HARBANS LAL,J. - (1.) THIS judgment will dispose of Civil Writ Petitions Nos. 354, 416, 418, 432, 462, 463, 473, 474, 495, 496, 497, 501, 504, 517, 519, 524, 555, 556, 557, 564, 571, 576, 579, 582, 586, 614, 623, 644, 648, 669, 693, 694, 734, 736, 805, 855, 864, 870 and 904 of 1975, which have been filed under articles 226 and 227 of the Constitution of India for the issuance of: (1) a writ of mandamus that the paddy being agricultural produce is exempt under Schedule B to the Punjab General Sales Tax Act, 1948 (hereinafter to be called the Act), and is, thus, exempt from purchase tax; (2) a writ of mandamus that the notification dated 15th January, 1968, including pacldy in Schedule C to the Act is not in accordance with Section 31 of the Act and that the said notification is not valid; (3) a writ of mandamus declaring Section 31 of the Act as ultra vires and unconstitutional; (4) that the petitioners are not dealers as defined under the Act and, therefore, not liable to pay any purchase tax; and (5) that Section 4-B as inserted by Punjab Act No. 3 of 1973 is ultra vires Article 246 read with entry 54, List II, Schedule VII, of the Constitution.
(2.) THE questions of fact and law arising out of these writ petitions are the same. For the purpose of proper appreciation of the matter in controversy, the facts of Civil Writ Petition No. 354 of 1975 (Mjs. Babu Ram Jagdish Kumar and Company- v. State of Punjab) are summarised below: M/s. Babu Ram Jagdish Kumar and Company (hereinafter to be called the petitioner) are licensed rice millers and are running a rice sheller in Kapurthala, and have been issued a licence under the Punjab Rice Dealers Licensing Order, 1964. The petitioner purchases paddy and after manufacturing the same into rice at his factory, that is, the sheller, disposes of the rice under the provisions of the Punjab Rice Procurement (Levy) Order, 1958, according to which, 95 per cent of the total quantity of Bold Group Rice and 90 per cent of the total quantity of Slender Group Rice (as mentioned in Schedule I of the said Order) are acquired by the Punjab Government for a price as fixed by the Government. Thus, the acquisition of this rice by the Government at a fixed price does not satisfy any ingredient of a contract and cannot be treated as a sale. The petitioner is a registered dealer under the provisions of the Act. It is further averred in paragraph 7 of the writ petition that rice and paddy were added to Schedule C by the Punjab Government by means of a notification dated 15th January, 1968, a copy of which is annexure P-3 to the writ petition and, thus, rice and paddy were made liable to purchase tax. This notification was issued in exercise of the powers conferred by Section 31 of the Act. It is averred in paragraph 23 of the writ petition that the respondents are compelling the petitioner to furnish the quarterly return for the quarter ending 31st December, 1974, and to deposit the amount of purchase tax before 30th January, 1975. A number of pleas were taken in the writ petition on some of which no arguments were addressed by the learned counsel for the petitioner. Broadly, the impugned notification (annexure P-3) making the purchasers liable to purchase tax on the purchases of paddy has been challenged by the learned counsel for the petitioner, Mr. M. C. Bhandare, on the following grounds: (1) that Section 31 of the Act, which has conferred power on the State Government to add any goods in Schedule C for the purpose of levying purchase tax suffers from excessive delegation of legislative power and is, thus, ultra vires the Constitution; (2) that the inclusion of paddy in Schedule C by the impugned notification (annexure P-3) has resulted in withdrawing the exemption conferred on the purchasers of goods to be used for the purpose of manufacture under Section 5 (2) (a) (ii) of the Act, which cannot be done by the delegated authority because the exemption was given by the legislature in the Act itelf; (3) the petitioner is not a dealer as defined in Section 2 (d) of the Act, because the paddy purchased by the petitioner is not sold as such. The same is only used for the purpose of manufacturing rice, which is not allowed to be sold by the Government in open market and 95 per cent of the rice is acquired by the Government under the Procurement Order at a fixed price. Under the circumstances, the petitioner does not carry on the business of purchasing paddy and selling rice (in the normal course of business ).
(3.) ALL these contentions-have been refuted by Mr. R. K. Chhiber, the learned counsel for the State. The various pleas raised in the petition have also been controverted in the written statement filed by the Excise and Taxation Officer, Kapurjhalq, 5. In order to properly appreciate the contentions raised by the learned counsel for the petitioner, it is necessary to peruse the purpose and scheme of the Act and the legislative policy laid down therein. The Act as it stands today has undergone a number of procedural and material changes. According to the scheme of Act No. 46 of 1948 (hereinafter to be called the principal Act), tax was intended to be levied only on sales of various goods except those which were exempt from this tax. In Section 2, definition of only "sale" was given. In Section 4, it was provided that sale of goods will be liable to tax by the Government according to the rates prescribed from time to time. In Section 5, it was provided that tax on sales of goods will be levied on the gross turnover of a dealer if it exceeds the taxable turnover. In Section 5 (2), exemptions were provided and details of deductions were prescribed to which the dealer was entitled for the purpose of his turnover to be determined by the assessing authority after deducting the sale of goods, which were given exemption. In Section 6, it was provided that Schedule B annexed to the Act will contain the list of goods on the sale of which no tax will be levied. Section 7 prohibited the dealers from carrying on the business unless they had got themselves registered under the Act and were in possession of the registration certificate. The machinery was also provided to submit applications on a prescribed form and to get the registration certificate issued from the authority concerned. In Sections 9, 10 and 11 machinery was provided for the determination and assessment of the tax. Section 12 laid down as to how the refund of tax could be claimed by the dealers in certain cases, where the tax had been got deposited in excess or in violation of any law. It was by means of Act 7 of 1958 that the legislature materially changed its policy in the matter of taxation regarding transactions of goods for the first time. Through this amending Act, tax was imposed on the purchase of goods along with sales. For this purpose, necessary amendments were introduced in the objects and reasons of this Act. It was provided as under:;