LexMITHAN LAL versus THE STATE OF DELHI & ANOTHER
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S.C.R. SUPREME COURT REPORTS MITHAN LAL v. T.FJE STATE OF DELHI & ANOTHER (with connected petition) (S. R. DAS C. J., VENKATARAMA AIYAR, S. K. A. K. SARKAR and VIVIAN BosE JJ.) 445 DAS, Sales Tax-Building contracts-Tax on supply of materials in construction worlls-Compe,ence of Parliament-Delegation of authority to extend taxation law-Notification by Government- V alidity-Bengal Finance (Sales Tax) Act, I94I (Ben.VI of I94I_), ss. 2, 4-Part C States (Laws) Act, r950 (XXX of I950),· s. 2~ Constitution of India, Arts. 246(4), 248(2). , 1 The petitioners were building contractors carrying. on busi- ness in Delhi, which under. the Constitution of India became a Part C State.· In exercise of the power conferred by Art. 246(4) of the 1:onstitution, Parliament enacted the Part C States (Laws) Act, 1950, by virtue of which the Chief Conimissioner of Delhi issued a notification extending the ' operation of the Bengal Finance (Sales Tax) Act, 194r, to Delhi. Acting under the pro- visions of this Act, the sales tax officer imposed tax on the peti- tioners in respect of materials supplied in execution of the build- ing contracts. After paying it for some years the petitioners challenged the validity of the assessment on the grounds, inter alia, that (r). as there was no sale of materials used in execution of. a building contract, a tax thereon was not authorised, and ·.(2) 'in any event, the provisions of the Act under which the sales tax officer sought to levy the tax were unc.onstitutional and invalid : Held, (1) It is within the competence of Parliament to impose a tax on the supply of materials in building contracts and to impose it under the name of sales tax, and as Parliament has the power to legislate for Part C States the imposition of the tax on the petit\oners is valid. . , $late of Madras v. Gannon Dunkerley and Co. (Madras) Ltd., [r959] S.C.R. 379, held inapplicable. . . (2) Section 2 of the Part C States (Laws) Act is not repug- nant to Art. 248(2) on the ground that it conferred on the Govern- ment authority'to extend a taxation law,to Part~ States. Wh(m ·a notification is issued under s. 2 of the Act by the appropriate Government extending the law of a Part A State to a Part CState, the provisions of the law which is extended become incorporated by reference, i1! the Act itself, .an,d therefqre ;t. tax .imposed there- under rs a tax 1mpost::d by Parliament. : (3) Sectio~ 2,of. the Act i; not b~d as an upconstitutiona.l delegation of legislative power$. , ~1 ·. • • • April 7. • • 446 SUPREME COURT REPORTS [1959] Jn r< The Delhi Laws Act, I9I2, [r95r] S.C.R. 747, followed. ~ltithan Lal (4) The expression "enactment which is in force in a Part A State" in s. 2 of the Act must be construed as meaning "statute Th ,1 1v. i D 11 . which is in operation in a part A State" as distinct from a statute e .:::i a e 0 e u which had been repealed, and cannot be interpreted as having reference to individual sections or provisions of a statute. (5) The notification in question whether it is viewed as one extending a subsisting statute to Delhi or as extending it \~ith modifications so far as the impugned provisions are concerned, is intra vires s. 2. ORIGINAL JURISDICTION: Petitions Nos. 15 & 16 of 1955. Petitions under Article 32 of the Constitution of India for enforcement of Fundamental Rights. Radhey Lal Aggarwal, for the petitioners. G. K. Daphtary, Solicitor.General of India and• R. H. Dhebar, for the respondents. T. M. Sen, for the States of Madras and Mysore .. (Interveners). ' G. G. Mathur and G. P. Lal, for the State of U. P. (Intervener) . • Sardar Bahadur, for the State of Kerala (Inter- vener). Ratnaparkhi, A. G., for M/s. Raipur Provincial Engineering Co. (Intervener). 1958. April 7. The ,Judgment of the Court. was delivered by Venkatarama • VENKATARAMA AIYAR J.-The petitioners are Aiyar J. building contractors carrying on business in Delhi, and they have filed the present applications under Art. 32 of the Constitution challenging the validity of certain provisio1is of the Bengal :Finance (Sales Tax) Act, 1941 (Ben. VI oi 1941), which had been extended to the State of Delhi by a notification dated April 28, 1951. The impugned provisions of the Act may now be referred to. Section 2(d) of the Act defines "goods" as including "all materials, articles and commodities, whether or not to be used in the construction,
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