STATE OF UTTAR PRADESH AND ORS. versus MODI INDUSTRIES LIMITED

Citation: [1977] 2 S.C.R. 548 · Decided: 04-01-1977 · Supreme Court of India · Bench: V.R. KRISHNA IYER · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
548 
-STATE OF UTTAR PRADESH AND ORS. 
v. 
MODI INDUSTRIES LIMITED 
·January 4, 1977 
(V. R. KRISHNA IYER AND P. N. SHINGHAL, JJ.] 
U. P. Sales Tax Act, 1948-S. 31-Scope of. 
The respondent filed its sales tax returns for the assessment years 1948-49 
and 1949.50 on the basis of its turnover of two previous years. In respect of 
certain commodities, the rate of sales tax was enhanced with effect from certain 
C 
dates falling . within the assessment years. 
D 
E 
F 
G 
H 
The High Court on reference took the view that the dealer who had chosen 
to be assessed on the basis of its tuinover of the previous year of assessment: 
\Vas liable to be assessed at the rule prevailing On the first day of the rel~vant 
assessment year and tJ,J.at any change in. the rate during the assessment year could 
not be applied to that assessment. 
The assessee, who had paid tax at the enhanced rate, applied for refund of 
the excess tax together With interest thereon under s. 11 (6) of the U.P. Sales Tax 
Act, 1948. The Additional Judge (Revisions), however, rejected the application 
holding that refund was not permissible in view of s. 31 introduced by the Amend-
ing Act (U.P. Act 3 of 1963). That section provided that where a dealer opted 
to be assessed to tax: on the basis of his turiiover of the previous year, he shall 
be assessed to tax at such .ta.tes as are prevalent during the year for which the 
assessment is being made, and if the rates of tax are altered during such assess· 
ment year, the dealer, in respect of the turnover of such goods. shall be liable 
to pay tax at the altered rates, as if the altered rates were in force during the 
previous year also proportionately for the number of days involved as they were 
in force during the assessment year. According to sub-section (2) of that sec-· 
tion the assessments made at the enhanced rates in accordance with the notifica· 
tion dated April 9, 1948 were to be deemed to be gocxI and valid as if they had 
been duly made and as if the amendment made by the inserfion of s. 31 had 
been in force on aU material dates. It was expressly provided by the suO-section 
that that was to be so notwithstanding any judgment, decn:e-or order of any 
court. 
The High Court quashed the order of assessment on the £round that the 
Revisin~ Authority was not free to take a different view from the one expressed 
by it (High Court) on anv ground whatsoever, including the grollnd of any 
subsequent amendment of the law. . 
Allowing the Appeal to this Court, 
HEt.D : There is nothing wrong with the vieW' taken bv the R~vising Authority. 
Wbe"n S. 31 of the Act is va1id, and is retroactive .and the Legi<;fatnre has shown 
the intention of restorin~ the assessments and orde"n; made before the a"lend· 
ment a<il l!Clod and valid in law a<il if thev had bPPTI dulv made- that wac; enou~h 
to set the controversy at rest. 
The amendment made by S. :11 wac; rPtrn::ic:tive 
and anpJied to assessments vendinP or c1oc:M a.c; if the Amending Act had been 
in force at aU ma.terial times. [554CD; S52C] , 
Comml,.,:•iion~'r of Sales Tax, U.P. v. Bijli Cotton Mills, Hathras, f19641 7 
S.C.R. 383 referred to. 
(a) Section 31 was sou2ht to be annlied to the facts of the case wh"'n the 
Ailditfr,nal Tnd.2e (Revisinnci) wac; in <:E"i•d'n of the c:tcie fnr ,the .nnmn•P .r.f .nao::ciin~ 
the necessary orders. to dispose it of finally in conformity with, the judgment of 
. 
u. P. v. MODI lNDl'.STRIES (Shinghal, !.) 
549 
the High Court. If he had passed an order under s. 11 (6) of the Act as directed 
by the High Court, that would have been of no consequence and would have 
been inoperative because of s. 31 (2). 
[553B-C & F] 
A 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1694 of 1971. 
(From the Judgment and Decree dt. 11-2-70 of the Allahabad 
High Court in Civil Misc. Writ No. 973 of 69). 
S. C. Manchanda and 0. P. R.ana for the Appellants. 
A. K. Sen, J. P. Goyal and Shreepal Singh, for the Respondent. 
The Judgment of the Court was delivered by 
SHINGHAL, J. This appeal by the State of Uttar Pradesh and 
three sales tax officers is directed against the judgment of the Allaha-
bad High Court dated February U, 1970. The High Court has 
granted a certificate of fitness under clause ( c) of article 13 3 ( 1) of 
the Constitution. 
Respondent Mod~ Industries Limited. hereinafter referred to 
as 
the dealer, was known earlier as the Modi Sugar Mills Ltd. It manu-
factured various. articles likei sugar, 
oil, van

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