JUDGEMENT
-
(1.)On August 16, 1962 the administration of Pondicherry, became vested in the Govermnent of India by virtue of de jure transfer. The Pondicherry Administration Act, XLII of 1962 constituted that territory as a separate centrally-administered unit and under the Union Territories Act, XX of 1963 a legislative assembly was set up for that area. The assembly under that Act acquired the power of enacting laws in respect of items in Lists II and III of the Seventh Schedule to the Constitution. The assembly thereafter passed the Pondicherry General Sales Tax Act, X of 1965 (hereinafter referred to as the Principal Act) which was published on June 3, 1965 after receiving the President's assent on May 25, 1965. Section 1(2)of that Act provided that the Act would come into force on such date as the Government may by notification appoint. Section 2 (1) provided that
"The Madras General Sales Tax Act 1959 (No. 1 of 1959) (hereinafter referred to as the Act) as in force in the State of Madras immediately before the commencement of this Act shall extend to and come into force in the Union Territory of Pondicherry subject to the following modifications and adaptations."
Then follow certain modifications and adaptations which are not relevant for our purposes except that Cl. (ix) of S. 2 (1) substituted S. 30 of the Madras Act and provided for an Appellate Tribunal. The substituted section laid down that the Government shall appoint a Judicial Officer who is otherwise qualified to he appointed as a Judge of the Tribunal Superieur d'. Appeal to be the Appellate Tribunal and to exercise the functions conferred under the Act. The Act also enacted a Schedule with description of goods, the point of levy and the rates at which the tax was to be levied. Section 2 (2) provided that the Madras General Sales Tax Rules, 1959 and any other Rules made or issued under the said Act and similarly in force were to apply to Pondicherry. As provided by S. 1 (2) the Pondicherry Government issued a notification, dated March 1, 1966 bringing into force the Madras Act as extended by the Act to Pondicherry as from April 1, 1966. In the meantime the Madras legislature had amended the Madras Act and consequently it was the Madras Act as amended upto April 1, 1966 which was brought into force under the said notification.
(2.)The petitioner is a merchant carrying on business in liquor and would be a dealer within the meaning of the Madras Act. Upto March 1966 he was liable and was paying certain taxes similar to the sales tax under the French regulations till then in force in Pondicherry. With the coming into force of the Principal Act he was served with a notice to register himself as a dealer. Thereupon he filed this petition challenging the validity of the Principal Act.
(3.)Mr. S. T. Desai for the petitioner contended that the Principal Act was void and was a still-born legislation by reason of the Pondicherry legislature having abdicated its legislative function in favour of the Madras State Legislature, that such abdication resulted from the wholesale adoption of the Madras Act as in force in the State of Madras immediately before the commencement of the Principal Act and that
S. 2 (1) read with S. 1 (2) meant that the legislature adopted not only the Madras Act as it was when it enacted the Principal Act but also such amendment or amendments in that Act which might be passed by the Madras Legislature upto the time of the commencement of the Act, i.e. upto April 1, l966. Mr.Setalvad, on the other hand, relied on the majority decision in Re. Delhi Laws Act, etc., case, 1951 SCR 747 : (AIR 1951 SC 332), and in particular on the summary by Bose, J. in Raj Narain Singh's case, : (1955-1 SCR 290, AIR 1954 SC 569), of the diverse views expressed by the learned Judges in that decision. As heading (4) in the said summary shows the learned Judges inter alia held by a majority of 5 to 2 that authorisation to select and apply future Provincial laws was not invalid. To ascertain the principle deducible from that conclusion, it becomes necessary to examine observations made by the five learned Judges. But before we do that it is also necessary to remind oneself of the principles governing the exercise of legislative power.