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PETITIONER: CHIEF COMMISSIONER UNION TERRITORY, CHANDIGARH

       Vs.

RESPONDENT: SIALKOT SILK STORES, CHANDIGARH

DATE OF JUDGMENT23/10/1978

BENCH: UNTWALIA, N.L. BENCH: UNTWALIA, N.L. CHANDRACHUD, Y.V. ((CJ) SHINGAL, P.N.

CITATION:  1979 AIR  435            1979 SCR  (2) 134  1979 SCC  (1) 255

ACT:      Punjab  General   Sales  Tax   Act,   1948-S.   6-State Government issued  a notification  of its intention to amend Schedule but  did not  issue a  second notification amending the Schedule  as required  by s.  6-State reorganised in the meanwhile and  the Union  Territory  of  Chandigarh  formed- Earlier notification  if "law  in force"-Newly  formed Union Territory-If could  avail of  the earlier  notification  and amend the schedule.

HEADNOTE:      Section 6  of the  Punjab General  Sales Tax  Act, 1948 provides  that   the  State   Government,  after  giving  by notification, not  less than  three months’  notice  of  its intention so  to do, may, by like notification add or delete from Schedule  and thereupon  Schedule shall be deemed to be amended accordingly.      The State  Government of  the composite State of Punjab issued a  notification under  s. 6  giving its  intention to delete from  Schedule pure  silken fabrics  from the list of tax-free  goods.   Before   the   issue   of   any   further notification, however,  the composite  State was reorganised and the  Union  Territory  of  Chandigarh  was  formed.  The Government of  the Union  Territory of  Chandigarh issued  a notification amending  item 30 of Schedule as intended to be amended by the notification issued by the former government.      In a  writ petition  filed before  the High  Court  the respondent challenged  the notification  as invalid  on  the ground that the earlier notification could not be availed of by the new Government for amending Schedule B. The appellant claimed that  the earlier  notification was  "law in force". But the  High Court  repelled this  argumenet It allowed the respondent’s writ      Dismissing the appeal, ^      HELD: 1. There was no "law in force" enabling the newly formed Union  ’Territory of Chandigarh to levy any sales tax on pure silken fabrics.      2. The  notification merely  notifying the intention of the State  Government to  add or  delete from  Schedule  any article by  itself had  no force of law until and unless, on

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the  expiry   of  the   period  of   three  months,  a  like notification was issued amending the Schedule. The erstwhile State Government  of  Punjab  could  not  issue  the  second notification in  respect of  the Union  Territory  after  it ceased to  be a part of the State of Punjab. Sales Tax could not be  charged on  pure silken  fabrics by  the said  State Government merely  by virtue  of the  notification.  It  was therefore not  a law  in force  when the composite State was reorganised. [136D-E] 135      3. No  provision is to be found in the Act to show that by a  legal fiction  the A  first notification  of intention issued by  the erstwhile State Government could be deemed to be a notification issued by the new Government. [137 B]      M/s. Rattan  Lal  and  Co.  and  another  etc.  v.  The Assessing Authority,  Patiala and another, etc. AIR 1970 S.C 1742 held inapplicable.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal No. 364 of 1969.      From the  Judgment and  order  dated  7-8-1968  of  the Punjab and Haryana High Court in Civil Writ No. 2199/68.      S. N. Anand and R. N. Sachthey for the Appellant.      Arvind Minocha for the Respondent.      The Judgment of the Court was delivered by      UNTWALIA, J.  The Chief  Commissioner, Union Territory, Chandigarh, has  preferred this  appeal by  certificate from the decision  of the High Court of Punjab & Haryana allowing the Writ  Petition  of  the  respondent  and  declaring  the amendment of item 30 in Schedule to the Punjab General Sales Tax Act, 1948, hereinafter referred to as the Act, invalid.      The composite and the then existing State of Punjab was re-organised  by   the  Punjab  Re-organisation  Act,  1966, Central Act  31 of  1966. The  Union Territory of Chandigarh was carved  out as one of the States on and from November 1, 1966. Under  section 6  of the Act no tax was payable on the sale of  goods specified in Schedule B. The State Government could amend this Schedule and at the relevant time the power so conferred  on the  State Government  was in the following terms:-           "The State Government after giving by notification      not less  than three months’ notice of its intention so      to do  may, by  like notification  add or  delete  from      Schedule and  there upon Schedule shall be deemed to be      amended accordingly." Item 30 of Schedule exempted from sales tax:           "All  varieties   of  cotton,  woollen  or  silken      textiles, including  rayon, artificial  silk or  nylon,      whether  manufactured   by  handloom  or  powerloom  or      otherwise,  but   not  including  car  pets,  druggets,      woollen durees and cotton floor durees."      On  August   24,  1966  the  State  Government  of  the composite State of Punjab issued a notification giving three months’ notice of its intention to amend Schedule to exclude pure silken  fabrics from  the list  of tax; free goods. But before the expiry of three months and before 136 any further  notification  could  be  issued  by  the  State Government as  required by  section 6  of the Act, the Union Territory of  Chandigarh came  into existence on November 1, 1966.  The  Government  of  the  Union  Territory  issued  a notification dated  January 4,  1968  amending  item  30  as

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intended to  be amended  by the  notification  dated  August 24,1966 issued  by the  State Government  of  the  composite State of Punjab. The respondent filed a writ petition in the High Court challenging this notification as being invalid on the ground  that  the  earlier  notification  could  not  be availed of  by the  new Government  for amending Schedule B. The stand  taken on  behalf of  the appellant  was that  the earlier notification was a "law in force" within the meaning of section  88 of  Central Act  31 of  1966. The  High Court repelled this argument, and in our opinion, rightly.      It is  plain on  the wordings  of section 6 of the Act, extracted above,  that a  notification merely  notifying the intention of  the State  Government to  add or  delete  from Schedule any  article, by  itself, had no force of law until and unless  on the  expiry of  the period  of three months a like notification  was issued  amending  the  Schedule.  The erstwhile State  Government of  Punjab  could  not  issue  a second notification  in respect of the Union Territory after it ceased  to be  a part  of the  State of Punjab. Sales tax could not  be charged  on pure  silken fabrics  by the  said State Government on October 31, 1966 merely by virtue of the notification dated August 24, 1966. It was, therefore, not a law in  force when  the composite  State  was  re-organised. Section 88  of the  Punjab Re-organisation Act, 1966 runs as follows:-           "The- provisions of Part II shall not be deemed to      have f  effected any change in the territories to which      any law  in force  immediately before the appointed day      extends or  applies, and  territorial references in any      such law  to the State of Punjab shall, until otherwise      provided  by   a  competent   .  Legislature  or  other      competent  authority,   be  construed  as  meaning  the      territories within  that State  immediately before  the      appointed day." It is  clear that  there was  no law in force on November 1, 1966, which  could enable  the Union  Territory to  levy any sales tax on pure silken fabrics.      Mr. S.  N. Anand  endeavoured to attack the judgment of the High  Court by taking a new stand in this Court that the notification dated  August  24,  1966  could  enure  to  the benefit  of   and  be   availed  by  the    Union  Territory Government. But  he failed  to point  out any provision L in Act 31  of 1966  or  any  other  law  to  substantiate  this argument. No 137 "deeming" provision could be brought to our notice, as there is none,  to  show  that  the  notification  issued  by  the erstwhile State  Government of  Punjab could be deemed to be one issued by the new Government of the Union Territory. For many  other  purposes  there  are  "deeming"  provisions  in Central Act  31 of  1966 e.g.  sections 59(1), 74(1) and 92. But no  provision is  to be  found to  show that  by a legal fiction the  first notification  of intention  issued by the erstwhile  State   Government  could   be  deemed  to  be  a notification issued  by the  new Government.  ’The  argument thus presented by Mr. Anand must be rejected.      Learned counsel  for the appellant placed reliance upon the principle of law enunciated in paragraph 12 at page 1749 in the  decision of this Court in M/s. Ratan Lal and Co. and another  etc.,  v.  The  Assessing  Authority,  Patiala  and another, etc.(1).  The principle  stated therein is that the new legislature  of the  new State after the re-organisation of  the   composite  State  could  amend  the  existing  law retrospectively  from   a  date  anterior  to  the  date  of reorganisation. Obviously the view expressed in the decision

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aforesaid is so very different that it cannot be of any help to the appellant in this case.      For the  reasons stated  above, we  dismiss the  appeal with costs. P.B.R.                                     Appeal dismissed.      (1) A.I.R. 1970 S.C., 1742 10-817SCI/78 138