HIRALAL RATTANLAL Vs. STATE OF UTTAR PRADESH

JUDGEMENT

(1.) These are appeals by certificate. They raise common questions of law for decision, and they are directed against a common judgment of the Allahabad High Court.

(2.) The facts of the case lie within a narrow compass. The appellants are dealers in foodgrains including cereals and pulses especially split or processed foodgrains and dal. The dispute in this case centres round the question whether the Government is competent to levy sales tax on the purchases made by the appellants of split or processed foodgrains and dal under the provisions of the United Provisions Sales Tax Act, 1948 as amended by the Uttar Pradesh Sales Tax Act (Amendment and Validation Act, 1970 (which will hereinafter be referred to as the Act).

(3.) Under the Sales Tax Act as it originally stood (which will hereinafter be referred to as the principal Act), the purchases of split or processed foodgrains and dal by dealers were sought, to be brought to tax under Section 3-D of the principal Act read with the notification issued. The validity of the levy was challenged by Tilock Chand Prasan Kumar, the appellant in Civil Appeal No. 1625 of 1971 in respect of the assessment made on him for the assessment year 1966-67 by assessment order dated June 30, 1968 by means of a writ petition under Art. 226 of the Constitution. The High Court of Allahabad struck down the levy holding that the dal purchased by the petitioner before it could not be said to be a commodity essentially different from the arhar dal purchased by the dal mills and accordingly the purchases effected by the petitioner could not be regarded as the first purchases. This decision is reported in (1970) 25 STC 118 (All). Thereafter the Governor of U. P. issued an ordinance known as Uttar Pradesh Sales Tax (Amendment and Validation) Ordinance, 1970 (U. P. Ordinance No. 2 of 1970) adding inter alia Explanation II to Section 3-D as well as Section 7 to the principal Act. This Ordinance was later on enacted as an Act to which we have already made reference. The provisions of the Amending Act are identical with the provisions in the Ordinance. Though at the time of the institution of the writ petitions from which these appeals arise, the Ordinance had not yet been made into the Act, the Amending Act came into force during the pendency of the writ petitions. Hence we shall refer to the provisions of the Amending Act.