- (1.) The respondents are dealers assessable to sales-tax under the East Punjab General Sales-tax Act, 1948. In their return for the assessment years 1935-56, 1956-57 and l957-58 they claimed exemption from tax in respect of sales of edible oils. It is common case before us that this exemption was claimed in respect of sales of edible oil produced in ghanis run by mechanical process. By his orders dated March 3, 1959, April 9, 1959 and July 17, 1959. the Assessing Authority, Jullundur held that exemption from tax was not allowable under item No. 57 of the schedule of tax-free goods as substituted by the Punjab Government Notification No. 3483-E and T-54/723(CH) dated August 5, 1954. The appeals from these orders were dismissed by the Deputy Excise and Taxation Commissioner. Jullundur Division by his orders dated August 3, 1959 and February 16, 1960. Bevision Petitions from these orders were dismissed by the Excise and Taxation Commissioner. Punjab by his orders dated November 24, 1961. Revision Petitions from the last orders were dismissed by the Financial Commissioner, Revenue, Punjab by his orders dated April 27, 1962. On the application of the respondents, the Financial Commissioner, Revenue, Punjab by his order dated August 9, 1962 referred under S. 22(1) of the Punjab General Sales-tax Act,1948 the following question of law for the decision of the High Court of Punjab at Chandigarh: "Whether notification No. 3483-E and T'-54/723(CH), dated the 5th August. 1954 whereby exemption from Sales-tax granted by the Government in respect of edible oils was abolished in the case of such edible oils produced in ghanis run by mechanical process was intra vires and not the law made by the Legislature of the State which requires the previous assent of the President of India." These References were marked as Sales-tax References Nos. 8, 10 and 11 of 1962. By its judgment dated August 19, 1963 the High Court held following its earlier decision in Ganga Ram Suraj Prakash v. State of Punjab, (1963) 14 STC 476 (Punj) that the notification was a law made by the State Legislature after the enactment of Central Act No. 52 of 1952, and since it did not receive the assent of the President it was ultra vires and invalid. In the earlier decision, the Punjab High Court held that (1) S. 5 of the East Punjab General Sales-tax Act, 1948. as it originally stood, was invalid on the ground of excessive delegation of legislative power to the executive (2) the remaining Sections of the Act including S. 6 could not survive the invalidity of S. 5, (3) the Act did not become valid until the insertion of the new S. 5 in the main Act by the East Punjab Act No. 19 of 1952 and (4) as the East Punjab Act No. 19 of 1952 which alone could sustain the impugned notification dated August 5, 1954 was passed after the Central Act No. 52 of 1952, the impugned notification could not be justified and was invalid. The High Court observed that it was not impressed with the argument that the notification was not a law made by the legislature of the State and therefore the assent of the President could be dispensed with. The present appeals have been preferred from the orders of the High Court dated August l9. 1963.
(2.) To appreciate the points in controversy, it is necessary to refer to the course of legislation. The East Punjab General Sales-Tax Act (East Punjab Act No. 46 of 1948) was enacted on November 15, 1948. Section 4 of the Act provided for the incidence of taxation and declared that the classes of dealers specified in sub-ss. (1), (2), (3) and . (4) would be liable to pay tax under the Act. Section 5 (1) was in these terms: "5. Rate of tax.-(I) Subject to the provisions of this Act, there shall be levied on the taxable turnover every year of a dealer a tax at such rates as the Provincial Government may by notification direct." 'Turnover' as defined in S. 2(1) included the aggregate of the amount of sales. 'Taxable turnover' as defined in S. 5 (2) was ascertained after deducting from the gross turnover inter alia sales of goods declared tax-free under S. 6. Section 6 (1) provided that no tax shall be payable under the Act on the sale of goods specified in the first column of the schedule to the Act. Section 6 (2) provided : "The Provincial Government, after giving by notification not less than three months' notice of its intention so to do, may by like notification add to or delete from the schedule, and thereupon the schedule shall be deemed to be amended accordingly." On November 19, 1952 the East Punjab General Sales-tax (Second Amendment) Act, 1952 (Act No. 19 of 1952) was passed amending S. 5 of the East Punjab Act No. 46 of 1948. Section 2 of the amending Act was in these terms : "In sub-section (1) of Section 5 of the East Punjab General Sales-tax Act, 1948, after the word 'rates' the following words shall be inserted, namely, 'not exceeding two pice in a rupee."
(3.) It is common ground before us that before the passing of the East Punjab Act No. 19 of 1952 the State Government had issued notifications under S. 5 fixing the rates of tax. In exercise of its powers under S. 6(2) of the Act, the Punjab Government issued the notification No. 3483-E: and T-51/2518 dated May 30, 1951 adding item No. 57 (edible oils) to the schedule referred to in S. 6 (2). The entry was as follows : "57. Edible oils produced from sarson, toria and til ghanis but not in hydrogenated form e. g. vegetable, ghee, vanaspati etc." By a later notification No. 3483-E and T-54/ 723(GH) dated August 5, 1954 the Punjab Government substituted the following entry No. 57 in the schedule: "57. Edible oils produced from sarson, toria and til indigenous kohlus worked by animal or human agency when sold by the owners of such kohlus only." It is common case before us that as a result of this notification, sales of edible oil produced by ghanis run by mechanical power ceased to be tax-free after August 5, 1954. It may be recalled that Article 286 (3) of the Constitution as it stood before the Constitution (Sixth Amendment) Act: 1956 provided : "No law made by the Legislature of a State imposing, or authorising the imposition of, a tax on the sale or purchase of any such goods as have been declared by Parliament by law to be essential for the life of the community shall have effect unless it has been reserved for the consideration of the President and has received his assent." On August 9, 1952 Parliament passed the Essential Goods (Declaration and Regulation of Tax on Sale or Purchase) Act, 1952 (Central Act No. 52 of 1952). By Section 2 of this Act read with item 5 of the schedule edible oils were declared to be essential for the life of the community. Section 3 of this Act was in these terms : "3. Regulation of tax on sale or purchase of essential goods - No law made after the commencement of this Act by the legislature of a State imposing, or authorising the imposition of, a tax on the sale or purchase of any goods declared by this Act to be essential for the life of the community shall have effect unless it has been reserved for the consideration of the President and has received his assent." On September 11, 1956 the Constitution (Sixth Amendment) Act, 1956 was passed substituting a new Clause (3) in Article 286. The amended Article 286 (3) did not put any check on a State law imposing or authorising the imposition of a tax on the sale or purchase of essential goods. The Central Act, No. 52 of 1952 was repealed by Sec. 16 of the Central Sales Tax Act, 1956 (Act No 74 of 1956) passed on December 21, 1956. The repealing Section came into force on January 5, 1957.;