COMMISSIONER OF SALES TAX, U.P. versus BIJLI COTTON MILLS, HATHRAS

Citation: [1964] 7 S.C.R. 383 · Decided: 20-03-1964 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

78.C.R. 
SUPRE:ME COURT REPORTS 
383 
COMMISSIONER OF SALES TAX, U.P. 
v. 
BIJLI COTTON MILLS, HATHRAS 
IP. B. GAJENDRAGADKAR, C.J., K. N. WAINCHOO, J. c. SHAH, 
N. RAJAGOPALA AYYANGAR AND S. M. SIKRI, JJ.] 
Sales Tax-Reference under Act pending before High Court 
-Impugned !egis!ation in relation to the matter in reference 
amended-High Court whether can take cognisance· of am•nded 
legis!ation-U.P. Sa!es Tax Act, 1948 (U.P. Act 15 of 1948), ss. 3A, 
31. 
The respondent is a manufacturer of cotton yarn and is 
registered as a dealer under the U.P. Sales Tax Act, 1948. This 
act came into force on April 1, 1948. Under this Act, sales tax was 
payable on sales of cotton yarn at a uniform rate of 3 pies in a 
rupee. Under s. 3(A) of the Act the Government of U.P. issued a 
not'fication declaring that with effect from June 9, 1948, the 
Sales Tax would be charged at the rate of six pies per rupee in 
respect of sales of the cotton yarn. In the present case, the 
assessee had opted under s, 7 of the Act to be assessed on the 
turnover of previous year. The Sales Tax Officer held on the 
basis of the notification dated June 9, 1948, that the rate of three 
pies per rupee in r~spect of sales of cotton yarn was to apply in 
the year of assessment for the first 69 days and for the remain-
ing part of the year the rate of six pies per rupee was to .apply. 
The decision of the Sales Tax Officer was affirmed by the Judge 
(Revisions) Sales Tax. The Judge referred the case to the High 
Court. On reference the High Court held on the basis of its 
judgment in Modi Food Products Ltd. that the rate of three pies 
per rupee would apply for the assessment of 1948-49 because the 
assessee had opted under s. 7 to be assessed on the basis of the 
turnover of the previous year. In the meantime the legislature 
of Uttar Prade5h by Act III of 1963 enacted s. 31 which makes 
Sales-tax exigible from an assessee who has opted to pay tax .on 
the turnover of the previous year, as if the altered rates were 
in force during the previous year. The amendment is given retro-
active operation and applies to assessments oending or closed. 
The question for consideration before this Court was whether 
this Amending Act would apply to the present assessment. 
He!d: (i) 'l'he law found incorporated in s. 31 by Amending 
Act III of 1963 would apply to the present case. This Court in 
giving its opinion on the question in the light of the amending 
Act is seeking to apply a legislative provision which was, by 
express enactment, in force at the time when the liability arose, 
for s. 31 enacted by Act III of 1963 is to be deemed to have been 
in operation at all material times in supersession of the previous 
law declared by this Court in Modi Sugar Mills Ltd.'s case. This 
Court is, therefore, not seeking to apply any Jaw to the question 
posed before the High Court which was not in force on the date 
of the transaction which is the subject-matter of the reference 
Modi Food Products Ltd. v. Commissioner of S_ales-tax, U.P. 
A.I.R. 1956 All. 35 and Commissioner of Sales-tax, U.P. v. Modi 
Sugar Mills Ltd., [1961) 2. S.C.R. 189 explained. 
1964 
March 2() 
384 
SUPREME COURT REPORTS 
[1964] 
1964 
(ii) When the question has been referred to the High Court 
-OvmmissWnrr of and in the meantime the law has been amended with retroactive 
Sal•·• Tnx, U.P. 
operation, it would be the duty of the High Court to apply the 
,.. 
law so amended as if it applies. By taking notice of the law 
llijli Collon ~N/,, which has been substituted for the original provision, the High 
llriJhra.9 
Court is giving effect to tr.e legislative intent and docs no more 
than what must be deemed to be necessarily implicit in the 
question referred by the Tribunal, provided the question is 
couched in terms of sufficient amplitude to cover an enquiry into 
the question in the light of the amended law, and the enquiry 
does not necessitate investigation of fresh facts. 
MI s. Chatturam Horilram Ltd. v. Commissioner of Income· 
tax, Bihar and Orissa, {1955] 2 S.C.R. 290 and M / s. Rampur 
Distillery Chemical Works Ltd. v. Commissioner of Income-tax, 
U.P., I.T. Reference No. 362/58 dt. 17-1-64, distinguished. 
CIVIL APPELLATE JURISPlCTION: Civil Appeal No. 546 nf 
1962. Appeal by special leave from the judgment and decree 
dated December 17, 1958 of the Allahabad. High Court in 
Misc. Case No. 152 of 1952. 
C. B. Agarwala and C. P. Lal, for the appellant 
S. K. Kapur, S. K. Mehta and K. L.

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