Ram Bharosey Lal Krishan Kumar Vs.
State of U.P. & Ors  INSC 290 (21 October 1971)
Uttar Pradesh Sales Tax Act, 1948--Ss. 3AA,
3D--Notification under s. 3D imposing purchase tax on goods covered by s. 3AA--Validity--Scope
of s. 3-D.
Under s. 3AA of the Uttar Pradesh Sales Tax
Act, 1948 "not withstanding anything contained in s. 3 or 3A" tax on
the turnover of the goods specified therein was not leviable except at the
point of sale by a dealer to the consumer.
Section 3D, incorporated into the Act later,
authorised the imposition of a tax on the turnover of first purchase and on the
issue of a notification under the section no tax could be levied under any
other section in respect of the goods so notified. On the question whether the
notification dated October 1, 1964 imposing a purchase tax on oil seeds was
invalid for the reason that it contravened s. 3AA of the Act,
HELD : It is open to the State Government to
levy purchase tax, in exercise of its powers under s. 3D, in respect of goods
covered by s. 3AA. At the time the legislature incorporated into the Act s. 3D
it must have been aware of the existence of s. 3AA, yet, in sub-s. (4) of s. 3D
it declared that on the issue of a notification under the section, no tax shall
be levied under any other section in respect of the goods so notified. The
ambit of this provision is very wide and it clearly takes in goods mentioned in
s. 3AA. Further, the non-obstante clause does not take in s. 3D, and if the
legislature intended to exclude the operation of s. 3D, in respect of matters
covered by s. 3AA nothing would have been easier than to say so. Therefore,
there are no grounds to cut down the amplitude of the power conferred on the
State Government under sub-s. (4) of s. 3-D. [150 H-151 D]
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 240 and 241 of 1969.
Appeals from the judgment and decree dated
December 18, 1968 of the Allahabad High Court in Civil Misc. Writ No. 4697 of
J. P. Goyal and Sobhag Mal Jain, for the
appellant (in both the appeals).
L. M. Singhvi and O. P. Rana, for the
respondents ( in both the appeals).
The Judgment of the Court was delivered by
Hegde, J. These are appeals by certificate. They are by the same appellant and
they raise common question of law. Hence they are considered together.
Two questions of law were urged on behalf of
the appellant in support of the appeals. The first contention urged was that
147 Section 3-D(1) of the U.P. Sales Tax Act, 1948 (to be hereinafter referred
to as the Act) is ultra vires the Constitution, firstly because that under that
section excessive legislative power had been delegated to the State Government
and secondly on the. ground that it discriminates between the registered
dealers who made their purchases through licensed dealers and the registered-.
dealers who made their purchases through dealers who are not licensed.
The second contention taken was
that-notification No. ST7122/X-900(16)64 dated October 1, 1964 issued under S.
3D(1) of the Act imposing purchase tax on oil seeds is invalidas it contravenes
S. 3AA of the Act.
We have considered the first ground of attack
in Civil Appeals, Nos. 362 and 1692 of 1969 (Mls. Sita Ram Bishambhar Dayal
etc. v. State of U.P.) in which we have delivered judgment just now. For the
reasons mentioned therein, the contention that S. 3-D(1) is ultra vires the
The only surviving question is whether the
notification referred to earlier is violative of s. 3AA of the Act.
Before examining that contention, it is
necessary to set out the, relevant facts.
The appellant is a partnership firm. It
carries on business as dealers in round nuts, oil seeds and Arhar. For the
assessment years 1965-66, 1966-67, the Sales-tax Officer, Rampur assessed' the
appellant to sales-tax on the turnover of the groundnuts oil manufactured by
the appellant and to purchase tax on the turnover of the oil seeds and food grains.
The appellant unsuccessfully appealed against the assessment orders. Thereafter
it took up the matter in revision before the revising authority. There, again
it substantially failed. Aggrieved by that decision, he moved' the High Court
of Allahabad for a writ of certiorari quashing the levy of purchase tax imposed
on him in respect of his purchases of oil seeds. The High Court rejected those
petitions. Hence these appeals.
We shall now extract the impugned
notification to the extent,: it is material for the purpose of this appeal.
It reads thus:
"Not. No. ST-7122/X-99(16)64 dated
October 1, 1964.
In exercise of the powers under sub-section
(1) of section 3-D of the Uttar Pradesh Sales Tax Act, 1948 (U.P. Act No. XV of
1948), the Governor of Uttar Pradesh is pleased to notify that with effect from
October 1, 1964, the turnover of first purchases in respect 148 of goods
mentioned below shall be liable to tax under Section 3-D of the said Act.
Name of goods Rate of tax.
1. Foodgrains including cereals and pulses1
.5 paisa per rupee
2. Gur 3 paisa per rupee
3. Oilseeds 2 paisa per rupee
-----------------------------------------------------------As per this
notification a purchase tax of 2 paise per rupee ,,on the turnover of the first
purchase of oil seeds is leviable. It is contended that this notification
violates s. 3AA of the Act. Section 3AA says:
"Notwithstanding anything contained in
section 3 or 3A, the turnover in respect of the following goods shall not be
liable to tax except at the point of sale by a dealer to the consumer, and the
rate of tax shall be such, not exceeding the maximum rate for the time being
specified in section 15 of the Central Sales Tax Act, 1956, as may be declared
by the State Government by notification in the Official Gazette:
(vi) oil seeds, that is to say, seeds
yielding non-volatile oils used for human consumption, or in industry, or in
the manufacture of varnishes, soap and the like, or in lubrication, and
volatile oils used chiefly in medicines, perfumes, cosmetics and the like.
2. Unless the dealer proves otherwise, every
sale 'by a dealer shall, for the purposes of sub-section (1) be presumed to be
to a consumer.
Explanation.--A sale of any of the goods
specified in sub-s. (1) to a registered dealer who does not purchase them for
resale in the same condition in which he has purchased them, or to an
unregistered dealer shall, for purposes of this section, be deemed to be a sale
to the consumer." 149 This section was incorporated into the Act on April
Under this section, on the goods specified
therein, sales tax not, exceeding the maximum rate for the time being specified
in s. 15 of the Central Sales Tax Act, 1956 can be levied by the State Government
on the turnover in respect of sales by dealers to the consumers. From an
analysis of this provision, we get the following:
1. that tax to be levied is a sales-tax;
2. levy in question is a single point levy;
3. the point of levy is the sale by the
dealer to the consumer and
4. the rate to be fixed by the State
Government is not to exceed the maxi mum rate for the time being specified in
s. 15 of the Central Sales Tax Act, 1956.
If we hold that provisions contained in s.
3AA continue to be in force in respect of dealing in oil seeds then the
appellant's. contention that the impugned levy is an invalid levy succeeds, But
the question is whether that contention is correct.
This takes us to s. 3-D. That section reads:
"1. Except as provided in sub-section
(2), there shall be levied and paid, food each assessment year or part thereof,
a tax on the turnover, to be determined in such manner as may be prescribed, of
first purchases made by a dealer or through a dealer, acting as a purchasing
agent in respect of such goods or class of goods, and at such rates, not
exceeding two paisa per rupee in the case of food grains, including cereals and
pulses, and pulses, and five paisa per rupee in the case of other goods and
with effect from such date, as may, from time to time, be notified by the State
Government in this behalf.
Explanation.-In the case of a purchase made
by a registered dealer through the agency of a licensed dealer, the registered
dealer shall be deemed to be the first purchaser, and in every other case of a
first purchase, made through the, agency of a dealer, the dealer who is the
agent shall be deemed to be the first purchaser.
2. x x x x
3. x x x x 150
4. On the issue of a notification under this
section no tax shall be levied under any other section in respect of the goods
5. The provisions of the second and third
proviso to Section 3 and of Section 18, shall mutatis mutandis apply in
relation to the tax payable under this Section.
6. x x x x
7. Unless the dealer proves otherwise to the
satisfaction of the assessing authority, every purchase by or through a dealer
shall, for the purposes of sub-section (1), be presumed to be the first
purchase by such dealer and every sale through a dealer shall, for the purposes
of sub-section (2), be presumed to be sale to a first purchaser." For our
present purpose, it is not necessary to refer to the second and third provisos
to S. 3 and S. 18. It may be noted that S. 3-D was incorporated into the, Act
on August 1, 1958.
The contention on behalf of the appellant was
that s. 3AA is a special provision regarding certain specified class of goods
including oil seeds whereas S. 3-D is a general provision. Hence dealings in
respect of oil seeds must be held to be governed exclusively by s. 3AA. In
support of his contention, the learned ,Counsel for the appellant called into,
aid the rule of construction that a special provision excludes the application
of a general provision.
On the other hand, it was contended on behalf
of the Revenue that power was conferred on the State Government to levy
purchase tax in place of sales-tax in respect of any goods' that may be
notified under s. 3-D(1) subject only to the conditions mentioned therein.
According to Dr. Singhvi, learned 'Counsel for the Revenue, the legislature
left the questions whether in respect of a class of goods, the appropriate levy
is sales tax or purchase tax as well as what is the appropriate point of levy,
to the State Government because a decision on that question has to be taken on
an assessment of various factors, some of which are not constant. According to
him in view of the language employed in sub-s. (4) of S. 3-D, it is not
possible to apply the rule of construction that special legislation in respect
of any particular topic should exclude the application of general legislation.
It may be noted that S. 3-D was incorporated
into the Act much later than S. 3AA. As seen earlier S. 3AA was incorporated
into the Act on April 1, 1956 whereas S. 3-D was added 151 on August 1, 1958.
At the time the legislature incorporated into the Act S. 3-D, it must have been
aware of the existence of S. 3AA but yet in sub-s. (4) of S. 3-D, it declared
that on the issue of a notification under that section, no tax shall be levied
under any other section in respect of the goods so notified. The ambit of this
provision is very wide and it clearly takes in goods mentioned in s. 3AA.
Now turning to S. 3AA, it is important to
note that it begins by saying "notwithstanding anything contained in section
3 or 3-A". The non-obstante clause does not take in S. 3-D. If the
legislature intended to exclude the operation of S. 3-D, in respect of matters
covered by S.
3AA, nothing would have been easier than to
say so. It could have said "notwithstanding anything contained in s. 3,
3-A and S. 3-D". But it did not choose to do that.
Therefore there are no grounds to cut down
the amplitude of the power conferred on the State Government under sub-s. (4)
of S. 3-D.
The High Court of Allahabad has consistently
taken the view that it is open to the State Government to levy purchase tax in
exercise of its powers under S. 3-D even in respect of goods covered by S. 3AA.
We are in agreement with that view.
In the result these appeals fail and they are
dismissed with costs. One set.
K.B.N. Appeals dismissed.