MATHRA PARSHAD AND SONS Vs. STATE OF PUNJAB
LAWS(SC)-1961-12-26
SUPREME COURT OF INDIA (FROM: PUNJAB & HARYANA)
Decided on
December 05,1961
MATHRA PARSHAD AND SONS
Appellant
VERSUS
STATE OF PUNJAB
Respondents
Cited Judgements :-
BROOKE BOND INDIA LTD. VS. STATE OF WEST BENGAL [LAWS(CAL)-1990-3-61] [REFERRED TO]KAPOOR VS. KOLKATA MUNICIPAL CORPORATION [LAWS(CAL)-2004-3-52] [REFERRED TO]
BHAGAWAT SONKER VS. UNION OF INDIA [LAWS(CHH)-2022-4-82] [REFERRED TO]
STATE OF KARNATAKA VS. HOTEL MADHUVAN INTERNATIONAL PRIVATE LTD [LAWS(KAR)-2008-12-16] [REFERRED TO]
KASHMIR SPICES VS. STATE OF J&K [LAWS(J&K)-1999-8-21] [REFERRED TO]
K L JOHAR AND CO VS. STATE OF KERALA [LAWS(KER)-1974-3-17] [REFERRED TO]
J K SYNTHETICS VS. MUNICIPAL COUNCIL KOTA [LAWS(RAJ)-1988-3-23] [REFERRED TO]
GRAM PANCHAYAT VS. DEPUTY COMMISSIONER [LAWS(P&H)-2013-5-244] [REFERRED TO]
BIBI AMNA KHATUN VS. ZAHIR HUSSAIN [LAWS(PAT)-1979-9-1] [REFERRED TO]
STATE OF PUNJAB VS. SANT SINGH KANWARJIT SINGH [LAWS(SC)-1969-12-1] [DISTINGUISHED]
ALL INDIA COUNCIL FOR TECHNICAL EDUCATION VS. SHRI PRINCE SHIVAJI MARATHA BOARDING HOUSES COLLEGE OF ARCHITECTURE [LAWS(SC)-2019-11-53] [REFERRED TO]
STATE OF PUNJAB VS. AMRIT BANASPATI CO LTD [LAWS(P&H)-1977-1-2] [REFERRED TO]
NADIPPISAI PULAVAR VS. UNION OF INDIA [LAWS(MAD)-2010-6-275] [REFERRED TO]
RAM KRISHNA KULWANT RAI VS. UNION OF INDIA [LAWS(CAL)-1968-4-4] [REFERRED TO]
TIKENDRA SINGH AND OTHERS VS. MANAGING DIRECTOR, MECOFED AND OTHERS [LAWS(MEGH)-2013-7-7] [REFERRED TO]
NAMITA PATNAIK ALIAS MOHANTY VS. DILLIP KUMAR PATTNAIK [LAWS(ORI)-2001-9-14] [REFERRED TO]
DELHI RACE CLUB LTD VS. GOVERNMENT OF NCT OF DELHI AND ORS [LAWS(DLH)-2012-2-674] [REFERRED]
KASHMIR HOUSE VS. DEPUTY COMMISSIONER OF COMMERCIAL TAXES HYDERABAD [LAWS(APH)-1970-4-14] [REFERRED TO]
BHARAT WOOD PRODUCTS CO VS. COMMISSIONER OF SALES TAX NEW DELHI [LAWS(DLH)-1986-3-6] [REFERRED TO]
M RAMANARASIAH VS. GOVERNMENT OF ANDHRA PRADESH [LAWS(APH)-1971-8-24] [REFERRED TO]
State of West Bengal VS. D B Enterprise [LAWS(CAL)-2003-8-8] [REFERRED TO]
Fosroc Chemicals (India) Private Limited VS. State of Karnataka [LAWS(KAR)-2008-6-103] [REFERRED TO]
STATE OF TAMIL NADU VS. N S RAJA AND COMPANY [LAWS(MAD)-1990-10-46] [REFERRED TO]
MATIRAM MIKIR VS. ASSAM BOARD OF REVENUE [LAWS(GAU)-2004-5-2] [REFERRED TO]
THE MANAGING DIRECTOR, MECOFED VS. TIKENDER SINGH AND ORS. [LAWS(MEGH)-2015-6-38] [REFERRED TO]
SILICAL METALLURGIC LTD VS. STATE OF KERALA [LAWS(KER)-2003-8-13] [REFERRED TO]
OM PARKASH RAJINDER KUMAR VS. K K OPAL [LAWS(P&H)-1966-10-4] [REFERRED TO]
D C JAIN VS. UNIVERSITY OF JODHPUR [LAWS(RAJ)-1976-11-24] [REFERRED TO]
KESAR SINGH AND ANOTHER VS. STATE OF PUNJAB THROUGH ITS DIRECTOR, RURAL DEVELOPMENT AND PANCHAYATS, PUNJAB AND ANOTHER [LAWS(P&H)-2012-7-579] [REFERRED TO]
RAJPUR FARMS LTD VS. COMMISSIONER OF COMMERCIAL TAXES BIHAR PATNA [LAWS(PAT)-1971-9-3] [REFERRED TO]
MANISH JALAN VS. COMMERCIAL TAX OFFICER, CENTRAL SECTION AND ORS. [LAWS(STT)-2000-2-2] [REFERRED TO]
UNION OF INDIA VS. SUNDER LAL [LAWS(CHH)-2022-4-5] [REFERRED TO]
NOLA JONATHAN RANBHISE VS. UNION OF INDIA [LAWS(BOM)-2014-2-49] [REFERRED TO]
ANCHAL SHARMA AND OTHERS VS. STATE OF H.P. AND OTHERS [LAWS(HPH)-2012-6-238] [REFERRED TO]
KARNATAKA STATE CINE JUNIOR ARTISTS ASSOCIATION VS. STATE OF KARNATAKA [LAWS(KAR)-1989-8-6] [REFERRED TO]
BELLAD AUTOMOBILE ENGINEERS VS. K A T [LAWS(KAR)-1998-1-51] [REFERRED TO]
BAL KRISHNA TIWARI VS. REGISTRAR OF AWADHESH PRATAP SINGH UNIVERSITY REWA AND [LAWS(MPH)-1977-12-5] [REFERRED TO]
SHREE DURGA OIL MILLS VS. SALES TAX OFFICER [LAWS(ORI)-1987-9-2] [REFERRED TO]
LINGARAJ PIPES PVT. LTD VS. SALES TAX OFFICER [LAWS(ORI)-2006-12-54] [REFERRED TO]
LAXMI NARAYAN AGARWALLA VS. STATE OF ORISSA [LAWS(ORI)-1983-3-5] [REFERRED TO]
SIALKOT TRADING COMPANY VS. ASSISTANT COMMISSIONER OF SALES TAX [LAWS(DLH)-1979-11-18] [REFERRED TO]
MAHESHWARI DEVI JUTE MILLS VS. STATE OF UTTAR PRADESH [LAWS(ALL)-1965-7-1] [REFERRED TO]
ASOKA OIL MILLS VS. SALES TAX OFFICER IRINJALAKUDA [LAWS(KER)-1984-4-18] [REFERRED TO]
KRISHOK BONUWA KRISHIPAM SAMABAI SAMITY LTD VS. MARANGI LTD [LAWS(GAU)-2012-9-73] [REFERRED TO]
MANSA RAM SUSHIL KUMAR VS. ASSESSING AUTHORITY [LAWS(P&H)-1964-5-5] [REFERRED TO]
NATHMAL TARACHAND VS. COMMISSIONER OF SALES TAX [LAWS(RAJ)-1962-8-1] [REFERRED TO]
KULDEEP SAINI VS. UOI [LAWS(DLH)-2011-2-65] [REFERRED TO]
SUNIL KUMAR ROY VS. ASSISTANT SUPERINTENDENT, COMMERCIAL TAXES [LAWS(CAL)-1969-6-42] [REFERRED TO]
COMMISSIONER OF SALES TAX VS. NEW GREAT EASTERN SPINNING AND WEAVING COMPANY LIMITED [LAWS(BOM)-1975-11-10] [REFERRED TO]
WELL WORTH PLASTICS AND CHEMICALS VS. STATE OF KERALA [LAWS(KER)-1984-4-12] [REFERRED TO]
ASSOCIATED CEMENT COMPANIES LIMITED VS. STATE OF KARNATAKA [LAWS(KAR)-2005-11-1] [REFERRED TO]
NEELAMBAL VS. MOHANARAMA CHETTIAR [LAWS(MAD)-1980-1-14] [REFERRED TO]
SILICAL METALLURGIC LIMITED VS. STATE OF KERALA [LAWS(KER)-1998-11-36] [REFERRED TO]
JASWANT KAUR VS. STATE OF HARYANA [LAWS(P&H)-1977-3-1] [REFERRED TO]
ATUL AUTO LTD VS. STATE OF GUJARAT [LAWS(GJH)-2015-11-129] [REFERRED]
COMMISSIONER OF SALES TAX VS. COOPER AND CO [LAWS(BOM)-1968-2-2] [REFERRED TO]
JAI HIND PRINTING PRESS VS. STATE OF GUJARAT [LAWS(GJH)-1982-10-3] [REFERRED TO]
CHACKO CHACKO KAITHAKUTTU VEEDU VS. BOARD OF REVENUE STATE OF KERALA [LAWS(KER)-1964-7-48] [REFERRED TO]
MADHULIKA SRIVASTAVA VS. UNION OF INDIA [LAWS(DLH)-2009-8-254] [REFERRED TO]
COMMERCIAL TAX OFFICER CENTRAL SECTION WEST BENGAL VS. B C NAWN AND BROS PRIVATE LTD [LAWS(CAL)-1972-1-20] [REFERRED TO]
SUDALAIMUTHU CHETTIAR S N VS. CONTROLLER OF ESTATE DUTY ASST [LAWS(MAD)-1972-12-7] [REFERRED TO]
DHRANGADHRA CHEMICAL WORKS LIMITED VS. STATE OF GUJARAT [LAWS(SC)-1972-9-24] [RELIED ON]
ASHOK KUMAR MAHESHWARI VS. STATE OF UTTAR PRADESH [LAWS(SC)-1998-1-93] [FOLLOWED]
MEGHA SINGH AND CO VS. STATE OF PUNJAB [LAWS(P&H)-1977-3-2] [REFERRED TO]
SUN PAPER MILLS LIMITED VS. UNION OF INDIA [LAWS(MAD)-1990-8-41] [REFERRED TO]
OM SHIV SHAKTI CEMENT PVT LTD VS. STATE OF RAJASTHAN [LAWS(RAJ)-1988-9-65] [REFERRED TO]
KENDRIYA NAGRIK SAMITI KANPUR VS. JAL SANSTHAN KANPUR [LAWS(ALL)-1982-5-27] [REFERRED TO]
JUDGEMENT
Hidayatullah, J. -
(1.)(Majority Judgment:B. P. Sinha, C. J., Hidayatullah, Shah And Mudholkar, JJ.) -The appellants are a firm of general merchants, which sells, among other goods, manufactured tobacco as defined in the Punjab Tobacco Vend Fees Act, 1954 (12 of 1954), which came into force in the State of Punjab from April 1, 1954. The firm is also a registered dealer under S. 7 of the East Punjab General Sales Tax Act, 1948, and till the end of March, 1954, was paying sales tax on manufactured tobacco also. Indeed, the firm paid sales-tax on manufactured tobacco, also for the next quarter ending on June 30, 1954, but did not pay in the succeeding quarter in view of certain events, to which a detailed reference will be made presently. On September 27, 1954, the State Government issued a Notification (No. 4556-E and T (Ch) -54/957) by which the schedule of exemptions under S. 6 of the Sales Tax Act, was amended by the inclusion of item 51, which reads as follows:
Item 51 "Manufactured tobacco as defined in the Punjab Tobacco Vend Fees Act, 1954."
This Notification was preceded by a Notification of May, 7, 1954 (No. 427-E and T (Ch)54/369), by which the State Government had given notice, as required by law, of its intention to add the said item in the schedule of exemptions. In June, 1954, the State Government issued a Press Note by which it was intended to convey to the dealers that though the Tobacco Vend Fees Act had come into force from April 1, 1954, it was not intended to levy both the sales tax as well as the fee for any period. The Press Note reads as follows:
"There is some misapprehension in the minds of dealers in manufactured tobacco as to whether sales tax is also chargeable in respect of manufactured tobacco after the 1st April, 1954, in addition to the license fees under the Tobacco Vend Fees Act. Government would like to make it clear that although the Tobacco Vend Fees Act has come into force with effect from 1st April, 1954, no license fees for dealers have yet been prescribed under the Act. Therefore, the levy of sales tax continues till the Vend Fee licences come into operation. It is to be clearly understood that the Vend Fee will be proportionately reduced for the current financial year to adjust the period for which sales tax will have been charged. Manufactured tobacco will be exempted from sales tax simultaneously with the enforcement of the Vend Fees."
(2.)On August 2, 1954, the State Government issued another Press Note, in which the decision was altered. The Press Note said:
"Government recently announced through a press note that the levy of Sales Tax on manufactured tobacco would be continued till the Vend Fee Licences came into operation and that the Vend Fee would be proportionately reduced for the current financial year in respect of the period for which Sales Tax would have been charged. In order to avoid double taxation, Government have since reconsidered the matter and have, in supersession of the previous decision, decided that the Sales Tax, if any, recovered from the dealers would be refunded and that no Sales Tax would be charged during the current financial year in respect of sales of tobacco which fall under the Tobacco Vend Fees Act. Tobacco Vend Fees will be recovered at full rates for the whole year as and when rules under the Punjab Tobacco Vend Fees Act are finalised."
It appears that the Rules under the Tobacco Vend Fees Act were not promulgated; nor were the forms and licences prescribed during the financial year ending on March 31, 1955. In the meantime, the appellants, as already stated, paid sales tax on sale of manufactured tobacco for the first quarter ending June 30, 1954, and the Notification exempting manufactured tobacco from sales tax was issued on September 27,1954. The appellants had made enquiries from the Excise and Taxation Commissioner, Purjab, about the Press Note of August 2, 1954, and had been assured that the Notification as printed in the Newspapers was accurate, and that Government intended implementing the Press Note.
(3.)On January 23, 1956, the appellants received a notice from the Excise and Taxation Officer, Rohtak, calling upon them to produce their account books. The appellants as well as other dealers of manufactured tobacco similarly affected, made representations on the basis of the Press Note of August 2, 1954, but without success. The appellants then filed on February 8, 1956, a petition under Art. 226 of the Constitution for substantially three reliefs. They were: (a) a declaration that the levy of sales tax on manufactured tobacco up to September 26, 1954, was illegal; (b) refund of the sales tax paid by it for the quarter ending June 30, 1954; and; (c) an order in the nature of a Writ of Prohibition against the proposed levy of sales tax till September 26, 1954. It remains to mention that the sales tax authorities were acting in conformity with a Press Note issued in August, 1955, by which the State Government went back upon the policy declared in August, 1954 and reaffirmed the policy stated in the Press Note of June, 1954. The following extract from the Press Note of August, 1955, may be read here:
"2. In conformity with the press note issued in June, 1954, and in view of the facts explained above, Government have now decided that sales tax on tobacco shall be levied for the year 1954-55 before the 27th September, 1954, only, the date on which tobacco was included in the schedule of exemptions appended to the General Sales Tax Act. This amounts to a handsome concession to the dealers and Government expect that, in return, every co-operation shall be shown by the dealers to the assessing authorities in the matter of the assessment of the tax."
The petition under Art. 226 was heard by a learned Single Judge of the Punjab High Court, who held that the orders of Government were entirely in accordance with law, that the East Punjab Sales Tax Act in so far as it related to the sale of manufactured tobacco was not repealed by the Tobacco Vend Fees Act and that sales tax on manufactured tobacco was payable from April 1, 1954, to September 26, 1954, in view of the fact that the exemption was made on September 27, 1954, and would operate from the latter date. Against the decision of the learned Judge dismissing the writ petition, an appeal under Letters Patent was filed. The Divisional Bench which heard the appeal, agreed with the Judgment appealed from, and dismissed the appeal. A certificate was, however, granted to the appellants, and the present appeal has been filed.
Item 51 "Manufactured tobacco as defined in the Punjab Tobacco Vend Fees Act, 1954."
This Notification was preceded by a Notification of May, 7, 1954 (No. 427-E and T (Ch)54/369), by which the State Government had given notice, as required by law, of its intention to add the said item in the schedule of exemptions. In June, 1954, the State Government issued a Press Note by which it was intended to convey to the dealers that though the Tobacco Vend Fees Act had come into force from April 1, 1954, it was not intended to levy both the sales tax as well as the fee for any period. The Press Note reads as follows:
"There is some misapprehension in the minds of dealers in manufactured tobacco as to whether sales tax is also chargeable in respect of manufactured tobacco after the 1st April, 1954, in addition to the license fees under the Tobacco Vend Fees Act. Government would like to make it clear that although the Tobacco Vend Fees Act has come into force with effect from 1st April, 1954, no license fees for dealers have yet been prescribed under the Act. Therefore, the levy of sales tax continues till the Vend Fee licences come into operation. It is to be clearly understood that the Vend Fee will be proportionately reduced for the current financial year to adjust the period for which sales tax will have been charged. Manufactured tobacco will be exempted from sales tax simultaneously with the enforcement of the Vend Fees."
(2.)On August 2, 1954, the State Government issued another Press Note, in which the decision was altered. The Press Note said:
"Government recently announced through a press note that the levy of Sales Tax on manufactured tobacco would be continued till the Vend Fee Licences came into operation and that the Vend Fee would be proportionately reduced for the current financial year in respect of the period for which Sales Tax would have been charged. In order to avoid double taxation, Government have since reconsidered the matter and have, in supersession of the previous decision, decided that the Sales Tax, if any, recovered from the dealers would be refunded and that no Sales Tax would be charged during the current financial year in respect of sales of tobacco which fall under the Tobacco Vend Fees Act. Tobacco Vend Fees will be recovered at full rates for the whole year as and when rules under the Punjab Tobacco Vend Fees Act are finalised."
It appears that the Rules under the Tobacco Vend Fees Act were not promulgated; nor were the forms and licences prescribed during the financial year ending on March 31, 1955. In the meantime, the appellants, as already stated, paid sales tax on sale of manufactured tobacco for the first quarter ending June 30, 1954, and the Notification exempting manufactured tobacco from sales tax was issued on September 27,1954. The appellants had made enquiries from the Excise and Taxation Commissioner, Purjab, about the Press Note of August 2, 1954, and had been assured that the Notification as printed in the Newspapers was accurate, and that Government intended implementing the Press Note.
(3.)On January 23, 1956, the appellants received a notice from the Excise and Taxation Officer, Rohtak, calling upon them to produce their account books. The appellants as well as other dealers of manufactured tobacco similarly affected, made representations on the basis of the Press Note of August 2, 1954, but without success. The appellants then filed on February 8, 1956, a petition under Art. 226 of the Constitution for substantially three reliefs. They were: (a) a declaration that the levy of sales tax on manufactured tobacco up to September 26, 1954, was illegal; (b) refund of the sales tax paid by it for the quarter ending June 30, 1954; and; (c) an order in the nature of a Writ of Prohibition against the proposed levy of sales tax till September 26, 1954. It remains to mention that the sales tax authorities were acting in conformity with a Press Note issued in August, 1955, by which the State Government went back upon the policy declared in August, 1954 and reaffirmed the policy stated in the Press Note of June, 1954. The following extract from the Press Note of August, 1955, may be read here:
"2. In conformity with the press note issued in June, 1954, and in view of the facts explained above, Government have now decided that sales tax on tobacco shall be levied for the year 1954-55 before the 27th September, 1954, only, the date on which tobacco was included in the schedule of exemptions appended to the General Sales Tax Act. This amounts to a handsome concession to the dealers and Government expect that, in return, every co-operation shall be shown by the dealers to the assessing authorities in the matter of the assessment of the tax."
The petition under Art. 226 was heard by a learned Single Judge of the Punjab High Court, who held that the orders of Government were entirely in accordance with law, that the East Punjab Sales Tax Act in so far as it related to the sale of manufactured tobacco was not repealed by the Tobacco Vend Fees Act and that sales tax on manufactured tobacco was payable from April 1, 1954, to September 26, 1954, in view of the fact that the exemption was made on September 27, 1954, and would operate from the latter date. Against the decision of the learned Judge dismissing the writ petition, an appeal under Letters Patent was filed. The Divisional Bench which heard the appeal, agreed with the Judgment appealed from, and dismissed the appeal. A certificate was, however, granted to the appellants, and the present appeal has been filed.
Copyright © Regent Computronics Pvt.Ltd.