Case: M/s. Rattan Lal &amp; Company &amp; Another Vs. Assessing Authority Patiala &amp; Another

whether to ask for a refund or not.This hardly can be said to create a discrimination.14. Lastly, it is contended that there is a delegated legislation in that the maximum has been provided without indication of the circumstances under which the tax is to be levied. This, it is said, creates unguided delegation to administrative authority, the function of the Legislature. It is to be noticed that the Central Act itself gives power to the Legislature to choose a rate of tax at not more than 3 per cent of the taxable turnover. The tax levied is well within that limit and therefore the Legislature has chosen the maximum and has left it free to the authorities to impose the tax within that maximum regard being had to the requirements of revenue and the expenditure necessary for the State.15. We may now deal with some arguments which are common to both sets of cases before considering the case of the Haryana amendment.It is argued that the reorganization of the State took place on November 1, 1966 and the amendment in some of its parts seeks to amend the original Act from a date anterior to this date. In other words, the Legislature of one of the States seeks to amend a law passed by the composite State. This argument entirely misunderstands the position of the original Act after the reorganization. That Act applied now as an independent Act to each of the areas and is subject to the legislative competence of the Legislature in that area. The Act has been amended in the new States in relation to the area of that State and it is inconceivable that this could not be within the competence. If the argument were accepted, then the Act would remain unamendable unless the composite State came into existence once more. The scheme of the States Reorganization Act makes the laws applicable to the new areas until superseded, amended or altered by the appropriate Legislature in the new States. This is what the Legislature has done and there is nothing that can be said against such amendment.16. In regard to Haryana cases also the same arguments are urged. It is contended that the amended Act there also offends Section 15 for the reasons which we have given.Neither the amendment of S. 55 in this area nor the introduction of Section 11-AA for refund offends against Section 15 of the Central Act or the equality clause of the Constitution. It is said that pending cases will always be reconsidered whether or not an application in that behalf is made but in the case of disposed-of cases it depends upon the party to intimate in writing that he has no objection to the assessment or reassessment already made. If any objection can be taken, it will be by those whose cases are pending and not by those whose cases have been closed. The option to submit to the assessment is open to every one alike and there is no discrimination if a party wants that his case need not be reconsidered. He has only to state that in writing and that would be the end of the matter.If he wants his case to be reconsidered, then he can go before the Tribunal and get his case reconsidered.17. It is also urged in this connection that there is a discrimination between the imported goods and local goods.It is said that the discrimination is also between the first purchase in the case of imported goods and last sale in the case of local goods. Since the imported goods might be more expensive by reason of freight, etc. or intermediary sales having taken place it is said, that the burden of tax will be heavier and therefore this will offend against the equality clause and Art. 304 of the Constitution. In our opinion this argument is without any substance. The rate of tax is same in every case. In State of Madras v. N. K. Nataraja Mudaliar, Civil Appeal No. 763 of 1967, D/- 18-4-1968 (reported in AIR 1969 SC 147), this Court stated that the essence of Arts. 301 and 303 is to enable the State by a law"to impose on goods imported from other States or the Union territories any tax to which similar goods manufactured or produced in the State are subject, so however, as not to discriminate between goods so imported and goods so manufactured or produced."It was pointed out by this Court that"imposition of differential rates of tax by the same State on goods manufactured or produced in the State and similar goods imported in the State is prohibited by that clause. But where the taxing State is not imposing rates of tax on imported goods different from rates of tax on goods manufactured or produced (sic) (in the State?). Article 304 has no application."18. Here also the tax is at the same rate and therefore the tax cannot be said to be higher in the case of imported goods. It may be that when the rate is applied the resulting tax is somewhat higher but that does not offend against the equality contemplated by Art. 304. That is the consequence of ad valorem tax being levied at a particular rate. So long as the rate is the same. Art. 304 is satisfied. Even in the case of local manufacturers, if their cost of production varies, the net tax collected will be more or less in some cases but that does not create any inequality because inequality is not the result of the tax but results from the cost of production of the goods or the cost of their importation. This ground, therefore, has also no substance. We do not think it necessary to set down here the provisions of the Haryana Amendment Act because they follow the scheme of the Punjab Amendment Act in substance and what we have said in regard to the Punjab Amending Act applies mutatis mutandis to Haryana Amendment Act also.19.

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

Explanation:
0[ds]In our opinion, therefore, the present provisions of the Act are quite clear and are quite sufficient to make the amended Act accord with the Central Act. The arguments noted in the earlier case of this Court do not therefore arise.It will thus be seen that the present Act does not suffer from any of the defects from which the unamended Act had suffered.It is, however, contended that the Act has been made retrospective but no machinery is provided to discover if the declared goods were assessed to tax more than once. As we have already pointed out, the matter is within the ken of the dealer himself and it is for him to decide whether he would not claim the benefit of S. 11AA and ask for a refund or in future transactions delete the sales from his taxable turnover when he is not the last dealer liable to pay the tax.Therefore the retrospectively of the Act does not make any difference.It is not contended before us that it was not within the competence of the Punjab Legislature to pass such an Act retrospectively. The defect pointed out is the self-same defect which was noticed in Bhawami Mills case. But that defect no longeris to be noticed that the Central Act itself gives power to the Legislature to choose a rate of tax at not more than 3 per cent of the taxable turnover. The tax levied is well within that limit and therefore the Legislature has chosen the maximum and has left it free to the authorities to impose the tax within that maximum regard being had to the requirements of revenue and the expenditure necessary for theargument entirely misunderstands the position of the original Act after the reorganization. That Act applied now as an independent Act to each of the areas and is subject to the legislative competence of the Legislature in that area. The Act has been amended in the new States in relation to the area of that State and it is inconceivable that this could not be within the competence. If the argument were accepted, then the Act would remain unamendable unless the composite State came into existence once more. The scheme of the States Reorganization Act makes the laws applicable to the new areas until superseded, amended or altered by the appropriate Legislature in the new States. This is what the Legislature has done and there is nothing that can be said against suchany objection can be taken, it will be by those whose cases are pending and not by those whose cases have been closed. The option to submit to the assessment is open to every one alike and there is no discrimination if a party wants that his case need not be reconsidered. He has only to state that in writing and that would be the end of the matter.If he wants his case to be reconsidered, then he can go before the Tribunal and get his caserate of tax is same in every case. In State of Madras v. N. K. Nataraja Mudaliar, Civil Appeal No. 763 of 1967, D/- 18-4-1968 (reported in AIR 1969 SC 147), this Court stated that the essence of Arts. 301 and 303 is to enable the State by a law"to impose on goods imported from other States or the Union territories any tax to which similar goods manufactured or produced in the State are subject, so however, as not to discriminate between goods so imported and goods so manufactured or produced."It was pointed out by this Court that"imposition of differential rates of tax by the same State on goods manufactured or produced in the State and similar goods imported in the State is prohibited by that clause. But where the taxing State is not imposing rates of tax on imported goods different from rates of tax on goods manufactured or produced (sic) (in the State?). Article 304 has no application.Here also the tax is at the same rate and therefore the tax cannot be said to be higher in the case of imported goods. It may be that when the rate is applied the resulting tax is somewhat higher but that does not offend against the equality contemplated by Art. 304. That is the consequence of ad valorem tax being levied at a particular rate. So long as the rate is the same. Art. 304 is satisfied. Even in the case of local manufacturers, if their cost of production varies, the net tax collected will be more or less in some cases but that does not create any inequality because inequality is not the result of the tax but results from the cost of production of the goods or the cost of their importation. This ground, therefore, has also no substance. We do not think it necessary to set down here the provisions of the Haryana Amendment Act because they follow the scheme of the Punjab Amendment Act in substance and what we have said in regard to the Punjab Amending Act applies mutatis mutandis to Haryana Amendment Act also.