SALES TAX OFFICER, CUTTACK AND ANOTHER versus M/S. B.C. PATEL & CO.

Citation: [1959] 1 S.C.R. 520 · Decided: 15-04-1958 · Supreme Court of India · Bench: SUDHI RANJAN DAS · Disposal: Appeal(s) allowed

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Judgment (excerpt)

Sdh Ganga Dhar 
v. 
Slta11kar ·Lal 
6' Others 
Sarkar]. 
April Ij. 
520 
SUPREME COURT REPORTS 
[1959) 
That, to our mind, indicates that the bargain had been 
freely made. There was 'nothing else to which our 
attention was directed as showing that the bargain 
was hard. 'Ve, therefore, think that the bargain was 
a reasonable one and the eighty-five years' term of the 
mortgag\l should be enforced. 
vV c then come to the 
conclusion that the suit was premature and miist 
fail. 
. 
In the result we dismiss this appeal with costs. 
Appeal di.smissed . 
SALES TAX OFFICEH, CUTTACK 
A::'\D ANOTHER 
v. 
M/s. B. C. PATEL & CO. 
• 
(S. Il. DAS C. J., VENKATARAMA AIYAH, S. K. DAS, 
A. K. SARKAR and VIVIAN BosE JJ.) 
Sales Tax-l\1otification e11jorci11g the charge not wholly in con-
snnance tf'ith t.lze charging provision-Validity-Assessn1cnt for 
periods both before .and aftci· the Constituti.011-Legality:-Orissa Sales 
Tax Act, r947 (Omsa XIV of r947), s. 4-Consl1tution of India, 
Art. r86. 
This appeal by the Sales Tax authorities was directed against 
the judgment and order of the Orissa High Court, passed under 
Art. 226 of the Constitution, quashing five orders of assessment 
covering five quarters made against the rPspondents \Vho carried 
on the business of collection and sale of l{endu leaves in the erst-
\vhile Feudatory State of Pallahara to \vhich, on its 1nerger into 
the province of Orissa on January 1, i948, the provisions of the 
Orissa Sales Ta.x Act, 1947, were extended on March r, 1949· On 
the same date the Government of Orissa issued a notification 
under s. 4(1) of the Act which was in the following terms: 
"In exercise of the powers conferred by sub-section (1) of 
Section 4 of the Orissa Sales Tax Act, 1947 (Orissa Act XIV of 
1947), as applied to Orissa State, the Government of Orissa are 
. pleased to appoint the 31st March, 1949· as the date with effect 
from \Vhich every dealer \vhose gross turnover during the year end-
ing the 31st Marci], 1949· exceed~d Rs. ~,ooo shall be liable to pay 
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SUPREME COURT REPORTS 
521 
under the said Act on sales effected after the said date". Section 
4 of the Act, inter alia, provided: '' (r) . ·" . with effect frrm 
.such date as the Provincial Governmrnt ·may by notification in 
the Gazette, appoint, being not earlier thari thirty days after the 
date of the said notification; every dealer· whose gross turnover 
during the year immediately preceding the commencement of this 
Act exceeded Rs. 5,000 shall be liable to pay tax under the Act 
on sales effected after the date so notifi~d .... (2) Every dealer to 
w~om sub-section (I) does not apply shall be liable to pay under 
this Act \l'ith effect from the commencement of the year immedi-
ately follo~~ing ~hat during which his gross turnover first exceeded 
Rs. 5,000 
. 
Safrs Tax Officer, 
Cuttack 
v. 
B. C. l'alel & Co. 
The' goods were admittedly delivered for oonsumption at 
various places outside the State and the Sales Tax Officer as well 
as the Assist1tnt Collector in appeal, proceeding on the basis that 
the sales took place in the State, held that the respondents were 
liable to Sales Tax for all the five quarters, two of which fell 
before the commencement of the Constitution and three the;·e-
after.• The contention of the respondents before the High Court 
was that the notification- under s. 4(1) of the Act was invalid as it 
ran counter to the provisions of that sub-section and no part of 
that charging section could, therefore, come into force. It was 
further contended that the assessment for the three quarters 
' following the commencement of the Constitution was invalid by 
reason ot Art. 286 of the Constitution. The High Court found 
entirely in favour of the assessee: 
Held (per Das C. ]., Venkatarama Aiyar, S. K. Das and 
Vivian Bose, JJ.), that the decision of the High Court in so far as 
it related to tt1e three post-Constitution quarters was correct and 
must be upheld. The orders of assessment for those quarters 
contravened both Art. 286 of the Constitution ands. 3o(r)(a)(i) 
of the Orissa Sales Tax Act and were without jurisdiction and 
must be set aside. So far as the two pre-Constitution quarters 
were concerned, the assessees were clearly liable under s. 4(2) 
of the Act. 
Per Das C. J. and Venkatarama Aiyar J. The first part.of 
the impugned notification, appointing the date from which the 
liability was to commence, was in consonance with s. 4(r) of 
the Act a

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