Case: State of Punjab &amp; Others Vs. Guru Nanak Flour &amp; Oil Mills &amp; Others

dealt with by this Court in its decision in State of Punjab v. Sansari Mal Puran Chand (1968) 1 SCR 336 = (AIR 1968 SC 331 ). This Court, after an elaborate reference to the provisions of the Act, as well as to the Constitution (Sixth Amendment) Act, with effect from September 11, 1956, held that the Act and the notification issued thereunder effectively imposed tax on sales of edible oils from September 11, 1956 and not before. Accordingly, this Court held that the notification dated August 5, 1954 issued by the State Government was valid from September 11, 1956 and as such the assessees were liable to pay tax on all sales of edible oils effected by them after September 11, 1956. This Court further held that the dealers were not liable to pay tax on their sales made before September 11, 1956. As there is a very elaborate discussion in the judgment of this Court for upholding the validity of the notification after the date mentioned above, we do not think it necessary to cover the ground over again. Therefore, it must be held that the view of the High Court, in the appeal before us, that the impugned notification is invalid and that the substituted entry 57 in Schedule B of the Act is not operative, cannot be sustained. There does not appear to have been any controversy that the assessees before us are producing edible oils not in the manner referred to under entry 57 but by a mechanical process. Therefore, it follows that their claim for exemption on the basis of entry 57, as it existed previously, falls to the ground.15. As the judgment of the High Court has been exclusively based on its previous decision in Ganga Ram Suraj Parkash (1963) 14 STC 476 (Punj), which has been overruled by this Court, it follows that part of the judgment and order of the High Court will have to be set aside.16. But the matter does not end there. We have to deal with the second point, which has already been set out. The question that arises is whether the assessment orders are in conflict with the decision of this Court in Bhawani Cotton Mills Ltd (1967) 3 SCR 577 = (AIR 1967 SC 1616 ), we have already referred to the fact that the assessees were permitted by the High Court to amend their writ petitions by raising an attack on the levy of purchases tax under the Act, as it stood on April 1, 1960, on purchases of oil seeds, on the ground that such levy is opposed to the provisions of the Central Act. That contention has no doubt not been considered by the High Court. But in view of the decision of this Court in Bhawani Cotton Mills Ltd., the contention of the assessees in this regard will have to be accepted. But it is not clear from the assessment orders or the record whether and at what stage the purchase tax has been levied in respect of oil seeds. In fact, it appears from the grounds taken by the State in the special leave petitions that the articles (which will include both oil seeds and edible oils) are declared goods. On this matter, without further materials, it is not possible for us to express any opinion.17. Even in the applications filed before the High Court for grant of certificate, as also in the grounds raised before this Court the State has specifically referred to the ordinance Nos. 1 and 12 of 1967 issued by the Governor of Punjab, in view of the decision of this Court in Bhawani Cotton Mills Ltd. (1967) 3 SCR 577 = (AIR 1967 SC 1616 ) and also to the Punjab General Sales Tax (Amendment and Validation) Act, 1967 (hereinafter to be referred as the Amendment Act), which replaced the Ordinances. Even in their statement of case, the appellant herein, have referred to the Amendment Act and in particular to the new Section 11 AA incorporated in the Act. On this basis they have raised a contention that the assessing authority will have to exercise his jurisdiction afresh in respect of the orders of assessment already passed regarding declared goods and pass fresh orders in accordance with the provisions of the Act as amended by the Amendment Act.18. We have elaborately considered in Civil Appeals Nos. 2319 and 2320 of 1968 etc. (SC) the changes introduced regarding the levy of sales tax on declared goods by the Amendment Act and in particular the obligation cast upon the assessing authority to reconsider the orders of assessment under Section 11 AA. We have delivered judgment in those appeals earlier in the day. Therefore we do not think it necessary to cover the ground over again. Having due regard to the principles laid down by us in those appeals, the assessing authority is directed to exercise his jurisdiction under Section 11 AA of the Act as it now stands and vary or revise the orders of assessment in all these appeals already made, so as to bring them in conformity with the provisions of the Act, as amended by the Amendment Act. If any assessment has not been completed, it is needless to state that the fresh order of assessment will have to be made by him, in accordance with the principles laid down by us in those decisions read along with the provisions of the Act, as it now stands, after the amendment, introduced thereunder by the Amendment Act.19. The appeals are allowed in part and the judgments and orders of the High Court are modified by declaring that the impugned notification is valid and it has effect from September 11, 1956 and sales tax on edible oils can be levied after that date. In other respect the appeals are dismissed, subject to the directions given to the assessing authority in the earlier part of the judgment. Parties will bear their own costs in all these appeals.20.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]8. At this stage it may be mentioned that though in the writ petition, as originally filed, an attack was made only on the notification dated August 5, 1954 regarding sales tax on edible oils, the assessees filed applications before the High Court for amending the writ petitions by making certain further allegations. In these applications, the firms challenged the levy of purchase tax, under the Act, on purchases of oil seeds on the ground that such levy is opposed to the provisions of the Central Sales Tax Act, 1956 (Act No. 74 of 1956) (hereinafter to be referred as the Central Act), in view of the decision that had been given by this Court in Bhawani Cotton Mills Ltd. v. State of Punjab (1967) 3 SCR 577   = (AIR 1967 SC 1616  ) holding that levy of sales tax under the Act, as it stood on April 1, 1960, in respect of declared goods, is illegal and invalid. In fact, the decision of this Court is referred to in the applications filed for amending the writ petitions. Therefore, the assessees added a further prayer that the assessment orders passed or orders proposed to be made are illegal and void, both on the ground that they are in conflict with the decision in Ganga Ram Suraj Parkash (1963) 14 STC 476 (Punj) and also the decision of this Court in Bhawani Cotton Mills Ltd.We have elaborately considered in Civil Appeals Nos. 2319 and 2320 of 1968 etc. (SC) the changes introduced regarding the levy of sales tax on declared goods by the Amendment Act and in particular the obligation cast upon the assessing authority to reconsider the orders of assessment under Section 11 AA. We have delivered judgment in those appeals earlier in the day. Therefore we do not think it necessary to cover the ground over again. Having due regard to the principles laid down by us in those appeals, the assessing authority is directed to exercise his jurisdiction under Section 11 AA of the Act as it now stands and vary or revise the orders of assessment in all these appeals already made, so as to bring them in conformity with the provisions of the Act, as amended by the Amendment Act. If any assessment has not been completed, it is needless to state that the fresh order of assessment will have to be made by him, in accordance with the principles laid down by us in those decisions read along with the provisions of the Act, as it now stands, after the amendment, introduced thereunder by the Amendment Act.19. The appeals are allowed in part and the judgments and orders of the High Court are modified by declaring that the impugned notification is valid and it has effect from September 11, 1956 and sales tax on edible oils can be levied after that date. In other respect the appeals are dismissed, subject to the directions given to the assessing authority in the earlier part of the judgment. Parties will bear their own costs in all these appeals.