LexPANDIT BANARSI DAS BHANOT versus THE STATE OF MADHYA PRADESH & OTHERS
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
s;c.R.
SUPREME COURT. REPORTS
427
To avoid misconception, it must be stated that the
z958
above conclusion has ·reference ·to wo. rks contracts,
.
\
~~~ef
which· are entire· and''indivisible,\ aS the contracts of-
MJdras
the respQ~dehts JjaV,~ been held by th~' learned Judges
v.
o~ th~ Cqurt b~lo'\V' to , he. ~ The" se,veral forms which Gannon Dunkerley
such , kinds· of contracts , can ,assume are set out in
"" Co .•
Hudson on Building Contracts; at<p. 165 .. It is pos-. (Madras) Ltd.
sible that .the parties
1might enter inte> distinct and
venkatarama
.,
separate ·contracts, 'one for the: transfer 'of materials
Aiyar J.
for money consideraticm, and the other for payment
of remuneration for services and for work done. In
such a case; there, are really two agreements, though
there is a single instrument embodying them, and the
power of the St.ate to separate the agreement to sell,
from the agreement to do work and render service and
to impose a tax thereon \cannot be questioned, and will
stand untouched by the present judgment.
In the result, the appeal fails, and is dismissed with·
costs.
Appeal dismissed. !I
.
~.,
PANDIT BAN ARSI DAS BRANOT.
v.
THE STATE OF MADHYA PRADESH
& OTHERS
(and connected appeals)
(S. R. DAS c. J., VENKATARAMA AIYAR, s. K. DAS,
·
A. K. SARKAR and VIVIAN BOSE J J.)
.
Sales Tax-Building contracts-Tax on supply of materials-
V alidity-Statute providing for exemption from t11xation, but also
enabling Government to a111end such exemption by notification-
C onstitutionality-C entral Provinces and Berar Sales Tax Act, r947
(C.P. & Berar 2I of 1947), ss. 2, 4{a), 6(1)(2).
· Section 4(a) of the Central Provinces and Berar Sales Tax
Act, 19~7, provided that every dealer whose turnover exceeded
certain limits shall be liable to pay tax in accordance with the
;·
provisions of the A~t on all sales effected after the commencement
•
-
April 3.
Pandit Banarsi
Da.~
v.
The State of
Madhya Pradesh
428
SUPREME COURT REPORTS
[1959)
of the Act; and bys. 2(g) of the Act, "sale ... means any trans-
fer of property in goods ... including a transfer of property in
goods made in course of the execution of a contract .... " Under
s. 6(1) of the Act no tax was payable on the·sale of goods specified
in Sch. ][ to the Act ands. 6(2) enabled the State Government by
notification to amend the Schedule.
Item 33 in Sch. II as
amended by Act XVi of 1949 and as adapted by the Adapta-
tion Order of 1950, was " Goods sold to or by the State Govern-
ment". In exercise of the power conferred bys. 6(2) of the Act,
the Government issued a notification on September .18, 19)'0,
amending item 33 by snbstituting the words "Goods s_old by the
State Government ".
The appellant, a contractor doing business in the construction
of buildings and roads for the Military and Public Works Depart-
ment in the State of Madhya Pradesh, challenged the validity of
the assessment which the respondent proposed to make on the
appellant under the provisions of the Central Provinces and
Berar Sales Tax Act, 1947, on the grounds (1) that the Provincial
Legislature had no authority under Entry 48 of List II, Sch. VII
of the Government of India Act, 1935, to impose a tax tin the
supply of materials in works contracts and that the provisions of
that Central Provinces and Berar Sales Tax Act which sought to
impose a tax thereon treating it as a sale were ultra vires, and (2)
that he was entitled to exemption under item 33 in Sch. II, to the
•
Act and that the notification of the Government dated September
18, r950, withdrawing that exemption was bad as being an un-
constitutional delegation of legislative authority : ·
• Held, that the expression "sales of goods" in Entry 48 has
the same meaning which it had in the Indian Sale of Goods Act,
1930, that in a building contract there is no sale of materials as
such, and that it is therefore ultra vires the powers of the Provin-
cial Legislature to impose tax on the supply of materials.
The State of Madras v. Gannon Dunkerley & Co. (Madras) Ltd.,
[r959] S.C.R. 379, followed.
/
Per Das C. J., Venkatarama Aiyar, S. K. Das and A. K. Sar-
k.;tr JJ.-It is not unconstitutional for the legislature to leave it
to the executive to determine details relating to the working of
taxation laws, such as the selection of persons on whom the tax
is to be laid, the rates at which it is to be charged in respect of
different classes of goods, aExcerpt shown. Read the full judgment & AI analysis in Lexace.