Case: Bhaiyalal Shukla Vs. State of Madhya Pradesh &amp; Others

1. These six petitions under Art. 32 of the Constitution have been filed by one Bhaiyalal Shukla who was doing business of construction of buildings, roads, bridges etc. as contractor for the Public Works Depart in Rewa Circle of the former Vindhay Pradesh State, now a part of the State of Madhya Pradesh. By these petitions, he challenges the levy of sales tax on building materials supplied by him in the construction of buildings, roads and bridges for the years,1953-54 to 1958-59. For the first year in question, sales tax amounting to Rs. 1,840-5-0 has already been charged and paid. He seeks refund of this amount. For the remaining years except the last two, proceedings for assessment have been completed, but the amounts have not been paid. For the remaining two years, proceedings are pending for assessment of the tax. The respondents in the case are the State of Madhya Pradesh which stands substituted for the State of Vindhya Pradesh and diverse officers connected with the assessment and levy of the tax.

Court's reasoning:
13. There is a fundamental fallacy involved in this reasoning. We are considering the applicability of the Central Provinces and Berar Sales Tax Act as extended to Vindhya Pradesh. The Vindhya Pradesh Amending Act made only verbal changes, but did not alter the structure of the tax. No doubt that Act contained certain provisions under which sale of building materials are taxable and if the authority to tax the so-called sales emanated from a stale Legislature, then the law would fail. But we have to remember, in this connection, that the law was first extended to Vindhya Pradesh by the Central Government acting under the authority of Parliament legislating for a Part C State. Parliament and the Central Government were not subject to the disabilities pointed out in Gannon Dunkerleys case, 1959 SCR 379  ; (AIR 1958 SC 560  ), and the matter was covered by the decision of this Court in Mithan Lals case, 1959 SCR 445 : (AIR 1958 SC 682  ).Even if the Notification, S. R. O. No. 6 failed to repeal Ordinance 2 of 1949, Parliament by its own law effaced that Ordinance in Vindhya Pradesh from December 29 1950, and enacted that the Ordinance shall be deemed to be repealed from that day. After the passing of the Repealing Act by Parliament, it is impossible to argue that Ordinance 2 of 1949 continued in Vindhya Pradesh down to January 8, 1953 because by fiction the Ordinance was repelled from December 29, 1950. Parliamentary legislation, therefore, came to the rescue so to speak, of the Notification by making room for the extension of the Central Provinces and Berar Act by repealing Ordinance 2 of 1949 which the Notification proprio vigore was unable to achieve, as laid down in the Delhi Laws Act case, 1951 SCR 747   : (AIR 1951 SC 332  ). The Notification of the central Governments (S.R.O. No. 6) and Act 66 of 1951 therefore, concurred in removing the Ordinance on December 29, 1950 and in extending the Central Provinces and Berar Sales Tax Act in its place on the same dateThe facts of this case are entirely different from those in Deepchands case, 1959 Sup (2) SCR 8 at P. 24 : (AIR 1959 SC 648   at p. 657).The extended law did not depend on the repeal of the earlier law for its validity. It would have been operative, even if the earlier law was not repealed but the earlier law was, in fact, repealed from December 20, 1950, and no question of conflict between the new and the old law ever arose. Parliament by repealing the Ordinance rendered the ineffective portion of the Notification a mere surplusage. The necessary result thus was that its operative part survived and the Central Provinces and Berar Sales Tax Act, 1947 was validly extended to Vindhya Pradesh, and was valid law as laid down in Mithan Lals case, 1959 SCR 445 : (AIR 1958 SC 682  ). It did not suffer from the defects pointed out by this Court in Gannon Dunkerleys case, 1959 SCR 379   : (AIR 1958 SC 560  ) as it was not enacted or extended by the State LegislatureThe section, therefore, refers to Ordinance 2 of 1949, which would be in force immediately before April 1, 1951 if not successfully repealed, but not to the Central Provinces and Berar Sales Tax Act, which was only extended before that date but had not been brought into force. In other words, S. 7 of the Act does no more than repeal from April 1, 1951 (if repeal was at all necessary) Ordinance 2 of 1949, which might be supposed to have continued as law till October 31, 1951, when it was repealed by Act 66 of 1951. In point of fact and also in law, it was really repealed from December 29, 1950 under the Repealing Act 66 of 1951. The Vindhya Pradesh Act 6 of 1952 cannot, therefore, be said to have enacted for the first time that the Central Provinces and Berar Sales Tax Act shall come into force from April 1, 1951 in Vindhya Pradesh. It only declared what was a legal fact even without this declaration. Nor did the Central Provinces and Berar Sales Tax - Act owe its existence to Act 6 of 1952. Act 6 of 1952 only declared what the result of the earlier laws was, and added the authority of the Vindhya Pradesh Legislature to remove doubts and to save the law from any attack on the ground that the wrong Legislature had repealed the Ordinance or extended the Central Provinces and Berar Sales Tax Act. In our opinion, this argument cannot be accepted18. The laws in different portions of the new State of Madhya Pradesh were enacted by different Legislatures, and under S. 119 of the States Reorganisation Act, all laws in force are to continue until repealed or altered by the appropriate Legislature. We have already held that the sales tax law in Vindhya Pradesh was validly enacted, and it brought its validity with it under S. 119 of the Stated Reorganisation Act, when it became a part of the State of Madhya Pradesh. Thereafter, the different laws in different parts of Madhya Pradesh can be sustained on the ground that the differentiation arises from historical reasons, and a geographical classification based on historical reasons has been upheld by this Court in M. K. Prithi Rajji v. The State of Rajasthan, Civil Appeal No. 327 of 1956, D/- 2-22-1960 (SC) and again in The State of Madhya Pradesh v. The Gwalior Sugar Co. Ltd., Civil Appeal Nos. 98 and 99 of 1957, D/- 30-11-1960 (SC).The latter case is important because the sugarcane cess levied in the former Gwalior State but not in the rest of Madhya Bharat of which it formed a part, was challenged on the same ground as here, but was upheld as not affected by Art. 14. We, therefore, reject this argument.