iminal Appeals Nos 157 and 158 of 1957 and 5 of 1958
Appeals by special leave from the judgment and order dated October 31 1955 of the Allahabad High Court in Criminal Reference Nos 28 29 and 30 of 1955 arising out of the judgment and order dated December 18 1954 of the Sessions Judge Deoria in Criminal Revisions Nos 7 8 and 9 of 1954
606 G C Mathur C P Lal and G N Dikshit for the appellant
W section Barlingay and A G Ratnaparkhi for the respondents
December 15
The Judgment of the Court was delivered by SHAH J
The question which falls to be determined in this group of appeals is whether field workers ie Supervisors and Kamdars employed by a sugar factory to guide supervise and control the growth and supply of sugarcane for use in the sugar factory are employees of a  Commercial Establishment  with in the meaning of the United Provinces Shop and Commercial Establishment Act XXII of 1947 herein after referred to as the Act
The Magistrate who tried the respondents for offences under section 27 of the Act held that the field workers were employees of a Commercial Establishment
The High Court at Allahabad took a contrary view and the State of Uttar Pradesh has appealed to this court against the order of the High Court with special leave under article 136 of the Constitution
The United Provinces Shop and Commercial Establishment Act 1947 was enacted to regulate the hours of employment and certain other conditions of employment in shops and commercial establishments
Commercial Establishment is defined by section 2 cl 3 of the Act
By section 12 of the Act provision is made for giving to the employees a weekly holiday besides holidays which may be granted under section 11
Section 13 provides for granting ordinary casual and  sickness leave
 Section 26 requires the employer to maintain such registers and records and to display such notices as may be prescribed and section 27 penalises contraventions of the Act and the rules made thereunder
The Lakshmi Devi Sugar Mills Ltd hereinafter referred to as the company owns a factory at Chhitauni for manufacturing sugar
The three respondents are respectively the General Manager Assistant Manager and Secretary of the company
The company employs certain classes of field workers to guide 607 supervise and control the growth and supply of sugarcane for use in the Factory
The Deputy Chief inspector of Shops and Commercial Establishment Uttar Pradesh filed three complaints against the respondents in the court of the Judicial Magistrate Deoria charging them with contravention of the provisions of sections 12 13 and 26 of the Act in respect of certain field workers employed by the company for guiding supervising and controlling the growth and supply of sugarcane
The respondents contended that the Act did not apply to those employees as they were workers within the meaning of the and accordingly exempt from the operation of the Act
The Judicial Magistrate rejected the contention and convicted the respondents of contravention of section 26 of the Act and sentenced each of them to pay a fine of Rs 30 in each of the three cases
Against the orders of conviction and sentence the respondents preferred revision applications to the Court of Session at Deoria
The Sessions Judge disagreed with the view of the Trial Magistrate and referred the cases to the High Court at Allahabad recommending that the orders of conviction and sentence passed by the Trial Magistrate be set aside
The High Court accepted the references and ordered that the respondents be acquitted
By the definition of a Commercial Establishment in section 2 cl 3 of the Act the clerical and other establishments of a factory to whom the provisions of the Factories Act 1934 do not apply are included in the connotation of that expression
It is true that the reference in the definition by which clerical and other establishments of factories are included is to the Factories Act of 1934 but by virtue of section 8 of the General Clauses Act X of 1897 it must be construed as a reference to the provisions of the Factories Act LXIII of 1948 which repealed the Factories Act of 1934 and re enacted it
The contention raised by the State by special leave that since the repeal of the Factories Act 1934 in the definition of Commercial Establishment in section 2 cl 3 are included all clerical and other establishments of a factory without any exemption has therefore no force
608 The defines a worker by section 2 1 as meaning it a person employed directly or through any a person employed directly or thought any agency whether for wages or not in any manufacturing process or in cleaning any part of the machinery or premises used for a manufacturing process or in any other kind of work incidental to or connected with the manufacturing process or the subject of the manufacturing process and a factory is defined by section 2m as meaning any premises including the precints thereof wherein a specified number of workers on any day of the preceding twelve months is employed
By the combined operation of these definitions persons employed in any manufacturing process or in cleaning any part of the machinery or part of the premises used for the manufacturing process or any other kind of work incidental to or connected with the manufacturing process or the subject of the manufacturing process are deemed to be workers in a factory
By the use in section 2 1 of the of the expression I employed in any other kind of work incidental to or connected with the subject of manufacturing process  not only workers directly connected in the manufacturing process but those who are connected with the subject of manufacturing process in a factory are included
It is unnecessary for the purpose of this case to decide the precise meaning of the expression I subject of the manufacturing process  in section 2 cl
1 because the diverse provisions of the are intended to benefit only workers employed in a factory ie in the precincts or premises of a factory
It is difficult to hold that field workers who are employed in guiding supervising and controlling the growth and supply of sugarcane to be used in the factory are employed either in the precincts of the factory or in the premises of the factory and if these workers are not employed in a factory the provisions of the do not apply to them and they evidently fall within the definition of  Commercial Establishment 
The High Court was of the view that the Supervisors and Kamdars connected with the subject of 609 manufacturing process namely sugarcane were workers within the meaning of the and accordingly they were excluded from the definition of  Commercial Establishment  under the Act
However even if the Supervisors and Kamdars were employed in any other kind of work connected with the subject of manufacturing process  unless they were employed in the factory the provisions of the do not apply to them there is no dispute that they are employees of a  Commercial Establishment  within the meaning of the Act
The High Court was therefore in error in acquitting the respondents of the offences of which they were convicted by the Trial Magistrate
The orders of acquittal passed by the High Court are set aside and the orders of conviction and sentence passed by the Trial Magistrate are restored
In view of the order of this Court dated October 1 1956 made at the time of granting special leave the respondents are entitled to their costs of hearing in this court
Appeal allowed


Summary:
The respondent mills a registered dealer under the Bihar Sales Tax Act 1947 Act 111 of 1947 was carrying on business of manufacture and sale of gunny bags hessian and other jute products at Katihar
During the period April 1 1950 to March 31 1951 it sold and despatched its wares worth about Rs 9224386 1 6 to dealers outside the State and realised a sum of Rs 211222 9 6 as sales tax from them
In assessing the sales tax payable by the said respondent for the relevant period the Superintendent of Sales Tax Purnea held that the said amount of sales tax had been realised in contravention of section 14A of the Act read with r 19 of the Bihar Sales Tax Rules and directed its forfeiture under the proviso to that section
The respondent challenged the validity of the said order under articles 226 and 227 of the Constitution
The High Court held that the proviso to section 14A of the Act was ultra vires the State Legislature as it violated articles 201 and 312 of the Constitution and set aside the order of forfeiture and quashed the proceedings under section 14A of the Act
The State of Bihar appealed to this Court
It was urged by way of preliminary objection on behalf of the respondent that since the proviso to section 14A of the Act had no application to the facts of the case there was no occasion to decide its constitutional validity
The contention of the appellint was that the proviso did apply to the respondent inasmuch 332 as he had contravened the conditions and restrictions imposed by the proviso to r 19
The question for determination therefore was whether the said respondent could be said to have realised any amount by way of tax in respect of such part of its turn over as was allowed to be deducted from his gross turn over for the determination of his taxable turn over under the Act or the rules as contemplated by the later part of the said proviso
Held that the preliminary objection must prevail
Held further that before the penalty of forfeiture could be imposed upon a dealer under the proviso to section 14A of the Bihar Sales tax Act 1947 it had to be shown that he had acted contrary to the conditions and restrictions prescribed by the Rules and it was not enough to show that the collection of the sales tax made by him was otherwise illegal or improper
The contravention of the statutory provisions contained in section 14A or of the Rules prescribing conditions and restrictions in that behalf alone could form the basis of the imposition of the penalty of forfeiture prescribed by the said proviso
With the insertion of section 33 into the Act with retrospective operation prohibiting the imposition of the tax on sales taking place outside the State and in view of the decision of this Court in State of Bombaay vs The United Motors India Ltd   the proviso to r 19 must be construed on the basis that the sales in question were outside the scope of the Act and no tax could be imposed on them
It could not therefore be said that that part of the respondent s turnover which was in question was an allowable deduction within the meaning of the said proviso
Such allowable deductions as are contemplated by the proviso are clearly based on the provisions of sections 6 7 and 8 of the Act as is quite clear from the Explanation to section 5 of the Act
State of Bombay  Another vs The United Motors India Ltd
An allowable deduction under the said proviso was not the same thing as exclusion of a part of the turn over on the basis of section 331a1 of the Act
It stands on an entirely different footing
Transactions which fall within the said section are in substance outside the Act and no tax can be imposed on them
The transaction in question did not therefore fall within the proviso to r19 and the proviso to section 14A was not attracted and the order of forfeiture passed against the respondent was unjustified and illegal