods shall be liable to pay tax at the altered rates as if the altered rates were in force during the previous year also proportionately for the number of days involved as they were in force during the assessment year
According to sub section 2 of that section the assessments made at the enhanced rates in accordance with the notification dated April 9 1948 were to be deemed to be good and valid as if they had been duly made and as if the amendment made by the insertion of section 31 had been in force on all material dates
It was expressly provided by the sub section that that was to be so notwithstanding any judgment decree or order of any court
The High Court quashed the order of assessment on the ground that the Revising Authority was not free to take a different view from the one expressed by it High Court on any ground whatsoever including the ground of any subse quent amendment of the law
Allowing the Appeal to this Court HELD There is nothing wrong with the view taken by the Revising Authority
When section 31 of the Act is valid and is retroactive and the Legislature has shown the intention of restoring the assessments and orders made before the amendment as good and valid in law as if they had been duly made
that was enough to set the controversy at rest
The amendment made by section 31 was retroactive and applied to assessments pending or closed as if the Amending Act had been in force at all material times
554C D 552C Commissioner of Sales Tax UPv
Bijli Cotton Mills Hathras  referred to
a Section 31 was sought to be applied to the facts of the case when the Additional Judge Revisions was in seisin of the case for the purpose of passing the necessary orders to dispose it of finally in conformity with the judgment of 549 the High Court
If he had passed an order under section 116 of the Act as directed by the High Court that would have been of no consequence and would have been inoperative because of section 312
553B C  F