BERI, J. - (1.) THIS is a petition under Art. 226 of the Constitution of India challenging the taxability of certain items and the vires of sec. 7 (2a) of the Rajasthan Sales Tax Act, 1954 (hereinafter called "the Act" ).
(2.) THE petitioner is a partnership firm registered under the Indian Partnership Act and carries on the business of manufacturing and selling of aerated water, ice box openers and straws. It is registered with the Commercial Taxes Officer, Jaipur City 'b' Cricle. THE petitioner commenced its business from the 1st of November, 1964. It was assessed for the accounting year 1964-65, that is, from 1-11-1964 to 31-3-1965. It challenges the provisions of the Act and the notifications issued thereunder dated 2-3-1963 and 211-1965 and the provisions of sec. 7 (2a) of the Act on various grounds and has prayed that by means of an appropriate writ, order or direction sec. 5 of the Act of 1954 as amended by Act 13 of 1964 and the notification dated 2-11-1965 made thereunder be held to be illegal, void and unconstitutional; that the notification dated 2-11-1965 be declared bad being not in conformity with the amended sec. 5 of the Act and sec. 7 (2-A) be declared beyond the legislative power of the Rajasthan State Legislature being violative of the provisions of the Constitution of India. The State by its reply has contested the contentions raised by the petitioner. Mr. C. B. Agarwal, learned counsel for the petitioner, has firstly, contended that the notification of the 2nd November, 1965 is not authorised by the amended sec. 5 of the Act because the amended sec. 5 does not authorise different rates and secondly, the amendment of sec. 5 by Act 13 of 1964 which came into effect on 4-5-1964 the previous notification of 2-3-1963 authorising different rates of sales tax, which is Annexure III in the petition, did not remain in force. His third submission is that sub-sec. (2a) of sec. 7 is ultra vires of the powers of the State Legislature because such advance tax is not authorised by entry 54 of List II of the 7th Schedule of the Constitution of India. He has cited certain authorities in support of his contentions which we shall notice at appropriate places. Mr. Rajnarain Munshi, learned Additional Advocate General, urged that the amended sec. 5 does authorise the State Government to fix separate rates for different goods subject to a maximum of 10 per cent. The amendment to sec. 5 does not alter the provisions in such a manner as to make the notification dated 2-3-63 (Annexure III) ineffective and it has full force and validity in view of the provisions of sec. 27 of the Rajasthan General Clauses Act, 1955 and lastly, he urged that the entry 54 of the State List of the 7th Schedule includes ancillary power for imposing the tax under sec. 7 (2a) of the Act. He has also relied on certain authorities which will be noticed at appropriate places. For an appreciation of the contentions raised under point 1 by the learned counsel for the petitioner it will be necessary to notice certain provisions of the Act. Under sec. 2 (c) of the Act 'assessment year' has been defined as under : - " (c) 'assessment year means the year commencing on the first day of April; " "taxable turnover,' and "turnover" have been defined in clauses (s) and (t) of sec. 2 of the Act respectively: - " (s) 'taxable turnover' means that part of turnover which remains after deducting therefrom the aggregate amount of the proceeds of sale of goods - (i) On which no tax is leviable under this Act, (ii) which have already been sold subjected to tax under this Act, (iii) which have been sold to persons outside the State for consumption outside the State, and (iv) which are taxable at a point of sale within the State subsequent to the sale by the dealer and such sale is covered by a declaration as may be required under any provision of this Act or the rules made thereunder ; Provided that where a dealer in goods which are exempted from tax Unconditionally, sells any bardana, container or any other packing material received alongwith such goods at the time of purchase thereof by him, the taxable turnover in respect of such sales shall, at the option of such dealer to be exercised in the prescribed manner, be one per cent of the aggregate amount of the sale prices received or receivable by him in respect of the sale or supply of scuh goods and bardana, container or material; Provided further that when any dealer has purchased any goods without paying any tax on the strength of any declaration furnished by him and the said goods are used by him for any purpose other than the one mentioned in declaration, the purchase price of such goods shall be included in his taxable turnover; " (t) 'turnover' means the aggregate of the amount of sale prices received or receivable by a dealer in respect of the sale or supply of goods or in respect of the sale or supply of goods in the carrying out of any contract : Provided that the proceeds of the sale by a person of agricultural or horticultural produce, grown by himself or, grown on any land in which he has an interest whether as owner, usufructuary mortgagee, tenant or otherwise, or poultry or dairy products from fowls or animals kept by him shall be excluded from his turnover : Provided further that in the case of a. prescribed class of dealers, other than a manufacturer, producer, processor or a dealer engaged in the execution of a contract, and at the option to be exercised by a dealer of such prescribed class, in such manner and subject to such terms and conditions, as may be prescribed, turnover shall mean the amount of purchase price paid or payable by him in respect of the goods purchased by him for sale plus an amount equal to 10 per cent of such purchase price. Explanation.- Subject to such condition and restrictions, if and, as may be in this behalf - (i) the amount for which goods are sold or supplied shall, in relation to a contract, be deemed to be the amount payable to the dealer for carrying out such contract. less the cost of labour; (ii) the amount for which goods are sold or supplied shall include any sum charged for anything done by the dealer in respect of the goods sold at the time of or before the delivery thereof; (iii) any cash or other discount on the price allowed in respect of any sale and any amount refunded in respect of articles returned by customers shall not be included; (iv) where for accommodating a particular customer or a purchaser, a dealer obtains goods from another dealer and immediately disposes of the same to the said customer or purchaser, the sale in respect of such goods shall be included in the turnover of the latter dealer alone. " Sec. 3 of the Act provides the incidence of taxation laying down that subject to the provisions of the Act, every dealer whose turnover in the previous year in respect of sales or supplies of goods exceeds particular amount he shall be liable to pay tax under this Act on his taxable turnover. Sec. 4 excludes from taxability exempted goods and sec. 5 has to be noticed before amendment and after amendment: - Sec. 5 before the amendment in 1964 : - "5. Rate of tax.- Thp tax payable by a dealer under this Act shall be at such single point in the series of sale by successive dealers as may be prescribed and shall be levied at the rate of 6 per cent on the taxable turnover. Provided that the tax in respect of the sale of any goods, which are not included in the Schedule, - (i) shall not be leviable : - (a) if such sale takes place in the course of inter-State trade or commerce within the meaning of sec. 3 of the Central Sales Tax Act, 1956 (Central Act 74 of 1956), or (b) if such sale takes place outside the State within the meaning of sub-sec. (1) of sec. 4 of the said Central Act, or , Sec. 5 after amendment by Act 13 of 1964 which came with effect from 4-5-1964 : - "5. Rate of tax.- The tax payable by a dealer under this Act shall be at such single point in the series of sales by successive dealers as may be prescribed and shall be levied at such rate not exceeding 10 per cent on the taxable turnover, as may be notified by the State Government in the Official Gazette : Provided that the tax in respect of the sale of any goods which are not included in the Schedule, - (i) shall not be leviable : - (a) if such sale takes place in the course of inter-State trade or commerce within the meaning of sec. 3 of the Central Sales Tax Act, 1956, (Central Act 74 of 1965), or (b) if such sale takes place outside the State within the meaning of sub-sec. (1) of sec. 4 of the said Central Act, or (c) if such sale takes place in the course of import or export within the meaning of sec. 5 of the said Central Act. (ii) in the case of such goods being those declared by sec. 14 of the said Act to be of special importance in inter-State trade or commerce, (a) shall not exceed two per cent of the sale price thereof, (b) shall not be payable if the sale takes place outside the State within the meaning of sec. 4 of that Act, and (c) shall not be leviable in the State at more than one stage; Provided also that where the State Government is of the opinion that it is necessary or expedient in the public interest so to do, it may, by notification in the Official Gazette, provide that the rate at which the tax payable by a dealer in respect of any goods or class of goods to be specified in the notification shall be such not exceeding 10 per cent on the taxable turnover as may be specified in the said notification. " (c) if such sale takes place in the course of import or export within the meaning of sec. 5 of the said Central Act. (ii) in the case of such goods being those declared by sec. 14 of the said Act to be of special importance in inter-State trade or commerce, commerce, (a) shall not exceed two per cent of the sale price thereof, (b) shall not be payable if the sale takes place outside the State within the meaning of sec. 4 of that Act, and (c) shall not be leviable in the state at more than one Stage; Provided further that in respect of sales of such class of goods or by such class of dealers as may be notified by the State Government in the Official Gazette, the State Government may levy tax in a lump sum on a part or the whole of their turnover, on such conditions as may be specified in the notification. "
(3.) ANNEXURE III, which is dated 2nd March, 1963, was issued by the Government of Rajasthan in exercise of its power conferred by sec. 5 of the Act. To it is appended a list containing 65 items which have been described in column 2 thereof and the rate of tax has been described in column 3 therein. The material entry is 64 which reads as follows : - "64. All kinds of eatables and non-alcoholic postable liquids, such as biscuits, syrups, distilled juices (ark), jams (Chatni, Murabbas), fruit juices, essences, gulkand etc. packed in tins or plastic containers or sealed packings of any kind 10%. The argument of the learned counsel for the petitioner is that the unamended sec. 5 and its second proviso provided different rates of taxes for different classess of goods and this power is inferable by the expression 'or class of goods to be specified in the notification shall be such not exceeding 10 per cent" as mentioned in the proviso. But after sec. 5 was amended neither the section itself nor the second proviso substituted therein conferred any authority on the State Government to levy tax on turn over by imposing tax at different rates on different classes of goods. The notification of 2-3-1963 (Annexure III) thus could not be deemed to have been under the amended provisions and the notification of November 2, 1965 (Annexure I) was clearly unauthorised because under the amended sec. 5 tax at different rates could not be issued. His further submission was that the proviso of the unamended Act could be read as a substantive provision as permitted by a decision of the Supreme Court in Commissioner of Commercial Taxes, Board of Revenue, Madras vs. Ramkishan Shrikishan Jhaver (l) and if we were to read the proviso of the amended Act also in the same spirit it will be clear that under the amended Act the expression "class of goods" is missing. Even if we were to treat that the second proviso to sec. 5 of the unamended provisions was transplanted as sec. 5 itself then too the taxing power by classifying goods was wanting. He urged that no equitable considerations arise in interpreting taxing statutes and its deficiencies could not be supplied. He relied on Commissioner of Sales tax, U. P. vs. Modi Sugar Mills Ltd. (2 ). He also relied on Commissioner of Income tax, Andhra Pradesh vs. Ms. Motors and General Stores (P) Ltd. (3), wherein the principle enunciated in the Bank of Chettined vs. C. I. T. , Madras (AIR 1940 PC 183) has been noticed. "if a person sought to be taxed comes within the letter of the law he must be taxed, however great the hardship may appear to the judicial mind to be. On the other hand, if the crown seeking to recover the tax cannot bring the subject within the letter of the law, the subject is free, however, apparently within the spirit of the law the case might otherwise appear to be. " The rule that taxing Acts are to be construed with strictness is based on the principle that "inasmuch as there was not an a priori' liability in the subject to pay any particular tax nor any antecedent relationship between the tax payer and the taxing authority no reasoning founded upon any supposed relationship of the tax-payer and the taxing authority could be brought to bear upon the construction of the Act" (Pyrce vs. Manmouthshine Canal and Railway Go. (1879) 4 A. 197 (H. L. ). ;