MANGAT RAM Vs. GOVERNMENT OF JAMMU AND KASHMIR

JUDGEMENT

(1.) WE propose to dispose of this bunch of writ petitions by a common judgments as they raise common questions of law.

(2.) EXCEPT Mangat Ram, the petitioner in Writ Petition No. 37 of 1978, who is running a dhaba, all other petitioners are halwais by profession. Till 11th October, 1972, all dhabawallas, lohwallas, tandoorwallas, tea-stall holders and halwais were exempt from payments of sales tax under entry No. 68 of Schedule II to SRO No. 157 dated 15th May, 1965, issued by the Government in exercise of its powers under section 5 of the Jammu and Kashmir General Sales Tax Act, 1962, hereinafter to be referred to as the Act, which had undergone many changes from time to time till then; the last amendment in its being made on 8th October, 1971, by SRO No. 525. On 11th October, 1972, the Government by virtue of SRO No. 729, withdrew the exemption enjoyed till then by halwais, dhabawallas, tandoorwallas, and tea-stall holders. Entry No. 34 was added to Schedule I to the basic SRO No. 157 relating to taxable goods which read as under :

(3.) THE obvious effect of this SRO being the withdrawal of exemption from payment of sales tax on the goods sold by dhabawallas, tandoorwallas, lohwallas, tea-stall holders and halwais whose annual turnover exceeding Rs. 40,000, its constitutional validity was challenged by one of the petitioners herein, namely, Sain Dass in Writ Petition No. 99 of 1972, titled Sain Dass v. State of J. and K. [1974] 34 STC 426 (FB ). The challenge was based upon the grounds : firstly, that section 4 (1) of the Act was itself ultra vires of the Constitution, in that, it gave unguided and uncanalized power to the Government to select the articles to be taxed and to fix the rate of tax to be charged on them; and secondly, that the SRO was also violative of the rules of equality enshirned in article 14 of the Constitution, inasmuch as halwais and bakerywallas being similarly situated, by taxing halwais alone, it had subjected them to hostile discrimination. This writ petition along with another Writ Petition No. 93 of 1972 titled Glacier Cold Storage and Ice Mills v. Assessing Authority, Sales Tax, Jammu, was heard and finally disposed of by a Full Bench on 22nd July, 1974. This judgment is reported as Glacier Cold Storage and Ice Mills v. Assessing Authority, Sales Tax, Jammu [1974] 34 STC 426 (FB); 1974 Jandk LR 531 (FB ). On the basis of various decisions of the Supreme Court and other High Courts in India, the Full Bench eventually upheld the constitutional validity of section 4 (1) on the grounds : firstly, that the State does not have to tax everything in order to tax something : East India Tobacco Co. v. State of Andhra Pradesh [1962] 13 STC 529 (SC); AIR 1962 SC 1733; secondly, that under a taxing statute the legislature has wide powers of classification and that the power of working details regarding the subjects to be taxed and fixation of the rate of tax, which in turn depend upon the social, economical and administrative considerations to be identified by legislature, has to be left to the Government : Hira Lal Rattan Lal v. Sales Tax Officer, Section III, Kanpur [1973] 31 STC 178 (SC); AIR 1973 SC 1034 and Orient Weaving Mills v. Union of India AIR 1963 SC 98; and thirdly, that the maximum limit of the rate of tax fixed by a taxing statute may itself provide sufficient guidelines to save it from the attack of unconstitutionality : Municipal Corporation of Delhi v. Birla Cotton, Spinning and Weaving Mills AIR 1968 SC 1232.