Case: Siddho Mal Paper Conversion Company Vs. State of Uttar Pradesh and Others

1. This appeal by special leave impugns the judgment of the High Court at Allahabad whereby the writ petition filed by the appellant was dismissed and the U.P. Sales of Motor Spirit, Diesel Oil and Alcohol Taxation (Amendment) Act, 1976 was upheld2. The appellant carries on the business of printing and processing wrappers used as flexible packing material. For the purposes of such printing and processing the appellant purchases and uses denatured spirit, which is an alcohol3. Onthe Governor of theissued an Ordinances (9 of 1974) called the U.P. Sales of Motor Spirit, Diesel Oil Taxation (Amendment) Ordinance whereby alcohol was added as a taxable commodity in the U.P. Sales of Motor Spirit, Diesel Oil and Alcohol Taxation Act, 1939 and tax was sought to be levied on the first sale of alcohol with effect fromThis Ordinance, later on enacted as U.P. Act 12 of 1974, amending the Act of 1939, was challenged by M/s Kesar Sugar Works Limited before the Allahabad High Court. Onthe Allahabad High Court held inter alia that the said Ordinance and Act of 1974 insofar as they referred to alcohol were bad in law and quashed the same4. One Governor of thegave his assent to the U.P. Sales of Motor Spirit, Diesel Oil and Alcohol Taxation (Amendment) Act, 1976, and it is this validating Act which was challenged by the appellant in the writ petition filed before the Allahabad High Court. The Allahabad High Court rejected the contentions of the petitioner and upheld the said Act

Court's reasoning:
9. It is, therefore, clear that the section itself provides the point of time at which the purchase tax is attracted and the rate at which it has to be paid. The section provides that it "shall be collected and paid in the prescribed manner to the State Government". That the Rules, being in the prescribed manner, were not gazetted untilcan make no difference to the validity of the levy. It is not even the appellants case that any attempt was made to collect the purchase tax from the appellant prior thereto so that he may have any grievance on that score. Counsel drew our attention to other provisions of the Act which make breach of the provisions thereof an offence. It is no ones case, once again, that these provisions have been invoked at any time prior to the publication of the Rules onHaving regard to the terms of Section 3 of the said Act we do not find any substance in the second contention