KAN SINGH, J. - (1.) THIS appeal has been brought by the State against the judgment and decree of the Senior Civil Judge, Bundi dated 8-3-63 awarding a decree for Rs. 18,486,67 paise by way of refund of sales tax on sale of motor spirits said to have been paid by the respondent.
(2.) THE respondent, the Motor Workers Cooperative Society Ltd, Bundi, is a Cooperative Society registered under the Rajasthan Cooperative Societies Act, 1953. It carries on business of motor transport and maintains a fleet of buses and trucks which are plied on hire. It also maintains a petrol pump by virtue of an agreement entered into with it by the Caltex (India) Ltd. THE Cooperative Society obtains petrol from the Caltex Company in bulk and utilises it for consumption by its own vehicles. THE Cooperative filed returns and on the basis thereof sales tax was realised by the Sales tax Authorities in accordance with the Rajasthan Sale of Motor spirit Taxation Act, 1954, hereinafter to be referred as the "act". THE plaintiff Cooperative Society brought the present suit on 25-7-60 in the court of the Senior Civil Judge for refund of the amount of 18,486 67 paise alleged to have been illegally realised from it. It was contended that there was no sale of petrol by the Company when the petrol was consumed by the vehicles belonging to the Company. It was averred that though the definition of the term "retail sale" as given in the Act would include consumption by a retail dealer himself of the goods, the provisions in the Act in including such consumption within the definition of sale were ultra vires. THE State resisted the suit on a number of grounds. The learned Senior Civil Judge came to the conclusion, on the authority of Bhopal Sugar Industries vs. D. P. Dube (i), that to the extent the consumption by a retail dealer of the goods was included in the definition of the term "retail sale" as given in sec. 2 (3) of the Act, it was void. Consequently, he came to the conclusion that the tax was realised from the Cooperative Society without the authority of law and accordingly the State was liable to refund the same. In the result, the learned Senior Civil Judge decreed the suit of the Cooperative Society as said above. In this appeal it is contended that the learned Senior Civil Judge could not have made a pronouncement regarding the validity of the provisions of the Act without making a reference to this court under sec. 113 Civil Procedure Code. Regarding the merits learned Deputy Government Advocate found himself confronted with the cited Supreme Court case. In that case their Lordships had to consider a similar provision occurring in the M. P. Sale of Motor Spirit and Lubricants Taxation Act (No 4 of 1958 ). Their Lordships referred to the earlier case, State of Madras vs. Gannon Dunderley and Company (2) and pointed out that a power to enact a law with respect to tax on sale of goods under entry 54 of List II of the Seventh Schedule of the Constitution must be one relating to sale of goods in fact and consequently the State Legislature cannot, in the purported exercise of its power to tax sales, tax transactions which are not sales by merely enacting that they shall be deemed to be sales. Reiterating what was said in Gannon Dunkerely's case, their Lordships pointed out that there are four elements involved in a sale (1) parties competent to contract, (2) mutual assent (3) a thing, the absolute or general property in which is transferred from the seller to the buyer, and (3) a price in money paid or promised. According to their Lordships, a transaction which did not conform to this traditional concept of sale cannot be regarded as one in respect of which the State Legislature is competent to enact a law imposing liability for payment of tax. Consequently their Lordships held that consumption by an owner of goods in which he deals is not a sale within the meaning of sale of goods Act and, therefore it is not a sale of goods within the meaning of entry 54 List II of the Seventh Schedule of the Constitution. In the result, their Lordships held that provisions of cl. (1) of sec. 2 of the M. P. Sale of Motor Spirit and Lubricants Taxation Act, 1958 to the extent they provided for the consumption by a retail dealer himself or on his behalf of motor spirit or lubricant to be sale were void. The provisions of sec. 2 (e) of the Act are word to word the same. The learned Senior Civil Judge was, therefore, right in holding that the matter stood concluded and on the parity of reasoning the relevant provision in sec. 2 (e) of the Act was void in so far as the consumption by the dealer was included in the definition of the term "retail sale". The question is whether in such a ease the learned Senior Civil Judge should have made the reference to this Court under sec. 113 Civil Procedure Code. I may read sec. 113 C. P. C. : "sec. 113. Reference to High Court - Subject to such conditions and limitations as may be prescribed, any Court may state a case and refer the same for the opinion of the High Court, and the High Court may make such order thereon as it thinks fit. Provided that where the Court is satisfied that a case pending before it involves a question as to the validity of any Act, Ordinance or Regulation or of any provision contained in an Act, Ordinance or Regulation, the determination of which is necessary for the disposal of the case, and is of opinion that such Act, Ordinance, Regulation or Provision is invalid or inoperative, but has not been so declared by the High Court to which that Court is subordinate or by the Supreme Court, the Court shall state a case setting out its opinion and the reasons therefor, and refer the same for the opinion of the High Court. " The learned Deputy Government Advocate stressed on the language of the proviso and submitted that the provisions of the Act had not been declared to be invalid by the Rajasthan High Court to which the Senior Civil Judge was subordinate or by the Supreme Court, and, therefore the learned Senior Civil Judge, was required to State a case setting out his opinion and the reason therefor and then refer the same for the opinion of this Court. To my mind, sec 113 Civil Procedure Code vests a discretion in the Court to State a case and make a reference to this Court or not. This discretion is subject to a two-fold limitation. In the first instance, it has to be exercised subject to such conditions and limitations as may be prescribed. The second limitation is as provided in the proviso, that is, whenever a subordinate court thinks of making a reference to the High Court it has to be satisfied in terms of the proviso that the determination of the question regarding the validity of any Act, Ordinance or Regulation or any provision contained in such Act, Ordinance or Regulation is necessary for the disposal of the case and such a provision has not been so declared to be invalid by the High Court or by the Supreme Court. As pointed out by their Lordships of the Supreme Court in State of Rajasthan vs. Leela Jain (3) the general principle of construction of a proviso is that the function of a proviso is to limit the main part of the section and carve out something which but for the proviso would have been within the operative part. In the absence of the proviso here, the discretion vested in the Court to state a case and refer the same for the opinion of the High Court would be hide indeed, but inspite of a case falling under the proviso the Court may yet in its discretion not make any reference. Such a discretion to make or not to make a reference is vested in the Court. In the present case on account of a similar provision in the Madhya Pradesh Act having been adjudged to be invalid, the making of such a reference by the Court below would have been an exercise in futility. There is, therefore, no force in the contention advanced by learned Deputy Government Advocate. The result is that the appeal has no force and it is hereby dismissed. The parties are, however, left to bear their own costs. . ;