Case: William Jacks and Company Limited Vs. State of Orissa

collections only under the terms of the third press note ?"6. By its judgment dated April 22, 1964, the High Court held that the first press not dated June 5, 1954, had statutory effect but the second and the third press notes had no statutory force and did not in any way affect the validity of the assessment orders made against the appellant-company after the coming into force of the Sales Tax Laws Validation Act, 1956, by which the effect of the judgment of this court in the Bengal Immunity Co. case ([1955] 6 S.T.C. 446; [1955] 2 S.C.R. 603) was taken away in respect of the "explanation sales" which took place between April 1, 1951, and September 6, 1955, and the levy and collection of sales tax in such cases was also validated. Section 7 of the Act states :"Power of the Provincial Government to exempt dealers from tax. - The State Government may, subject to such restrictions and conditions as may be prescribed including conditions as to registration and registration fees, by order, exempt in whole or in part any class of dealers from the payment of the tax."Section 9-B provides :"9-B. (1) No person who is not a registered dealer shall realise any tax as such on sale of goods from the purchasers.9-B. (3) The amount realised by any person by way of tax on sale of any goods, shall, notwithstanding anything contained in any provision of this Act, be deposited by him in a Government treasury within such period, as may be prescribed, if the amount so realised exceeds the amount payable as tax in respect of that sale or if no tax is payable in respect thereof."7. Section 2 of the Sales Tax Laws Validation Act, 1956, is to the following effect :"Validation of State laws imposing, or authorising the imposition of, taxes on sale or purchase of goods in the course of inter-State trade or commerce. - Notwithstanding any judgment, decree or order of any court, no law of a State imposing, or authorising the imposition of, a tax on the sale or purchase of any goods where such sale or purchase took place in the course of inter-State trade or commerce during the period between the 1st day of April, 1951, and the 6th day of September, 1955, shall be deemed to be invalid or ever to have been invalid merely by reason of the fact that such sale or purchase took place in the course of inter-State trade or commerce; and all such taxes levied or collected or purporting to have been levied or collected during the aforesaid period shall be deemed always to have been validly levied or collected in accordance with law.Explanation. - In this section, law of a State in relation to a State specified in Part C of the First Schedule to the Constitution, means any law made by the Legislative Assembly, if any, of that State or extended to that State by a notification issued under section 2 of the Part C States (Laws) Act, 1950."8. The main contention on behalf of the appellant is that the second press note issued by the Orissa Government on November 2, 1955, must be deemed to be an order of the State Government exempting non-resident dealers from liability to tax on inter-State transactions for the period from April 1, 1951, to September 6, 1955. It was argued that the press note should be deemed to have statutory effect and the sales tax authorities had therefore no jurisdiction to pass orders of assessment against the appellant-company on December 4, 1956. In our opinion, the argument put forward on behalf of the appellant is not warranted. In the first place, it is obvious that after the decision of this court in the Bengal Immunity case ([1955] 6 S.T.C. 446; [1955] 2 S.C.R. 603) the Orissa Government could not have lawfully levied any sales tax on the "explanation sales" and therefore the issue of the press note dated November 2, 1955, suspending the levy of sales tax on such sales with effect from that date could not be reasonably construed as an order of exemption contemplated by section 7 of the Act since no such exemption was necessary in view of the law declared by this court in the Bengal Immunity case ([1955] 6 S.T.C. 446; [1955] 2 S.C.R. 603). The second press note must therefore be treated to be merely an administrative direction indicating what would be the effect of the decision of this court in the Bengal Immunity case ([1955] 6 S.T.C. 446; [1955] 2 S.C.R. 603) and it was not intended to be an order of exemption made under the provisions of section 7 of the Act. In the second place, it should be noticed that the word "exemption" appears nowhere in the second press note which merely states that the levy of sales tax on the "explanation sales" has been "suspended" with immediate effect. It is therefore not possible to accept the argument on behalf of the appellant that the second press note must be deemed to be an order of the State Government granting exemption under section 7 of the Act with regard to "explanation sales". On behalf of the appellant reference was made by Mr. S. T. Desai to the decision of this court in State of Kerala v. Cochin Coal Co., Ltd. ([1961] 12 S.T.C. 1; [1961] 2 S.C.R. 219) in which it was held that a notification of the State of Travancore-Cochin dated February 5, 1954, had the effect of exempting the respondent from liability to sales tax. But the principle of this decision has, however, no application to the present case because the language of the second press note is quite different from the language of the notification which was the subject-matter of debate in State of Kerala v. Cochin Coal Co., Ltd. ([1961] 12 S.T.C. 1; [1961] 2 S.C.R. 219). We accordingly reject the argument of Mr. S. T. Desai on this point.9.

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

Explanation:
0[ds]In our opinion, the argument put forward on behalf of the appellant is not warranted. In the first place, it is obvious that after the decision of this court in the Bengal Immunity case ([1955] 6 S.T.C. 446; [1955] 2 S.C.R. 603) the Orissa Government could not have lawfully levied any sales tax on the "explanation sales" and therefore the issue of the press note dated November 2, 1955, suspending the levy of sales tax on such sales with effect from that date could not be reasonably construed as an order of exemption contemplated by section 7 of the Act since no such exemption was necessary in view of the law declared by this court in the Bengal Immunity case ([1955] 6 S.T.C. 446; [1955] 2 S.C.R. 603). The second press note must therefore be treated to be merely an administrative direction indicating what would be the effect of the decision of this court in the Bengal Immunity case ([1955] 6 S.T.C. 446; [1955] 2 S.C.R. 603) and it was not intended to be an order of exemption made under the provisions of section 7 of the Act. In the second place, it should be noticed that the word "exemption" appears nowhere in the second press note which merely states that the levy of sales tax on the "explanation sales" has been "suspended" with immediate effect. It is therefore not possible to accept the argument on behalf of the appellant that the second press note must be deemed to be an order of the State Government granting exemption under section 7 of the Act with regard to "explanation sales". On behalf of the appellant reference was made by Mr. S. T. Desai to the decision of this court in State of Kerala v. Cochin Coal Co., Ltd. ([1961] 12 S.T.C. 1; [1961] 2 S.C.R. 219) in which it was held that a notification of the State ofdated February 5, 1954, had the effect of exempting the respondent from liability to sales tax. But the principle of this decision has, however, no application to the present case because the language of the second press note is quite different from the language of the notification which was theof debate in State of Kerala v. Cochin Coal Co., Ltd. ([1961] 12 S.T.C. 1; [1961] 2 S.C.R. 219). We accordingly reject the argument of Mr. S. T. Desai on this point.