The State of Bihar Vs. Rat Bahadur
Hurdut Roy-Mott Lall Jute Mills & ANR  INSC 142 (26 November 1959)
SINHA, BHUVNESHWAR P.(CJ) SUBBARAO, K.
GUPTA, K.C. DAS SHAH, J.C.
CITATION: 1960 AIR 378 1960 SCR (2) 331
CITATOR INFO :
C 1984 SC1194 (28)
Sales Tax-Amount realised by registered
dealer from sales outside the State-Forfeiture of such amount-Validity-
Allowable deduction, meaning of-Bihar Sales Tax Act, 1947 (XIX of 1947), Ss. 5,
6, 7, 8, 14A Proviso, 33, r. 19 Proviso,
The respondent mills, a registered dealer
under the Bihar Sales Tax Act, 1947 (Act 111 of 1947), was carrying on business
of manufacture and sale of gunny bags, hessian and other jute products at
Katihar. During the period April 1, 1950, to March 31, 1951, it sold and
despatched its wares worth about Rs. 92,24,386-1-6 to dealers outside the State
and realised a sum of Rs. 2,11,222-9-6 as sales-tax from them. In assessing the
sales-tax payable by the said respondent for the relevant period the
Superintendent of Sales Tax, Purnea, held that the said amount of sales-tax had
been realised in contravention of s. 14A of the Act read with r. 19 of the
Bihar Sales Tax Rules, and directed its forfeiture under the proviso to that
section. The respondent challenged the validity of the said order under Arts.
226 and 227 of the Constitution. The High Court held that the proviso to S. 14A
of the Act was ultra vires the State Legislature as it violated Arts. 20(1) and
31(2) of the Constitution and set aside the order of forfeiture and quashed the
proceedings under s. 14A of the Act. The State of Bihar appealed to this Court.
It was urged by way of preliminary objection on behalf of the respondent that
since the proviso to s. 14A of the Act had no application to the facts of the
case, there was no occasion to decide its constitutional validity. The
contention of the appellant was that the proviso did apply to the respondent
inasmuch 332 as he had contravened the conditions and restrictions imposed by
the proviso to r. 19. The question for determination, therefore, was whether
the said respondent could be said to have realised any amount by way of tax in
respect of such part of its turn-over as was allowed to be deducted from his gross
turn-over for the determination of his taxable turn-over under the Act or the
rules, as contemplated by the later part of the said proviso.
Held, that the preliminary objection must
Held, further, that before the penalty of
forfeiture could be imposed upon a dealer under the proviso to s. 14A of the
Bihar Sales tax Act, 1947, it had to be shown that he had acted contrary to the
conditions and restrictions prescribed by the Rules and it was not enough to
show that the collection of the sales tax made by him was otherwise illegal or
improper. The contravention of the statutory provisions contained in s. 14A or
of the Rules prescribing conditions and restrictions in that behalf alone could
form the basis of the imposition of the penalty of forfeiture prescribed by the
With the insertion of S. 33 into the Act with
retrospective operation, prohibiting the imposition of the tax on sales taking
place outside the State and in view of the decision of this Court in State of
Bombaay v. The United Motors (India) Ltd.  S.C.R. 1069, the proviso to r.
19 must be construed on the basis that the sales in question were outside the
scope of the Act and no tax could be imposed on them. It could not, therefore,
be said that that part of the respondent's turnover which was in question was
an allowable deduction within the meaning of the said proviso.
Such allowable deductions as are contemplated
by the proviso are clearly based on the provisions of ss. 6, 7 and 8 of the Act
as is quite clear from the Explanation to s. 5 of the Act.
State of Bombay & Another v. The United
Motors (India) Ltd.
An allowable deduction under the said proviso
was not the same thing as exclusion of a part of the turn-over on the basis of
s. 33(1)(a)(1) of the Act. It stands on an entirely different footing.
Transactions which fall within the said section are in substance outside the
Act and no tax can be imposed on them. The transaction in question did not,
therefore, fall within the proviso to r.19 and the proviso to S. 14A was not
attracted and the order of forfeiture passed against the respondent was
unjustified and illegal.
& CIVIL APPELLATE JURISDICTION: Civil
Appeal No.678 of 1957.
Appeal from the judgment and order dated
August 1, 1956-of the Patna High Court, in Misc. Judicial Case No. 188 of 1955.
Civil Appeals Nos. 546 of 1958 and 115 of 1959.
333 Appeals from the judgment and order dated
March 8, 1957, of the Patna High Court, in Misc. Judicial Cases Nos. 116 and
215 of 1956.
Lal Narayan Sinha and S. P. Varma, for the
C. K. Daphtary, Solicitor-General of India
and R. C. Prasad, for respondent No. 1 in C. A. No. 678 of 57.
B. C.. Ghose and P. K. Chatterjee, for the
H. N. Sanyal, Additional Solicitor-General of
India and C. P. Lal, for respondent No. 1 in C.A. No. 546 of 58.
H. N. Sanyal, Additional Solicitor-General of
India and P. K. Chatterjee, for respondent No. 1 in C.A. No. 115 of 1959.
1959. November 26. The Judgment of the Court
was delivered by GAJENDRAGADKAR J.-This is a group of three appeals which have
been filed in this Court by the State of Bihar (hereinafter called the
appellant) against three separate registered dealers with a certificate issued
by the Patna High Court Under Art. 132(1) of of the Constitution that they
involve a substantial question of law as to the interpretation of Art. 20(1) of
the Constitution. The facts in each one of the three appeals are similar,
though not exactly the same, but they raise a common question of law under the
proviso to s. 14A of the Bihar Sales Tax Act, 1947 (Act XIX of 1947)
(hereinafter called the-Act). Orders of forfeiture have been passed against the
three registered dealers in the three appeals respectively, and they raise a
common question of law in regard to the validity of the said orders. By consent
Civil Appeal No. 678 of 1957, has been argued before us as the principal appeal
and it has been conceded that our decision in that appeal will govern the two
other appeals. We would,, therefore, set out the facts in Civil Appeal No, 678
of 1957 and deal with the merits of the points raised for our decision in that
Rai Bahadur Hurdut Roy Motilal Jute Mills,
Katihar (hereinafter called the first respondent) was at the, 43 334 material
time registered as a dealer under the Act and was carrying oil business of
manufacture and sale of gunny bags, Hessian and other jute products at Katihar
in the district of Purnea. During the period April 1, 1950, to March 31, 195 1,
the said respondent sold and despatched its ware worth about Rs. 92,24,386 to
dealers outside the State of Bihar and realised a sum of Rs. 2,11,222-9-6 as
sales tax from such dealers. The said respondent's assessment to sales tax for
the relevant period was taken up by the Superintendent of Sales Tax, Purnea
(hereinafter called the second respondent) on May 31, 1953; and in consequence
of these proceedings the impugned order of forfeiture came to be passed.
Meanwhile Art. 286 of the Constitution along
with other articles was considered by this Court in the State of Bombay &
Anr. v. The United Motors (India) Ltd. & Ors. (1). The question which this
Court bad to consider in that case was about the vires of the impugned
provisions of the Bombay Sales Tax Act, 1952 (Act XXIV of 1952), and for the
decision of the said question Art. 286 fell to be Considered.
According to the majority judgment in that
286(1)(a) read with the explanation thereto
and construed in the light of Art. 301 and Art. 304 prohibits the taxation of
sales or purchases involving inter-State elements by all States except the
State in which the goods are delivered for the purpose of consumption therein.
The latter State is left free to tax such sales or purchases and it derives
this power not by virtue of the explanation to Art. 286(1) but under Art.
243(3) read with Entry 54 of List 11. The view that the explanation does not
deprive the State in which the property in the goods passed of its taxing power
and that consequently both the State in which the property in -the goods passes
and the State in which the goods are delivered for consumption have the power
to tax is not correct.
When the first respondent's assessment was
taken up by the second respondent his attention was invited to this Court's
decision in the case of the United Motors (1); he followed the said decision
and held that (1)  S.C.R. 1069.
335 the turnover of Rs. 92,24,386-1-6 on
account of despatch of manufactured jute products to out-of-Stat buyers was
exempted from the levy of tax; this meant, a deduction of the said amount from
the amount of Rai Bahadur the total turnover shown by the first respondent in
the return submitted by him according to the provisions of the Act.
Subsequently the second respondent proceeded
against the first respondent under s. 14A of the Act" and issued a notice
in that behalf on June 18, 1954. By this notice the first respondent was called
upon to show cause why the entire amount of Rs. 2,11,222-9-6 which had been
recovered by him as sales tax from the dealers should not be forfeited to
Government. The first respondent showed cause but the second respondent was not
satisfied with the explanation given by the first respondent, and so he
directed the first respondent to deposit the said amount into the Government
treasury and produce the proof of payment before him within a month of the
receipt of his order. This order was passed on February 10, 1955. It shows that
the second respondent thought that the matter raised for his decision was
the first respondent had collected the amount
in question as tax under the Act from his customers for and on behalf of the
appellant, and so he could not retain the said amount ;
it must go to the State coffers. He also held
that the first respondent had represented to the, purchasers that the amount
was chargeable as sales tax under the Act and as such the first respondent had
clearly contravened the explicit provisions of s. 14A of the Act read with r.
19 of the Bihar Sales Tax Rules (hereinafter called the Rules). It is on these
findings that the second respondent passed the impugned order of forfeiture.
The first respondent then applied to the
Patna High Court, tinder Arts. 226 and 227 of the Constitution challenging the
validity of the said order. It was urged on his behalf that the proviso to s.
14A under which the impugned order was purported to have been passed did not
apply to the case of the first respondent, and as such the order was Dot
justified 336 by the said proviso. It was also contended that if it is held
that the said proviso justified the impugned order it was ultra vires the State
Legislature inasmuch as it violates Art. 20(1) and Art. 31(2) of the
Constitution. The High Court did not consider the first contention raised
before it; it dealt with the two constitutional points urged by the first
respondent and found in his favour on both of them.
On these findings the petition filed by the
first respondent was allowed, the impugned order of forfeiture was set aside
and the proceedings taken against the first respondent under s. 14A were
quashed. The appellant then applied for and obtained a certificate from the
said High Court under Art. 132(1) of the Constitution.
On behalf of the appellant Mr. Lal Narain
Sinha has contended that the High Court was in error in holding that the proviso
to s. 14A violates either Art. 20(1) or Art.
31(2) of the Constitution. He has addressed
us at length in support of his case that neither of the two articles is
violated by the impuged proviso. On the other hand, the learned
SolicitorGeneral has sought to support the findings of the High Court on the
said two constitutional points; and he has pressed before us as a preliminary
point his argument that on a fair and reasonable construction, the proviso
cannot be applied to the case of the first respondent. We would, therefore,
first deal with this preliminary point.
In cases where the vires of statutory
provisions are challenged on constitutional grounds, it is essential that the
material facts should first be clarified and ascertained with a view to determine
whether the impugned statutory provisions are attracted; if they are, the
constitutional challenge to their validity must be examined and decided.
If, however, the facts admitted or proved do
not attract the impugned provisions there is no occasion to decide the issue
about the vires of the said provisions. Any decision on the said question would
in such a case be purely academic.
Courts are and should be reluctant to decide
constitutional points merely as matters of academic importance.
337 Before considering the preliminary point
raised by the first respondent it is necessary to refer briefly the relevant
scheme of the Act. The Act was originally passed in 1947 because the
Legislature thought it necessary to make an addition to the revenue of Bihar,
and for that purpose to impose a tax on the sale of goods in Bihar. The
provisions of the Act as well as the statutory Rules framed under it have been
subsequently modified from time to time. In our present discussions we would
refer to the provisions and the Rules which were in operation at the material
time. The goods the sale of which is taxed under the Act are defined by s. 2(d)
as meaning all kinds of moveable property other than those specifically
excepted. Section 2(g) defines " sale " inter alia as meaning any
transfer of property in goods for cash or other considerations and the second
proviso to it prescribes that the sale of any goods-(1) which are actually in
Bihar at the time when, in respect thereof the contract of sale as defined in
s. 4 of that Act is made, or (2) which are produced or manufactured in Bihar by
the producer or manufacturer thereof,-shall wherever the delivery or contract
of sale is made, be deemed for the purposes of this Act to have taken place in
Bihar. The tax leviable Linder the Act is defined by s. 2(hh) as including a
fee fixed in lieu of the tax under 'the' first proviso to s. 5, whereas under
s. 2(i) " turnover " means the aggregate of the amounts of sale
prices received and receivable by a dealer in respect of sale or supply of
goods or carrying out of any contract, effected or made during the given
period, or, where the amount of turnover is determined in the prescribed
manner, the amount so determined. Section 4 which is the charging section
provides that every dealer whose gross turnover during the specified period on
sales which have taken place both in and outside Bihar exceeds Rs.
10,000 shall be liable to pay tax on sales
which have taken place in Bihar oil and from the date of the commencement of
the Act. This section shows that the incidence of taxation can be attracted
only where the gross turnover of the dealer exceeds Rs. 10,000 and in 338
determining this prescribed minimum. sales which take place both in Bihar and
outside are taken into account. Section 5, prescribes the rate of tax at six
pies in a rupee on the taxable turnover. The provisos to this section confer
specific powers on the State Government; the first proviso which is relevant
for our purpose empowers the State Government by notification to fix a higher
rate of tax not exceeding one anna in a rupee or any lower rate of tax in
respect of sale of any goods or class of goods specified in such notification
subject to such conditions as it may impose. The explanation to this section
indicates what the taxable turnover for the purpose of the section means.
" Taxable turnover " according to this explanation means that part of
a dealer's gross turnover on sales which have taken place in Bihar during any
period which remains after deducting therefrom the items specified in cls. (a)
and (b) of the explanation. The sale of any goods declared from time to time as
tax-free goods under s. 6 is one of those items. Section 6 empowers the State
Government to exempt sale of any goods or class of goods from the levy of tax
under this Act subject to the conditions specified in the section, whereas s. 7
empowers the Government to exempt dealers from tax, and s. 8 authorises the
Government to prescribe points at which goods may be taxed or exempted.
Section 9 deals with the question of
registration of dealers and provides that no dealer who is liable to pay tax
under s. 4 shall carry on business unless he has been registered under the Act
and possesses a registration certificate.
Under s. 11 a list of registered dealers is
published, and by s. 12 such registered dealers are required to furnish such
returns by such dates and to such authorities as may be prescribed. Section 13
prescribes the procedure for assessment, and s. 14 requires that the tax
payable under the Act shall be paid in the manner hereinafter provided at such
intervals as may be prescribed. Section 14(2) requires the registered dealer to
pay into a Government treasury the full amount of tax due from him according to
the returns which he has to file and has to 339 furnish along with the said
return a receipt from the treasury showing the payment of such amount.
Having thus provided for the recovery of the
tax charged under s. 4, s. 14A in effect authorises registered dealers to
reimburse their dues by making collections of the tax payable by them in
accordance with the restrictions and conditions as may be prescribed. It
provides that no dealer who is not a registered dealer shall realise any amount
by way of tax on sale of goods from purchasers nor shall any registered dealer
make any collection of tax except in accordance with such restrictions and
conditions as may be prescribed. That takes us to the proviso to s. 14A with
which we are directly concerned in the present appeal. It reads thus:
" Provided that if any dealer collects
any amount by way of tax, in contravention of the provision of this section or
the conditions and restrictions prescribed there under, the amount so collected
shall, without prejudice to any punishment to which the dealer may be liable
for an offence under this Act, be forfeited to the State Government and such
dealer shall pay such amount into the Government treasury in accordance with a
direction issued to him by the Commissioner or any officer appointed under
section 3 to assist him and in default of such payment, the amount shall be
recovered as an arrear of land revenue." The effect of this proviso is
clear. A dealer is authorised to collect amounts by way of tax from the
purchasers only in accordance with the provision of s. 14A and the conditions
and restrictions prescribed there under. The conditions and restrictions
referred to in the proviso are to be found in the material Rules framed under
the Act. If it is shown that a dealer has collected an amount by way of tax in violation
of the conditions and restrictions prescribed by the Rules he incurs the
penalty of forfeiture as specified in the proviso. There can be no doubt that
before the penalty of forfeiture can be imposed upon the dealer under the
proviso it must be shown that he has acted contrary to the conditions and
restrictions prescribed 340 by the Rules. It would not be enough to show that
the collection of the amounts in question by the dealer is otherwise illegal or
improper. The contravention of the statutory provision contained in s. 14A or
of the Rules prescribing conditions and restrictions in that behalf alone can
form the basis of the imposition of the penalty under the proviso. This
position is not disputed before us.
The appellant contends that the proviso is
attracted to the present case because the first respondent has contravened the
conditions and restrictions imposed by the proviso to r.
19, whereas the first respondent argues that
a proper construction of this latter proviso does not justify the appellant's
plea. It would thus- be seen that the decision of the preliminary point raised
by the first respondent involves the narrow question of the construction of the
proviso to r. 19.
Before construing the said proviso it is,
however, necessary to refer to s. 33 of the Act. This section was enacted on
April 4,1951, but it has been expressly made retrospective as from January 26,
1950. Therefore at the material time this section must be deemed to have been
Section33(1)(a)(i)provides that notwithstanding
anything contained in the Act a tax on the sale or purchase of goods shall not
be imposed under the Act where such a sale or purchase takes place outside the
State of Bihar. Section 33(2) makes the explanation to cl. (1) of Art. 286 of
the Constitution applicable for the interpretation of sub cl. (i) of cl. (a) of
sub-s. (1). It is common ground that if the relevant provision just cited is
construed in the light of the decision of this Court in the case of the United
Motors (1) there can be no doubt that the sales which are the subject-matter of
the present proceedings consist of transactions on which a tax cannot be
imposed under the Act.
That is why the appellant strongly relies on
this provision and contends that in construing the proviso to r. 19 the true
legal position in respect of the transactions in question must be borne in
Let us now read the proviso to r. 19. Rule 19
itself prescribes the procedure which has to be followed by (1)  S.C.R.
341 a registered dealer in realising any
amount by way of tax on sale of goods from purchasers. This procedure refers to
the issue of a cash memo or a bill as prescribed by it. The proviso to this
Rule lays down that no such registered dealer shall realise any amount by way
of tax at a rate higher than the rate, at which he is liable to pay tax under
the Act, or realise any amount by way of tax in respect of such part of his
turnover as is allowed to be deducted from his gross turnover for the
determination of his taxable turnover under the Act or these Rules. The
appellant relies on the latter part of the proviso and argues that the part of
the turnover of the first respondent which is in question fell within s.
33(1)(a)(1) and as such was not liable to be taxed. That being so there was no
justification for the first respondent to collect any amount by way of tax from
his purchasers under s. 14A. The scheme of S. 14A is to permit the registered
dealer to collect such amounts of tax from his purchasers as he in his turn is
liable to pay to the appellant. Authority to collect such tax amounts given to
the registered dealer inevitably postulates his liability to pay a similar
amount to the appellant. Therefore the conduct of the first respondent in
collecting amounts by way of tax from his purchasers amounts to a breach of s.
It is also contended that having regard to
the -provisions of s. 33(1)(a)(i) the first respondent was entitled to claim a
deduction of the transactions in question from his gross turnover under the
latter part of the proviso, and that clearly means the first part of the said
proviso applies to his case and it prohibited him from realising the said
amounts. His conduct in collecting the amounts, therefore, constitutes a breach
of the conditions specified in the proviso to r. 19.
In appreciating the validity of these
arguments it would be relevant to remember that at the material time there was
considerable confusion in the minds of the public as well as the State
authorities about the true scope and effect of the provisions of Art. 286(1) of
the Constitution. It is not disputed that during the material period and in the
years preceding it registered 44 342 dealers used to pay tax in respect of
transactions which were really not liable to be taxed under s. 33(1)(a)(i) and
such tax was being received by the appellant. In fact, as we have already
pointed out s. 14 of the Act imposes a liability on the registered dealer to
furnish along with his return a receipt for the payment of the tax which is
payable under the return. Such payments were made by registered dealers in
respect of similar transactions and were accepted. It is an accident that the
assessment proceedings of the first respondent were actually taken up for
decision by the second respondent after the decision of this Court in the case
of the United Motors (1). If the question about the first respondent's
liability to pay the tax under the Act had been decided before the date of the
said decision there is no doubt that he would have been required to pay the tax
for the transactions in question. Indeed it is common ground that the
notification issued for the material period levied a tax at three pies on the
goods in question " if the sales tax authority is satisfied that the goods
have been despatched by or on behalf of the dealer to any person outside the
Province of Bihar." This notification is consistent with the definition of
the word " sale " as it then stood. It is thus clear that at the
material time the appellant thought that transactions like those in question in
the present appeal were liable to pay the tax at the rate of three pies as
prescribed by the relevant notification;
the registered dealers also had no doubt on
the point; and so taxes were collected in respect of such transactions by the
appellant from the registered dealers and by the registered dealers in their
turn from their purchasers.
Nevertheless, after the enactment of s. 33
the legal fiction about the retrospective operation of the said section must be
given effect to and in construing the proviso to r. 19 it must be assumed that
the transactions in question were outside the scope of the Act and no tax could
have been imposed in respect of them. Construing the proviso on this
assumption, can it be said that in respect of the part of the first
respondent's (1)  S.C.R. 1069.
343 turnover which is in question a deduction
was allowable within the meaning of the proviso? In our opinion this question
cannot be answered in favour of the appellant.
Rule 19 itself was framed in 1949 and has not
been amended subsequent to the enactment of s. 33. As it was framed its
reference to the allowable deductions was clearly based on the provisions of
ss. 6, 7 and 8 of the Act. This position would be clear beyond all doubt if we
read the material words in the proviso in the light of the explanation to s. 5
of the Act. The explanation in terms enumerates deductions which have to be
made in determining the taxable turnover of the 'registered dealer and it is to
these deductions which are allowable under the three sections specified in the
explanation to which the latter part of the proviso to r. 19 refers. A claim
for the exclusion of a part of the first respondent's turnover on the strength
of s. 33(1)(a)(i) cannot, therefore, be said to be an allowable deduction under
This question can be considered from another
point of view.
The provisions which allow deductions to be
made or grant exemptions in respect of certain transactions obviously postulate
that but for them the transactions in question would be liable to. tax under
the Act; and so when such transactions are included in the return the
registered dealer is allowed to claim appropriate deductions in respect of
them. But, the position with regard to s. 33 is entirely different ;
transactions which attract the provisions of the said section are in substance
outside the scope of the Act and no tax can be imposed on them at all. If that
be the true position the claim which can be made by the registered dealer in
respect of such transactions cannot in law be regarded as a claim for allowable
deductions or exemptions properly so-called; it is really a claim that the Act
itself does not apply to the said transactions. Therefore, in our opinion it
would be straining the language of the second part of the proviso to r. 19 to
hold that the transactions in question fell within its purview.
There is one more point to be considered in
Form VI which has been prescribed for 344
making the returns under s. 12 requires the gross turnover to be mentioned at
the outset, and then it provides for the different deductions allowable under
the Act. This form was prescribed in 1949 and has not been amended after the
addition of s. 33 to the Act. On looking at this form it seems difficult to
entertain the argument that the claim for the total exclusion of the
transactions in question can be made under any of the headings prescribed in
the form. The appellant, however, contends that the first item of gross
turnover means the whole of the gross turnover which must include all sale
transactions whether they took place within Bihar or outside it, and in support
of this argument reliance is placed on the definition of " turnover "
contained in s. 2(1). If the whole of the gross turnover has to be mentioned
under item 1, it is urged, the claim for the exclusion of the transactions in
question can well be adjusted under one or the other of the deduction items
prescribed in the form. We are not inclined to accept this argument. The form
as it has been prescribed construed in the light of the material provisions
contained in ss. 6, 7 and 8 does not support the case that in prescribing its
several items it was intended that the transactions failing under s. 33 should
be first shown under item 1 and then excluded under one or the other of the
remaining items of deduction. Besides it may be relevant to point out that the
heading of Chapter VII which deals with the submission of returns by dealers is
" return of taxable turnover " and it is arguable that the gross
turnover mentioned in Form VI may mean "gross taxable turnover " and
not the gross turnover including the transactions which are outside the scope
of the Act.
Then as to the argument about the
contravention of s. 14A itself it is difficult to appreciate how any provision
of s. 14A can be said to have been contravened. Section 14A consists of two
parts both of which are put in a negative form. The second part with which we
are concerned in effect means nothing more than this, that a registered dealer
can make collections of such tax only as is payable by him in accordance with
the restrictions and conditions as may be 345 prescribed. If the argument is
that the first respondent was not liable to pay any tax and as such was not
entitled to make any corresponding collection, then the collection made by him
may fall outside s. 14A and be otherwise unjustified or improper; but it does
not amount to the contravention of any provision of s. 14A as such. In fact s.
14A itself refers to the restrictions and conditions which may be prescribed
and, as we have already seen, these conditions and restrictions are prescribed
by the Rules in general and by r. 19 in particular. So the argument urged under
s. 14A takes us back to the question as to whether the proviso to r. 19 has
been contravened. In dealing with this question we cannot ignore the fact that
the relevant provisions which fall to be construed in the present appeal impose
a serious penalty on the registered dealer, and so, even if the view for which the
appellant contends may perhaps be a possible view, we see no reason why the
other view for which the first respondent contends and which appears to us to
be more reasonable should not be accepted.
In the result we hold that the proviso to s.
14A cannot be invoked against the first respondent and so the order of
forfeiture passed against him by the second respondent is unjustified and
In view of this conclusion it is unnecessary
to consider the objections raised by the first respondent against the validity
of the proviso on the ground that it contravenes Arts. 20(1) and 31(2) of the
Constitution. We may incidentally add that during the course of the arguments
before us we have also heard all the learned counsel on the question as to
whether the said proviso contravenes the provisions of Art. 19(1)(f) as well.
The result is the appeal fails and is
dismissed with costs.
The decision of this appeal governs Civil
Appeals Nos. 546 of 1958 and 115 of 1959. They also fail and are dismissed with