V. M. Syed Mohammad and Company Vs.
The State of Andhra  INSC 19 (11 March 1954)
DAS, SUDHI RANJAN MAHAJAN, MEHAR CHAND (CJ)
BOSE, VIVIAN HASAN, GHULAM
CITATION: 1954 AIR 314 1954 SCR 1117
CITATOR INFO :
R 1955 SC 661 (205) R 1957 SC 877 (16) R 1958
SC 538 (12) R 1960 SC1254 (3,9) RF 1992 SC1277 (85)
Constitution of India, art. 14-Government of
India Act, 1935, entry 48 in List II of the Seventh Schedule-Madras General
Sales Tax Act (IX of 1939)-Whether ultra vires the Constitution or Government
of India Act, 1935-Rule 16(5) framed under the Act-Whether ultra vires s. 5
(vi) of the Act.
Held, that the Madras General Sales Tax Act
(IX of 1939), is not ultra vires the Government of India Act, 1935 as entry 48
in List II of the Seventh Schedule to the Government of India Act, 1936 was
wide enough to cover a law imposing 'a tax on the purchaser of goods as well as
on the seller.
Held, also that inasmuch as there was nothing
to suggest that the purchasers of other commodities were similarly situated as
the purchasers of bides and skins in the present case the Act 1118 was not void
under art. 14 of the Constitution on the ground that the impugned Act singles
Out for taxing purchaser of certain specified commodities only but leaves out
purchasers of Mother commodities.
Article 14 does not forbid classification for
legislative purposes provided such classification is based on some differentia
having a reasonable relation to the object and purpose of the law in question.
Rule 16(5) framed under the Act contravenes
the provisions of s. 5(vi) of the Act but this sub-rule is severable and does
not affect the validity of the rules which may otherwise lie within the ambit
of the Act.
Chiranjit Lal Chowdhury v. The Union of India
( S.C.R. 869)relied upon.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 187 and 188 of 1953.
Appeals under article 132 of the Constitution
of India from the Judgment and Order, dated the 29th August, 1952, of the High
Court of Judicature at Madras in Writ Petitions Nos. 21 and 41 of 1952.
K.V. Venkatasubramania Iyer (A. N. Rangaswami
and. S. K. Aiyangar, with him) for the appellant.
M. Seshachalapathi for the respondent.
V.K. T. Chari, Advocate-General of Madras (V.
V. Raghavan, with him) for the intervener (State of Madras).
T. R. Balakrishna lyer and Sardar Bahadur for
the intervener (State of Travancore-Cochin).
Nittoor Sreenivasa Rao, Advocate General Of
Mysore (Porus A. Mehta, with him) for the intervener (State of Mysore).
Lal Narayan Sinha (B. K. P. Sinha, with him)
for the intervener (State of Bihar).
1954. March 11. The Judgment of the Court was
delivered by DAS J.-These two appeals arise out of Writ Petitions Nos.
21 'and 41 -of 1952, filed in the High Court
of Judicature at Madras under article 226 questioning the validity of the
Madras General Sales Tax Act (IX of 1939) and of the Turnover and Assessment
Rules framed under that Act.
1119 The petitioners are tanners carrying, on
business in Eluru, West Godawari District, which is now part of the newly
created State of Andhra. They make large purchases of untanned hides and skins
and after tanning them in their tanneries they export the tanned hides and
skins or sell the same to local purchasers. In the High Court the appellants
impugned the Act and the rules on the following grounds :-I (a) The Provincial
Legislature had no power under the Government of India Act of 1935 to enact a
law imposing a tax on purchasers;
(b) The liability to pay tax on sales is
thrown on the purchaser not by the statute but by the rules. This is an
unconstitutional delegation by the legislature of its functions to the
executive and the imposition of ,the tax is accordingly illegal;
(c) The Act has become void under article 14
of the Constitution, as it singles out for taxation purchasers in some trades
and is, therefore, discriminatory; and (d) The rules framed under the Act are
inconsistent with the provisions enacted in the body of the Act and are void.
The High Court repelled each of the aforesaid
grounds except that under item (d). It held that rule 16(5) was ultra vires in
that it offended against section 5 (vi) of the Act and dismissed their
applications. Hence the present appeals by the appellants under the certificate
granted by the High Court that it was a fit case for appeal to this court.
Learned advocate appearing in support of
these appeals has not pressed the objection under item (b) but has insisted on
the remaining grounds of objection. In our opinion the decisions of the High
Court on those grounds are substantially well-founded and correct. On the
question of legislative competency the learned advocate drew our 'attention to
entry 54 in List II of the Seventh Schedule to the Constitution of India and argued
that this entry clearly indicated that entry 48 in List II of the Seventh
Schedule to the -Government of India Act, 1935; under which the 145 1120
impugned Act was passed, was much narrower in its scope and could not be read
as authorise in a the making of a law with respect to taxes on the purchase of
goods. This argument appears to us to be fallacious, for the intention of the
Constituent Assembly as expressed in entry 54 in List II of the Seventh
Schedule to the Constitution cannot be a guide for ascertaining the intention
of a totally, different body, namely, the British Parliament, in enacting entry
48 in List 11 of the Seventh Schedule to the Government of India Act, 1935.
Further, we agree with the High Court that entry 48 in List II of the Seventh
Schedule to the Government of India Act, on a proper construction, was wide
enough to cover a law imposing tax on the purchaser of goods as well and that
the Constituent Assembly in entry 54 of List II in the Seventh Schedule to the
Constitution accepted this liberal construction of the corresponding entry 48
and expressed in clearer language what was implicit in that corresponding
The next point urged by the learned advocate
was founded on article 14 of the Constitution. The appellants' grievance is
that the impugned -Act singles out for taxing purchasers of certain specified
commodities only but leaves out purchasers of all other commodities. The
principle underlying the equal protection clause of the Constitution has been
dealt with and explained in Chiranjitlal Chowdhury v. The Union of India (1)
and several subsequent cases and need not be reiterated. It is well,settled
that the guarantee of equal protection of laws does not require that the same
law should be made applicable to all persons. Article 14, it has been said,
does not forbid classification for legislative purposes, provided that such
classification is based on some differentia having a reasonable relation to the
object and purpose of the law in question. As pointed out by the majority of
the Bench which decided Chiranjitlal Chowdhury's case, there is a strong
presumption in favour of the validity of legislative classification and it is
for those who challenge it as (1)  S.C.R. 1121 unconstitutional to allege
and prove beyond all doubt that the legislation arbitrarily discriminates
between different persons similarly circumstanced. There is no material on the
record before us to suggest that the purchasers of other commodities are
similarly situated as the purchasers of hides and skins. The majority decision
in Chiranjitlal Chowdhury's case(1) clearly applies to the case before us and
there is no getting away from the position that the appellants before us have
not discharged the burden of proof that, according to the majority decision,
was upon them to do.
Lastly, the learned advocate urges that rule
16(5) clearly contravenes the provisions of section 5(vi) of the Act.
This sub-rule has been held to be ultra vires
by, the High Court and, indeed, the learned Advocate-General of Madras did not
in the High Court, as before ,us, dispute that rule 16(5) was repugnant to
section 5(vi). That sub-rule, however, affects only unlicensed dealers and the
appellants who are admittedly licensed dealers are not affected by that
sub-rule. Further, it has not been suggested before us that the appellants were
ever called upon to pay any tax on purchase of hides or skins in respect of
Which tax had been previously paid by some prior purchaser. That sub-rule is
clearly severable and cannot affect the validity of the rules which may
otherwise be within the ambit of the Act.
Our attention has not been drawn to any other
infirmity in the rules.
In the premises there is no substance in
these appeals which must, therefore, be dismissed with costs.
Agent for the respondent and for the
interveners, States of Madras, Mysore and Bihar: R. H. Dhebar.
(1)  S.C.R. 869.