Mitter, J. - (1.) This appeal, by special leave, is from a judgment and order of the High Court of Kerala dated August 16, 1963 passed in Tax Revision Case No. 17 of 1962 filed by the respondent, Cochin Coal Co., Ltd. against the order of the Sales Tax Appellate Tribunal, Trivandrum.
(2.) The facts necessary for the disposal of this appeal are as follows. The respondent-assessee was a non-resident dealer (not resident in Kerala) during the year 1955-56. The period we are concerned with here ends on September 4, 1955. It used to supply coal to consumers in Travancore Cochin State which later became Kerala. For the assessment year in question (1956-56) the assessee was asked to file statements showing its turnover of supplies of coal made to purchasers in the State of Kerala and in reply to the notice under S. 12 (2) (b) of the Travancore Cochin General Sales Tax Act it stated that the sale of coal to steamers arriving and berthed in Travancore Cochin State waters were not taxable because the goods were stored by the steamers for consumption on the high seas. The assessee however did not question its liability to pay tax in respect of supplies made to other consumers in the State of Kerala. On March 7, 1959 the Sales Tax Officer. Circle I Mattancherry assessed the respondent on a turnover of Rs. 1,29,352/- The respondent filed an appeal therefrom and the Assistant Commissioner of Agricultural Income-Tax and Sales Tax, Ernakulam allowed to appeal in part and reduced the turnover by omitting the portion of it after 6th September, 1955. In the result, the assessee's turnover was reduced to Rs. 69,607/- There was a further appeal to the Kerala Sale Tax Appellate Tribunal. This was disposed of on January 2, 1962 in favour of the assessee. The Tribunal held that the sales being inter State sales were, according to the decision of the Kerala High Court in T. R. Cs. 1, 2 and 3 of 1961 (reported in (1963) 14 Sales Tax Cases 850) not taxable. The Tribunal held that S. 26 (1) (b) of the General Sales Tax Act, as amended by S. 13 (ii) of Act 12 of 1957 prohibited the taxation of inter-State sales after March 31, 1951. The Deputy Commissioner of Agricultural Income-tax and Sales Tax Central Zone, Ernakulam, went up to the High Court of Kerala under S. 15-B (1) of the Act. The question of law raised for decision by the High Court was, "Whether in the light of the amending Act 9 of 1962 the finding of the Tribunal is correct -
(3.) In rejecting the application, the High Court reasoned as follows:- (1) Central Act 7 of 1956 was intended to validate State laws imposing or authorising the imposition of taxes on the sale or purchase of goods in the course of inter-State trade or commerce. (2) This Court had decided in the State of Kerala vs. Cochin Coal Co. Ltd., (1961) 2 SCR 219, that S. 26 of the General Sales Tax Act, 1125 imposed a tax on the sale or purchase of goods in the course of inter-State trade or commerce and taxation of such sales during the period between 1-4-1955 and 6-9-1955 was validated by the above Central Act. (3) S. 26 of the General Sales-tax Act. 1125 prior to its amendment by Act 12 of 1957 was pari materia with S. 22 of the Madras General Sales Tax Act which came up for consideration in the case of M. P. V. Sundararamier and Co. vs. State of Andhra Pradesh, (1958) SCR 1422. The Supreme Court held that S. 22 of the Madras Act "intended to authorise taxation of sales falling within the Explanation, subject to authorisation by Parliament as provided in Art. 286 (2) ." (4) Act 12 of 1957 raised the controversy as to whether Central Act 7 of 1956 could be considered as salvaging the levy of tax on inter-State sales after the amendment introduced in S. 26. According to the decision in T. R. Cs. 1 2 and 3 of 1961 Kerala inter-State sales after 3lst March. 1951 were not taxable. (5) The Constitution (Sixth Amendment) Act. 1956 made substantial changes as regards levy of tax in inter-State sales. As a result of the amendment of Art. 269, taxes on the sale or purchase of goods other than newspapers where such sale or purchase takes place in the course of inter-State trade or commerce were to be levied and collected by the Government of India and it was for Parliament to formulate principles for determining when a sale or purchase of goods takes place in the course of inter-State trade or commerce. (6) The Validating Act 9 of 1962 was enacted subsequent to the Constitution (Sixth Amendment) Act which came into force on 11th September 1956. In view of the amendment of the Constitution in 1956 the Legislature of Kerala had not the competence to pass any legislation on the subject of inter-State sales whether prospective or retrospective or both in the Year 1962 with the result that the State could not call in aid the provisions of Act 9 of 1962 to tax inter-State sales. ;