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PETITIONER: SALES TAX OFFICER, CUTTACKAND ANOTHER

       Vs.

RESPONDENT: M/s.  B. C. PATEL & CO.

DATE OF JUDGMENT: 15/04/1958

BENCH: DAS, SUDHI RANJAN (CJ) BENCH: DAS, SUDHI RANJAN (CJ) AIYYAR, T.L. VENKATARAMA DAS, S.K. SARKAR, A.K. BOSE, VIVIAN

CITATION:  1958 AIR  643            1959 SCR  520

ACT: Sales  Tax-Notification enforcing the charge not  wholly  in consonance  with the charging  provision-Validity-Assessment for periods both before and after the Constitution-Legality- Orissa  Sales  Tax  Act,  1947  (Orissa  XIV  Of  1947),  s. 4--Constitution of India, Art. 186.

HEADNOTE: This  appeal  by  the Sales  Tax  authorities  was  directed against  the  judgment and order of the Orissa  High  Court, passed  under  Art. 226 of the Constitution,  quashing  five orders of assessment covering five quarters made against the respondents  who carried on the business of  collection  and sale  of  Kendu leaves in the erstwhile Feudatory  State  of Pallaliara  to  which, on its merger into  the  province  of Orissa  on  January 1, 1948, the provisions  of  the  Orissa Sales Tax Act, 1947, were extended on March 1, 1949.  On the same  date  the Government of Orissa issued  a  notification under S. 4(1) of the Act which was in the following terms: " In exercise of the powers conferred by sub-section (1)  of Section 4 Of the Orissa Sales Tax Act, 1947 (Orissa Act  XIV of  1947),  as applied to Orissa State,  the  Government  of Orissa  are pleased to appoint the 31st March, 1949, as  the date  with  effect  from  which  every  dealer  whose  gross turnover  during  the  year ending  the  31st  March,  1949, exceeded Rs. 5,000 shall be liable to pay 521 under  the  said Act on sales effected after the  said  date Section 4 Of the Act, inter alia, provided : " (1) .... with effect  from such date as the Provincial Government  may  by notification in the Gazette, appoint, being not earlier than ’thirty days after the date of the said notification,  every dealer  whose  gross turnover during  the  year  immediately preceding  the commencement of this Act exceeded  Rs.  5,000 shall  be liable to pay tax under the Act on sales  effected after the date so notified.... (2) Every dealer to whom sub- section (1) does not apply shall be liable to pay under this Act  with effect from the commencement of the  year  immedi- ately  following that during which his gross turnover  first

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exceeded Rs. 5,000 ". The  goods  were  admittedly delivered  for  consumption  at various  places outside the State and the Sales Tax  Officer as well as the Assistant Collector in appeal, proceeding  on the basis that the sales took place in the State, held  that the  respondents were liable to Sales Tax for all  the  five quarters,  two of which fell before the commencement of  the Constitution  and three thereafter.  The contention  of  the respondents before the High Court was that the  notification under  s. 4(1) Of the Act was invalid as it ran  counter  to the  provisions  of  that sub-section and no  part  of  that charging section could, therefore, come into force.  It  was further contended that the assessment for the three quarters following  the commencement of the Constitution was  invalid by  reason or Art. 286 of the Constitution.  The High  Court found entirely in favour of the assessee : Held (per Das C. J., Venkatarama Aiyar, S. K. Das and Vivian Bose, jj.), that the decision of the High Court in so far as it  related  to  the three  post-Constitution  quarters  was correct  and must be upheld.  The orders of  assessment  for those quarters contravened both Art. 286 of the Constitution and  s.  30(r)(a)(1) of the Orissa Sales Tax  Act  and  were without  jurisdiction and must be set aside.  So far as  the two pre-Constitution quarters were concerned, the  assessees were clearly liable under s. 4(2) of the Act. Per Das C. J. and Venkatarama Aiyar J. The first part of the impugned  notification, appointing the date from  which  the liability was to commence, was in consonance with s. 4(1) Of the  Act  and, therefore, clearly intra vires,  whereas  the second  part,  indicating the class of dealers on  whom  the liability  was to fall, went beyond that section  and  must, therefore, be held to be ultra vires and invalid.  But since the  two parts were severable, the invalidity of the  second part  could in no way affect the validity of the first  part which  brought the charging section into operation  and  the assessees were liable for the two pre-Constitution  quarters under s. 4(1) as well. Per S. K. Das and Vivian Bose JJ.-It would not be correct to say  that  the second part of the notification  was  a  mere surplusage  severable  from the rest  of  the  notification. Liability to pay the 522 tax  under s. 4(1) of the Act could arise only on the  issue of a valid notification in conformity with the provisions of that  sub-section and as there was no such notification  the assessees were not liable under s. 4(1) Of the Act which did not  come into operation.  Subsections (1) and (2) Of  s.  4 are  mutually  exclusive, and their periods  of  application being different both could not apply at the same time and no notification  was necessary to bring into  operation  sub-s. (2) Of the Act. The  goods  having been admittedly sold  and  delivered  for consumption  outside  the State of Orissa,  under  Art.  286 (1)(a)   read  with  the  Explanation  as  also   under   S. 30(1)(a)(1) of the Act, the sales were outside the State  of Orissa and, consequently, the assessment for the three post- Constitution quarters were without jurisdiction. The  State  of  Bombay v. The United  Motors  (India)  Ltd., [1953]  S.C.R. 1069 and The Bengal Immunity Company  Limited v. The State of Bihar, [1955] 2 S.C.R. 603, relied on. Per  Sarkar J.-There could be no liability under s. 4(1)  Of the Act till a date was appointed thereunder, and where  the notification,  as in the instant case, fixing such  a  date, was not in terms of that sub-clause, there was no fixing  of a  date at all and the sub-clause could not come  into  play

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and no liability could arise under it.  It was impossible to ignore the second part of the notification in question as  a mere  surplusage since the notification read as a whole  had one  meaning and another without it.  The  Government  could not  be  heard  to  say  that  what  it  had  said  in   the notification was not what it actually meant. Both the sub-clauses Of S. 4 having been brought into  force at  the same time by the same notification, they applied  to all  dealers together and contemplated a situation in  which the liability of a dealer under sub-cl. (1) might arise.  It was apparent from the scheme of the Act that sub-cl. (2) was not intended to have any operation till a date was appointed under  sub-cl.  (1)  and a liability  under  it  might  have arisen.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 230 of 1956. Appeal  by special leave from the judgment and  order  dated April 12, 1955, of the Orissa High Court in 0. J. C. No.  60 of 1952. C.   K.  Daphtary, Solicitor-General of India, R.  Ganapathi Iyer and R. H. Dhebar, for the appellants. S.   N. Andley, J. B. Dadachanji and Rameshuar Nath, for the respondent. 1958.  April 15.  The Judgment of Das C. J. and 523 Venkatarama Aiyar J. was delivered by Das C. J. The Judgment of S. K. Das and Vivian Bose JJ. was delivered by S. K.  Das J. Sarkar J. delivered a separate judgment. DAS C. J.-We agree that this appeal must be allowed in  part but  we prefer to rest our judgment on one of  the  material points  on a ground which is different from that adopted  by our  learned Brother S. K. Das J. in the judgment which  has just  been  delivered  by  him and which  we  have  had  the advantage of perusing. The  Orissa  Sales  Tax  Act, 1947  (Orissa  XIV  of  1947), hereinafter referred to as the said Act received the  assent of the Governor-General on April 26, 1947, when s. I of ’the Act came into force.  On August 1, 1947, a Notification  was issued by the Government of Orissa bringing the rest of  the said  Act  into force in the Province of Orissa, as  it  was then  constituted.   Section  4, as it stood  at  all  times material to this appeal, ran as follows: "  4(1) Subject to the provisions of sections 5, 6, 7 and  8 and with effect from such date as the Provincial  Government may,  by  notification in the Gazette,  appoint,  being  not earlier  than  thirty  days  after  the  date  of  the  said notification,  every dealer whose gross turnover during  the year  immediately  preceding the commencement  of  this  Act exceeded Rs. 5,000 shall be liable to pay tax under the  Act on sales effected after the date so notified: Provided that the tax shall not be payable on sale  involved in  the  execution  of  a contract which  is  shown  to  the satisfaction  of the Collector to have been entered into  by the dealer concerned on or before the date so notified. (2)Every dealer to whom subsection (1) does not apply  shall be  liable  to pay tax under this Act with effect  from  the commencement  of the year immediately following that  during which his gross turnover first exceeded Rs. 5,000. (3)Every dealer who has become liable to pay tax under  this Act shall continue to be so liable until the expiry of three consecutive years, during each of 524

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which his gross turnover has failed to exceed Rs. 5,000  and such further period after the date of such expiry as may  be prescribed  and  on  the expiry of this  latter  period  his liability to pay tax shall cease. (4)Every dealer whose liability to pay tax has ceased  under the  provisions of sub-section (3) shall again be liable  to pay tax under this Act with effect from the commencement  of the  year immediately following that during Which his  gross turnover again  exceeds Rs. 5,000." On  August  14,  1947,  a notification  was  issued  by  the Government  of Orissa appointing September 30, 1947, as  the date  with  effect from which that sub-section was  to  come into force in the then province of Orissa. On January 1, 1948, by a covenant of merger executed by  its ruler,  the  feudatory State of Pallahara  merged  into  the province of Orissa.  In exercise of the powers delegated  to it  by the Government of India under what was then known  as the Extra Provincial Jurisdiction Act, 1947, the  Government of Orissa on December 14, 1948, issued a notification  under s.  4 of that Extra Provincial Jurisdiction  Act,  extending the Orissa Sales Tax Act to the territories of the erstwhile feudatory States, including Pallahara which had merged  into the  province of Orissa.  On March 1, 1949,  a  notification under  s.  1(3)  was  issued by  the  Government  of  Orissa bringing ss. 2 to 29 of the said Act into force in the added territories.   On  the  same day  another  notification  was issued under s. 4(1) of the Act, which was in the  following terms: In  exercise of the powers conferred by Sub-section  (1)  of Section 4 of the Orissa Sales Tax Act, 1947 (Orissa Act  XIV of  1947)  as  applied to Orissa State,  the  Government  of Orissa  are pleased to appoint the 31st March, 1949, as  the date  with  effect  from  which  every  dealer  whose  gross turnover  during  the  year ending  the  31st  March,  1949, exceeded Rs. 5,000 shall be liable to pay tax under the said Act on sales effected after the said date." It  was  after this notification had been. issued  that  the respondents were sought to be made liable to tax. The respondents were assessed under the said Act 525 for five quarters ending respectively on September 30, 1949, December  31, 1949, June 30, 1950, September 30,  1950,  and December  31, 1950.  It will be noticed that the  first  two quarters  related to a period prior to the  commencement  of the Constitution and the remaining three quarters fell after the  Constitution came into force.  The Sales  Tax  Officer, Cuttack  having assessed the respondents to Sales Tax  under the said Act for each and all of the said five quarters  and the  respondent’s several appeals against the  said  several assessment  orders under the said Act having been  dismissed on  April 12, 1952, the respondents filed a  petition  under Art.  226  of  the Constitution in  the  Orissa  High  Court praying,  inter alia, for a writ in the nature of a writ  of certiorari  for quashing the said assessment orders and  for prohibiting  the  appellants  from  realising  the  tax   so assessed or from making assessments on them in future.   The contention of the respondents before the High Court was that the notification issued by the Government of Orissa on March 1, 1949, under s. 4(1) being invalid in that it ran  counter to  the  provisions  of that sub-section,  no  part  of  the charging section came into -force and consequently they were not  liable to tax at all for any of the five quarters.   As regards the three quarters following the commencement of the Constitution,  they urged an additional plea,  namely,  that the assessment orders for those three quarters were  invalid

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by reason of the provisions of Art. 286 of the Constitution. The  High Court accepted both these contentions and  by  its judgment  and order pronounced on April 12, 1955,  cancelled the  assessments.  The Sales Tax Officer, Cuttack,  and  the Collector  of  Commercial  Taxes.   Cuttack,  have  appealed against the judgment and order of the High Court. As  regards  the  assessment  orders  for  the  three  post’ Constitution  quarters,  the  decision  of  the  High  Court purports to have proceeded on the decision of this Court  in the  State of Bombay v. United Motors (India) Ltd. (1).   We find ourselves in complete agreement with (1)  [1953] S.C.R. 1069. 67 526 our  learned Brother S. K. Das J. for reasons stated by  him that  the assessment orders for the three post  Constitution quarters were hit by cl. (1) of Art. 286 and also s. 30  (1) (a)  (1) of the Act and were rightly held by the High  Court to  be  without  jurisdiction.  It is  with  regard  to  the assessment orders for the two pre-Constitution quarters that we  have come to a conclusion different from that  to  which our  learned Brother has arrived.  We proceed to  state  our reasons. The  impugned  notification,  as  hereinbefore  stated,  was issued  on  March 1, 1949, under s. 4 (1) of the  said  Act. Under  that  sub-section every dealer whose  gross  turnover during  the year immediately preceding the  commencement  of the  Act exceeded Rs. 5,000 would be liable to pay  the  tax under the Act on sales effected after the date " so notified ", that is to say, the date which the provincial  Government might by notification in the Gazette appoint.  It is  clear, therefore,  that  s. 4 (1) by its own terms  determined  the persons on whom the tax liability would fall but left it  to the  provincial  Government only to appoint  the  date  with effect  from  which the tax liability  would  commence.   It follows,  therefore, that the only ’power conferred by s.  4 (1)  on the Government was to appoint, by a notification  in the Official Gazette, a date with effect from which the  tax liability   would  attach  to  the  dealers  described   and specified  in the sub-section itself as the persons on  whom that liability would fall.  The Government of Orissa  issued the notification, hereinbefore quoted, " in exercise of  the powers  conferred  by  sub-section (1) of section  4  "  and appointed March 31, 1949, as the date with effect from which the  tax  liability  would commence.  It  was  none  of  the business of the Government of Orissa to say on what class of dealers  the  tax liability would fall, for  that  had  been already  determined by the sub-section itself Therefore,  by the notification the Government of Orissa properly exercised its powers under sub-s. (1) in so far as it appointed  March 31,  1949,  as  the  date, but it  exceeded  its  powers  by proceeding  to  say that all dealers  whose  gross  turnover during the year ending                      527 March  31, 1949, exceeded Rs. 5,000 should be liable to  pay tax  under the Act.  This part of the  notification  clearly ran  counter to the sub-section itself, for under that  sub- section  it  is  only those  dealers  whose  gross  turnover exceeded  Rs. 5,000 " during the year immediately  preceding the commencement of this Act " that became liable to pay the tax.  For the purposes of the five assessment orders it made no difference whether the Act is taken to have commenced  on December  14,  1948, when it was extended to  the  feudatory States  by notification under s. 4 of the  Extra  Provincial Jurisdiction  Act,  1947,  or on March  1,  1949,  when  the

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notification  under s. 1 (3) was issued, for in either  case the year immediately preceding the commencement of this  Act was  April  1,  1947,  to March  31,  1948.   The  position, therefore,  is  that  by the earlier part  of  the  impugned notification  the Government of Orissa properly and  rightly exercised  its  power in appointing March 31, 1949,  as  the date  with effect from which the liability to pay tax  under the Act would commence, but by its latter part did something more  which  it had no business to do, i. e.,  to  indicate, contrary to the sub-section itself, that those dealers whose gross  turnover  during the year ending on March  31,  1949, would be liable to pay tax under the Act.  The  notification in  so far as it purports to determine the class of  dealers on whom the tax liability would fall, was certainly invalid. The  question that immediately arises is as to  whether  the whole  notification should be adjudged invalid as  has  been done  by the High Court and as is proposed to be done by  my learned  Brother  S. K. Das J. or the two  portions  of  the notification should be severed and effect should be given to the earlier part which is in conformity with s. 4(1) and the latter  part which goes beyond the powers conferred  by  the subsection  to the Government of Orissa should be  rejected. Immediately  the question of severability arises.   Are  the two  portions severable ? We find no difficulty  in  holding that  the portion of the notification which went beyond  the powers  conferred  on  the Government  of  Orissa  is  quite clearly and easily severable from that 528 which  was  within its powers.  It cannot possibly  be  said that had the Government of Orissa known that it had no power to  determine  the persons on whom the tax  liability  would fall it would not have appointed a date at all.  In our view there  is  no question of the two parts  being  inextricably wound up.  We, therefore, hold that the notification, in  so far as it appointed March 31, 1949, as the date with  effect from which liability to pay tax would commence was valid and the rest of the notification was invalid and must be treated as   surplus  without  any  legal  efficacy.   The   result, therefore,  is  that the charging  section  was  effectively brought  into force and the entire charging  section  became operative  and dealers could be properly brought  to  charge under the appropriate part of the charging section. It is true that the notification having also stated that the dealers,  whose  gross turnover exceeded 5,000  (luring  the year ending March 31, 1949, would be liable to pay the  tax, the  sales tax authorities naturally applied their  mind  to the question whether during the year ending March 31,  1949, the gross turnover of the respondents exceeded the requisite amount,  but did not inquire into the question  whether  the respondent’s  gross turnover exceeded Rs. 5,000  during  the year immediately preceding the commencement of the Act which in  this case was the financial year from April 1,  1947  to March  31, 1948.  If the matter stood there, it  would  have been  necessary  to  send the case back  to  the  Sales  Tax Officer to enquire into and ascertain whether the quantum of the  gross  turnover  of the  respondents  during  the  last mentioned financial year ending on March 31, 1948,  exceeded Rs.  5,000  or it did not.  But a remand is not  called  for because  it appears from the judgment under appeal  that  it was  conceded  that for the period April 1, 1949,  till  the commencement  of the Constitution on January 26,  1950,  the respondents would have been liable to pay sales tax provided a valid notification had been issued, under sub-s. (1) of s. 4. This concession clearly amounts to an admission that  the gross turnover of the respondents during the financial

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529 year   ending  on  March  31,  1948,  which  was  the   year immediately  preceding March 31, 1949, exceeded  Rs.  5,000. We have already held that the notification’ issued under  s. 4(1)  in so far as it appointed March 31, 1949, as the  date with effect from which the liability to pay sales tax  would commence  was good and valid in law.  That  finding  coupled with  the  concession mentioned above relieves us  from  the necessity   of   remanding  the  case  to  the   sales   tax authorities.   Even if we assume, contrary to the  aforesaid concession,  that  the  gross turnover  of  the  respondents during the financial year ending on March 31, 1948, did  not exceed  Rs. 5,000 and, therefore, s. 4 (1) did not apply  to them  the respondents will still be liable to pay the  sales tax for the two pre-Constitution quarters under s. 4 (2). For reasons stated above we hold that the assessment  orders for the three post-Constitution quarters were invalid and we accordingly  agree  that  this appeal, in so far  as  it  is against  that  part of the order of the  -High  Court  which cancelled  the  assessment  orders  for  those  three  post- Constitution quarters, should be dismissed.  We further hold that  the assessments for the two pre-Constitution  quarters were valid for reasons stated above and accordingly we agree in allowing this appeal in so far as it is against that part of  the  order  of  the  High  Court  which  cancelled   the assessment orders for the two pre-Constitution quarters  Oil the  ground that the notification issued under s. 4  (1)  of the Act was wholly invalid.  Under the circumstances of this case  we also agree that the parties should bear  their  own costs in the High Court as well as in this Court. S.   K.  DAS  J.-This  appeal on  behalf  of  the  assessing authorities, Cuttack, has been brought pursuant to an  order made  on  January 17, 1956, granting them special  leave  to appeal to this Court from the judgment and order of the High Court of Orissa dated April 12,1955, by which the High Court quashed  certain  orders  of assessment of  sales  tax  made against the respondent. The short facts are these.  The respondent, Messrs.B.  C. Patel and Co., is a partnership firm carrying on 530 the  business of collection and sale of Kendu  leaves.   The firm  has its headquarters at Pallahara, which was  formerly one  of  the Feudatory States of Orissa and merged  in  the. then province of Orissa by a merger agreement dated  January 1,  1948.  The Sales Tax authorities, Cuttack, in the  State of  Orissa, assessed the respondent to sales tax in  respect of sales of Kendu leaves which took place for five  quarters ending  on September 30, 1949, December 31, 1949,  June  30, 1950,  September 30, 1950 and December 31, 1950.  It  should be  noted  that two of the aforesaid quarters related  to  a period  prior to the commencement of the  Constitution,  and the  remaining three quarters were  post-Constitution.   The facts  which the Sales Tax authorities found were (I.)  that the  respondent  collected Kendu leaves in Orissa  and  sold them  to  various merchants of Calcutta,  Madras  and  other places  on receipt of orders from them, (2) that  the  goods were sent either f. o. r. Talcher or f. o. r. Calcutta,  and (3) the sale price was realised by sending the bills to  the purchasers for payment.  The admitted position was that  the goods were delivered for consumption at various places  out- side  the  State  of  Orissa.   The  Sales  Tax  authorities proceeded  on the footing that all the sales took  place  in Orissa even though the goods were delivered for con sumption at  places  outside  Orissa.  By  five  separate  assessment orders  dated May 31, 1951, the Sales Tax Officer,  Cuttack,

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held  that  the  sales having taken  place  in  Orissa,  the respondent  was  clearly liable to sales tax  for  the  pre- Constitution  period and, for the post-Constitution  period, though  the  sales came within cl. (2) of Art.  286  of  the Constitution,  the respondent was liable to sales tax  under the   Sales  Tax  Continuance  Order,  1950,  made  by   the President.   These findings were affirmed by  the  Assistant Collector  of  Sales Tax, Orissa, on appeal,  by  his  order dated April 12, 1952.  The respondent assessee then filed  a petition  under  Art. 226 of the Constitution  in  the  High Court  of  Orissa  and prayed for the issue  of  a  writ  of certiorari or other appropriate writ quashing the  aforesaid orders of assessment.  The case of the respondent before the High Court was that the assessment orders., both with 531 regard   to  the  pre-Constitution   and   post-Constitution periods,  were invalid and without jurisdiction.   The  High Court accepted the case of the respondent and held that  the assessment  orders  for the entire period were  invalid  and without  jurisdiction.  The present appeal has been  brought from  the aforesaid judgment and order of the High Court  of Orissa dated April 12, 1955. Though  before  the Sales Tax authorities and  in  the  High Court,  an  attempt  was made on behalf  of  the  respondent assessee  to  show  that there were no  completed  sales  in Orissa and what took place in Orissa was a mere agreement to sell,  that question is no longer at large before  us.   The Sales  Tax authorities found against the respondent on  that question and the High Court did not consider it necessary to decide it on the petition filed by the respondent.  The High Court  proceeded on certain other grounds pressed before  it by  the  respondent,  and we proceed  now  to  consider  the validity  of those grounds.  The grounds are different ,  in respect  of  the two periods,  pre-Constitution,  and  post- Constitution,  and it will be convenient to take  these  two periods separately. But  before  we do so, it is necessary to state  some  facts with  regard to the enactment and enforcement of the  Orissa Sales  Tax  Act,  1947 (Orissa  XlV  of  1947),  hereinafter referred  to as the Act, in the old province of  Orissa  and the  ex-Feudatory State of Pallahara.  The Act received  the assent  of the Governor General on April 26, 1947,  and  was first  published  in  the Orissa  Gazette  on  May  14,1947. Section  I  came into force at once in the old  province  of Orissa  and sub-s. (3) of that section said that " the  rest of  the  Act  shall  come into force on  such  date  as  the Provincial  Government may, by notification in the  Gazette, appoint  ".  The Provincial Government  of  Orissa  notified August 1, 1947, as the date on which the rest of the Act was to come into force in the province of Orissa.  It is  neces- sary at this stage to refer to the charging section,  namely s.  4 of the Act, which is set out below as it stood at  the relevant time: " 4. (1) Subject to the provisions of sections 5, 6, 7 532 and  8  and  with effect from such date  as  the  Provincial Government  may,  by notification in the  Gazette,  appoint, being  not  earlier than thirty days after the date  of  the said notification, every dealer whose gross turnover  during the year immediately preceding the commencement of this  Act exceeded Rs. 5,000 shall be liable to pay tax under the  Act on sales effected after the date so notified. (2) Every dealer to whom subsection (1) does not apply shall be  liable  to pay tax under this Act with effect  from  the commencement  of the year immediately following that  during

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which his gross turnover first exceeded Rs. 5,000. (3)Every dealer who has become liable to pay tax under  this Act shall continue to be so liable until the expire of three consecutive  years, during each of which his gross  turnover has failed to exceed Rs. 5,000 and such further period after the  date  of such expiry as may be prescribed  and  on  the expiry of this latter period his liability to pay tax  shall cease. (4)Every dealer whose liability to pay tax has ceased  under the  provision of sub-section (3) shall again be  liable  to pay tax under this Act with effect from the commencement  of the  year immediately following that during which his  gross turnover again exceeds Rs. 5,000." It is to be noticed that for a liability to arise under sub- s. (1) of s. 4, a notification by the Provincial  Government is  necessary, and the notification must fix the  date  from which  every  dealer whose gross turnover  during  the  year immediately  preceding the commencement of the Act  exceeded Rs. 5,000 shall be liable to pay tax under the Act on  sales effected  after the date so notified.  Such  a  notification was  issued  for the old province of Orissa  on  August  30, 1947,  and  September 30,1947, was fixed as  the  date  with effect  from which every dealer whose gross turnover  during the year ending March 31, 1947, exceeded Rs. 5,000 was  made liable to pay tax under the Act on sales effected after  the said  date.   This was the position in the old  province  of Orissa.  We have already stated that the 533 ex-Feudatory  State  of Pallahara was merged  into  the  old province  of Orissa by a merger agreement dated  January  1, 1948.  After the merger of Pallahara in the old province  of Orissa,  the  Government  of  Orissa  under  the   delegated authority  of  the  Central Government  and  exercising  the powers under s. 4 of the Extra Provincial Jurisdiction  Act, 1947 (XLVII of 1947) (as it was then called) applied the Act to  the  former  Orissa  States  including  Pallahara  by  a notification dated December 14, 1948.  The only modification made  in  applying  the  Act to the  Orissa  States  was  to substitute  the  words  " Orissa States  "for  the  words  " Province of Orissa ", wherever they occurred in the Act., By merely applying the Act to the Orissa States on December 14, 1948,  all  sections of the Act did not come into  force  in that area at once, since a notification under sub-s. (3)  of s. 1 was necessary to bring into force ss. 2 to 29.  Such  a notification was issued on March 1, 1949.  The  notification was in these terms: " In exercise of the powers conferred by sub-section (3)  of section 1 of the Orissa Sales Tax Act, 1947 (Orissa Act  XIV of  1947),  as applied to Orissa States, the  Government  of Orissa are pleased to appoint the 1st day of March, 1949, as the  date  on which sections 2 to 29 of the said  Act  shall come into force The position therefore was this.  Section  1 of  the  Act came into force in Pallahara  on  December  14, 1948, and the remaining sections came into force on March 1, 1949, namely, those sections which dealt with the  liability of  a  dealer  to pay sales tax, set  tip  a  machinery  for collection  of  the  tax  and  dealt  with  other  ancillary matters.   A notification under sub-s. (1) of s. 4 was  also necessary for a liability to arise under that sub-section in the  said area, and such a notification was issued on  March 1,  1949.  That notification must be quoted in full, as  one of  the  points  for our decision is  the  validity  of  the notification.  The notification read: " In exercise of the powers conferred by sub-section (1)  of section  4 of the Orissa Sales Tax.  Act, 1947  (Orissa  Act

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XIV of 1947), as applied to Orissa States, the Government of Orissa are pleased to 68 534 appoint  the 31st March, 1949, as the date with effect  from which  every  dealer whose gross turnover  during  the  year ending  the  31st March, 1949, exceeded Rs. 5,000  shall  be liable to pay tax under the said Act on sales effected after the said date ". Two  other provisions of the Act must be referred  to  here. The word "dealer" is defined in s. 2(c) in these terms : "  ’dealer’ means any person who carries on the business  of selling   or   supplying  goods  in  Orissa,   whether   for commission, remuneration or otherwise and includes any  firm or   a  Hindu  joint  family,  and  any  society,  club   or association which sells or supplies goods to its members; ". The  word  "  year  " is defined ins.  2(j)  and  means  the financial year. Now,  with  regard to the pre-Constitution period  the  High Court has found that the notification under subs. (1) of  s. 4  dated  March  1, 1949, was an  invalid  notification  and therefore  the respondent was not liable to tax  under  that subsection  in respect of the transactions which took  place in  the  pre-Constitution period.  The reason why  the  High Court has held that the notification in question was invalid must  now be stated.  The scheme of sub-s. (1) of s.  4  is, firstly,  to fix a date, not earlier than thirty days  after the date of the notification, from which the liability is to commence;  and,  secondly, to impose a liability  on,  every dealer  whose  gross turnover during  the  year  immediately preceding  the commencement of the Act exceeded  Rs.  5,000. The  tax  liability is on transactions of  sale  which  take place  after  the notified date (which must  necessarily  be after  the commencement of the Act); but in  determining  on which class of dealers, the incidence of taxation will fall, the crucial period as mentioned in the sub-section itself is the year immediately preceding the commencement of the  Act. Therefore, the subsection contemplates two. matters, one  of which  may  be  called the ’relevant date’,  and  the  other ’relevant period’.  So far as the old province of Orissa was concerned, there was no difficulty.  The notification  fixed September  30,  1947,  as the relevant date,  and  the  year immediately preceding 535 the  commencement of the Act in the old province  of  Orissa was  the relevant period, viz., the financial year  1946-47, i.  e., April 1, 1946 to March 31, 1947.  Therefore  dealers whose  gross turnover exceeded Rs. 5,000 in 1946-47,  became liable  under sub-s. (1) of S. 4 to tax on  transactions  of sale  after  September  30, 1947, in  the  old  province  of Orissa.   The notification for the Orissa  States,  however, fixed  March  31,  1949,  as the  relevant  date  ;  but  in determining the class of dealers who would be subject to the liability,  it took the year ending March 31, 1949,  as  the relevant period.  This was clearly a mistake, because  under sub-s. (1) of S. 4 the crucial year is the year  immediately preceding the commencement of the Act.  The Act commenced in the  Orissa States either on December 14, 1948, or on  March 1,  1949, and the financial year immediately  preceding  was the  year 1947-48, i. e., April 1, 1947 to March  31,  1948. The  notification  would have been in  consonance  with  the subsection,  if it had mentioned the year ending  March  31, 1948,  (instead of March 31, 1949) as the crucial  year  for determining the class of dealers who would be subject to the liability  under  sub-s. (1) of S. 4. This  mistake  in  the

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notification is the ground on which the High Court held that the assessments for the two quarters of the pre-Constitution period were invalid and without jurisdiction. The  learned  Solicitor-General  who has  appeared  for  the appellants  has  conceded  that a mistake was  made  in  the notification.   However,  lie has argued-firstly,  that  the mistake  was  immaterial and secondly, that  the  assessment orders for the pre-Constitution period were justified  under sub-s.  (2)  of  s: 4. As to the  first  argument  that  the mistake was immaterial, he has submitted that the  liability to  tax  arose  tinder the sub-section  and  not  under  the notification,  and any mistake in the notification  did  not affect such liability; lie has also submitted that the words and  figures  which  gave  rise to  the  mistake  were  mere surplusage  and  could  be  severed from  the  rest  of  the notification.  We are unable to accept this argument.  For a liability to arise under sub-S. (1) of S. 47 the issue of a; 536 notification  is an essential prerequisite, and  unless  the notification   complies   with  the  requirements   of   the subsection,  no  liability to tax can arise under  it.   The notification not only fixed the relevant date, but fixed the relevant  period  for determining the class of  dealers  who would  be subject to the liability.  In doing so, it made  a mistake,  the result of which was that the notification  was not in conformity with the law.  We do not think that it can be  severed  in the way suggested by the  learned  Solicitor General. Now,  we  come  to  the second  argument  whether  the  pre- Constitution  assessment orders are justified  under  sub-s. (2)  of  s. 4. The High Court held that they were  not,  and gave two reasons for its view: one was that, subsections (1) and  (2) were mutually exclusive and the other was based  on the  opening  words of sub-s. (2), which says that  "  every dealer to whom sub-section (1) does not apply etc." The High Court expressed the view that if the notification under sub- s.  (1) were correctly drawn up, the subsection  would  have applied to the respondent ; therefore, the opening words  of sub-s. (2) barred the application of the sub-section to  the respondent.  At first sight, there appears to be some  force in  this view.  But on a closer examination we do not  think that the view expressed by the High Court is correct.   Sub- sections  (1)  and (2) are mutually, exclusive only  in  the sense that they do not operate in the same field ; that  is, the  relevant periods for their application  are  different. The  relevant period for the application of sub-s. (1) is  " the year immediately preceding the commencement of the Act." Sub-section  (2) however does not require any  notification, and under it every dealer is liable to pay tax under the Act with  effect from the commencement of the  year  immediately following  that  during  which  his  gross  turnover   first exceeded Rs. 5,000.  Obviously, the relevant period for  the application of sub-s. (2) is the year immediately  following that  during  which  the gross turnover of  a  dealer  first exceeded   Rs.   5,000.   The  contrast  between   the   two subsections is this: for sub-s. (1) the crucial year is  the year immediately preceding the commencement of 537 the,  Act; but for sub-s. (2) the crucial, year is the  year in  which  the dealer’s gross turnover  first  exceeded  Rs. 5,000.   We agree that for the same relevant year both  sub- sections (1) and (2) cannot apply, because sub-s. (2) says-" Every dealer to whom subs. (1) does not apply etc." Let  us, for  example, take the year 1946-47 in the old  province  of Orissa.   That  was  the  year  immediately  preceding   the

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commencement of the Act in that area, and sub-s. (1) applied to  all  dealers whose gross turnover  exceeded  Rs.  5,000, first  or otherwise, in that year; sub-s. (2) did not  apply to  such dealers even if their gross turnover  exceeded  Rs. 5,000 for the first time, in that year; because where sub-s. (1)  applies,  sub-s. (2) does not apply.  But what  is  the case   before  us?   The  year  immediately  preceding the commencement  of the Act in the Pallahara area was  1947-48, and  sub-s. (1) would have applied to the respondent if  the notification  had mentioned that year.  But it did not,  and the  result  was that it was not necessary to  find  if  the respondent’s  gross turnover exceeded Rs. 5,000 in  1947-48. What  was  found was that the  respondent’s  gross  turnover exceeded  Rs.  5,000 in 1948-49, that is,  the  year  ending March  31,,  1949,  which  was  not  the  year   immediately preceding the commencement of the Act in the Pallahara area. Obviously,  therefore,  sub-s.  (1) did  not  apply  to  the respondent;  but he clearly came under sub-s. (2).  The  Act came  into force in the Orissa States on March 1, 1949.   By March  31, 1949, the respondent’s - gross turnover  exceeded Rs. 5,000.  He was, therefore, liable to pay tax under  sub- s.  (2  )  with effect from the  commencement  of  the  year immediately following March 31, 1949, that is, from April 1, 1949.   It has been argued for the respondent that the  word ‘first’ in sub-s. (2) means ‘ first’ after the  commencement of  the  Act.  Assuming this to be correct,  the  respondent still  comes under sub-s. (2)  because even if the Act  came into force on March 1, 1949, the respondent’s gross turnover first  exceeded Rs. 5,000 in the year ending March 31,  1949 which was after the commencement of the Act. 538 We are, therefore, of the view that all the requirements  of sub-s.  (2)  are  fulfilled  in  this  case,  and  the   two assessment  orders made against the respondent for the  pre- Constitution period were validly made under sub-s. (2) of s. 4 of the Act.  The effect of the invalid notification  under sub-s.  (1) was that there was no liability thereunder,  and no  dealers were liable to pay tax under  that  sub-section. But  that  did not mean that any dealer  who  properly  came under  sub-s.  (2) was free to escape his liability  to  pay tax.   Surely,  the position cannot be worse  than  what  it would  have been if the Provincial Government had failed  to issue a, notification under sub-s. (1). We  now  turn to the post-Constitution  period.   The  short ground  on which the High Court held the  assessment  orders for  this period to be invalid was based on the decision  of this  Court  in  The State of Bombay v.  The  United  Motors (India) Ltd. (1)  Said the High Court: " Clause (1) of Article 286 prohibited a State from taxing a sale  unless  such  sale  took place  within  the  State  as explained  in the Explanation to the clause of the  Article. Similarly,  clause (2) of that Article restricted the  power of a State to tax a sale which took place  in the course  of inter-State trade or commerce’.  Doubtless, by virtue of the proviso  to that clause an Order by the President  may  save taxation  on  such inter-State sales till  the  31st  March, 1951.  The recent S.C. p. 252 hap, settled the law regarding the true scope of these two clauses of the Article.  Where a transaction  of  sale involves inter-State elements  if  the goods  are delivered for consumption in a  particular  State that State alone can tax the sale by virtue of clause (1) of that  Article  and  by a legal  fiction  that  sale  becomes ‘intra-State  sale’.  Clause (2) of Article 286  applies  to those  transactions of sale involving  inter-State  elements which  do  not come within the scope of clause (1)  of  that

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Article.  On the admitted facts of the present case,  clause (1)  of Article 286 would apply.  The sales  involve  inter- State  elements inasmuch as the buyers are  outside  Orissa, price is paid outside Orissa and (1)  [1953] S.C.R. 1069. 539 goods are delivered for consumption outside Orissa.   Hence, by virtue of clause (1) of Article 286 as explained by their Lordships  of the Supreme Court, the State of Orissa is  not competent to tax such transactions of sale." The  learned Solicitor General has rightly pointed out  that in  a  later decision of this Court in The  Bengal  Immunity Company Limited v. The State of Bihar and Others (1),  which was,  not available to the High Court when it delivered  its judgment, the view expressed in the United Motors, case  (2) was  departed  from in so far as the earlier  decision  held that cl. (2) of Art. 286 of the Constitution did not  affect the  power of the State in which delivery of goods was  made to tax inter-State sales or purchases of the kind  mentioned in  the Explanation to cl. (1) and the effect of the  Expla- nation  was that such transactions were saved from  the  ban imposed  by  Art. 286 (2).  The learned  Solicitor  General, therefore, contends that on the basis of the later decision, the  assessments made should be held to be valid  under  the Sales  Tax  Continuance Order 1950, made by  the  President, even  though the sales took place in course  of  inter-State trade or commerce. It is necessary to state here that by the Adaptation of Laws (Third  Amendment)  Order, 1951, made by  the  President  in exercise  of the power given by cl. (2) of Art. 372  of  the Constitution, s. 30 was inserted in the Act to bring it into accord  with  the  Constitution,  from  January  26,   1950. Section  30  which in substance reproduced Art. 286  of  the Constitution, as it then stood, was in these terms- "  30. (1) Notwithstanding anything contained in this  Act-- (a)  a tax on sale or purchase of goods shall not be imposed under this Act, (i)  where  such sale or purchase takes  place  outside  the State of Orissa; or (ii) where such sale or purchase takes place, in the  course of import of the goods into, or export of the goods out  of, the territory of India; (b) a tax on the sale or purchase of any goods (1) [1955] 2 S.C.R. 603.     (2) [1953] S.C.R. 1069. 540 shall  not,  after the 31st day of March, 1951,  be  imposed where  such  sale or purchase takes place in the  course  of inter-State trade or commerce except in so far as Parliament may by law otherwise provide. (2)  The  explanation  to clause (1) of Article 286  of  the Constitution  shall  apply for the  interpretation  of  sub- clause  (i) of clause (a) of sub-section (1). We are of  the view  that the Bengal Immunity decision (1) does not  really help   the  learned  Solicitor-General  to   establish   his contention  that the assessments for  the  post-Constitution period were valid.  The admitted position was that the goods sold  were  delivered  for  consumption  at  various  places outside  the State of Orissa.  Therefore, under cl. (1)  (a) of Art. 286 read with the Explanation as also under s. 30 of the Act, the sales were outside Orissa.  It is true that the Bengal Immunity decision (1) took a view different from that of  the  earlier decision in so far as it held  that  inter- State sales were converted into intra-State sales by the Ex- planation;  but it -was pointed out that the  States’  power with  respect to a sale or purchase might be hit by  one  or

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more of the bans imposed by Art. 286.  With reference to the different  clauses  of  Art. 286, it  was  observed  in  the majority judgment of the Bengal Immunity decision(1): " These several bans may overlap in some cases but in  their respective  scope  and  operation  they  are  separate   and independent.   They deal with different phases of a sale  or purchase  but, nevertheless, they are distinct and  one  has nothing  to  do with and is not dependent on  the  other  or others.   The  States’ legislative power with respect  to  a sale  or purchase may be, hit by one or more of these  bans. Thus,  take  the  case  of  a  sale  of  goods  declared  by Parliament  as  essential by a smaller in West Bengal  to  a purchaser in Bihar in which goods are actually delivered  as a direct result of such sale for consumption in the State-of Bihar.  A law made by West Bengal without the assent of  the President taxing this sale will be unconstitutional  because (1) it will offend Article 286 (1) (a) as the gale has taken place outside the territory by virtue of the (1)  [1935] 2 S.C.R. 603. 541 Explanation  to  clause  (1) (a), (2) it  will  also  offend Article 286 (2) as the sale has taken place in the course of inter-State  trade or commerce and (3)such law will also  be contrary  to  Article  286 (3) as the  goods  are  essential commodities  and the President’s assent to the law  was  not obtained  as  required by clause (3) of Article  286.   This appears  to  us to be the general scheme of  that  article." (see pp. 638-639 of the report). At p. 647 of the- report, it was further observed-- "  The operative provisions of the several parts of  Article 286, namely, clause (1) (a), clause (1) (b), clause (2)  and clause  (3) are manifestly intended to deal  with  different topics and, therefore, one cannot be projected or read  into another.   On  a careful and anxious  consideration  of  the matter  in  the light of the fresh  arguments  advanced  and discussions held oil the present occasion we are  definitely of the opinion that the Explanation in clause (1) (a) cannot be  legitimately  extended  to  clause  (2)  either  as   an exception  or as a proviso thereto or read as curtailing  or limiting the ambit of clause (2)." As to the President’s order, it was stated at p. 656: " It will be noticed that under that proviso the President’s order  was  to  take  effect  "  notwithstanding  that   the imposition of such tax is contrary to the provisions of this clause  ".  This  non obstante clause does  not,  in  terms, supersede clause (1) at all and, therefore, prima facie, the President’s  order was subject to the prohibition of  clause (1) (a) read with the Explanation.  " Obviously, therefore, even on the Bengal Immunity  decision. (1) the assessments for the post-Constitution period in this case  were hit by cl. (1) (a) of Art. 286 as also s. 30  (1) (a)  (i)  of  the Act and were rightly held  to  be  without jurisdiction. The  result,  therefore,  is that in our  view  this  appeal should succeed in part, as we hold that the assessments  for the -two quarters of the pre-Constitution period were  valid under sub-s. (2) of s. 4 of the Act and the (1)  [1955] 2 S.C.R. 603. 69 542 assessments  for the post-Constitution period were  invalid. In  view  of the divided success of the parties  we  further think  that  they should bear their own costs  in  the  High Court and in this Court. SARKAR  J.-The respondents are a firm of merchants  carrying

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on  business  in  a part of the State of  Orissa  which  was formerly  the feudatory State of Pallahara.  This  State  of Pallahara  had  merged in the Province of  Orissa  under  an agreement  with  the Government of India, dated  January  1, 1948.  On December 14, 1948, the Government of Orissa  under the  powers  conferred  by  s. 4  of  the  Extra  Provincial Jurisdiction  Act,  1947,  and with the  permission  of  the Government  of  India, issued a  Notification  applying  the Orissa  Sales Tax Act, 1947 (Orissa XIV of 1947), passed  by the  Legislature  of Orissa, to the areas  which  previously constituted  the feudatory States including Pallahara,  then merged  in Orissa.  The respondents were assessed  to  sales tax  under  this Act in respect of their  sales  which  took place during five quarters between July 1, 1949 and December 31, 1950.  They had appealed under the provisions of the Act to   higher   authorities  from  the  original   orders   of assessment, but were unsuccessful.  They then applied to the High  Court  of Orissa on November 11. 1952, for  an  appro- priate  writ directing the Sales Tax Officer  the  assessing authority and one of the appellants herein, to refrain  from realizing  the tax or from giving effect to  the  assessment orders in any manner whatsoever and quashing such orders and also   prohibiting  future  assessment.   By  its   judgment delivered  on  April 12, 1955, the High  Court  allowed  the petition  and  cancelled the assessment orders.   From  that judgment the present appeal has come to this Court. The  question that I propose to discuss in this judgment  is whether  the  respondents are liable to pay  tax  under  the provisions of the Act in the circumstances which existed  in this  case and to which, I shall refer a little later.   The sections  of  the Act under which the tax is  sought  to  be levied are set out below: S.1. (1) This Act may be called the Orissa Sales Tax Act, 1947. 543 (2) It extends to the whole of the Province of Orissa. (3)This  section shall come into force at once and the  rest of  this  Act  shall come into force on  such  date  as  the Provincial  Government may, by notification in the  Gazette, appoint. S.2.  In this Act, unless there is anything repugnant  in the subject or context,- (j)  " year " means the financial year. S.   4. (1) Subject to the provisions of sections 5, 6, 7 and 8 and with effect from such date as the  Provincial Government  may,  by notification in the  Gazette,  appoint, being  not  earlier than thirty days after the date  of  the said notification, every dealer whose gross turnover  during the year immediately preceding the commencement of this  Act exceeded Rs. 5,000 shall be liable to pay tax under the  Act on sales effected after the date so notified: Provided that the tax shall not be payable on sale  involved in  the  execution  of  a contract which  is  shown  to  the satisfaction  of the Collector to have been entered into  by the dealer concerned on or before the date so notified. (2)Every dealer to whom sub-section (1) does not apply shall be  liable  to pay tax under this Act with effect  from  the commencement  of the year immediately following that  during which his gross turnover first exceeded Rs. 5,000. (3)Every dealer who has become liable to pay tax under  this Act shall continue to be so liable until the expiry of three consecutive  years, during each of which his gross  turnover has failed to exceed Rs. 5,000 and such further period after the  date  of such expiry as may be prescribed  and  on  the expiry of this latter period his liability to pay tax  shall

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cease. (4)Every dealer whose liability to pay tax has ceased  under the  provisions of sub-section (3) shall again be liable  to pay tax under this Act with effect from the commencement  of the  year immediately following that during which his  gross turnover again exceeds Rs. 5,000. 544 It  is conceded that the respondents are dealers within  the meaning of the Act.  The term " turnover " is defined in the Act but for the purpose of this judgment it can be taken  in its  popular sense.  It is also unnecessary to consider  ss. 5, 6, 7 and 8 of the Act, for nothing turns on them in  this appeal. Section  I of the Act came into force in the Pallahara  area on December 14, 1948, by virtue of the notification of  that date  mentioned earlier.  Oil March 1, 1949, the  Government of  Orissa issued under s. 1 (3) of the Act a  notification, being  Notification No. 2267/F appointing that date  as  the date on which the, rest of the Act would come into force  in the  Pallahara  area.  It is not in dispute  that  March  1, 1949,  has to be considered as the date of the  commencement of the Act in the Pallahara area.  That is the result of the definition  of the commencement of an Act given in s. 2  (8) of the Orissa General Clauses Act, 1937.  As will have  been noticed s. 4 (1) of the Act required a date to be  appointed before liability under it could arise.  Such a date had been appointed  by  the Government of Orissa before the  Act  was applied  to the areas previously belonging to the  feudatory States  and the Government felt that this appointment  of  a date would not be an appointment for these areas.  The  case before  us has proceeded oil the basis that appointment  was not a proper appointment under this section for these areas. In  fact,  the Government of Orissa had oil March  1,  1949, issued  a Notification No. 2269/F, purporting to  appoint  a date under s. 4 (1) for the areas previously covered by  the feudatory States including the Pallahara State, then  merged in Orissa.  That Notification is in these terms: In  exercise of the powers conferred by sub-section  (1)  of Section 4 of the Orissa ,Sales Tax Act, 1947 (Orissa Act XIV of  1947),  as applied to Orissa States, the  Government  of Orissa are pleased to appoint the. 31st March, 1949, as  the date  with  effect  from  which  every  dealer  whose  gross turnover  during  the  year ending  the  31st  March,  1949, exceeded Rs. 5,000 shall be liable to pay tax under the said Act on sales effected after the said date. 601 might have retired from the contest on a re-appraisement  of his prospects at the election as compared with those of  the deceased  contesting  candidate.  When  death  removed  that contesting candidate from the field, a person who had  given notice  of retirement from the contest as aforesaid  may  as well re-consider his position and feel that as compared with the other surviving candidates he -would have fair prospects of success at the election and if an election is held  after the countermanding of the poll by the returning officer,  he might  just  as well put forward his candidature and  it  is provided  that in that event he shall not be ineligible  for being  nominated  as  a candidate for  election  after  such countermanding ; and there is perfectly good reason for  the same,  because  otherwise, withdrawal  or  retirement  might possibly be considered a disqualification or refusal to seek election. This  brings  us to the provisions as  to  retirement  front contest under s. 55A.  A candidate might not have  withdrawn his  candidature within the period prescribed and  his  name

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might   have  been  included  in  the  list  of   contesting candidates  published by the returning officer under s.  38. Being  thus a contesting candidate duly declared as such  he would be entitled to go to the poll.  He may, however, as  a result  of  the  election  campaign  find  himself  in   the predicament  that his prospects at the election  are  meagre and  he might even have to face the situation of  having  to forfeit his security deposit if he went to the poll.   There may be a number of motives operating in his mind which it is not  necessary to discuss and be may just as  well  withdraw his  candidature  and  retire  from  the  field.   A   locus poenitentiae  is  therefore  given to him under  s.  55A  to retire  from the contest by giving notice in the  prescribed form  which has to be delivered to the returning officer  on any  day not later than 10 days prior to the date fixed  for the poll.  If a candidate thus retires from the contest,  he decides  not to go to the poll and the provision is made  in the  rules  for  the correction of the  list  of  contesting candidates  so  that  no elector shall  in  the  absence  of necessary information waste his vote upon him.  A 602 copy  of  such  notice is to be  affixed  by  the  returning officer  to  his notice board and in  -the  polling  station "and  each  of the remaining, contesting candidates  or  his agent  is to be supplied with such copy and the  notice  has also got to be published in the official gazette. Such  retirement from contest might result in the number  of remaining contesting candidates becoming equal to the number of seats to be filled and s. 55A (6) and (7) work  out   the situation as it would then obtain with  reference to ss.  53 and 54 and provide that in that event the returning  officer is to forth with declare such candidates to be duly  elected to  fill  those  seats  and countermand  the  poll  a  fresh election  being necessary only in the event of  filling  the remaining seat or seats, if’ any. If, however, a poll has to be taken under s. 53(1) in  spite of  the retirement of a contesting candidate  or  candidates from contest is aforesaid the process of election  continues in spite of such retirement and the question any arise as to what  would happen if any of the contesting  candidates  who has  thus retired dies before the commencement of the  poll. If  there  was  nothing  more, s. 52  would  apply  and  the returning  officer upon being satisfied of the fact  of  the death  of the candidate Would have to countermand  the  poll and report the fact to the Election.  Commission and also to the  appropriate authority.  Provision is therefore made  in s.  55A  (5)  that  any person who has  given  a  notice  of retirement under s. 55A (2) is deemed not to be a contesting candidate  for  the purposes of s. 52.  This  is  a  deeming provision and creates a legal fiction.  The effect of such a legal  fiction  however is that a position  which  otherwise would   not   obtain  is  deemed  to  obtain   under   those circumstances.  Unless a contesting, candidate who had  thus retired  from  the  contest continued  to  be  a  contesting candidate for the purposes of election and the effect of the death of such contesting (Candidate was " contemplated in s. 52,  it would not have been found necessary to enact s.  55A (5).  It is because such a contesting, candidate who retires from the 603 contest  under  s.  55A (2) continues to  be  a.  contesting candidate  for  the purposes of election that  it  has  been considered  necessary to provide for the consequence of  his death  and to exclude such a candidate from the category  of contesting candidates within the meaning of the term as used

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in  s. 38 of’ the Act, that is to say, candidates  who  were included in the list of validly nominated candidates and who had  not  with  drawn their candidature  within  the  period prescribed  and  who  had  been included  in  the  list  of’ candidates prepared and published by the returning,  officer in   the  manner  prescribed.   This  provision,   therefore warrants  the conclusion that a contesting  candidate  whose name  was included in the list under s. 38 but  who  retires from  the  contest  under  s. 55A  (2)  continues  to  be  a contesting  candidate for the purpose of the Act  though  by reason  of such retirement it would be unnecessary  for  the constituency  to cast its votes in his favour at  the  poll. Such candidate continues to be contesting candidate for  the purposes of the Act, notwithstanding his retirement from the contest under s. 55A (2).  When  we  come  to the provisions of Part  VI  of  the  Act relating to disputes regarding election, we find that  there is  no  definition  given  in s.  79  of  the  expression  " contesting  candidate ", though there are definitions  of  " candidate " and " returned candidate " to be found  therein. An election petition calling in question any election can be presented  by any candidate at such election or any  elector on one, or more of the grounds specified in ss. 100 (1)  and 101 to the Election Commission and a petitioner in  addition to  calling  in  question  the  election  of  the   returned candidate,  or  candidates may further claim  a  declaration that  he  himself  or  any other  candidate  has  been  duly elected.    Where   the  petitioner  claims   such   further declaration, he must join as respondents to his petition all the contesting candidates other than the petitioner and also any other candidate against whom allegations of any  corrupt practices are made in the petition.  The words " other  than the petitioner " are meant to exclude the petitioner when he happens to be one of 604 the contesting candidates who has been defeated at the polls and would not apply where the petition is filed for instance by an elector.  An elector filing such a petition would have to  join  all  the contesting candidates  whose  names  were included  in the list of contesting candidates prepared  and published by the returning officer in the manner  prescribed under s. 38, that is to say, candidates who were included in the  list  of validly nominated candidates and who  had  not withdrawn  their candidature within the  period  prescribed. Such  contesting  candidates  will  have  to  be  joined  as respondents  to such petition irrespective of the fact  that one  or more of them had retired from the contest tinder  s. 55A  (2).  If the provisions of s. 82 which  prescribes  who shall  be  joined  as respondents to the  petition  are  not complied with, the Election Commission is enjoined under  s. 85  of the Act to dismiss the petition and similar  are  the consequences of noncompliance with the provisions of s.  117 relating  to deposit of security of costs.  If the  Election Commission however does not do so and accepts the  petition, it  has to cause a copy of the petition to be  published  in the official gazette and a copy thereof to be served by post on each of the respondents and then refer the petition to an election  tribunal  for  trial.  Section  90  (3)  similarly enjoins  the  Election  Tribunal  to  dismiss  an   election petition which does not comply with the provisions of s.  82 or s. 117 notwithstanding that it has not been dismissed  by the  Election  Commission under s. 85.  Section  90  (3)  is mandatory and the Election Tribunal is bound to dismiss such a  petition  if  an application is made before  it  for  the purpose.

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Turning  now  to  s. 117, we find that  it  is  a  provision relating  to  the deposit of security for the costs  of  the petition.   When a petitioner presents an election  petition to the Election Commission under s. 81 he is to enclose with the  petition a Government Treasury receipt showing  that  a deposit  of one thousand rupees has been made by him  either in a Government Treasury or in the Reserve Bank of India  in favour  of  the  Secretary to  the  Election  Commission  as security 605 for  the  costs of the petition.   The  Government  Treasury receipt  must show that such deposit has been actually  made by  him  either in a Government Treasury or in  the  Reserve Bank of India; it must also show that it has been so made in favour  of the Secretary to the Election Commission  and  it must further show that it has been made as security for  the costs of the petition.  These are the three requirements  of the  section  which  have to be  fulfilled.   The  question, however,  arises  whether  the  words "  in  favour  of  the Secretary  to  the Election Commission "  are  mandatory  in character so that if the deposit has not been made in favour of  the  Secretary  to the Election  Commission  as  therein specified  the  deposit  even though made  in  a  Government Treasury or in the Reserve Bank of India and as security for the costs of the petition would be invalid and of no  avail. If, for instance, the petitioner made the deposit either  in a  Government  Treasury or in the Reserve Bank of  India  in favour  of  the Election Commission itself  and  obtained  a Government Treasury receipt in regard to the same, could  it be  contended  that in spite of such a deposit  having  been made,  the  said  Government Treasury  receipt  was  not  in conformity   with  the  requirements  of  s.  117  and   the petitioner  could  be  said not to have  complied  with  the requirements  of that section so as -to involve a  dismissal of his petition under s. 85 or s. 90 (3) ? The extreme case illustrated above has been taken by us only in order to demonstrate to what lengths a literal compliance with  the provisions of s. 117 can be pushed.  The  petition is to be presented to the Election Commission, the  security for  the  costs  of  the petition has to  be  given  to  the Election  Commission and s. 121 provides for an  application to be made in writing to the Election Commission for payment of  costs by the person in whose favour the costs have  been awarded and yet, even though the deposit may have been  made by  a petitioner in favour of the Election Commission and  a Government Treasury receipt evidencing the same be  enclosed along with his 77 606 petition the provisions of s. 117 of the Act can be said not to  have been complied with merely because the  deposit  was made in favour of the Election Commission and not in  favour of   the   Secretary  to  the  Election   Commission.    The relationship between the Election Commission on the one hand and  the Secretary to the Election Commission on  the  other need not be scrutinized for the purposes of negativing  this contention.  It is enough to say that such a contention  has only got to be stated in order to be negatived.  It would be absurd to imagine that a deposit made either in a Government Treasury  or in the Reserve Bank of India in favour  of  the Election   Commission   itself  would  not   be   sufficient compliance with the provisions of s. 117 and would involve a dismissal  of  the petition under s. 85 or s. 90  (3).   The above  illustration  is sufficient to demonstrate  that  the words  "  in  favour  of  the  Secretary  to  the   Election

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Commission " used in s. 117 are directory and not  mandatory in their character.  What is of the essence of the provision contained  in s. 11.7 is that the petitioner should  furnish security  for the costs of the petition, and should  enclose along  with  the  petition a  (Government  Treasury  receipt showing that a deposit of one thousand rupees has been  made by  him  either in a Government Treasury or in  the  Reserve Bank of India, is at the disposal of the Election Commission to be utilised by it in the manner authorised by law and  is under its control and payable on a proper application  being made  in  that behalf to the Election Commission or  to  any person duly authorised by it to receive the same, be he  the Secretary to the Election commission or any one else. If,  therefore  it can be shown by evidence led  before  the Election  Tribunal that the government Treasury  receipt  or the chalan which was obtained by the petitioner and enclosed by  him  along with his petition presented to  the  Election Commission was such that the Election Commission could on  a necessary  application  in that behalf be in a  position  to realise  the said sum of rupees one thousand for payment  of the  costs  to the successful party it would  be  sufficient compliance                             607 with the requirements of s. 117.  No such literal compliance with  the  terms  of  s. 117 is  at,  all  necessary  as  is contended for on behalf of the appellant before us. As  regards  the  amendment of a petition  by  deleting  the averments  and  the prayer regarding  the  declaration  that either  the petitioner or an other candidate has been.  duly elected,  so  as  to cure lie defect of  nonjoinder  of  the necessary  parties as respondents, we may only refer to  our judgment  * about Io be delivered in Civil Appeal No. 76  of 1958,  where  the  question  is  discussed  at  considerable length.   Suffice it to say here that the Election  Tribunal has  no  power to grant such an amendment, be it by  way  of withdrawal  or  abandonment  of  a  part  of  the  claim  or otherwise, once, an Election Petition has been presented  to the Election (commission claiming such further declaration. Considering Civil Appeal No. 763 of 1957 in the light of the observations  made  above, we find that  sundararaja  Pillai whose name was included in the list of contesting candidates prepared and published by the returning officer under s.  38 but who retired from the contest under s. 55A (2) before the commencement  of the poll was included in the  expression  " contesting  candidate " used in s. 82 and was by  reason  of the first respondent claiming a further declaration that the second  respondent had been duly elected, a necessary  party to  the  petition.   Inasmuch  as he was  not  joined  as  a respondent, the petition was liable to be dismissed under s. 90(3) of the Act. This  defect  could  not be cured by any  amendment  of  the petition  seeking  to  delete the  claim  for  such  further declaration  and the Election Tribunal was clearly in  error in allowing such amendment on the grounds disclosed in 1. A. No. 3 of 1957 or otherwise. In regard to the deposit of security, however, the  position was quite different.  According to the evidence given by  K. Nataraja Mudaliar, head accountant in. charge of the Madurai Taluk  sub-Treasury,  the amount was kept  in  the  Election Revenue  deposit and the monies were at the disposal of  the Election  Commission ; also that the Election Commission  or anyone  * Basappa v. Ayyappa, see p. 6ii, post. 608 authorised  by the Election Commission in that behalf  could

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draw the said monies and no one else could withdraw the same without   such  authority.   If  that  was  so,  there   was sufficient  compliance with the requirements of s.  117  and there  could be no question of dismissing the  petition  for noncompliance with the provisions of that section. Having  regard therefore to the conclusion reached above  in regard  to the non-compliance with the provisions of s.  82, Civil Appeal No. 763 of 1957 will be allowed, the orders  of dismissal made by the High Court on the writ petitions  Nos. 531  of 1957 and 532 of 1957 will be set aside,  the  orders passed by the Election Tribunal dated July 5, 1957, will  be vacated  and the Election Petition No. 147 of 1957  will  be dismissed  with costs.  As the appellant has failed  in  his contention  in regard to the provisions of s. 117,  we  feel that the proper order for costs should be that each party do bear  and  pay  his own costs here as well as  in  the  High Court. Civil  Appeal  No. 764 of 1957 also shares a  similar  fate. The   first  respondent  therein  did  not  join  as   party respondents  to his petition the two candidates whose  names had  been included by the returning officer in the  list  of contesting candidates but who had subsequently retired  from the contest before the commencement of the poll.  They  were necessary  parties  to the petition in so far as  the  first respondent had claimed a further declaration that he himself be  declared  duly  elected  under  s.  101.   The  Election Petition No. 74 of 1957 filed by him, was thus liable to  be dismissed  for  non-joinder of necessary  parties  under  s. 90(3) of the Act. This appeal will also be accordingly allowed, the orders  passed by the High Court in Writ Petitions Nos.  573 and 574 of 1957 will be set aside, the orders passed by  the Election  Tribunal  on  July 13,1957, will  be  vacated  and Election  Petition No. 74 of 1957 will be,  dismissed.   The first respondent will pay the appellants costs throughout. So  far  as Civil Appeal No. 48 of 1958  is  concerned,  the difficulty which faces the appellant is that we                              609 have  nothing on the record of the appeal to show what  were the exact terms of the deposit made by the second respondent under  s. If 7. The copy of the chalan which is  cyclostyled at p. 45 of the record is deficient in material  particulars and does not throw any light on the question.  The appellant no  doubt made an application to the Election.  Tribunal  to try  his  objection as regards the non-compliance  with  the provision,-, of that section as a preliminary objection  and determine  whether the second respondent had  complied  with the provisions of s. 117 and if not to dismiss his petition. The   Election  Tribunal,  however,  did  not  decide   this preliminary  objection  but ordered that the  trial  of  the petition  (lo proceed.  The High Court before whom the  Writ Petition  M. J. No. 480 of 1957 was filed also came  to  the same  conclusion  as  it thought that the  matter  could  be decided  at  the time of hearing itself  and  dismissed  the application. We  are of opinion that both the Election Tribunal  and  the High  Court  were  wrong  in the view  they  took.   If  the preliminary  objection  was not entertained and  a  decision reached thereupon, further proceedings taken in the Election Petition   would  mean  a  full  fledged   trial   involving examination of a large number of witnesses on behalf of  the and  respondent  in support of the numerous  allegations  of corrupt  practices attributed by him to the  appellant.  his agents  or  others working on his behalf; examination  of  a large  member of witnesses by or on behalf of the  appellant

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controverting the allegations made against him;  examination of  witnesses in support of’ the recrimination submitted  by the appellant against the 2nd respondent; and a large number of  visits by the appellant from distant places  like  Delhi and  Bombay to Ranchi resulting in not only  heavy  expenses and  loss  of time and diversion of the appellant  from  his public  duty  in the various fields of’  activity  including those in the House of the People.  It would mean unnecessary harassment  and  expenses  for  the  appellant  which  could certainly  be avoided if the preliminary objection urged  by him  was  decided  at  the initial  stage  by  the  Election Tribunal, 610 We  are therefore of the opinion that the orders  passed  by the  High  Court  in M. J. C. No. 480 of  1957  and  by  the Election Tribunal in Election Petition No. 341 of 1957  were wrong and ought to be set aside.  The Election Tribunal will decide  the  preliminary  objection in regard  to  the  non- compliance  with  the  provisions  of  s.  117  by  the  2nd respondent  in the light of the observations made above  and deal with the same according to law.  The parties will be at liberty  to lead such further evidence before  the  Election Tribunal  as  they may be advised.  The costs  of  both  the parties, here, as well as in the courts below will be  costs in  the Election Petition to be dealt with by  the  Election Tribunal hereafter and will abide the result of its decision on the preliminary objection.                      Appeal,s allowed.               Appeal No. 48 of 1958 remanded. 611