THE PUNJAB STATE, CHANDIGARH versus SANSARI MAL PURAN CHAND

Citation: [1968] 1 S.C.R. 336 · Decided: 22-08-1967 · Supreme Court of India · Bench: K.N. WANCHOO · Disposal: Case Partly allowed

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Judgment (excerpt)

mE PUNJAB STATE, CHANDIGARH 
v. 
SANSARI MAL PURAN CHAND 
August 22, 196 7 
A 
[K. N. 
WANCHOO, C.J., R. S. 
BACHAWAT, V. RAMASWAMI, 
B 
G. K. MITTER AND K. S. HEGDE, JJ.) 
East Punjab General Sales Tax Act 46 of 1948, ss. 5 and 6(2)-
Whether s. 5 as amended by East Punjab Act 19 of 1962 effective in 
imposition of Sal.es Tax on Essential goods prior to amendment of 
Art. 286(3) of the Constitution and repeal of s. 3 of Central Act 52 
of 1952. 
The respondents were dealers assessable to sales tax under. the 
C 
East Punjab General Sales Tax Act, 1948, and, in respect of the 
assessment years 1955-56 to 1957-58, lhey claimed an exemption from 
tax on sales of edible oil produced by them in ghanis run by mechani-
cal process. The assessing authority rejected this ciaim on the ground 
that such sales were not exempt from tax in view of the amendment 
of the Schedule to the Act specifying tax-free goods by the notifi-
cation dated August 5, 1954. The respondent's appeals to the Excise 
and Taxation Commissioner and to the Financial Commissioner 
D 
were rejected but the High Court, upon a reference, held that the 
notification was a law made by the State legislature after the enact-
ment of Central Act No, 52 of 1952 which, read with Art. 286(3) of 
the Constitution, placed a bar on a State by a law imposing or autho-
rising the imposition of a tax on the sale of essential goods unless 
the law in question had received the assent of the President; and 
since the notification had not received such assent, it was ultra vires 
and invalid; the respondents were, therefore, entitled to exemption 
under Item No. 57 of the Schedule prior to its amendment by the 
B 
notification of August 5, 1954. 
On appeal to this Court, 
Held: The respondents were not liable to pay tax on sales of 
edible .oils produced in ghanis run by mechanical power effected by 
ihem before September U, 1956; but they were liable to pay tax on 
such sales made after September 11, 1956. [348E) 
· 
(i) The amended s. 5 inserted in East Punjab Act No. 46 of 1948 
F 
by East Punjab Act No. 19 of 1952 authorising the fixation of the 
rate of tax leviable on the taxable turnover, was a law authorising 
the imposition of a tax within the purview of the unamended Art. 
286(3) of the Constitution. As the East Punjab Act No. 19 of 1952 
was passed after the enactment of Art. 286(3) of the Constitution 
and after Parliament had by Central Act 52 of 1952 declared edible 
oil to be essential for the life of the community and it was not 
reserved for consideration of the President and did not receive his 
G 
assent, it could not take effect during the currency of Art. 286(31 
prior to its. amendment in so far as it authorised the imposition of 
a tax on the sale or purchases of edible oil. It could however take 
effect in respect of sale and purchases of other goods. [344A-C; 
348B-CJ 
(ii) The effect of the amendment of Art. 286(3) of the Constitu-
tion by the Constitution (Sixth Amendment) Act with effect from 
B 
September 11, 1956 was that the restriction put by Art. 286(3) on the 
operation of the amended s. 5 in respect of essential goods was 
336 
'" 
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,. 
•
• 
PUNJAB I/, SANSABI MAL (Bacltawill, J.) 
337 
A 
lifted and the section thereafter took effect on .. such goods also. 
There was no force in the contention that the amended '!. 5 was 'a 
still-born Jaw and that the section was not revived by the remfl\'el 
of the ban. It was inserted by the East Punjab Act No. 19 of 1962 
-which was passed by a competent legislature and always took effect 
in respect. of non~ssential goods. [344D-F] 
B 
0 
D 
B 
Section 3 of Central Act 52 of 1952 had no independent existence 
and after the amendment of Art. 286(3) it had no force from· Sedtem-
~er )1, 1956 until its repeal with effect from Janu"1"' 5, 195'7 by 
Central Act 74 of 1954. [345C.D, E-F] 
(iii) The notification of August 5, 1954 which 
~ncled the 
Schedule of tax.free goods was authorised by s. 6(2) which was a pre-
Constitution law outside the purview of Art. 286(3) .. 'The notification 
did not require the assent of the President for affecting l!Sl'ential 
goods. The notification was therefore valid and took effect in ~ 
of edible oil as from August 5, 1954 and thet'eafter "sales of· edible 
oil produced in ghanis run by mechanical power were taxable. But 
as the amended s. 5 could not then affect edible oil, no tax was 
effectively imposed on it until September 11, 1956 during the cur-
rency of the unam

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