INTERNATIONAL COTTON CORPN. (P) LTD, versus COMMERCIAL TAX OFFICER, HUBLI & ORS.

INTERNATIONAL COTTON CORPN. (P) LTD.

COMMERCIAL TAX OFFICER, Hl'BLI & ORS. October 4, I 974

[A. N. RAY, C. J., Y.V. CHAHFACHto A. C. Gt.JPTA, JJ.) • ·

• · lACJJtl~'tl )~· r ;.~o

1. 8(2A) Ctnlrol hod Sole& th~ tffect Tax oj Act, up~ol/ng l9S6-S s.'6(t·A) 8(2)(a)-C of th~~11"1'£:::1 WJ/idity of-Whtrhu of the rtcorti-Jj Sa!~s Tax Officer tntltltd to rtcrl'j cr-1, or [[0]]PP<Ut111 011 tht fare fare . Y tor •tr rtrtljkotlon. •tr rtrtljkotlon. rtrtljkotlon.

11"1'£:::1 "1'£:::1 1'£:::1 '£:::1 WJ/idity of-Whtrhu cr-1, or [[0]]PP<Ut111 011 tht fare fare Y tor •tr rtrtljkotlon. •tr rtrtljkotlon. rtrtljkotlon.

Certam Inter-state sale, of the appeUants were assessed th to central sales-tax before lOth November 1964 On tha &:; Sales !Ill( Officer do/am Laklhml Nanimhalah Setty & Son~ 'held that where'• ~ t!ti' Coun ifl Yad· not liable to aalea tax if it were an Intra-state sales und am transactJon "'115 appropriate State lt. would not be liable to sales-tax if it '~>'!: ;:;es-~aw 01.r .the effect. to this declston the a~es.smeot orders of tho appellants W:ete rectified 1~ s~t as1de the effect or this decuioo, sub-s. (l·A) "'-u Inserted 1n 1• 6 and coc~uell· ual amendment '1\"8.5 made in au~s. (2-A) of a. 8 of the Central Salts-Tax Act on 9-6-1969. Thereupon the assessma authority Bialn brouaht to tax the inter-stato , sales. ~cction 8{2)(a) ~ter ita amendment enaeted that the tax pay8ble by any dealer oa hJJ tlll'llO\Icr relatlnf to tho sale of aoods in the ~une of inter-sute trado or commerce not fallina Wlthill •ub-I. (1) ill the ease or declared 1oods shall be ..UCU· Jated at the rate applicable to the sale or purchase oC such aoodJ uUidc t.bo appro-priate State.

It ...,. contended (1) that the clause it ll.llconstitulion:U in that Parliameot has abdicated 111 lqil!ative (unction by adoptina the rato applicable to the sale or pur-chaae of sooda ~ the appropm~ State; (2) under a. 8(2)(a) it i3 tho rate of tax that wu prevaknt wlu:n that tectloo was enacted and not any Jubsequcnt variations ill the rate of tax that ~ru appllcable; (3) that while traDsactions bttwoen lOth No•· ember, 1964 aJ:id 9th Jllllt, 1969 :wore exempted !'rom liability to pay tax, if iD f~ the tu In respect of th.est transactions had not been collected by the dealer, silln· lar c:o!ICGSion had not been sranttd to da!en who were siroilally aituated, that ·is, thoso 'll'ho had not collected any tax on their sales prior to !WI NovcmberJ 1964 and that auch concession sbo11ld bo available to ~ who had DOt mace any collection after 23rd January, 1962, that it the d11to of the j~dament of Hiah Court; (4) that Section 8(2A) whJch "u &mended at the samo tJmc as sub-4. 6<1-A) wu inserted had the effect of lmpUcdly rcpealina sut>-s. 6(l.A); (~~t the Sal~u O&cer h.t.d no power tO rectify tho a.sseuroent ordct1 after C:OJDU!i 11110 force o( ~ Cwtral Sa!ea Tu (,Amwdment) Aet, 1969 aince there was no error appar.Cllt ( .t11• fiiCe of the record; and (6) that the rectil!cation order was beyond tho polllt [0 ]tlllll under rule 38 ot tho ,Mysorc Sales Tu Rules.

Di.mllMin tho 11ppeaJ.s,

tho purpote of dto RElD : (l)(a) The adoption of Lhe rate oC local .ales tue ~tiamellt biiS In any Cc:nu . .t Salet tax 1n partu:ular State doea oot •row ~;~am<D-t provides w•t tb• ">' abdicated Ita lcaltl11t1ve runctJon. Whcro aw [0 ]a !.iublo to tho .ale or rate or Centr&l aa!ea-tu ahould be calculated at tho rate1111ft~ Jc~sla.tivo policy c&ll pu~haq ot such aoods Inside the appropn~t~. S~e, :,:~! C<etr&l slllcs-tax should, be dl5certled ill tuch law, tho policy bellli ., .. I r law made by ParllamtDl In 110 event, be lu• than the rate ot lo~.,'<ftes~~utrerina from the vice of~ containina the above provlsJonJ CI.JliiOt be ""' [10 ]tho abovo law tncorporatet · ar.c 1ri1hlD cleJeaauon lucl! tho of nccetaatY leiJ,!l&tlvo provialont tuDctlon. to On the ~~ contu:a'objectivt 0~ ta~ea-tu and to ploC tho ua le~.t.~~ r-0 ~&mdy,. to pr_,yent evuJon of paymtot o loopboA (3$0D·FJ )l s T c. 219, toUond. Q. hylff S/1/c ltl/1· (lf'l'f.) Co. Ltll. v. Aut. Cllllf""· .•

(b) The letislative policy laid down by Parliament in s. 8(2)(a) is that inter-state trade should not be discriminated against. If the argument of the appellant is accepted there will have to be unending series of amendments to this section every tinte one State or the other alters its rate of tax. [351-D]

(2) "Rate applicable" merely means the rate applicable at the relevant point of time and not the rate applicable when section 8(2){a) was enacted, The whole scheme of the Central Sales-Tax Act is to adopt the machinery or the Jaw relating to sales-tax Acts of the various states in cases where those states happen to be the ap· propriate states as also the rates prescribed by those Acts. [352-D; 351-G)

(3) (a) The fact that transactions of sales during the poriod between 23rd January, 1962 and lOth November, 1964·were not given the same concession as the transactions between lOth November, 1964 and 9th June, 1969 did not mean that the latter concession was unconstitutional. concession is not matter of right. Where the legislature, taking into consideration the hardships caused to certain set of tax payers gives them certain concession, it does not mean that action is bad as another set of tax payers similarly situated may not have been given similar concession. {353C·D)

(b) There can be no que.~tion of discrimination in this case. Section 6(1-A) read with s, 10 of the Amendment Act i~ not unconstitutional in so far as it',relates to the p:riod between 23rd January, 1962 and lOth November. 1964. (3S3B-F]

(4) (a) Such an intention cannot be imputed to Parliament which enacted both the provisions·at the same time. Both the provisions should be so read .as not to aullify the effect of the one or the other. The fact s, 6(1A) is also included in the rron-obstante clause of. s. 8(2A) did not mean by itself that the effect of s. 6(1A) was obliterated. {353G·H:

(b) Section 6(IA) and s. 8 (2A) can stand toget)ler. The legislature might, for the sake of convenience or from other considerations of policy, make either sale or purchase taxable In r~pect of the sale of any particular goods. That does aot mean that the sale and ,purchase in respect of the same transaction are two dif· ferent transactions. They are two facets of the same transaction. When sub-s. (2A) of s. 8 uses the words "the sale or, as the case may be, the purchase" it is merely referring to the fact that State Sales-tax Acts make either the sale or purchase tax-able and not that where the sale is ta:a:able the purchase i~ exempt from tax and where the purchase is taxable the sale is exempt from tax and, therefore, where one of them j.8 ex.empt from tax in respect of an intra·.~tate sale. the inter-state sale .is completely Olleo:lpt fr~m tax. [3S4C·DJ(c) Reading section 6(1A) and aection 8(2A) toaether along with the explana-tion the conclwion deducible would be that where the intra-state sates of certain ~:oods are liable to tax even though only at one point, whether of purchase or of sale subsequent inter-State sale of the same commoditY is liable to tax; but where th11t commodity is not liable to tax at all if it were an intra-State sale, the inter-State sale of that commodity is also exempt, from tax. Where an Intra-State sale of particular commodity is taxable at lower rate thl\n 3 per cen.t then the tax on the inter-State sale of thaJ.. commodity will be at ·~hat lower ra~e. As .sale or purchase of any goods shan rR>t be exempt from tax 1n respect of tnter-State sales of thoSe commodities if as an intra-State sale the purchase or sale of those commo-dities is exempt only in specific circumstances or under specified conditions or is leviable on the sale or purchase at specified stages, [354F-HJ

(S) It is incorrect to .say that because this Court had not in Joseph's case consi-dered the arguments regarding conflict between s. 6(JA) and s. 8(2A) there was no error· appa'rent on the face of the record. Clearly when the Court said that. tho ·effect of the Central Sales·ta"< (Amendment) Act, 1969 was to supersede the judg-ment of this Court in Yaddalam's case the Sales-tax authorities were undoubtedly entitled to rectify their earlier rectification order which was made consequent on the decision in Yaddalam's case. After the Central Sales Tax (Amendment) Act. 1969 the decision of this Court in Joseph's case there was no question about the error not being apparent on the face of the record. _[3SSC·D)

. (6) What was sought to be rectified wa-s the assessment order rectmed as 1. oonscquence of this Court's decision in Yaddalam'.t case. After such rectificatlon the 0r1ginal assessment order was no longer in force. and that was not the order SOUJbt to be rectified. It is admitted that all the rectification ordo1'3 would bo with• .b time calculated from tho original rectification order. Rule 38 itself apeaks of "illy order" and there is no doubt that tho rectified order is also "any order" which tiD be rectified under Rule 38. [3S4E-FJ

8 CtVlL APPELLATE JURISDiCTION : Civil Appeal No. 514 of 1970

Appeal from the judgme~t and order ·dated the 22nd December, 1969 of the Mysore High Court in W.Ps. No. 5361 of 1969.

C!VLL APPEAL Nos. 166 to 173 of 1973.

From the judgment and order dated the 15th October, 1979 of the Mysoro High Court in W.Ps. Nos. 893/70, 5367/69,2031-2035/70 and 5734 of 1969. respectively. · AND

CtVJL APPEALS Nos.·I81 to 243 of 1973.

From the judgment and order dated the 15th October, 1970 of the My~ore ,High Court in W.Ps·. Nos. 2534, 2529; 2532, 2530-31, 2535-36/70, 3560-3562/67, 7124-7129, 7131/69, 2476-78, 2480 & 2486/70, 2479/70, 1211/70, 1081/70, 4690/69, 3846/70, 5634-35, 5638-39/69, 5632/69; 3040, 3039/70, 3147-48, 2772, 2775, ·2777, 2773/70, 5426, ~770, 5503/69, 3033-36, 3037-38/70, 6087, 6089, 6086, 6088/89, 2062, . 2820/70,470, 1749, 2833 and 2834 of 1970 respectively:

· Civil Appeal. No. 2078 of 1970.

From the Judgment and order dated the 25th May, 1970 of the Mysore Higli Court in W. P. No. 5179 of 1969.

· K. Srinirasan and Vineet Kumar, for the appellants (in C.As. Nos. 514 and 2078/70). · · ·

K. Srinlrasan and J. Ramamurthy, for the appellantt (in C.As. N0s. : 166-173.& 181·243/73)

A. K. Sen, (in . .A. No. 166/73), H. B. Datar (in C.A. No. 2078) and M. Vttrappa, for respondents nos. l & 2 (in C.A~. Nos. 514 & 2078/70 and 166/73, 181-203, 205·216, 218-236, 242-243/73) and respondents (in C.As. Nos. 204, 217 and .237-241/73). .

B. Sen (in C.A. No. 514/70and l66J73) and Girish Chandra, for re-G spondent No. 3 (in C.As. Nos . . 514 & 2078/70, 166-173/73, 181-203, 205·216, 218-23.6 and 242-243/73). ·

K. M. K. Nair the intervener (in C.A. No. 514/70).

The ~udginent of the Court was delivered by :

. AL~GIJUSWAMJ, J.-These appeals arise out of the judgment of the High Court of Mysore dismissing batch of writ petitions filed by · nuinber of dealers 1nlhe State of Mysore (now Karnataka) questioning · the le.vy of sales tax under the Central Sa1os Tax Act on certain inter-State sales. The goods dealt with were all declared goods and un~er

stJPREME COURT REPORTS Il975J 2 s.c.a.

tho M sore Sales Tax Act they were ~!lxable at ,tho point of purchase at 1964 1 si~ ~he 10 point. The importance of assoss.ment thiS date pe~tods w11l become clear arc pr1or to lOth when wo November, proceed to ddat with tho mat tor subsequently, Tho assessing authorities asses. sed all these transactions of inter-State sales to tax. This Court doUvored its judgment in what is known as Yaddalam'a Case (16 stc 231) holding that where certain transaction was not liablo to sales tax if it wore an intra-State sa!e under the Sates. ~ax Law of ~he apPro-priate State, it would not bo liable to sates tax If 1t were an tnter-Stato sale. Pollowi.ng this decision the assessment orders were rectified giving cfioct to the judgment. To set aside the effect of this decision sub-s (lA) was inserted in section 6 and consequential amendment was m1do in sub-s. (2A) of s~:ction 8 of the Central Sales Tax Act. After this the as~essing authorities again r~tificd the a~se~sment orders and brought to tax the intcr-Stato sales.

Before this Court the validity of section 8(2)(a) as well as section 6 (lA) of the Central Sates Tax Act read with section 10 of the Central ·~a~ex T&JC (Amendment) Act, 1969 is questioned. In the alternative 1118 ~ bts le argued to sales that tax. oven Tho after rectification orders tho amendment these transactions arc also impugned are not on tho ground :

I. tha~ there was no mistake apparent on the face of tho record to JRusufy the rectification under Rule 38 of the Mysorc Sales Ta:r ules, and

2: 'petha~odin .any case such rectification is beyond the permitted tl •

8(2)T(~~ i~st c~ntcnrion regarding tho unconstitutionality of section Silk Mfi. (<;;& [1 ]to be based on tho decision of this Court in G. &roll tionatit/~r s.'lclJ(bCo). Ltd. v. A7.rt. Commr.(l) dealing ~i~ the constttu• I ants that do ~ . · We constder that far (rom supporting the appol· aaid behalf in of th.tt the ;[1]P~~lants. slon actuaiiy Itts 1!s only necessary to set out what thts against the contention put fo~ard Court on observed In that case : thocts0 maJority [10].[0 ]• . It whtlo ls .hardly necessary to upholding tho validity add of any thing section 8(2)(b) mo~.

·. fitation ' ''It or has ra:e~ arg~od on behalf of the o.ppel!ants that t~o m'nt hu und [0 ]~ u legislative function and as tho Parli&· Contrala~lcs t:r socl!on 8(2Xb) of the Act, not fixed the rate of or purchaso or~ but h:u ~dopted the rate appUcablo to tho solo rato oxooeds 10 goods tnsJde the appropriate Stato in case su~h lativo function pe;hoent, tho parliament has abdicated Its legiS· be .constitutio~al!y ~ [1]h<?ve provision is consequently st~ted [1]( ;&[1]Jla.tiv0 POwer, ~ahd bc~use ,of excessive do~egauon. U· Oundcd. Section B( )(b contention, t.n our opinion, JS not 'IIi~ View to Prevent [2 ]. ) of the Act has plainly been enacted wr ~ OVl!IOQ or the payment of tho Central aa [05 ]'T. C. 2151, . •

tax. The Act prescribes low rate of tax of 3 per cent in the case of inter-State sales only if the goods are sold to the Govern-ment or to -registered dealer other than the Government. In the case of such registered dealer, it is essential that t.he goods should l?e of the description mentioned in sub-section (3) of section 8 of the Act. In order, however, to avail of the benefit. of such low rate of tax under section 8(1) of the Act, it · i~ also essential that the dealer selling the goods should furnish to the prescribed authority in the prescribed manner declaration duly filled and signed by the regi ~ tered dealer, to whom the goods. are sold, containing the prescribed particulats .in the pres~ cribed form obtained from the prescribed authority, or if the goods are sold to the Government not being registered dealer, certificate in the prescribed form duly filled and signed by duly authorised officer of the Government. In cases not falling: under sub-section (1), the tal'l payable by any dealer in res--pect of inter-State sale of declared goods is the Iate applic2ble to the sale or purchase of such goods inside the appropriate. State : vide section 8(2)(a) of the Act. As regards goods other than the declared goods, section 8(2)(b) provides that the tax pay-able by any dealer on the sale of such goods in the course of inter-· State trade or commerce shall be calculated at the rate of 10 per· cent or at the rate applicable to the sale or purchase of such. goods inside the appropriate State, whichever is higher.

The question with which we arc concerned is whether the. Parliament in not fixing the rate itself and in adopt~ng-the rate· applicable tothe sale or pruchase of goods 1nstde the appropriate State has not laid down any lcgislt!.tive policy and has abdicated its legislative function In this connection we are. of the view that clear legislative policy. can be found in lhe . pro-visions of section 8(2)(bJ of the Act. T~e policy of the law Jn · this . respect is that in· case the rate of local s~los tax. be less than 10 per cent, in such an event the dealer, if·the ~ does notJall within section 8(1) of the Act, should pay Central,-sales tax M the rate of 10 per cent. If, however, the rate of loC!ll sates tax for the goods copcerned be more· than 10 per .. cent, tn .that event .the policy is that the tate of Central sales tax shall also-be the same as that of the local sales tax for the said goods. The object of law thus is that the rate of Central sales talt shall in no event be less than the rate of local sales tax for me goods in question though it may exceed the local rate in case that ra~e' be less than 10 per cent. For. example, if the local rate of tax tn the appropriate State for the non.declared goods be 6 per cent, in such an e"ent dealer, whose case not covered by section-8(1) of the Act, would have to pay Central sates tax at the rate· of 10 per cont. In case, however, the rate of local sales tax for such goods be 12 per cent, the rate of Central sates tax would also-be 12 per cent because otherwise, if the rate of Contra! sates tar. were only 10 per cent, the unregistered dealer who purchases. goods in the course of inter-State trade would be in better posi-tion than an intra-state purchaser and there would be no·

SUPUMB COUU. REPORTS

disincentive to th~ d~1ler~ to do3is t from selling goo~ to unregistered pruchaser~ in the course of inter-State trade. The. ObJect of the law .apparently is to deter inter-State sales to un~egtstered dealers ~s coch inter-State sales would · facilitate evaSlOn of t~x. It ~s_ also -not possible to fut the maximum rate under section 8(2)(b) because the rate of local sales tax varies from State to State. The .rate of local sales tax can also be changed by the State Legis!atures from time to time. · It is. not within the competence of the Parliament to trx the maximum rate of local sales tax. The fixation of the rate of local sales tax is essentiallY matter for the State Legislatures and t~ Parliament does not have any control in the matter. The Parlia-ment has therefore necassarily, if it wants to prevent evasion of pay-ment of Central sales tax, to tack the rate of such tax with that' 9~ local .sales tax, in case the rate of s.uch local sales tax exceeds parttcular limit."

"The adopt ion oft he rate of local sales tax for the purpose of the Central Sales tn as applicable in particular State does not show that the Parliament has in any way abdicated its legisla-tive function. Where law of Parliament provides that the rate of Central sales tax should be 10 per cent or that of the local sales tax, whichever be higher, definite legislative policy can be dis-cerned in such law, the policy being that the rate of Central sales tax should in no event be less than the rate of local sales t;•.x. In such case,' it is, :~s already stated above, not possible to men-tion the precise figure of the maximum rate of Central sales taX: in the law made by the Parliamt:nt because such rate is linked with the rate of local sales tax which is prescribed by the State L~gislaturcs . The PlLrliamcnt in making such law cannot be said to have indulged in self-effacement. On the contrary, the Parliament by making such Ia w effectuates its legislative policy, according to which the rate of Central sales tax should in cer-tain contingencies be not less than, the rate of local sales tax in the appropriate State. law made by Parliament containing the above provision cannot be said to be suffering from the vice of excessive del~gatio~ oflegislative function. On the con· tr.a~y, the above law Illcorporates within itself the necessary pro· VISions to ca~ry out the objective of the Legislative, namely, to prevent evasto n of payment of Central sales tax and to plug possible loopholes". .

Mathew, J. speaking for himself a'nd'the learned Chief Justice held :

"We think that ~arliament fixed the rate ~f tax on inter-Stat sales of the descnption specified in section 8(2)(b) of the t ~ ~he rate fixed by tl~c appropriate State Legislature in rcspe~t ~f mtr~·State sales with purpose, namely, to check evasion of tax on. mter-S_tate sales and to prevent discrimination between res1dents m one State and those in other States p 1' . · th ht th t 1 · ar Jamt;nt . oug_ un ess t rate fixed by the States from time to time IS adopted a<> the rJlte of tax for inter-State sales of the

kind specified in the sub-clause, 'there vill be evasion of tax in inter-State sales as well as discrimination. We have already pointed out in our judgment in State of Tamil Nadu and Another· v. Sitalaksh.ni Vilis Ltd. and Others, Civil Appeals Nos. 2547-2549 of 1969 and 105-106 of 1970 (since reported in 33 STC 200 $C) the objectives which Parliament wanted to achieve by adopting tht:: rate of tax in the appropri~tt: State for tning the local sales. And for attaining these objectives Parliament could. not have fixed the rate otherwise than by incorporating the rate to be fixed from time to time by the appropriate State Legis-lature in respect oflocal sales. It may be noted that in so far· as inter-State sales are concerned, the Central Sales Tax Act. by section 9(2) has adopted the law of the appropriate State as . regards the procedure for levy and collection of ~he tax as also for impositon of penalties"·:

It is only nece~sary to add that the leg,slative policy laid dcwn by·· Parliament in section 8(2)(a) is that inter-State tr2.de shculd not be discriminated against.lf the .argument of the appellantf. ili accept(.cl. there will have to be unending series of amendments to this sectio• . every time one State or other alters its rate of tax. ·

· It is n~.;xt contended that as section 8(2)(a) states that the tax pay-able shall be calculated at the rate applicable to ~the sale or purchaso of such goods inside the appropriate State it is the rate that was pre-valent when section 8(2)(a) was enacted that would' be applicable anci not any subsequen~ variation in this rate of tax. If this ugument is accepted ~o questionofunconsthutionaldelegationof the Parliament's Legislative powers in favour of the State Legislatures would arise. at· aU. It would be re~embered that the ground for attacking the coll-stitutionality of section 8(2)(a) is that Parliament if it is deemed to haTe permitted the application of rate of sales tax enacted by State Le~i'­lature in respect of intra-State sales to inter-State sales also that wou1c1· . be impermissible' delegation by .Parliament of its JegislatiTe pc_:weri. We have already deaJt with that question. All that is necessary ncv to add is that the rate applicable merelymeans the rate app_licable at the relennt point of time and not the rate applicable lYhen sect! on 8(2)(a) -was enacted. The whole scheme of the Central Sales Tax· Act is to adopt the machinery of the law relating to Sales Tax Acts of the variou States, in cases where those States happen to be the appropriate States as also the rates prescribed by those Acts. Under section 9 cf the Act · 1he tax payable by any dealer under the Central Sales Tax Act is fo bo leviedandcollected by the Government of India in accordance lYith the provisions of sub-section (2) of that section. Under sub-sectioa (2) subject to the provisions of that Act and the rules made thereu'nder, the authorities for the time being empowered to assess, re.assess~ col· Ject and enforce payment of any tax under the gener.a1 sales ta~ l2.w of the appropriate State shall, on behalf of the Government of India, assess, re-assess collect and enforce payment of tax, inchiding an7 penalty, payabte by dealer ~der this Act as if the tax or·penaltJ payable by such.a dealer under this Act is tax or penalty payable under the sencral S:&Ies tax law of the State; and for this purpose they may,-l 'I sUPREME COURT REPORTS [1975] 2 s.c.a. :352 . n of the. powers the) have under the general sales tax exerc1;e :~1 ~~t~ .Yand the provisions of such law, including ~revisions law rt;l~:~~f~ 0[1 ]~0 ;;~he ur~s t~!nsferee rovisional assessn?ent, of anY. bust ness, tmpostt•on a~ van~ l?ayment of the of tax lia-tax, re. g\jit of person carrying on bu.slfl~~s on the transfere~ of, or succes-sor (o such business, transfer of habtl.ttY of ~n} firm or Htndu undivided : famil\• to pay tax in the event of the dtsso~ut10n of~uch firm or partition of such family, recovery of taX from thtrd part17s, appeals, re.views, r.:visions, references, refunds, rebates: penalttes. compoud[1]ng of offences and treatment of documents furntshed by dc:_aler as confiden-tial, shall apply according)y': .. ~hough the tax IS levted and co!lectc:d by the G:>varnment of Ind1a 1t IS 1ntended for the benefit of and 1s paid 10 [the S!ate whose officers assess ][and ][collect ][the ][~ax. ][The ][adoption ]of the mlchinery of and the rate of ta...;: prevalent tn the ~tate 1s for 'the c;)flv.!nienc~ of assessment as well a.s for the conventence of the parties so that they ~ill not hav~ t;> dea! wt~h ~wo .sets of office.rs and two 'ICtS of laws in addttion to aVo1d1ng dtscnmmatton between tntra-State ·and inter-State sales. The '<cry purpose of the Act and its scheme would be defeated or at least considerably impeded if the rates of tax .. I cable to inter-State sales where appliclble in any State in respect that of intra-state State is the sales were appropriate not appli-State . we are satisfied that the rate applicable is the rate applicable at the re. levant point of time. Only that interpretation is consistent whh the (e. gislative policy that inter-State trade should not be discriminated a&aJnst. ~~ v.:as also urged that sub-section (lA) of section 6 violates Article 14 10 v1e.w of !cction 10 of the Central Sales Tax (Amer.dment) Act, 1~ wh1ch by section 3 intserted sub-section (lA) in section 6. ~~~n 10 reads as follows : "10. Exemption from liability to pay tax ifl certain cases:-·(!) where any sale of gocds in the course of inter-State trade or commerce has been effected during the period between the lOth aay of November, 1964 and the 9th da}' of June, 1969, and the de~ler effcctil'lg such sale has not collected any tax under the pri-nciJX':l Act on the-ground that no such tax could have been levtcd or collected in respect of such sale or any portion of the turnover relating to such sale and no such tax could have been leVIed or collected if the amend menu made in the principal Act . thing by ~b!s oontalll.e~ Act. ha~ 10 not secl!on ~n 9 I!lllde, or the then, said amendments, notwith standing the dealers any-G shall not be h~blo to pay any tax under the principal Act, as me ndod by tJ:ia Act, i" respect of such sale or such part of tho turnover rt:latmg to such sale. ora.n;'u.that(2) F~r 1!" the ~s purposes collcctt~ of sub-section under th~ (J), princip;ll tho burden Act of in proving respect portion of tho ferred to [10]• sub-sectton (I) or in respect of any .effectin& •uch 1 ~~~~r relattng to such sale shall be on the dealer .-·· ;._ .. -... . ' \ •·.

The argument is that while transac.:tions tetween the lOth day of No-vember, 1964, that is the date of judgment ofthis Court in Yaddalam's case and the 9th day of June, 1969, that is the date on which the Central Sales Tax (Amendment) Ordina.nce,l969, wh.ich preceded and was sub-sequently replaced by the Central Sales Tax (Amendment) Act, 1969, was promulgated, were exempted from the liabilit} to pay tax, if in. fact the tax in respect of these transactions had not been collected by the dealer, similarconcessio'n had not been granted to dealers who were similarly situated, that is, who has not collected any tax on their sales prior to 10-11-1964 and that such concession should be avail-able at least in the case of assessees who had n~t made any collec-tion after the judgment of the Mysore High Court in Yaddalam's case, that is, 23rd January, 1962. There are two answers to this submission. Firstly, the fact that transactions of sale prior to the pericd before lOth November 1964 or at least the period between 23·1·1962 and 10-11-64 were not given the same concession as the traJUactions between 10-11·64 and 9-6-1969 does not mean that the latter concession is unconstitu-tional. concession is not matter of right. Whc:re the Legislature taking into consideration the hardships caused to certain set of tax-payers gives them certain concession it does not mean that that ac-tion is bad as another set of tax-payers similarly situated may not have been given similar concession. It would not be proper to strike. down the provision of law giving conl't:ssion to the former on the ground that the latter are not given such concession. Nor is it possible for this Court to .direct that the latter set should be given similar con-cession. That would mean legislation by this Court and this Court has no legislative powers.

We are not able to appreciate the suggestion on behalf of the appel-lants that section 6{1A) read with section 10 of th~ Amendment Act should be declared unconstitutional in so far as it relates·to the period between 23-1-62 and 10-11-64 or how that is permissible. That means .that the tax leviable under section 6(IA) cannot be levied during ~hat period. That means even those who have collected the tax would escape. Second I}, in respect ·of that period also the dealers cOncer-ned might very often be the same set of persons and there .~an there-fore be no question of discrimination.

The next submission on behalf of the appellants was that su~sec­tion (2A) of section 8, which was ame~ded at the same' time as sub:-sec. tion (lA) was inserted in section 6, has the effect of impliedly repeal-ing sub-section (lA) of section 6. We are unable to accept this con-tention. · Firstly, such an intention cannot be imputed to Parliament which enacted both the provisions at the same time. }roth the pro-visions should, therefore, be so. read as not to nullify the effect of the one or the other. Indisputably, sub-s. (lA) of section 6 was inserted. in order to get over the decision of this Court in Yaddalam's cuse. Its ~ffect is t~ bring to tax inter-State sales which w~uld not ~ li3;ble to tax tf they were intra-State sales. The fact that t~1s sub-sectton ts also included in the non-obstante clause of sub-section (2A) of section 8 does not mean by itself that the effect of sub-section (lA) of section 6

is obliterated. We will, therefore, have to look into th~ amended 5Ub· s. (2A) of section 8 and see what it means. The contention of the appel-lants primarily depends upon the words "the sale or, as the case may be, the purchase of which is, under the sales tax: law of the appropriate State, exempt from tax''. What is urged is that transactions of purchase are generally exempt from the tax whenever the JOOds are taxable at the point of sale and similar!} the transactions of sale are exempt from tax generally whenev~r the goods are taxable at the point of purchase. The untenabilit) of this argument would be apparent from the fact that this means that all sales and purchases are generally e"empt from ta~. Tllis ·argument proceeds on the basi~ that the sale and purchase are different transactions. The Legislature might for the ~ake of convenience or from other _considerations of polic} make either sale or a· ·purchase tamble in respeCt of the sale of any particular goods. That does not mean that the sale and purchase in respect of the same transactions are two diff-erent transactions. They are two facets of the same trans(ll;ticns. Therefore when sub-s~tion (2A) of section· 8 uses the words "the sale or, as the case may be, the purchase" it is mereJJ referring to the fac! that State Sales Tax Acts make either the Sale or purchase taxable and-not that wht>re the sale is taxable the purchase is exempt from tax and wh~re the purchase is taxable the sale is exempt from tax and therefore where one of them is exempt from tax in respect\ of an intra-State sale the inter-State sale is completely exempt from tax. We agree with the view of the Mysore High Court that lhe object of sub-section (2A) of section 8 is to ex-empt transaction of sale of any goods if they are wholly exempt from the tax under the sales tax law of the appropriate State and make the said sale chargeable at lower rates where under Jh~ Sales Tax Act of the State the ·sale transactions are .chargeable to ta-x. at lower rate and it is· not rorrectto s'ay that where goods are taxable at the point of purchase or sale the transa~tion is exempt from tax genera-Hy. sales tax has necessarily to be levied on sale or purchase and tbis argument implies that all sales are exempt from tax. The plait. meaning of the said sub-section is that if under the sales taJr law of the appropriate State no.tax is levied either at the point of sale or at the po. · intof purchase at any stage the tax under the. Act shall be nil. Readins ·section 6(1A) and section 8(2A) together along with the Explanatio:a the conclusion deducible would be this : where the intra-State sales of certain goods are liable to tax, even tho~h only at one point, whether of purchase or of sale; subsequent inter-State sale of the sam~ commo-dity is liable to tax, but where that commodity is not liable to tax at all if it were an intra-State sale the inter-State sale of that commodity is · also exempt from tax. Where an intra~State sale of particular com-modity is taxable at lower rate than 3 per cent then the tax on the inter~ State sale of that commo< ity will be at that lower rate. sale or purchase of any goods shall not be exempt from tax in respect of inter-State sales of those ~ommodities if as an intra-State sale the purchase or sale of those commodities· is exempt' only in specific circumstances or under specified conditions or is leviable on the sale or purchase at spe. cified stages. On this interpretation se.ction 6(1A) as well as section 8(2A) can stand together.

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INTERNATIONAL COTTON CORPN. v, C.T.o. (A.faalriswami, ].) 355

A. Nor are we able~ accept the contention that the Sales Tli't Officers had no power to rectify the assessment orders after the coming into force of the Central Sales Tax (Amendment) Act 1959 on the ground· that !here was no error appare~t on the face of the recoru. This argument IS based on the fact t~at m two cecisions in Mysore Silk House v. State of Mysare (l) and In Pierce Leslie & Ca. v. State of Mysore (SRTP No. 63-64 of 1963) the Mysore High Court had taken the view that the inter-State transactions were not liable to tax and that view had been upheld by .Yaddalam's. case and~ Court in its decision in Joseph's case (2) d1d llot consrder the effect of sub-s. {2Al of section 8 and therefore when there is such difference of opinion it cannot be said to. be case of an error on the face of the record. Tt is incorrect to I&J that because this Court had not, in Joseph's case, considered the argu• ment now pnt forward regar ing the conflict between section 6(1A) and section 8(2A) there was no error apparent on the faoe of tho record. Clearly when it said that the effect of the Central Salea Tax (Amendment) Act, 1969 is to supersede the judgment of this Court in Yaddalam's case the Sales Tax Authoriti~ were undoubtedly entitled to re.;tif} their earlier rectification order which was made consequent . oh thedecision in Yadrfalum's cas~. After the Central Sales Tall •' (Amenoment) there was no queAct.l969 stion about and the the decision error not of being this Court apparent in Joseph' on the face I case .·. ··i ··i of the record. This attack on the rectiftcation.order, therefore. fa.J!a. The other attack that the rectification order is beyo~d the P?int · of time provided in Rule 38 of the Mysore Sales Tax Rules IS also w1th· out substance. What was sought to be re~ified .v:as ~e assessm~t order rectified as consequence of this Courts decJSIOO 10 YaddaliJ/'fl $ case After 5Uch rectification the original assessment order Wll;ified longer . ;n force and that was not the order sought t?thin~ ~ctl cal. It is admitted that all the· rectification orders would be ~ tune • .. , :.i culated from the original rectification order· R:fite 38. dtsc!f !J::~~~ ' . "any order'' and there j, ~o doubt that tbe recti ec. or er IS order" which can be recti.fie<l under Rule 38. . The appeals arc dismissed with costs. Costs one ~t. .,j/ .. 'I ,P.B.R. Apptau dlsml$Ud. ,:;{ :,.· ·:u .l·i '· ;f ; .. ;, O> tl s.T.C. m. (2) ~ S. T.C. 411. 1--)(ljJ8U~. ~7S ·,. - --~t ·- · -_;:-·.: ::. ' -

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