SARJOO PROSAD, C. J. - (1.) THE petitioner in this application has moved for an appropriate writ or direction quashing the order of assessment made by the Sales-Tax Officer, Nagour Circle, and restraining that Officer and the State of Rajasthan from imposing or realising the sales-tax so imposed.
(2.) THE petitioner carries on business in cloth and 'gota" under a certificate of regis- tration under sec. 6 of the Rajasthan Sales-Tax Act, 1954 (Act No. XIX of 1954 ). He submitted his return of turnover for the assessment years 1956-57 and 1957-58 before the Sales-Tax Officer and claimed that he was not liable to pay any tax on coarse and medium cloth worth Rs. 9,574/- which he sold between 1st April, 1956, and 18th April, 1956, for the assessment year 1956-57, on the ground that the Rajasthan Sales-Tax Act did not apply to the sale of that variety of cloth. He claimed a similar exemption in respect of the sale of medium and coarse cloth worth Rs. 34,915/- during the assessment year 1957-58. THEse claims were disallowed by the Sales-Tax Officer, who held that those sales were assessable to tax. The contention raised on behalf of the petitioner in this application is three-fold. Under Art. 286 (3) of the Constitution of India, no law made by the Legislature of the State imposing or authorising the imposing of a tax on the sale or purchase of any such goods as had been declared by Parliament by law to be essential for the life of the community could have effect until it had been reserved for the consideration of the President and received his assent. By virtue of the Essential Goods (Declaration and Regulation of Tax on Sale or Purchase) Act, 1952 (Act No. LII of 1952), coarse and medium cloth had been declared to be goods essential for the life of the community. Therefore, it was necessary that the provision in the Sales-Tax Act authorising the levy of sales-tax on coarse and medium cloth should have received the assent of the President before it was put into force. Sec. 28 of the Sales-Tax Act purported to levy tax on coarse and medium cloth upto 31. 3. 56. This Act had the assent of the President. Sec. 28 was amended by the Rajasthan Sales-Tax (Amendment) Act, 1956 (Act No. 5 of 1956), according to which the tax could be levied upto 31st March, 1957 but this Amendment did not receive the assent of the President before it was put into force and therefore, it could have no effect so far as the sale of coarse and medium cloth and other goods essential for the life of the community were concerned; and any such imposition after 31st March, 1956, on the authority of the amended provision was illegal. The second contention is that the Act itself came into force on the 1st of April, 1955, by virtue of a notification in the Rajasthan Gazette dated 12th March, 1955. whereas the Rajasthan Sales-Tax Rules, 1955, came into force on the 29th March,1955 when they were published in the Rajasthan Rajpatra and since the Rules were framed before the coming into force of the Act itself under which the framing of the Rules could be authorised, the Rules could not take effect. The third contention of the learned counsel is based upon the application of Rule 15 of the Rules framed under the Sales-Tax Act. The contention is that in the return of turnover for the year 1956-57 the petitioner claimed that he was not liable to pay sales-tax on imported "gota" and cloth worth Rs. 42,945/- on the ground that the tax payable by the dealer could be imposed at a single point only in the series of sales of successive dealers. According to Rule 15 the tax payable on the above commodities at the first point in the series of sales could only be when the commodities in question were first sold to the assessee and since the petitioner had purchased the goods in Rajasthan from dealers outside Rajasthan, who were liable to pay sales-tax on the first sale made by them to the petitioner, the petitioner could not be liable for payment of any tax in respect of these commodities. So far as the first two points are concerned, the learned counsel has very fairly conceded that in view of the Rajasthan Sales-Tax Assessment and Recovery Validation Act, 1958 (Act No. 44 of 1958) and Rajasthan Sales Tax (Validation) Act, 1958 (Act No. 50 of 1958), as also the earlier decisions of this Court, these points were not available to the petitioner ; and, therefore, he has not pressed them. He has, however, made a faint attempt to press the third point before us on the application of Rule 15. He points out that on the interpretation of Art. 286 of the Constitution, as given by the Supreme Court in Bengal Immunity Co. Ltd. Vs. State of Bihar (1), the State could not levy tax on inter-State sales. Nevertheless the Sales-Tax Laws Validation Act, 1956 (Act No. 7 of I956 ). validated the tax imposed on inter-State sales by the States, and since sec. 2 of the Act validated such imposition between the 1st day of April, 1951, and the 6th of September, 1956, the sales or purchases made by the petitioner during the 1951 and 6th of September, 1955, falling within the assessment year 1956-57, were open to taxation in the hands of the outside dealers by the State ; therefore, by virtue of Rule 1 5 no further tax could be levied when the goods came in the hands of the assessee. This argument, in our opinion, is fallacious and ignores two important considerations. Rule 15, sub-Rule (1) provides that the tax payable under the Act shall be at the first point in the series of sales and this sub-Rule would apply to all dealers, including manufacturers and importers ; but this Rule has got to be read subject to the provisions of the Act itself. A "dealer" in the Act has been defined in sec. 2 (f) to mean a person who carries on the business of selling or supplying goods in the State, and the incidence of taxation relates to the turnover of that dealer in respect of the sales or supplies of goods. As held by this Court in a very recent decision in Messr. Tulsiram Vs. State of Rajasthan (Civil Writ No. 169 of 1957 decided on 17th January, 1961), there is a territorial nexus between the State and the dealer liable to pay tax; and, therefore, the Sales-Tax Act, which came into operation on the 1st of April, 1955, had no application to the case of a dealer outside the State of Rajasthan, and there could be no occasion to tax any such dealer on the sale effected by him. Besides, it is important to remember that the Sales-Tax Laws Validation Act, 1956, passed by the Central Legislature only validated tax which had already been levied and recovered. It did not authorise fresh imposition of tax by the State and the law remained as it was interpreted by the Supreme Court, with reference to Art. 286 of the Constitution. The language of sec. 2 of the Validation Act is: - ". . . . . . . . . . . . all such taxes levied or collected or purporting to have been levied or collected during the aforesaid period shall be deemed always to have been validly levied or collected in accordance with law. " That being so, the application of Rule 15 must be confined to the case of first sale effected by the dealer to the various consumers in the State and as such the assessment made by the Sales-Tax Officer cannot be impugned on that ground. In our opinion, none of the above grounds can be successfully maintained. The application, therefore, must be rejected. We do not think that we would be justified in awarding any cost against the petitioner, in view of the fact that his application on the other points has failed because of the Rajasthan Validation Acts, which came into operation after the presentation of this application. .;