STATE OF KERALA versus N. SAMI IYER TOBACCO MERCHANT

Citation: [1966] 2 S.C.R. 361 · Decided: 26-10-1965 · Supreme Court of India · Bench: K. SUBBA RAO · Disposal: Dismissed

Judgment (excerpt)

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STATE OF KER.ALA. 
v. 
N. SAMI IYER TOBACCO MERCHANT 
October 26, 1965 
[K SuBBA RAo, J. C. SHAH ANDS. M. S1KR1, JI.] 
Madras General Sales Tax ,Act, (9 of 1939) repealed in its application· 
to Malabar Area (Kera/a) Act 12 of 1957-Sales Tax on tobacco under 
Madras Act paid at purchase point-Whether in respect of sanze goods 
tax chargeable under Kera/a Act at point of sale-Whether s. 3(5) of 
Madras Act continued to operate in favour of dealer-Effect of s. 4(c) 
of the General Clauses Act 1125 (M.E.). 
The respondent, a dealer, .in the Malabar area, paid tax under the 
Madras General Sales Tax Act, 1939, on his purchases of tobacco durfog 
the period of April 1, 1957 to September 30, 1957 the tax on tobacco 
being leviable under that Act at the point of purchase.. 
The proviso to 
s. 3(5) of the Act laid down that tax could not be levied again at the· 
point of sale in respect of those goods on which it had been paid at the 
point of purchase. 
Malabar area was transferred by the operation of the 
States Reorganisation Act, 1956 from Madras State to the newly formed' 
State of Kerala. 
By (Kerala) Act 12 of 1957 the Travancore-Cochin 
General Sales Tax Act. 1125 M.E. was made applicable to the whole state 
of Kerala. 
Act 12 of 1957, while repealing the Madras General Sales 
Tax Act in so far as it was applicable to MaJab1r area, made 
some 
transitional provisions for the said area providing that any registration or 
licence granted under the Madras Act would continue to have effect and 
that in calculating the total turnover for the :financial year ending \\Tith 3 l st 
March. 1958, the turnover of a dealer under the Madras Act for 
the 
period upto September 30, 1957, would also be taken into account. 
Under 
th~ Kerala Act, tax on tobacco was chargeable at the point of sale. When 
the Sales Tax Authorities under the provisions of the Kerala Act sought 
to tax his total turnover for the period April l. 1957 to March 31, 1958. 
the respondent protested that those goods on which he bad already paid 
tax at the point of punrchase under the Madras Act could not be taxed' 
again at the point of sale. His plea was rejected by the Sales Tax autho-
rities but was accepted in revision by the High Court. 
The Kerala State 
thereupon appealed to this Court. 
It was urged on behalf of the appellant that the respondent had no 
right not to be taxed except under the Madras Act. 
All he was entitled 
to was to take advantage. of the proviso to s. 3(5) of. that Act. 
Rut 
even so Act 12 of 1957 mflnifested a contrary intention within the meaning 
of s. 4(c) of the General Clauses Act, 1125-which corresponded to s. 6(c) 
of the Indian General Clauses Act. 
HELD : (i) Rv vir'ue of s. 4(c) of the General Clauses Act 1125 
the deale.r continued to be liable to taxation under the Madras Act in 
respect of the disputed turnover at the. 
purchase point. 
For iexan1plc) if 
for some reason he had not been a<Sessed before Act 12 of 1957 came· 
H 
into force he would have been as<esscd under the Madras Act at the nur-
chase µoint because a liability within the meaning of s. 4(c) would have-
becn incurred by him. 
To this liability would he attached a right, the-
right not to be taxed !in respect of any sale of goods which had been· 
-362 
SUPREME COURT REPORTS 
[1966] 2 s.c.R. 
·taxed at the point of purchase under the Madras Act. The respondent's 
-contention had therefore to be accepted. [365 E-G] 
(ii) No 
intention could be discerned in Act 12 of 1957 t6 destroy 
·the rights and liabilities acquired or incurred under the Madras Act. The 
registration under the Madras Act and the licences issued thereunder were 
•pres£rved. If the Legislature had the intention to override the right attached 
A 
to the liability unde; s. 3 ( 5) of the Madras Act, it would have used mme 
B 
-clear and precise words. [3 66 BJ 
State of Punjab v. Mohar Sing [1955] I. S.C.R. 893, referred to. 
Crv1L APPELLATE JURISDICTION : Civil Appeal No. 490 of 
1964. 
Appeal by special leave from the judgment and decree dated 
.July 13, 1961 of the Kerala High Court in Tax Revision No. 44 of 
1960. 
V. A. Seyid Muhammad, 
Advocate-Genera/, Kera/a, 
and 
M. R. Krishna Pillai, for the appellant. 
Arun B. Saharya and Sardar Bahadur, for the respondent. 
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The Judgment .of the Court was delivered by 
Sikri, J. 
This appeal by special leave is directed against the 
judgment of the High Court of Kerala in Tax Revision Case 
No. 44 of 1960

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