LACHMI NARAIN ETC. ETC versus UNION OF INDIA & ORS.

Citation: [1976] 2 S.C.R. 785 · Decided: 25-11-1975 · Supreme Court of India · Bench: Y.V. CHANDRACHUD · Disposal: Appeal(s) allowed

Cited by 8 judgment(s) · cites 3 · see the full citation network in Lexace

Judgment (excerpt)

-
• 
J 
785 
ti· '. 
LACHMI NARAIN ETC. ETC. 
I '«'.' 
: . i~: ....... \;,..-
~~ 
v. 
UNION OF INDIA & ORS. 
November 25, 1975 
fY. V. CHANDRACHUD, R. S. SARKARIA AND A. C. GUPTA, JJ.] 
:S 
Union Territories (Laws) Act, 1950, s. 2-Bengal Finance (Sales Tax) Act, 
1941, extended to Delhi with certain modificatidns 
by 
1951-Notification-
Notificatlon more than 6 years later inserting further modificatio11 
of 
the 
Bengal Act in the 1951 Notification-Validity-Section 6(2) of the Bengal Act 
l'l!quiring 3 months notice before withdrawing exemption from tax-If man-
dardry-lf period of notice could be curtailed by Central Govunment by Noli• 
fication-Leglslation by reference, when can be inferred-Government, if can 
take advallfage of its /apse-General Clc!llses Act (10 of 1897), s. 21, app/ica• 
bi/ity. 
Section 2, of the Part C States (Laws) Act. 1950, empowered the Central 
Government to extend by notification in the official gazette, to any Part C 
State, or to any part of it, with such rest,rictidns and modifications as it thinks 
fit, any enactment in force in a Part A State. In 1951, the Central Government, 
in exercise of this power, extended by a Notification the Bengal Finance (Sales 
Tax) Act, 1941, to the then Part C State of Delhi with certain modifications 
in s. 6. 
The section, after such extension with modifications, provided : 
6(1) No tax shall be payable under this Act on the sale of goods 
specified in the first column of the Schedule subject to the ccindi-
tions etc; and 
(2) The State Government [Amended as Central Government 
in 
c 
D 
· 19561 after giving by notification in the official gazette not less 
~~~l~c!ti~::'~~d ;~t~: o~iti~r~~e~~iogth~~w1~ ~~e'::~Yth~Ysl~~= 
E. 
dule and thereupon the Schedule shall be amended accordingly 
A modified Schedule of goods exempted from tax under s. 6 was also subsli· 
luted for the original Schedule in the Bengal A<:t, by the Notification. 
After the passing of the States Reorganisation Act, 1956, the Part C States 
(Laws) Act became Union Territories (Laws) Act, 1950. with necessary adap-
tations. 
In 1957, the Central Government issued a Notification in purported exercise 
of the powers under s. 2 of the 1950-Act. amending the 1951-Notification. 
By the 1957-Notification an additional modification of s. 6 of the Bengal Act 
was introduced in the 1951-Notification, namely the words "such previous 
notice .as it considers reasonable" were substituted for the words "not less than 
3 months' 11oticc'' in s. 6(2). 
In 1959, Parliament passed the Bengal (Sales Tax) (Delhi Amendment) Act, 
1959, making some amendments in various secticms of the Bengal Act but teft 
G 
s. 6 untouched. 
By various notifications. exemption from sales tax was granted to several 
commodities. but subsequently, the exemption was withdrawn by other notifi-
cations after gfring notice of less than 3 mon.ths. 
Dealers in those commodities, who were aggrieved by the withdrawal of the 
exemption. challenged the validity of the withdrawal. The High Court dismiss-
ed their petitions, on the main ground that Parliament. while enacting 
the 
Amending Act of 1959, had put its seal of approval to the curtailed period of 
notice in s. 6(2) and as such, it should be taken to have been provided by 
Parliament itself in the Bengal Act. 
fli 
78 6 
SUPReME COURT REPORTS 
(1976) 2 S.C.R. 
A 
Allowing the appeals t'o this Court, 
B 
c 
D 
E 
F 
·G 
H 
HELD : The 19'57-Notification purporting to substitute the words "such 
previous notice as it considers reasonable" for the words "not less than 3 
months' notice" in s. 6(2) of the Bengal Act, is beyond the powers of the 
Central Government, conferred on it, by s. 2 of the Union Territories (Laws) 
Act, 1950; and in consequence, the various notifications, in so far as they with-
drew exemptions from tax with respect to the sewral commodities, are invalid 
and ineffective, as tbe exemption was withdrawn without complying with the 
mandatory requirement of not less than 3 months' notice enjoined by 
the 
section. 
[808-D-E] 
(I) (a) The primary power bestowed by s. 2 of the Union 
Territories 
(Laws) Act, 1950, on the Central Government is one of exte11sio11, that is, 
bri11gi11g into operation and effect, in a Union Territory, an enactment already 
in force in· a State. 
The discretion conferred by the section to make "restric-
tions and modifications'' in the enactment sought to be extended. is not a sepa-
rate and independent power, which can b'C exerci

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