CHIEF COMMISSIONER UNION TERRITORY, CHANDIGARH versus SIALKOT SILK STORES, CHANDIGARH

Citation: [1979] 2 S.C.R. 134 · Decided: 23-10-1978 · Supreme Court of India · Bench: Y.V. CHANDRACHUD · Disposal: Dismissed

Judgment (excerpt)

B 
134 
CHIEF COMMISSIONER UNION TERRITORY, 
CHANDIGARH 
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. 
D 
E 
:F 
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 Chandi-
garh 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 notifi-
cation wa5 issued amending the Schedule. 
The erstwhile State Government 
of Punjab could not issue the second notification in respect of the Union Terri-
tory 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] 
t 
• • 
• 
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, Chandi-
garh, has preferred tills appeal by certificate from the decision of the 
High Court of Punjab & Haryana allowing the Writ Petition of the res-
pondent 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-organis-
ed 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 there-
upon Schedule B shall be deemed to be amended accordingly." 
item 30 of Sche

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