Case: M/s. Raghunandan Prasad Mohanlal Vs. State of Uttar Pradesh &amp; Others

2. In the writ petition the assessee challenged the validity of 2 notifications issued by the Government of U.P. The first of those notifications was published as Notification No.dated March 31, 1956 and the second was published as Notification Nos.7 dated September 30, 1956. The High Court came to the conclusion that though the first notification was struck down by that court earlier, it has now been revalidated by U. P. Sales Tax (Validation) Act, 1958 and hence the validity of that notification is not open to challenge. It upheld the contention of the appellant that the second Notification No.7 dated September 30, 1956 is invalid. But in view of its conclusion that the first notification has been properly revalidated, it held that the appellant was not entitled to any relief. It accordingly dismissed the writ petition.3. The U.P. Sales Tax Act came into force on April 1, 1948. On June 7, 1948, the province of U.P. issued Notification No.under Section 4 of that Act exempting Atta, Maida, Sooji and Bran and all cereals from payment of sales tax with effect from April 1, 1948. Thereafter the Parliament passed the Essential Goods (Declaration and Regulation) of Tax on Sales and Purchase in order to give effect to Article 286(3) of the Constitution. That Act declard cereals, Atta, Maida, Sooji, Bran as essential goods. In view of that Act no law of a State Legislature imposing levy of authorising imposition of tax on sale or purchase of essential goods could take effect without the prior assent of the President. The U.P. Sales Tax (Amendment) Ordinance No. 9 of 1956 was promulgated with the prior assent of the President authorising the State Government to impose sales tax on essential goods from April 1, 1956. Thereafter the State Government issued Notification No.dated March 31, 1956 under Sec. 3 of the U.P. Sales Act, 1948 imposing sales tax of six pies per rupee on sales of Atta, Maida and Sooji. That notification was to take effect from April 1, 1956. As a result of that notification exemption given to Atta, Maida and Sooji under Notification No. 911/X dated March 31, 1956 was withdrawn. The above ordinance was replaced by an Act of U.P. Legislature (Act 19 of 1956). That Act was known as U.P. Sales Tax (Amendment) Act, 1956. It was published in the U.P. Gazette extraordinary dated May 28, 1956. On September 30, 1956 the U.P. Government issued Notification No.6 dated September 30, 1956 imposing single point tax on Atta, Maida and Sooji with effect from October 1, 1956. That notification was purported to have been issued under sec.of the U.P. Sales Act, 1948. On January 5, 1957 the Central Act No. 52 of 1952 was replaced by Central Sales Tax Act. U.P. Act 19 of 1956 referred to earlier was decleared ultra vires the Constitution by the High Court of Allahabad on May 9, 1957. That Act and the notifications issued on March 31, 1956 were attempted to be validated by U.P. Sales Tax (Validation) Amendment Act, 1957 (Act No. 24 of 1957) which was published in the U.P. Gazette on September 3, 1957 after obtaining the assent of the President on August 31, 1957. That Act again was decleared ultra vires the Constitution by the Allahabad High Court. Thereafter the U.P. Sales Tax (Validation) Act, 1958 (U.P. Act 15 of 1958) was enacted. It received the assent of the President on May 3, 1958. It was published in the U.P. Gazette on May 6, 1958. It was given retrospective effect as from March 31, 1956. The validity of Act 15 of 1958 has been upheld both by the Allahabad High Court as well as by this Court. This in short is the History of the legislations with which we are concerned in this case.

Court's reasoning:
8. One cannot understand how a notification can be revived subject to its supersession by some other notification. Obviously reference to supersession of the Notification No.dated March 31, 1956 is wholly inconsistent with the language of Section 3(1) of the U.P. Act 15 of 1958. It appears to be an error that has crept into the Act. As the intention of the Legislature is clear from the language of the provisions referred to earlier we must hold that Notification No.dated March 31, 1956 is revived with retrospective effect. Further, as seen earlier, Notification No.has already been struck down by the High Court as invalid. The same has not been revived by the Validation Act. Hence it does not exist in law.9. For the reasons mentioned above we are in agreement with the High Court that Notification No.dated March 31, 1956 is inquestion does not appear to have been argued before the High Court. Hence it is not advisable for us to go into that question though from a reading of the Notification it is not possible to acced to the contention of Mr. Gupta that the levy in question is an excise duty and not sales tax.11. The only other contention advanced on behalf of the appellant is that sales tax has been levied on some permit sales and the same was impermissible in law. He tried to base his argument on this part of the case on the decision of this Court in M/s New India Sugar Mills Ltd. vs. Commr. of Sales Tax, Bihar. The contention that a portion of the turnover related to sales of controlled articles to have been taken before the High Court at a late stage; yet the High Court permitted the appellant to place material before it to satisfy the Court that the relevant transactions cannot be considered as sales. From the affidavit filed by the assessee, it is not possible to conclude that the transactions in question are not "sales". The affidavit does not speak of any control over the sales. It merely refers to certain controls over purchases. On the material before us it is not possible to hold that any of those transactions are not "sales".