Das, J. - (1.) These two appeals arise out of W. P. Nos. 21 and 41 of 1952 filed in the High Court of Judicature at Madras under Article 226 questioning the validity of the Madras General Sales Tax Act (IX of 1939) and of the Turnover and Assessment Rules framed under that Act.
(2.) The petitioners are tanners carrying on business in Eluru, West Godawari District, which is now part of the newly created State of Andhra. They make large purchases of untanned hides and skins and after tanning them in their tanneries they export the tanned hides and skins or sell the same to local purchaseers. In the High Court the appellants impugned the Act and the Rules on the following grounds: (a) the Provincial Legislatures had no power under the Government of India Act of 1935 to enact a law imposing a tax on purchasers; (b) The liability to pay tax on sales is thrown on the purchaser not by the statute but by the rules. This is an unconstitutional delegation by the legislature of its functions to the executive and the imposing of the tax is accordingly illegal; (c) The Act has become void under Article 14 of the Constitution, as it singles out for taxation purchasers in some trades and is, therefore discriminatory; and (d) The rules framed under the Act are inconsistent with the provisions enacted in the body of the Act and are void. The High Court repelled each of the aforesaid grounds except that under item (d) it held that Rule (16(5) was 'ultra vires' in that it offended against S. 5 (vi) of the Act and dismissed their applications. Hence the present appeals by the appellants under the certificate granted by the High Court that it was a fit case for appeal to this Court.
(3.) Learned Advocate appearing in support of those appeals has not pressed the objection under item (b) but has insisted on the remaining grounds of objection. In our opinion, the decisions of the High Court on those grounds are substantially well-founded and correct. On the question of legislative competency, the learned Advocate drew our attention to entry 54 in List II of the seventh Schedule to the Constitution of India and argued that this entry clearly indicates that entry 48 in List II of the Seventh Schedule to the Government of India Act, 1935, under which the impugned Act was passed was much narrower in its scope and could not be read as authorising the making of a law with respect to taxes on the purchase of goods. This argument appears to us to be fallacious, for the intention of the Constituent Assembly as expressed in entry 54 in List II of the Seventh Schedule to the Constitution cannot be a guide for ascertaining the intention of a totally different body namely the British Parliament, in enacting entry 48 in List II of the Seventh Schedule to the Government of India Act, 1935. Further, we agree with the High Court that entry 48 in list II of the Seventh Schedule to the Government of India Act, on a proper construction, was wide enough to cover a law imposing tax on the purchaser of goods as well and that the Constituent Assembly in entry 54 of List II in the Seventh Schedule to the Constitution accepted this liberal construction of the corresponding entry 48 and expressed in clearer language what was implicit in that corresponding entry.;