LexSTATE OF KERALA versus COCHIN COAL CO. LTD., COCHIN
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STATE OF KERALA
v.
COCHIN COAL CO. LTD., COCHIN
August 31, 1967
(K. N.
WANCHOO, CJ., R. S.
BACHAWAT, V.
RAMASWAMI,
G. K. MITTER AND K. S. HEGDE, JJ.]
Travancore..Cochin General Sales T""' Aet {H of 194&-M.Jr,
1125), s. 26-Inter-State sales during 1955-56-Sales within Travancore-
Cochin State-If liable to sales-tax-Constitution of India, 1950, Mt.
286(2) before the Sixth Amendment and Sales Tax Laws Validation
Act (7 of 1956)-Effect of.
Before the Constitution came into force, the Travancore-Cochin
General Sales Tax Act, M.E. 1125, levied a tax on sale of goods and
inter-State sales were not exempt from such taxation. By Act 12
of 1951, s. 26 was· inserted in the Act to bring the Act into line with
Art. 286 of the Constitution as it then stood, and imposed a ban on
the levy of tax on inter-State sales after March 31, 1951, unless
Parliament otherwise provided under Art. 286(2). On September 6,
1955, this Court held in The Bengal Immunity Co. Ltd. case, [1955]2
S.C.R. 603, that inter-State sales could not be taxed by a State, even
if they were inside sales with respect to that State. This led to the
passing, by Parliament. of the Sales Tax Laws Validation Act, 1956,
for the purpose of validating the levy and collection of taxeii on
inside
sales
between
April 1, 1951 and September 6, 1955. In
Sundararamier & Co. case [1958] S.C.R. 1422 this Court decided
that s. 22 of the Madras General Sales Tax Act, 1939--which was in
µari materia with s. 26 of the Travancore-Cochin Act-<>perated to
impose a tax, subject to authorisation by Parliament as provided in
Art. 286(2); in other words it was a piece of legislation imposing tax
in praesenti but with a condition annexed that it was to come into
force in futuro as and when Parliament so provided; and this view
was re-affirmed by this Court in the Cochin Coal· Co.'s case [1961]
~ S.C.R. 219) with respect to s. 26 of the Travancore-Cochin Act.
[ 418C; 422 B-F]
.
The respondent-assessee was a dealer, not resident in Travan-
core-Cochin State. It supplied coal to consumers within the State,
the last of the transactions being on September 4, 1955.
On the question whether the inter-State sales during assess-
ment year 1955-56, were taxable .under the provisions of the Travan-
core-Cochin Act, the Sales Tax Appellate Tribunal and the High
Court held in favour of the assessee.
In appeal by the State to this Court,
Held: The ban imposed by s. 26 of the Travancore-Cochin Act,
having been lifted by the Sales Tax Laws Validation Act, sales'tax
could be levied and collected by the State for the period covered by
that Act. The Amendment to the section by Kerala Act 12 of 1957 did
not fall to be considered in the present case inasmuch as the Amend-·
ing Act was only prospective and did not operate to invalidate any
levy of tax imposed before. The question as to whether the State of
Kerala had legislative competence to amend s. 26 by Kerala Act 9
of 1962 which purported to validate, the levy and collection of
taxes before September 6,.1955 is also irrelevant for the purpose of
this appeal. [422G: 423A-D]
J.{S5SC I-(•) 13
U6
SUPllEKE OOUIIT RBPORTS
[1968] 1 8,0,L
CIVIL APPELLATE JURISDICTION:
Civil Appeal No. 380 of
A
1966.
Appeal by. special leave from the judgment and order dated
August 16, 1963' of the Kerala High Court in Tax Revision Case
No. 17 of 1962.
S. V. Gupte, Solicitor-General and A. G. Pi;dissery, for the
B
appellant.
0. P. Malhotra, P. C. Bhartar and 0. C. Mathur, .for the
respondent.
Sardar Bahadur, for the intervener.
The Judgment of the Court was delivered by
Mitter, I. This appeal, by special leave, is from a judgment
and order of the High Court of Kerala dated August 16, 1963
pa~ in Tax Revision Case No. 17 of 1962 filed by the respon-
dent, Cochin Coal Co. Ltd. against the order of the Sales Tax
Appellant Tribunal, Trivandrum.
The facts necessary for the disposal of this appeal are as
follows. The respondent-assessee was a non-resident dealer (not
resident in Travancore-Cochin) during the year
1955-56.
The
period we are concerned with here ends on September 4, 1955.
It used to supply coal to consumers in T1'81Vancore Cochin State
which later became Kerala. For the assessment year in question
(1955-56) the assessee was asked to file statements. showing its
turnover of supplies of coal made to purchasers in the State of
Kerala and in reply to the notice under s. I 2(Excerpt shown. Read the full judgment & AI analysis in Lexace.