Case: Hiralal Rattanlal etc. etc Vs. State of U.P. and Anr. etc. etc

correct. The notification in question was issued under Section 3-D. Section 3-D refers to foodgrains but because of Explanation II to that section, we have now to read the expression "foodgrains" as containing two different items, processed or split foodgrains and unprocessed or unsplit foodgrains. Consequently while reading the expression "foodgrains" in the notification also, we must adopt the same approach. This conclusion is also obvious from Section 7.If the legislature had not retrospectively validated the assessments made on the first purchases of split or processed foodgrains, what did Section 7 seek to achieve ? That section says in plain words that notwithstanding any judgment, decree or order of any court or tribunal to the contrary, every notification issued or purporting to have been issued under Section 3-D of the principal Act, before the commencement of the Amending Act shall be deemed to have been issued under that section as amended by the Amending Act and shall be so interpreted and be deemed to be and always to have been as valid as if the provisions of the Amending Act were in force at all material times and accordingly, anything done or any action taken (including any order made, proceedings taken, jurisdiction exercised, assessment made, or tax levied, collected or paid, purporting to have been done or taken in pursuance of any such notification) shall be deemed to be, and always to have been validly and lawfully done or taken. 27. We asked the learned counsel appearing for the appellants to let us know the field in which Section 7 can be said to operate. Their answer was that though the legislature intended to validate the assessments made on the first purchases of the split or processed dal, it failed to achieve that object because of the defective phraseology employed in Explanation II to Section 3-D and Section 7 of the Amending Act. In other words their submission was that Section 7 has become otiose. It was urged on behalf of the appellants that a taxing provision will have to be strictly interpreted and in finding out the intention of the legislature in the matter of imposing tax, we cannot travel beyond the words of the section. 28. There is no doubt that a taxing provision has to be strictly interpreted. If a legislature intends to impose any tax, that intention must be made clear by the language employed in the statute; but that does not mean that the provision in a taxing statute should not be read reasonably. The contention that we should ignore Section 7 of the Amending Act is a contention difficult of acceptance. Dealing with a similar contention Venkatarama Ayyar, J. speaking for the Court in J. K. Jute Mills case, 12 STC 429 = (AIR 1961 SC 1534 ) (supra) observed at p. 435 :"The object of the legislation as stated in the long title and in the preamble to the Act was to validate the impugned notification in relation to the amended section. Schedule B to the Act expressly mentions that notification. And if we are now to accede to the contention of the petitioner, we must hold that though the legislature set about avowedly to validate the notification dated March 31, 1956, it failed to achieve that object. A construction which will lead to such a result must, if that is possible, be avoided." 29. We have earlier come to the conclusion that because Explanation II to Section 3-D the expression "foodgrains including pulses" in Section 3-D should be read as including two different items i.e. (1) unsplit or unprocessed foodgrains including pulses and (2) split or processed foodgrains including pulses. Consequently the expression "foodgrains" in the notification will also have to be read in the same manner. This, in our opinion, is the reasonable way of reading the notification in the light of Section 3-D, Explanation II to that section and Section 7 of the Act. 30. The only remaining contention is that the delegation made to the executive under Section 3-D is an excessive delegation. It is true that the legislature cannot delegate its legislative functions to any other body. But subject to that qualification, it is permissible for the legislature to delegate the power to select the person on whom the tax is to be levied or the goods or the transactions on which the tax is to be levied. In the Act, under Section 3 the legislature has sought to impose multi-point tax on all sales and purchases. After having done that it has given power to the executive, a high authority and which is presumed to command the majority support in the legislature, to select for special treatment dealings in certain class of goods. In the very nature of things, it is impossible for the legislature to enumerate goods, dealings in which sales tax or purchase tax should be imposed. It is also impossible for the legislature to select the goods which should be subjected to a single point sales or purchase tax. Before making such selections several aspects such as the impact of the levy on the society, economic consequences and the administrative convenience will have to be considered. These factors may change from time to time. Hence in the very nature of things, these details have got to be left to the executive. 31. In Banarsi Das Bhanot v. State of Madhya Pradesh, 1959 SCR 427 = (AIR 1958 SC 909 ) the question arose whether it was permissible for the legislature to empower the executive to amend the Schedule relating to exemptions. This Court by majority answered that question in the affirmative. If further held that it is not unconstitutional for the legislature to leave it to the executive to determine the details relating to the working of the taxation laws, such as the selection of the person on whom the tax is to be levied, the rates at which it is to be charged in respect of different classes of goods and the like.

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

Explanation:
0[ds]21. It was next urged that on a true construction of Explanation II to Section 3-D, no charge can be said to have been created on the purchases of split or processed pulses. It was firstly contended that an Explanation cannot extend the scope of the main section; it can only explain that section. In construing a statutory provision, the first and the foremost rule of construction is the literary construction. All that we have to see at the very outset is what does that provision say ? If the provision is unambiguous and if from the provision, the legislative intent is clear, we need not call into aid the other rules of construction of statutes. The other rules of construction of statutes are called into aid only when the legislative intent is not clear. Ordinarily a proviso to a section is intended to take out a part of the main section for special treatment. It is not expected to enlarge the scope of the main section. But cases have arisen in which this Court has held that despite the fact that a provision is called proviso, it is really a separate provision and the so-called proviso has substantially altered the main section. In Commr. of Income-tax, Bombay City, Bombay v. Bipinchandra Maganlal and Co. Ltd., Bombay, (1961) 2 SCR 493   = (AIR 1961 SC 1040  ), this Court held that by the fiction in Section 10 (2) (vii) second proviso read with Section 2 (6C) of the Indian Income-tax Act, 1922 what is really not income is, for the purpose of computation of assessable income into taxable income22. In State of Rajasthan v. Leela Jain, (1965) 1 SCR 276   = (AIR 1965 SC 1296  ), this Court observed:"The primary purpose of the proviso now under consideration is, it is apparent, to provide a substitute or an alternative remedy to that which is prohibited by the main part of Section 4 (1). There is, therefore, no question of the proviso carving out any portion out of the area covered by the main part and leaving the other part unaffected. What we have stated earlier should suffice to establish that the proviso now before us is really not a proviso in the accepted sense but an independent legislative provision by which to a remedy which is prohibited by the main part of the section, an alternative is provided. It is further obvious to us that the proviso is not co-extensive with but covers a field wider than the main part of Section 4 (1)."23. In Bihta Co-operative Development and Cane Marketing Union Ltd. v. Bank of Bihar, (1967) 1 SCR 848   = (AIR 1967 SC 389  ), this Court was called upon to consider the Explanation to Section 48 (1) of the Bihar and Orissa Co-operative Societies Act, 1935. Therein this Court observed :"The question then arises whether the first Explanation to the section widens the scope of sub-section (1) of Section 48 so as to include claims by registered societies against non-members even if the same are not covered by clause (c)."24. On the basis of the language of the Explanation this Court held that it did not widen the scope of clause (c).But from what has been said in the case, it is clear that if on a true reading of an Explanation it appears that it has widened the scope of the main section, effect must be given to legislative intent notwithstanding the fact that the legislature named that provision as an Explanation. In all these matters the Courts have to find out the true intention of the legislature25. We are unable to accept the contention that Explanation II to Section 3-D did not widen the scope of Section 3-D. Section 3-D as it originally stood dealt with foodgrains and pulses. It did not treat the unprocessed or unsplit foodgrains and pulses as a separate item but because of Explanation II, we have now to read the expression "foodgrains" in Section 3-D as containing two separate items viz. (1) foodgrains unprocessed or unsplit and (2) foodgrains processed or split. It is true that Explanation II is not very happily worded but the intention of the legislature is clear and unambiguous. The newly added Explanation brings to tax with retrospective effect the split or processed foodgrains as well26. We next come to the contention that no levy of purchase tax can be made on split or unprocessed (processed ?) pulses without a fresh notification under Section 3-D read with Explanation II shwoing therein separately foodgrains unsplit or unprocessed as well as foodgrains split or processed. As seen earlier the notification issued merely refers to foodgrains. That notification does not classify foodgrains into two separate categories - processed or split and unprocessed or unsplit. Therefore we were told that no tax can be levied on processed or split foodgrains on the basis of that notification. This contention cannot be accepted as correct. The notification in question was issued under Section 3-D. Section 3-D refers to foodgrains but because of Explanation II to that section, we have now to read the expression "foodgrains" as containing two different items, processed or split foodgrains and unprocessed or unsplit foodgrains. Consequently while reading the expression "foodgrains" in the notification also, we must adopt the same approach. This conclusion is also obvious from Section 7.If the legislature had not retrospectively validated the assessments made on the first purchases of split or processed foodgrains, what did Section 7 seek to achieve ? That section says in plain words that notwithstanding any judgment, decree or order of any court or tribunal to the contrary, every notification issued or purporting to have been issued under Section 3-D of the principal Act, before the commencement of the Amending Act shall be deemed to have been issued under that section as amended by the Amending Act and shall be so interpreted and be deemed to be and always to have been as valid as if the provisions of the Amending Act were in force at all material times and accordingly, anything done or any action taken (including any order made, proceedings taken, jurisdiction exercised, assessment made, or tax levied, collected or paid, purporting to have been done or taken in pursuance of any such notification) shall be deemed to be, and always to have been validly and lawfully done or taken27. We asked the learned counsel appearing for the appellants to let us know the field in which Section 7 can be said to operate. Their answer was that though the legislature intended to validate the assessments made on the first purchases of the split or processed dal, it failed to achieve that object because of the defective phraseology employed in Explanation II to Section 3-D and Section 7 of the Amending Act. In other words their submission was that Section 7 has become otiose. It was urged on behalf of the appellants that a taxing provision will have to be strictly interpreted and in finding out the intention of the legislature in the matter of imposing tax, we cannot travel beyond the words of the section28. There is no doubt that a taxing provision has to be strictly interpreted. If a legislature intends to impose any tax, that intention must be made clear by the language employed in the statute; but that does not mean that the provision in a taxing statute should not be read reasonably. The contention that we should ignore Section 7 of the Amending Act is a contention difficult of acceptance. Dealing with a similar contention Venkatarama Ayyar, J. speaking for the Court in J. K. Jute Mills case, 12 STC 429   = (AIR 1961 SC 1534  ) (supra) observed at p. 435 :"The object of the legislation as stated in the long title and in the preamble to the Act was to validate the impugned notification in relation to the amended section. Schedule B to the Act expressly mentions that notification. And if we are now to accede to the contention of the petitioner, we must hold that though the legislature set about avowedly to validate the notification dated March 31, 1956, it failed to achieve that object. A construction which will lead to such a result must, if that is possible, be avoided."29. We have earlier come to the conclusion that because Explanation II to Section 3-D the expression "foodgrains including pulses" in Section 3-D should be read as including two different items i.e. (1) unsplit or unprocessed foodgrains including pulses and (2) split or processed foodgrains including pulses. Consequently the expression "foodgrains" in the notification will also have to be read in the same manner. This, in our opinion, is the reasonable way of reading the notification in the light of Section 3-D, Explanation II to that section and Section 7 of the Act30. The only remaining contention is that the delegation made to the executive under Section 3-D is an excessive delegation. It is true that the legislature cannot delegate its legislative functions to any other body. But subject to that qualification, it is permissible for the legislature to delegate the power to select the person on whom the tax is to be levied or the goods or the transactions on which the tax is to be levied. In the Act, under Section 3 the legislature has sought to impose multi-point tax on all sales and purchases. After having done that it has given power to the executive, a high authority and which is presumed to command the majority support in the legislature, to select for special treatment dealings in certain class of goods. In the very nature of things, it is impossible for the legislature to enumerate goods, dealings in which sales tax or purchase tax should be imposed. It is also impossible for the legislature to select the goods which should be subjected to a single point sales or purchase tax. Before making such selections several aspects such as the impact of the levy on the society, economic consequences and the administrative convenience will have to be considered. These factors may change from time to time. Hence in the very nature of things, these details have got to be left to the executive31. In Banarsi Das Bhanot v. State of Madhya Pradesh, 1959 SCR 427   = (AIR 1958 SC 909  ) the question arose whether it was permissible for the legislature to empower the executive to amend the Schedule relating to exemptions. This Court by majority answered that question in the affirmative. If further held that it is not unconstitutional for the legislature to leave it to the executive to determine the details relating to the working of the taxation laws, such as the selection of the person on whom the tax is to be levied, the rates at which it is to be charged in respect of different classes of goods and the like.