134
CHIEF COMMISSIONER UNION TERRITORY,
CHANDIGARH
B
_v._
SIALKOT SILK STORES, CHANDIGARH
_October_ 23, 1978
(Y. V. CHANDRACHUD, C.J., N. L. UNTWALIA AND P. N. SHINGHAL, JJ.]
_Punjab General Sales Tax Act,_ 1948-S. _6-State_ _Government issued a_
_notification_ _of_ _its intention to amend Schedule B but did not_ _issue_ _a second_
_notification amending the schedule_ _as_ requir~d _by_ s. _6-State_ _reorganised in the_
·C _1neanwhile_ _and_ _the Union Territory of Chandigarh forn1ed-Earlier notification_
_-If_ _"law in_ _force"-Newly_ _fonned Union_ _Territory-If_ _could avail_ _of_ _the_
_earlier notification and amend the schedule._
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Section 6 of the Punjab General Sales Tax Act, 1948 provides that the
State Government, after giving by notification, not less than ..1hree months'
notice of its intention so to do, may, by like notification add or delete from
Schedule B and thereupon Schedule B shall be deemed to be amended accord ...
ingly.
The State Government of the composite State of Punjab issued a notification
under s. 6 giving its intention to delete from Schedule B pure silken fabrlcs
from the list of tax-free goods. Bef6re the issue of any further notification,
however, the composite State \Vas reorganised and the Union Territory of
Chandiga,rh was formed. The Government of the Union Territory of Chandigarh issued a notification amending item 30 of Schedule B as intended to be
amended by the notification issued by the former government.
In a writ petition filed before the High Court the respondent challenged
the notification as invalid on the ·ground that the earlier notification could
not be availed of by the new Government for amending Schedule B. The
appellant claimed that the earlier notification was "law in force". But the
High Court repelled this argument. It allowed the respondent's writ.
Dismissing the appeal,
HELD : 1. There was no "law in force" enabling the newly formed Union
Territory of Chandigarh to levy any sales tax on pure silken fabrics.
2. The notification merely notifying the intention of the State Government
to add or delete from Schedule B any article by itself had no force of
law until and. unless, on the expiry of the period of three months, a like notification wa5 issued amending the Schedule. The erstwhile State Government
of Punjab could not issue the second notification in respect of the Union Territory after it ceased to be a part of the State of Punjab. Sales Tax could
not be charged on pure silken fabrics by the· said State Government merely
by virtue of the notification. It was therefore not a law in force when the
composite State was reorganised. [136 D-E]
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CHIEF COMMR. _v._ SIALKOT SILK STORES _(Untwalla,_ _].)_ 135
**3.** **No** **provision** **is** **to** **be found** **in** **the** **Act** **to** **sho\v** **that** **by** **a legal** **fiction** **the** **A**
**'first** **notification of intention issued** **by** **the** **erstwhile State Government could**
**be deemed** **to** **be** **a notification** **issued** **by** **the** **new** **Govcrnn1cnt.** **[137** **B]**
_**Mis.**_ _**Rattan Lal and Co. and another etc.**_ **v.** _**The**_ _**Assessing Au1hority,**_
_**l'atiala and another, etc.**_ **AIR 1970 S.C, 1742 held inapplicable.**
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 364 of 1969. **B**
From the Judgment and Order dated 7-8-1968 of the Punjab and
Haryana High Court in Civil Writ No. 2199/68.
S. _N._ _Anand_ and _R._ _N._ _Sachthey_ for the Appellant.
_Arvind Mi1wcha_ for the Respondent.
The Judgment of the Court was delivered by
UNTWALIA, J. The Cillef Commissioner, Union Territory, Chandigarh, has preferred tills appeal by certificate from the decision of the
High Court of Punjab & Haryana allowing the Writ Petition of the respondent and declaring the amendment of item 30 in Schedule B to the
Punjab General Sales Tax Act, 1948, hereinafter referred to as the Act,
invalid.
The composite and the then existing State of Punjab was re-organised by the Punjab Re-organisation Act, 1966, Central Act 31 of 1966.
The Union Territory of Chandigarh was carved out as one of the States
on and from November 1, 1966. Under section 6 of the Act no tax
was payable on the sale of goods specified in Schedule B. The State
Government could amend tills Schedule and at the relevant time the
power so conferred on the State Government was in the following
terms:
"The State Government after giving by notification not
less than three months' notice of its intention so to do may,
by like notification add or delete from Schedule B and thereupon Schedule B shall be deemed to be amended accordingly."
item 30 of Schedule B exempted from sales tax :
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"All varieties of cotton, woollen or silken textiles, includ- **G**
ing rayon, artificial silk or nylon, whether manufactured by
handloom or powerloom or otherwise, but not including carpets, druggets, woollen durees and cotton floor durees:"
On August 24, 1966 the State Government of the composite State
of Punjab issued a notification giving three months' notice of its inten- **H**
tion to amend Schedule B to exclude pure silken fabrics from the list
of tax free goods. Bnt before the expiry of three months and before
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B
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D
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136 SUPREME COURT REPORTS (1979] 2 s.c.R.
any further notification could be issued by the State Government as
required by section 6 of the Act, the Union Territory of Chandigarh
came into existence on November 1, 1966. The Government of the
Union Territory issued a notification dated January 4, 1968 amending
item 30 as intended to be amended by the notification dated August 24,
1966 issued by the State Government of the composite State of Punjab.
The respondent filed a writ petition in the High Court challenging this
notification as being invalid on the ground that the earlier notification
could not be availed of by the new Government for amending Schedule
B. The stand taken on behalf of the appellant was that the earlier
notification was a "law in force" within the meaning of section 88 of
Central Act 31 of 1966. The High Court repelled this argument, and
in our opinicn, rightly.
It is plain on the wordings of section 6 of the Act, extracted above,
that a notification merely notifying the intention of the State Government to add or delete from Schedule B any article, by itself, had· no
force of law until and unless on the expiry of the period of three months
a like notification was issued amending the Schedule. The erstwhile
State Government of Punjab could not issue a second notification in
respect of the Union Territory after it ceased to be a part of the State
of Punjab. Sales tax could not be charged on pure silken fabrics by the
said State Government on October 31, 1966 merely by virtue of the
notification dated August 24, 1966. It was, therefore, not a law in
force when the composite State was re-organised. Section 88 of the
##### Punjab Re-organisation Act, 1966 runs as follows :
"The provisions of Part II shall not be deemed to have
effected any change in the territories to which any law in
force immediately before the appointed day extends or
applies, and territorial references in any such law to the State
of Punjab shall, until otherwise provided by a competent
Legislature or other competent authority, be construed as
meaning the territories within that State immediately before
the appointed day."
G It is clear that tl1ere was no law in force on November 1, 1966, which
could enable the Union Territory to levy any sales tax on pure silken
fabrics.
Mr. S. N. Anand endeavoured to attack the judgment of the High
Court by taking a new stand in this Court that the notification dated
H August 24, 1966 could enure to the benefit of and be availed by the
Union Territory Government. But he failed to point out any provision
in Act 31 of 1966 or any other law to substantiate this argument. No
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CHIBF COMMR. _v._ SIALKOT SILK STORES _(Untwalia,_ _!.)_ 137
"deeming" provision could be brought to our notice, as there is noKe,
to show that the notification issued by the erstwhile State Government
of Punjab could be deemed to be one issued by the new Government of
the Union Territory. For many other purposes there are "deeming" provisions in Central Act 31of1966 e.g. sections 59(1), 74(1) and 92.
But no provision is to be found to show that by a legal fiction the first
notification of intention issued by the erstwhile State Government could
be deemed to be a notification issued by the new Government. The
argument thus presented by Mr. Anand must be rejected.
Learned counsel for the appellant placed reliance upon the principle
of law ennnciated in paragraph 12 at page 1749 in the decision of this
Court in _Ml_ _s._ _Ratan Lal and_ _Co._ _and another etc.,_ v. _The Assessing_
_Authority, Patiala and another, etc.(_ _[1]_ _)._ The principle stated therein
is that the new legislature of the new State after the re-organisation of
the composite State could amend the existing law retrospectively from
a date anterior to the date of reorganisation. Obviously the view
expressed in the decision aforesaid is so very different that it cannot be
of any help to the appellant in this case.
·For the reasons stated above, we dismiss the appeal with costs.
P.B.R.
(I) A.I.R. 1970 S.C., 1742
10-817SCI/78
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_Appeal dismissed._
