DAS GUPTA, J.: - (1.) THE following Judgment of the court was delivered by
(2.) THESE 31 appeals by the State of Madhya Pradesh are against the orders made by the High court' of Madhya Pradesh in 31 applications under Art. 226 of the Constitution by dealers in tobacco. All these petitioners carried on business in Madhya Bharat which later became part of the State of Madhya Pradesh. They were assessed to sales tax on their sales of tobacco in accordance with the notification issued by the State government in exercise of powers under s. 5 of the State Sales Tax Act and large amounts were collected by the Madhya Bharat government and later by the Madhya Pradesh government. The petitioners contended that the taxing provisions under which the tax was assessed and collected from them was unconstitutional as it infringed Art. 301 of the Constitution and did not come within the special provision of Art. 304(a). Accordingly, they prayed for appropriate writs or orders for refund of all the taxes that has been collected from them. In resisting these applications the Madhya Pradesh government contended, first, that the Wing provisions did not offend Art. 301 of the Constitution and that in any case, they satisfied the requirements of Art. 304(a). It was further contended that even if the taxing provision was unconstitutional and the assessment and collection of tax had been without any legal authority the petitioners were not entitled to the order for refund prayed for. The High court was of opinion on a consideration of; the notification under which the tax was assessed that it imposed a tax only on imported tobacco and not on home grown tobacco and so it did not come within the special provisions of Art. 304(a) of the Constitution and consequently the infringement of Art. 301 of the Constitution which resulted from the imposition of a tax on import of goods made the provisions void in law. The prayer for refund was allowed in the applications out of which C.A. Nos. 362-377, C.A. Nos. 861--867 of 1962 and C.A. No. 25 of 1963 have arisen. The prayer was rejected in the remaining applications. In the present appeals the State of Madhya Pradesh challenges the correctness of the High court's decision that the taxing provision was unconstitutional and void and also the orders for refund made in some of the petitions mentioned above. The liability to pay tax arose under s.3 of the Madhva Bharat Sales Tax Act. This Act came into force from the 1st day of May 1950. As originally enacted it provided that (a) every dealer who imports goods into Madhya Bharat shall be liable to pay tax on his taxable turnover in respect of sales or supplies of goods effected from the 1st day of May 1950 if his total turnover in the previous year in respect of sales or supplies of goods exceeded Rs. 5,000.00; (b) similarly every manufacturer or processor whose turnover in the previous year exceeded Rs. 5,000.00 was made liable to pay tax on his taxable turnover in respect of sales or supplies of goods effected from the 1st day of May 1950; (c) every other dealer was made liable to pay tax on his taxable turnover in respect of sales or supplies of goods effected from the 1st day of May 1950, if the total turnover in the previous year exceeded Rs. 12,000.00. By later amendments the word 'processor' was deleted from cl. (b) of the section and the meaning of the words 'any other' in cl. (c) was made clearer by substituting the words 'any goods of a dealer not falling in cl. (a) or cl. (b)'. There was also an amendment in 1950 making it, clear that the taxable turnover on which the tax liability. arose was in respect of sales or supplies of goods effected in Madhya Bharat. Section 5 of the Act provides that the tax payable by a dealer shall be at a single point and shall not be less than Rs. 1/9.00 per cent or more than 6-1/4 per cent of the taxable turnover, as notified from time to time by the government by publication in the Official Gazette. This is subject to a proviso that the government may in respect of a special class of goods charge tax upto 12-1/2% on the taxable turnover. The second Ss. of s. 5 empowers the government to notify at the time of notifying the tax payable by a dealer, the goods and the point of their sale at which the tax is payable. The legal position therefore is that unless there is a valid notification under s. 5 no tax can be levied. The contention of the petitioners dealers which has succeeded in the High court is that the notifications on the strength of which the tax was assessed on them were invalid.
(3.) THE first notification was issued on 30/04/1950. This provided that with effect from the 1st day of May 1950 sales tax shall be collected in respect of goods specified in column 2 of the Schedule that was attached to the notification at the point of sale mentioned in column 3 at the rates mentioned in column 4. THE relevant portion of the Schedule ran thus:- JUDGEMENT_1006_AIR(SC)_1964Html1.htm This was followed by another notification dated 22/05/1950 under which a lower rate was prescribed for tobacco used for Bidi manufacturers. But the point at which the tax was payable remained unaltered. The relevant portion of the Schedule to this notification was in these words: JUDGEMENT_1006_AIR(SC)_1964Html2.htm For a short period, i.e., from the 1/01/1954 to the 21/01/1954 these two notifications remained inoperative in consequence of a notification dated the 24/10/1953, under which from the 1/01/1954 the point of sale at which the tax was payable was altered to 'on a sale by a dealer direct to a consumer or to a dealer who does not hold a licence or registration certificate under the Sales Tax Act'. This last notification was again superseded by a notification dated the 21/01/1954 in consequence of which the old position was restored with effect from 22/01/1954. That is, with effect from 22/01/1954 the point at which the tax was payable, again became a sale by an importer. ;