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PETITIONER: RAM BHAROSEY LAL KRISHAN KUMAR

       Vs.

RESPONDENT: STATE OF U.P. & ORS.

DATE OF JUDGMENT21/10/1971

BENCH:

ACT: Uttar Pradesh Sales Tax Act, 1948--Ss. 3AA, 3D--Notification under  s.  3D imposing purchase tax on goods covered  by  s. 3AA--Validity--Scope of s. 3-D.

HEADNOTE: Under  s. 3AA of the Uttar Pradesh Sales Tax Act, 1948  "not withstanding  anything contained in s. 3 or 3A" tax  on  the turnover  of  the goods specified therein was  not  leviable except  at  the point of sale by a dealer to  the  consumer. Section 3D, incorporated into the Act later, authorised  the imposition of a tax on the turnover of first purchase and on the  issue of a notification under the section no tax  could be levied under any other section in respect of the goods so notified.   On the question whether the  notification  dated October  1,  1964 imposing a purchase tax on oil  seeds  was invalid  for  the reason that it contravened s. 3AA  of  the Act, HELD  : It is open to the State Government to levy  purchase tax,  in exercise of its powers under s. 3D, in  respect  of goods  covered  by  s. 3AA.  At  the  time  the  legislature incorporated  into the Act s. 3D it must have been aware  of the  existence  of s. 3AA, yet, in sub-s. (4) of  s.  3D  it declared  that  on  the issue of a  notification  under  the section,  no tax shall be levied under any other section  in respect  of  the  goods  so notified.   The  ambit  of  this provision  is  very  wide  and it  clearly  takes  in  goods mentioned in s. 3AA.  Further, the non-obstante clause  does not  take  in  s. 3D, and if  the  legislature  intended  to exclude  the  operation  of s. 3D,  in  respect  of  matters covered by s. 3AA nothing would have been easier than to say so.   Therefore,  there  are  no grounds  to  cut  down  the amplitude  of  the power conferred on the  State  Government under sub-s. (4) of s. 3-D. [150 H-151 D]

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 240 and 241 of 1969.  Appeals  from  the judgment and decree dated  December  18, 1968  of the Allahabad High Court in Civil Misc.   Writ  No. 4697 of   1968. J. P. Goyal and Sobhag Mal Jain, for the appellant (in both the  appeals). L. M. Singhvi and O. P. Rana, for the respondents ( in both the  appeals). The Judgment of the Court was delivered by Hegde, J. These are appeals by certificate.  They are by the same appellant and they raise common question of law.  Hence

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they are considered together. Two  questions of law were urged on behalf of the  appellant in  support of the appeals.  The first contention urged  was that 147 Section  3-D(1)  of  the U.P. Sales Tax  Act,  1948  (to  be hereinafter  referred  to  as the Act) is  ultra  vires  the Constitution,  firstly  because  that  under  that   section excessive legislative power had been delegated to the  State Government and secondly on the. ground that it discriminates between  the  registered dealers who  made  their  purchases through  licensed dealers and the registered-.  dealers  who made  their purchases through dealers who are not  licensed. The  second contention taken was that-notification  No.  ST- 7122/X-900(16)64  dated October 1, 1964 issued under  S.  3- D(1)  of  the  Act imposing purchase tax  on  oil  seeds  is invalidas it contravenes S. 3AA of the Act. We  have  considered  the first ground of  attack  in  Civil Appeals,  Nos.  362  and  1692  of  1969  (Mls.   Sita   Ram Bishambhar  Dayal  etc. v. State of U.P.) in which  we  have delivered  judgment  just now.  For  the  reasons  mentioned therein,  the contention that S. 3-D(1) is ultra  vires  the Constitution fails. The only surviving question is whether the notification  re- ferred to earlier is violative of s. 3AA of the Act. Before examining that contention, it is necessary to set out the, relevant facts. The appellant is a partnership firm.  It carries on business as  dealers  in  roundnuts, oil seeds and  Arhar.   For  the assessment  years 1965-66, 1966-67, the  Sales-tax  Officer, Rampur assessed’ the appellant to sales-tax on the  turnover of  the groundnuts oil manufactured by the appellant and  to purchase   tax  on  the  turnover  of  the  oil  seeds   and foodgrains.   The appellant unsuccessfully appealed  against the assessment orders.  Thereafter it took up the matter  in revision  before  the revising authority.  There,  again  it substantially failed.  Aggrieved by that decision, he moved’ the  High  Court  of  Allahabad for  a  writ  of  certiorari quashing the levy of purchase tax imposed on him in  respect of  his  purchases of oil seeds.  The  High  Court  rejected those petitions.  Hence these appeals. We  shall  now  extract the  impugned  notification  to  the extent,: it is material for the purpose of this appeal. It reads thus: "Not.  No. ST-7122/X-99(16)64 dated October 1, 1964. In  exercise of the powers under sub-section (1) of  section 3-D  of the Uttar Pradesh Sales Tax Act, 1948 (U.P. Act  No. XV  of  1948), the Governor of Uttar Pradesh is  pleased  to notify  that with effect from October 1, 1964, the  turnover of first purchases in respect 148 of  goods  mentioned  below shall be  liable  to  tax  under Section 3-D of the said Act. ------------------------------------------------------------ SI.            Name of goods           Rate of tax. NO. -------------------------------------------------------------       1.  Foodgrains including cereals and pulses1 .5  paisa per rupee      2. Gur    3 paisa per rupee      3. Oilseeds    2 paisa per rupee ------------------------------------------------------------ As per this notification a purchase tax of 2 paise per rupee ,,on  the  turnover of the first purchase of  oil  seeds  is leviable.   It is contended that this notification  violates

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s. 3AA of the Act.  Section 3AA says:               "Notwithstanding anything contained in section               3  or  3A,  the turnover  in  respect  of  the               following  goods  shall not be liable  to  tax               except at the point of sale by a dealer to the               consumer,  and the rate of tax shall be  such,               not  exceeding the maximum rate for  the  time               being  specified in section 15 of the  Central               Sales Tax Act, 1956, as may be declared by the               State   Government  by  notification  in   the               Official Gazette:               (i).........               (ii)........               (iii).......               (iv)........               (v)........               (vi)  oil   seeds,  that  is  to  say,   seeds               yielding  non-volatile  oils  used  for  human               consumption,   or  in  industry,  or  in   the               manufacture  of varnishes, soap and the  like,               or  in  lubrication, and  volatile  oils  used               chiefly in medicines, perfumes, cosmetics  and               the like.               2.  Unless the dealer proves otherwise,  every               sale  ’by a dealer shall, for the purposes  of               sub-section  (1)  be  presumed  to  be  to   a               consumer.               Explanation.--A  sale  of  any  of  the  goods               specified in sub-s. (1) to a registered dealer               who  does not purchase them for resale in  the               same condition in which he has purchased them,               or  to an unregistered dealer shall, for  pur-               poses of this section, be deemed to be a  sale               to the consumer." 149 This section was incorporated into the Act on April 1, 1956. Under  this section, on the goods specified  therein,  sales tax  not,  exceeding  the maximum rate for  the  time  being specified in s. 15 of the Central Sales Tax Act, 1956 can be levied by the StateGovernment on the turnover in respect  of sales by dealers to the consumers.  From an analysis of this provision, we get the following:               1.    that tax to be levied is a sales-tax;               2.    levy in question is a single point levy;               3.    the  point  of levy is the sale  by  the               dealer to the consumer and               4.    the  rate  to  be  fixed  by  the  State                             Government  is not to exceed the  maxi mum  rate               for  the time being specified in s. 15 of  the               Central Sales Tax Act, 1956. If  we hold that provisions contained in s. 3AA continue  to be  in  force in respect of dealing in oil  seeds  then  the appellant’s. contention that the impugned levy is an invalid levy  succeeds, But the question is whether that  contention is correct.               This takes us to s. 3-D.  That section reads:               "1.  Except  as provided in  sub-section  (2),               there  shall  be levied and  paid,  food  each               assessment year or part thereof, a tax on  the               turnover,  to be determined in such manner  as               may be prescribed, of first purchases made  by               a dealer or through a dealer, acting as a pur-               chasing  agent  in respect of  such  goods  or               class  of  goods,  and  at  such  rates,   not

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             exceeding  two paisa per rupee in the case  of               foodgrains, including cereals and pulses,  and               pulses,  and five paisa per rupee in the  case               of other goods and with effect from such date,               as may, from time to time, be notified by  the               State Government in this behalf.               Explanation.-In the case of a purchase made by               a  registered dealer through the agency  of  a               licensed  dealer, the registered dealer  shall               be  deemed to be the first purchaser,  and  in               every  other  case of a first  purchase,  made               through  the, agency of a dealer,  the  dealer               who  is  the agent shall be deemed to  be  the               first purchaser.           2.    x    x    x    x           3.    x    x    x    x 150               4.  On the issue of a notification under  this               section no tax shall be levied under any other               section in respect of the goods so notified.               5.  The  provisions of the  second  and  third               proviso to Section 3 and of Section 18,  shall               mutatis mutandis apply in relation to the  tax               payable under this Section.               6.   x           x             x            x               7.  Unless the dealer proves otherwise to  the               satisfaction of the assessing authority, every               purchase by or through a dealer shall, for the               purposes of sub-section (1), be presumed to be               the  first purchase by such dealer  and  every               sale through a dealer shall, for the  purposes               of sub-section (2), be presumed to be sale  to               a first purchaser." For our present purpose, it is not necessary to refer to the second  and  third provisos to S. 3 and S. 18.   It  may  be noted  that S. 3-D was incorporated into the, Act on  August 1, 1958. The contention on behalf of the appellant was that s. 3AA is a  special  provision regarding certain specified  class  of goods  including  oil  seeds whereas S.  3-D  is  a  general provision.   Hence dealings in respect of oil seeds must  be held  to be governed exclusively by s. 3AA.  In  support  of his  contention,  the  learned ,Counsel  for  the  appellant called  into,  aid the rule of construction that  a  special provision  excludes the application of a general  provision. On the other hand, it was contended on behalf of the Revenue that  power  was conferred on the State Government  to  levy purchase tax in place of sales-tax in respect of any  goods’ that  may  be notified under s. 3-D(1) subject only  to  the conditions  mentioned  therein.  According to  Dr.  Singhvi, learned  ’Counsel for the Revenue, the legislature left  the questions  whether  in  respect of a  class  of  goods,  the appropriate levy is sales tax or purchase tax as well as what is the appropriate point of levy, to the State Government because a decision on that  question has to be taken on an assessment  of  various factors,  some of which are not constant.  According to  him in view of the language employed in sub-s. (4) of S. 3-D, it is  not  possible  to apply the rule  of  construction  that special  legislation  in  respect of  any  particular  topic should exclude the application of general legislation. It  may be noted that S. 3-D was incorporated into  the  Act much later than S. 3AA.  As seen earlier S. 3AA was incorpo- rated into the Act on April 1, 1956 whereas S. 3-D was added 151

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on August 1, 1958.  At the time the legislature incorporated into  the  Act  S.  3-D, it must  have  been  aware  of  the existence  of  S. 3AA but yet in sub-s. (4) of  S.  3-D,  it declared  that  on the issue of a  notification  under  that section,  no tax shall be levied under any other section  in respect  of  the  goods  so notified.   The  ambit  of  this provision  is  very  wide  and it  clearly  takes  in  goods mentioned in s. 3AA. Now  turning  to  S. 3AA, it is important to  note  that  it begins  by  saying "notwithstanding  anything  contained  in section 3 or 3-A".  The non-obstante clause does not take in S.  3-D.   If  the  legislature  intended  to  exclude   the operation  of  S. 3-D, in respect of matters covered  by  S. 3AA,  nothing  would have been easier than to  say  so.   It could have said "notwithstanding anything contained in s. 3, 3-A  and  S.  3-D".   But it did  not  choose  to  do  that. Therefore there are no grounds to cut down the amplitude  of the power conferred on the State Government under sub-s. (4) of S. 3-D. The High Court of Allahabad has consistently taken the  view that it is open to the State Government to levy purchase tax in  exercise of its powers under S. 3-D even in  respect  of goods  covered  by S. 3AA.  We are in  agreement  with  that view. In the result these appeals fail and they are dismissed with costs.  One set. K.B.N.          Appeals dismissed. 152