# BHAIYALAL SHUKLA v. STATE OF MADHYA PRADESH

- **Citation:** [1962] Supp. 2 S.C.R. 257
- **Court:** Supreme Court of India
- **Decided:** 1962
- **Bench:** B. P. Sinha, J. L. Kapur, M. Hidayatullah, J.C. Shah, J. R. MumrnLKAR
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/bhaiyalal-shukla-v-state-of-madhya-pradesh-2605
- **Pages:** 19

## Headnote

Sales Tax-0. P. and Berar Act .extended to Vindhya
Pradesh-Validity-0. P. & Berar Sales Tax Act, 194'1 (21 of
1947), a1 extended to Vindhya Pradesh-Par! 0 States (Laws)
Act, 1950, s. 2-Government of Part 0 States Act ( 49 of 1951),
ss. 21, 22--Part 0 State8 (Miscellaneous Law•) Repealing Aet
(66 of 1951)-Vindhya Pradesh Law8 (Validating) Act (6 of
1952), s. 7-Vindhya Pradesh Sales Tax Ordinance (2 of 1949)
-ConBtitution of India Art. 14.
The appellant was doing business of construction as
contractor under Public Works Department in Vindhya
Pradesh, now Madhya Pradesh. He challenged the levy of
Sales Tax on building materials cupplied by him for the year
1953-54 to 1958-59. The contention of the Petitioner was that
the tax was not leviable in view of the decision of the Supreme
Court in Gannon Dunkerley's case and Pandit Banarsi Das's
ca8e. The respondents claimed that the tax was leviable because
the case fell within the derision in Mithan Lal's case. The Rajpramukh of the United S'tate of Vindhya Pradesh promulgated
the Vindhya Pradesh Sales Tax Ordinance 2 of 1949. On
Vindhya Pradesh becoming Part C State of India the said
Ordinance of Rajpramukh was applied to the whole of it with
effect from April 1, 1950, by notification No. 7 of March 28,
1951.
Under s. 2 of the Part C States (Laws) Act, 1950,. by
notification No. S . .R.O. 6 datrd December 29, 1950, the
Central Provinces & Berar Sales Tax Act 1947, was extended
to Vindhya Pradesh. The notification also added s. 29 to the
Madhya Pradeah Act so extended, by which ordinance 2 of
1949 was repealed. By reason of the decision of this Coll!'! in
the Delhi Laws Act case the addition of s. 29 was unconstitutional. Parliament thon enacted the Part C States (Miac.
Laws) Repealing Act (60 of 1951).
By s. 2 of the Act the
Vindhya Pradesh Sales Tax Ordinance, 1949, was deemed to
have been repealed from December 29, 1950. The Vindhya
Pradesh Laws (Validity) Art, 1952, also provioed and declared
that Central Provinces & Berar Sales Tax Act, 1947, which
was extended to Vindhya Pradesh under s. 2 of the Part C
States Laws Act, 1950, has been and shall be deemed to be
in force in Vindhya Pradesh from April 1, 1951. The said
C. P. & Berar Sales
1~a:;
Act drfined contract, goods, sales
etc. and by these definition the materials used or supplied by
1111
Dtter•m 11.
1981
Buiμ/a/ Shwk/a
Y.
Stak of
M a./ltya ProJ11h
258 SUPREME OOURT REPORTS [1982) StTPP.
a building contractor in the conJtructions etc. were made
liable to Sales Tax in accordance with the schedule r.atcs.
The question is, whether C. P. & Berar Sales Tax Act, 1947,
can be said to have been extended. for the !"int time by the
Vindhya Pradesh lagL,lature in 1952, when it pasoed
the
Vindhya PradCJh Laws (Validating) Act, 1952 to the exclusion
of the order contained in the notification'No. S.R.O. 6 or
whether the Act continued to be in force in Vindhya Pradesh
even before and all that the Vindhya Pradesh Act did as to
remove any doubts about its validity.
The rival cont,ntions of the appellant and the rcspon.
dents are reduced to the proposition that if the State Legisla·
ture of Vindhva Pradesh extended the Central Province and
Berar Sales Tax Act, the extended Act would suffer from
di<ability pointed out in Ga'"''"' DunTc.rley'• caae, but If the
said Act was extended hy the notification under Part C States
(Laws) Act, 1950, then it must be treated as incorporated in
the Act and to have the authQfitv of Parliament wh!ch, in
relation to Part C States,
~ad no limitation whatever.
Hdd, that !he extended law in the C. P. & Berar Sales
Tax Act, 1947, did not depend on the repeal of the earlier law
for its validity. It would have been operative, even if the
('arlicr 1aw was not repealed, but_ the earlier law wu in f'act
repealed from December 29, 1950, and no question of conflict
between the new and the old law ever arose.
Hild, further, that the Vindhya Pradesh Amending Act
made only verbal changes. but did not alter the structure of
th

## Text

2 S.C.R.
SUPREME COURT REPORTS
257
BHAIYALAL SHUKLA
v.
STATE OF MADHYA PRADESH
(B. P. SINHA, c. J., J. L. KAPUR, M. HIDAYATULLAH,
J.C. SHAH and J. R. MumrnLKAR, JJ.)
Sales Tax-0. P. and Berar Act .extended to Vindhya
Pradesh-Validity-0. P. & Berar Sales Tax Act, 194'1 (21 of
1947), a1 extended to Vindhya Pradesh-Par! 0 States (Laws)
Act, 1950, s. 2-Government of Part 0 States Act ( 49 of 1951),
ss. 21, 22--Part 0 State8 (Miscellaneous Law•) Repealing Aet
(66 of 1951)-Vindhya Pradesh Law8 (Validating) Act (6 of
1952), s. 7-Vindhya Pradesh Sales Tax Ordinance (2 of 1949)
-ConBtitution of India Art. 14.
The appellant was doing business of construction as
contractor under Public Works Department in Vindhya
Pradesh, now Madhya Pradesh. He challenged the levy of
Sales Tax on building materials cupplied by him for the year
1953-54 to 1958-59. The contention of the Petitioner was that
the tax was not leviable in view of the decision of the Supreme
Court in Gannon Dunkerley's case and Pandit Banarsi Das's
ca8e. The respondents claimed that the tax was leviable because
the case fell within the derision in Mithan Lal's case. The Rajpramukh of the United S'tate of Vindhya Pradesh promulgated
the Vindhya Pradesh Sales Tax Ordinance 2 of 1949. On
Vindhya Pradesh becoming Part C State of India the said
Ordinance of Rajpramukh was applied to the whole of it with
effect from April 1, 1950, by notification No. 7 of March 28,
1951.
Under s. 2 of the Part C States (Laws) Act, 1950,. by
notification No. S . .R.O. 6 datrd December 29, 1950, the
Central Provinces & Berar Sales Tax Act 1947, was extended
to Vindhya Pradesh. The notification also added s. 29 to the
Madhya Pradeah Act so extended, by which ordinance 2 of
1949 was repealed. By reason of the decision of this Coll!'! in
the Delhi Laws Act case the addition of s. 29 was unconstitutional. Parliament thon enacted the Part C States (Miac.
Laws) Repealing Act (60 of 1951).
By s. 2 of the Act the
Vindhya Pradesh Sales Tax Ordinance, 1949, was deemed to
have been repealed from December 29, 1950. The Vindhya
Pradesh Laws (Validity) Art, 1952, also provioed and declared
that Central Provinces & Berar Sales Tax Act, 1947, which
was extended to Vindhya Pradesh under s. 2 of the Part C
States Laws Act, 1950, has been and shall be deemed to be
in force in Vindhya Pradesh from April 1, 1951. The said
C. P. & Berar Sales
1~a:;
Act drfined contract, goods, sales
etc. and by these definition the materials used or supplied by
1111
Dtter•m 11.
1981
Buiμ/a/ Shwk/a
Y.
Stak of
M a./ltya ProJ11h
258 SUPREME OOURT REPORTS [1982) StTPP.
a building contractor in the conJtructions etc. were made
liable to Sales Tax in accordance with the schedule r.atcs.
The question is, whether C. P. & Berar Sales Tax Act, 1947,
can be said to have been extended. for the !"int time by the
Vindhya Pradesh lagL,lature in 1952, when it pasoed
the
Vindhya PradCJh Laws (Validating) Act, 1952 to the exclusion
of the order contained in the notification'No. S.R.O. 6 or
whether the Act continued to be in force in Vindhya Pradesh
even before and all that the Vindhya Pradesh Act did as to
remove any doubts about its validity.
The rival cont,ntions of the appellant and the rcspon.
dents are reduced to the proposition that if the State Legisla·
ture of Vindhva Pradesh extended the Central Province and
Berar Sales Tax Act, the extended Act would suffer from
di<ability pointed out in Ga'"''"' DunTc.rley'• caae, but If the
said Act was extended hy the notification under Part C States
(Laws) Act, 1950, then it must be treated as incorporated in
the Act and to have the authQfitv of Parliament wh!ch, in
relation to Part C States,
~ad no limitation whatever.
Hdd, that !he extended law in the C. P. & Berar Sales
Tax Act, 1947, did not depend on the repeal of the earlier law
for its validity. It would have been operative, even if the
('arlicr 1aw was not repealed, but_ the earlier law wu in f'act
repealed from December 29, 1950, and no question of conflict
between the new and the old law ever arose.
Hild, further, that the Vindhya Pradesh Amending Act
made only verbal changes. but did not alter the structure of
the tax. No doubt, that Act contained· certain provisionJ
under which sales of build in it materialo are taxable, and if the
authority to tllx the. so·called sales emanated from a State
Legi•lature, then the law would fail. The law wa• first ex•
tended to the Vindhva Pradesh by the Central Government
acting under the authority of Parliament legislating for a Part
C State.
Parliament and the Central Government were not
suhject to the disabilities pointed out in Gannon l>Knkerley'a
caae, and the matter was covered bv Millian Lal'• ca.te. Even
if the notification S.R.O. No. 6 failed to repeal Ordinance
2 of 1949 Parliament bv its own law efl'aCl'd that ordinance in
Vindhva Prad"'h from December 29, 1950, and enacted that
that Ordinance shall be deemed to be repealed from that day.
The Ordinance 2 of I 949 did not continue in Vindhya Pradesh
down to January 8, 1953. becau.e bv fiction the Ordinance
was repealed from December 29, 1950.
Held. also, that the laws in different portions of new
State of Madhya Pradeoh were enacted by different lcgisla·
tures and under s. 119 of the States Reorganisation Act, all
2 S.C.R.
SUPREME COURT REPORTS
259
laws in force in a state were to continue until repealed or
altered by the appropriate Legislature. The different sales•
tax laws in different parts of Madhya Pradesh are valid on the
grnund that the differentiation arises from historical reason•,
and a geographical classification based on historical rea•ons is
not affected by Art. 14 of the Constitution.
State of Madra• v. Gannon Dunkerley & Oo. [1959] S.O.R.
379, Pandit Banar8idas v. State of Madhya Prade•h, [1959]
S.O.R. 427. Mithan Lal v. State of Delhi, [1959] S.O.R. 445,
Jn re the Delhi Law• Act, 1912, [1951] S.O.R. 747, Gannon
Dunkerley v. State of Madra•, [1954] 5 S.T.O. '216, Behram
Khurshed Pe8ikaka v. The State
~f Bombay, [1955] 1.S.O.R.
613, Deepchand v. State of Utlar Prade•h, [1959] Supp. 2 S.0.R.
8, John M. Wilker'9on v. Charles A. Rahrer, (1891) 140 U.S.
545, M. K. Prithi Rajji v. State of Raja•than C. A. No. 327/56
decided on 2-11-60 and Stale of Madhya Pradeah v. The
Gwalior S'U{Jar Oo. Ltd. C. A. Nos. 98 and 99 of 1957 decided
on 30-11-1960, referred to.
ORIGINAL JURISDICTION : Petitions Nos. 110
to 115 ofl960.
(Under Article 32 of the Constitution of India
for enforcement of Fundamental Rights)
A. V. Viswanatha Sastri, R. K. Garg, D. P.
Singk, S. 0. Aggarwal and M. K. Ramamurthi, for
the Petitioner.
B. Sen, B. K. B. Naidu and J. N. Shroff, for
the Respondents.
1961. December 21. The Judgment of the
Court was delivered by
HIDAYATULLAH, J.-These six petitions under
Art. 32 of the Constitution have been filed by one
Bhaiyalal Shukla, who was doing business of construction of buildings, roads, bridges etc. as contractor for the Public Works Department in Rewa
Circle of the former Vindhya Pradesh State, now
a part of the State of Madhya Pradesh. By these
petitions, he "challenges the levy of sales tax on
building matnials supplied by him in the construction of buildings, roads and bridges for the
years, 1953-54 to 1958.G9. For the first year in
question, sales tax amounting to Rs. 1,840·5-Cl has
. 1981
Bllajyal•I SluJcla
Y;
St•te •f
Modh7• Pradesh
HiJ""""""" I.
1961
BltaiJalal Sliokla
'"
Stcteof
M.ala.1• frd(f,14
HidavaJu//ah .J,
260 SUPREME COURT REPORTS [1962] SUPP.
already been charged and paid. He seeks refund
of this a.mount. For the remaining years except
the last two, proceedings for assessment have been
completed, but the amounta have not been paid.
For the remaining two years, proceedings are
pending for assessment of the tax. The respon.
dents in the oase are the State of Madhya Pradesh,
which Htands substituted for the State of Vindbya
Pradesh, and diverse officel'8 connected with the
&sseasment and levy of the tax. The contention
of the petitioner is that the tax is not levi&ble in
view of the decisions of this Court in two cases
reported in The Stare of .Madras v. Gannon Dunkerky
and Co., (Madras) Ltd., (1) and Pandit Banarsidas v,
The State of Madhya Prade,sh ('). The respondent.,
however, claim that the tax is leviab]e, because
the cnse fa.Ila within the decision of this Court
reported in Mithan Lal T, The Stale of Delhi(').
Tho Unit-Od State of Vindhya Pradesh was
formed by the Rulers of the States in Bal(helkhand
and Bundhelkhand, who agreed to unite into a
common State, with the Maharaja of R11wa as the
Rajpramukh. By the Covenant which w&e entered
into by them at that time, it was provided that
until a Constitution for the United State was
formed, the legislative authority of the United State
would ve~t in the Rajpramukh, and he was autho·
rised to make and promul!!ate Ordinances for the
peace and good government of the United State or
any part thereof, and any Ordinance made by him
had the force of an Act passed by the legisl&ture of
the United State.
The Rajpramukh. in exercise of his powers
drawn from the Covenant, promul(!ated the Vindhya
Pradesh Sales Tax Ordinance 2 of 1949 for the levy
of a tax on the sale of goods in Vindhya Pradesh.
On the ina.usrurstion of the present Constitution of
(I) ! 195"J S. C.R. 379.
(2) [1959] S. C.R. 427.
(3) [1959] S. C.R. 445.
2 S.C.R.
SUPREME COURT REPORTS
261
India, Vindhya Pradesh became, at first, a part B
State but later by the Constitution (Amendment of
the First and Fourth Schedules) Order, 1950, it was
transferred from Part B to Part C of the Constitution. The Ordinance of the Rajpramukh was applied to the whole of Vindhya Pradesh with effect
from April l, 1950 by Notification No. 7 of March
28, 1950 by the Chief Commissioner, Vindhya Pradesh, acting under s. 1(2) of the Ordinance.
Parliament then passed the Part C States (Laws)
Act, 1950. Section 2 oft.hat Act provided :
"Pawer to extend enactments to certain Part
C States :-The Central Government may, by
notification in the Official Gazette extend to
any Part C State ......... or to any part of such
State, with such restrictions and modifications
as it th,inks fit, any enactment which is in
force in a Part A State at the date of the notification and provision may be made in any
enactment so extended for the repeal or
amendment of any corresponding law (other
than a Central Act) 'Which is for the time
being applicable to that Part C State."
In exercise
of the power
conferred by the
above section, the Central Government by Notification No. S.R.O. 6 dated December 29, 1950, extended to the State of Vindhya Pradesh the Central
Provinces and Berar l:lales Tax Act, 1947 (21 of
1947) as in force for the time being in the State of
Madhya Pradesh, subject to certain modifications
necessitated by the application of the Act to this
new area. By the same Notification, a new section
was added to the Madhya. Pradesh Act, which read
as follows:
"29. Repeal and Saving : The Vindhya
Pradesh Sales Tax Ordinance 2· of 1949 is
hereby repealed, provided that ......... ,"
and here follow certain provisions saving the pre·
vious operation of the Ordinance.
IIMI
Bluiryalal Shuk1
v.
State of
Madhya Pradesl
Hiduyatul/ah J,
1961
Bliaflo/111 SW/o
y,
SI.ii of
M UJuo Pr.Jtsh
llid'f1Clulla4 J ·
262 SUPREME COURT REPORTS [ll:l!s~] SUl'l'.
On March 20, 1951, tho Central Government
issued Notification No. 52/ECON. in exercise of tho
powers conferred by sub-a. (3) of s. l of the Central
Provinces and Berar Sales Tax Act, 1947, as extended to tho State of Vindhya Pradesh by ~otification
No. S.R.O. 6, ordering that from April l, 1951 the
extended Act would come into force in the State of
Vindhya Pradeeh. On May 23, 1951, this Court
rendered its judgment in In re the Dellli Laws Act
1912(' ). It was held by majority by this Court
thats. 2 of the Part C States (Laws) Aot, 1950 was
intra vires, except for the concluding sentence,
"provision may be made in any enactment so extended for the repeal or amendment of any corresponding law (other than a Central Act) which is for
the time being applicable to that Part C State",
ina.Hmuch as it was uUra vires the Indian Parlia·
ment.
Parliament then passed the Government C;f Part
C States Act, 1951 (49 of 1951) on September 6, 1951.
Under that Act, Legislative A880mblies were set
up, and under s. ~l, they· were investRd, subject to
certain limitations, with Powers· of legislation with
respect to any of the matters enumerated in the
State List or in the Concurrent List. Section 22 of
that Act provided :
"If any provision of a law made by the
Legislative Assembly of a State is repugnant
to any provision of a law made by Parliament, then the law made by Parliamont whether
passed before or after the law made by the
Legislative
Asaembly of the State, shall
prevail and tho law made by the Legislative
Assembly c•f the State hhall, to the extent of
the repugnancy, be void.
Explanation : For the purposes of this
section, the expression 'law made by Parliament' shall not molude any law which provides
(I) [1951] S. C, R. 747.
•
2 S.C.R.
SUPREME COURT REPORTS
263
for the extension to the State of any law in
force in any other part of the territory of
India."
In view of the decision of this Court in the Delhi
Laws Act case('), the· Part C States (Miscellaneous
Law) Repealing Act, 1951 (66 of 1951) waa enacted
by Parliament on October 31, 1951. Bys. 2 of that
Act, laws described in Column 2 of its Schedule
were repealed or were deemed to have been repealed
with effect from the dates specified in the corresponding entry in column 3 of that Schedule. In the
Schedule, the Vindhya Pradesh Sales Tax Ordinance, 1949 (2 of 1049) wa.s repealed from December 29, 1950. The Vindhya Pradesh Legislative
Assembly,
which was set up, then pqssed the
. Vindhya Pradesh Laws (Validating) Act, 1952 (6 of
1952). By that Act, which was ·to extend to the
whole of Vfodhya Pradesh and to come into force
on January 8, 1953, it was provided as follows :
"2. For the removal of all doubts it is
hereby declared that ......... Central Provinces
and Berar Sales Tax Act, 194 7 as extended to
Vindhya Pradesh under section 2 of the Part
C States Laws Act, 1950 (has been) and shall
be deemed to be in force in Vindhya Pradesh
from April 1, 1951.
7. Repeal and savings :-As from the dates
of the actual enforcement of the Acts specified
in section 2 of this Act the oorr~sponding laws
in force in Vindhya Pradesh immediately
before the said dates shall be deemed to have
been repealed without prejudice to anything
done or suffered thereunder or any right, privilege, obligation or liability acquired, a.corned
or incurred thereunder before the aforesaid
dates."
Section 2 of the Central Provinces and Berar
Sales Tax Act, 1947, which was extended to
(I) [19Sl] S. C.R. 747.
1;61
Bhai;>alal Shukla
v
State of
Madhya Pradesh
Hidayatullah J.
1H1
llltM,.tal 8INIJ:l•
v.
SW. of
Iii <div• Pru.sh
BiJq.iulU.• .J,
264 SUPREME COURT REPORTS (1962] SUPP
Vindhya Pradesh, defined "contract" to mean any
agreement for the carrying out for cash or deferred
payment or other valuable consideration, the construction, fitting out, improvement or repair of any
building, road, bridge or other immovable property,
and further defined "goods" to m~an all kinds of
property including all materials, articles and com·
modities, whether or not to be used in the construction, fitting out, improvement or repair of immovable
property, and finally defined "sale" as including a
tranHfer of property in goods made in the course of
the execution of a contract. By these definitions,
the materials used or supplied by a building contractor in the construction of buildings, road11,
bridges, etc. were made liable to sales tax in accordance with a schedule of rates to which reference
seemH unneceBSary.
The legality of these and similar provisiona of
law purporting to impose BAies tax on building
materials in State Acts came up for consideration
before High Courts in India, and two well-defined
views were expressed, one holding that the power
to disentangle in a building contra.ct the sale of
materiaJs from the execution of works with a view
to taxing such a sale, wr.s not beyond the legislative
power of tbe States acting under Entry 48, List II,
Seventh &hedule of the Government of India Act,
1935, corresponding to Entry 54 of the like List in
the Constitution. It was held in those oases that
a building contract, though entire, involved labour
plus materials and in respect of the materials there
was a sale involving transfer of property for consideration, and that the legislature had the power to
frame a definition of "sale" to separate the two.
The other view was that building contracts were
entire. and tliat there was no sa.ie of goods 1111 cont.empla.ted by the Indian Sale of Goode Aot, which
wu the senoe in which the Entry wu fr&med, a
eeDCe which had a well-recognised ~al import
2 S.C.R.
SUPREME COURT REPORTS
265
This Court in Ganrwn Dunkerley's case,(') approved
the latter view, which is found in the decision of the
'.\-lajras :Lligh Court in sub rwm Gannon Dunkerley v.
State of Madras (2), and disapproved the contrary
view. It was pointed out that though in a popular
sense there was a sale of the. materials, there was
none in the sense in which the expression "sale of
goods" is used in the Indian Sale of Goods Act,
since there was no agreement to sell or sale of materials as such, nor did the property !'ass therein
as movables. In Pandit
Banarsi Das's case (').
which was a case from the State of Madhya Pradesh
and which was heard similltaneously, it was held
that if the parties entered into distinct and separate
contracts, one for transfer of materials fur money
consideration and the other, for payment of remuneration for services or works done, then there was
a sale within the meaning of the Sale of Goods Act
and the levy of tax was valid; but that if the con·
tract was an entire one, the levy was without competence. The sections of the Central Provinces and
Berar Sales Tax Act making such a division and
taxing the so-called sales of materials were declared to be beyond·the powers of the State Legislature.
The petitioner contends that the impugned sectipns of the Central Provinces and Berar Sales Tax
Act, as applied to Vindhya Pradesh, fell within
these two rulings, and must also be declared ultra
vires the Vindhya Pradesh State Legislature, when
the latter enacted the Vindhya Pradesh Laws (Validating) Act, 1952_
As against this, the respondents contend that
the Notification S.R.O. No. 6, which added s. 29
repealing the Vindhya Pradesh Sales Tax Ordinance
2 of 1949, the Part C States (Miscellaneous Laws)
Repealing Act, 1951 and the Vindhya Pradesh Laws
(Validating) Act, 1952 all concurred in repe1.ling
(1) [1959] S. C.R. 379.
(2) [1954] 5 S. T. C. 216
(3) [195'] S. C. R. 427.
Blt«iyalal Shukla
..
State •f
Madhya Prahsh
H id•y•tulloh J.
•
IHI
B4aiy.;al S""'l•
v.
Slat1 of
Madla,J• Prt.Ct1h
lljj•y•trrllelt J.
266 SUPREME COURT REPORTS [1962] SUPP.
Ordinance 2 of 1949 from December 29, 1950, but
left inta:ct the operation of the Central Provinces
and Berar Sales Tax Act as extt:nded to Vindhya
Pradesh by S. R. 0: No. 6 of 1950. The Vindhya
Pradesh Lawe (Validating) Act, 1952 merely removed the doubts by stating a11ain that the Central
Provinces and Berar SaleH Tax Act had been and
"shall be deemed to be in force in Vindhya Pradesh
from April 1, 1951 ", but did not re-enact that Act.
According to tho respandents, the Central Provinces
and Berar Sales Tax Act was in force in Vindhya
Pradesh as a result of its .extension by Notification
S. R. 0. 6 and Notification No. 52 (Eoon), the repeal
of Ordinance 2 of 1949 being achieved by the Part
C States (Miscellaneous Laws) Repealing Act, 1951
from December \!9, 1950. The respondents, therefore, seek to uphold the impugned provisions on the
basis of the ruling of this Court in Mithan Lal's
casu (' ), where it was pointed out that whatever
might be said of the State Legislatures operating
under List II did not hold good in the. case of Pa.rlili.ment whioh derived its powers in relationt to
legislation in Part C States, not only from all the
Lists but also from the residuary powers of taxation mentioned in Art. 248(2). It was also held
that e. 2 of the Part C States (Laws) Act, 1950 was
not repugnant to Art. 248(2), that tho extended law
became incorporated by refer<'nce in the Part C
States (Laws) Act, and that the tax was thus one
imposed by Parliament itself. The respondents,
therefore, contend that, as held in Mithan Lal'a
case(') when parliament enacted the Part C States
(Laws) Act, 1950 and conferred power on the Central Goverament to extend any Act of a Part A
State to any Part C State, that power of extention
carried with it the plenary powers of Parliament,
and even though the law so extended migh~ have
been outside the competence of the State Legislature which enacted it, when extended under the
11)
[19~) S. C.R. HS.
-
2 S.C.R.
SUPREME COURT REPORTS
267
authority of Parliament was a valid piece of law in
a Part C State.
The rival contentions may be reduced to the
proposition that if the State Legislature of Vindhya
Pradesh extended the Central Provinces and Berar
8ales Tax Act, then the extended Act would suffer
from the disability pointed out in G1mnon Dunkerky's case (1) , but if the Central Provinces and
Berar Act was extended by the Notification under
the Part C States (Laws) Act, 1950, then it must
be treated as incorporated in that Act am! to have
the authority of Parliament which, in relation to
Part C States, had no limitations whatever. We
have, therefore, to see
whether
the Central
Provinces and Ber'ar Sales Tax Act, 1947 can be said
to have been extended for the first time by the
Vindhya Pradesh Legislature in 1952 when it passed
the Vindhya Pradesh Laws (Validating) Act, 1952
to the exclusion of the order contained in the
Notification No. S. R. O. 6, or whether the Act
continue~ to be in force in Vindhya Pradesh even
before, and all that the Vindhya Pradesh Act did
was to remove any doubts a.bout its validity.
The contention on behalf of the petitionoir
is that the Notification.dated December 29, 1950
was invalid in its latter part, as decided by thjs
Court in the Delhi Laws Act case ('). That portion
dealt with the repeal of Ordinance 2 of 1949, and
if the Notification was invalid in that part, then
the Central Provinces and Berar Sales Tax Act,
which was extended by the opening part, never
ca.me into force. Mr. Viswanatha Sastri contended
that the Notification must be looked at compendiously, andthat it was impossible to think that the
Central Government would have extended the
Central Provinces and Berar Sales Tax Act, if the
ear lier Ordinance still continued to operate. He
rd!ied in this connection upon the observations of
this Court in Pesikaka' s case (') to urge that the
(l) [1959) S. C.R. 379.
(21 [1951) S. C.R. M7.
(3) [1955)1 S. C. R 613,638.
1961
Bh•iYalal Situkl•
..
&late of
Jtadhy• Prad•sh
Hidayatul/ah .I.
Bho~4illl Sh.kl•
v.
Stal1 of
Al ~iiiya Pr•~sfi
II iJ•J•lrdl.Ja J.
268 SUPREME COURT REPORTS [1~2] SUPP.
N<,tification
which was
beyond the
powers
of the Central Government in its latter part must be
regarded as a nullity, and contended that if the
invalid.portion of the Yotification was fundamental to the operation of the valid, then the valid
portion also must equally fail because it could
not have been intended that two laws on the same
topic were to operate sim•Jltaneously in Vindhya
Pradesh. According to him, the extension of the
Central Province& and Berar Act could not and
would not have been made, if the Ordinance had
not been first repealed. Section 29 whieh w&B
added, though composed of two parts, was, accord·
ing to him, really a part of a single scheme and
the repeal of the Ordinance and the extension of
the Central Provinces and Berar Act oould stand
or fall together, and since the Ordinance was never
validly repealed, it continued tv operate in Vindhya
Pradesh till its repeal on October 31, 1951, by the
Part C States (Miscellaneous Le.we) Repealing Act,
J951, and when the Act repealed it from December 29, 1950, the effect was that there was no sales
tax law in operation in Vindhya Pradesh, because
the Pa.rt U 8tates (Miscellaneous Laws) Repealing
Aot, 1951, did not enact or extend any law on the
subject of sa.lee tax in or to Vindhya Prade11h.
According to him,. till the enactment oft~ Vindhya.
Pradesh Laws (Valida.ting) Act 6 of 1952 on January,
8, 1953 there was no law impoeing sales tax in
Vindhya. Pradesh, and the law was then made by
the Legislature of Vi.udhya Pradeeh by extending
the Central Provinces a11d Ber:u- Sales Tax Aetl
from April 1, 1951. He therefore, oontended that
since the powers.of the Vindhya Pradesh Legiala·
ture did not include the power of impoeing sale&
tax on building materials, thia Aet of the Vindhya
Pradesh Legislature, if it BOUght to impose ealee
tax on building material&, fell within the ruling in
Ga'W11()n /)?tnkerkr/ s case (') and muat be declared
as of no effect. He also referred to Aot 9 of 1953
\IJ [lg59J S. e, R. S79.
2 S.C.R.
SUPREME COURT REPORTS
269
passed by the Vindhya Pradesh State Legislature,
by which the Act was further amended, and stated
that the extended Act, as amended, owed its existence neither to Parliament nor to the Central
Government acting under thtt Part C States (Laws)
Act but to the Vindhya Pradesh Laws (Validating)
Act, 1952 (6 to 1952) and the Vindhya Pradesh
Amendment Act, 1953 (9 of 1953).
There is a fundamental fallacy involved in this
reasoning. We are considering the applicability of
the Central Provinces and Berar Sales Tax Act as
extended to Vindhya Pradesh.
The
Vindhya
Pradesh Amending Act made only verbal changes,
but did not alter the structure of the tax. No
doubt, that Aot, contained certain provisions under
which sales of building materials are taxable, and
if the authority to tax: the so-called sales emanated
from a State Legislature, then the Jaw would fail.
But we have to remember, in this connection, that
the law was first extended to Vindhya Pradesh by
the C9ntral Government acting under the authority of Parliament legislating for a Part C State.
Parliament and the Central Government were not
subject to the disabilities pointed out in Gannon
Dunkerley's case (1), and the matter was covered by
the decision of this Court in Mithan Lal's case (').
Even if the Notification, S. R. O. No. 6, failed to
repeal Ordinance 2 of 1949, Parliament by its own
law effaced that Ordinance in Vindhya Pradesh
from December 29, 1950, and enacted that the
Ordinance shall be deemed to be repealed from
that day. After the passing of the Repealing Act
by parliament, it is impossible to argue that Ordinance 2 of 1949 continued in Vindhya Pradesh
down to January 8, 1953, because by fiction .the Ordi·
nance was repealed from December 29, 1950. Parlia·
mentiiry legislation, therefore, came to the rescue,
so to speak, of the Notification by making room
for the extension of the Central Provinces and
(I) [1959) S. C.R. 379.
(2) [1959] S. C.R. 445.
1961
Bh· iyalal Skuk a
V,
Sf.alt of
Ma4hy11 f'radtsh
H ida;•alullah J •
I~/
BA.i1olal ~hol/1
v.
11&.u af
M odli,ya Pfadt JJi
Hi1aJ14IUl/1\ J.
270 SUPREME OOURT REPORTS [1962) BOPP.
Berar Act by repealing Ordinance 2 of 1949 whieh
the Notification 'Pf"oprio vigore was unable to achieve
as laid down in the Delhi Law8 Act case('). The Notification of the Central Government (S. R. 0. No. 6)
and Act 66 of 1951, therefore concurred in removing the Ordinance on December 29, 1950 and in
extending
the Central Provinces
and
Berar
Sales Tax Act in its place on the same date.
Mr. Viswanatha Sastri
argued,
on
the
strength
of
ruling
of this Court in Deepchand v.
State of Uttar Praduh [') that the
validity of a law must be judged as on the date
on which it was p8.8i!ed, and if the law was invalid
on that date, then the law must be deemed not to
have existed at a.II, unless it was later re-enacted.
The passage relied upon is a.a follows :
"The validity of a statute is to be tested
by the oonstitutional power of a legislature
at the time of its enactment by that legislature and, if thus tested, it is beyond the
legislative power, it is not rendered valid
without re.enactment if later, by consti·
tutional amendment, the nece88Bry legislative power is granted. An after acquired power
cannot, ex proprio vigore, validate a statute
void when enacted." (p. 24).
This argument would be applicable if we were
to consider that Notification No. S. R. 0. 6 in
isolation, and the question wa11 one of validation
of that Notification. The Notification is being
questioned, because it sought to repeal Ordinanoe
2 of 1949, which it coulrl not do. But, today we are
not in a polition to say that Ordinance 2 of 1949
continued in Vindhya Pradc·sh, because Parliament by the Part C States (Miieellaneous Lawe}
Repealing .Act, 1951 has enacted
~bat the eaid
Ordinance must be deemed to have been repealed
from December ~9, 1950. Indeed, in the ruling
(I) [1951] S.C,R. 747.
(2! [1959) Supp. 2 S.C.R. 8, 24.
2 S.C.R.
SUPREME OOURT REPORTS
271
of this Court at the same page are cited passages
from Willoughby on Conqtitution of the United
States (2n<l Edu.) Vol. I, p. l()based on the decision
in John M. Wilkerson v. Olvtrles A. Rahrer (1) to
the effect that if the cause of the unconstitutionality is removed then the law does not need to be
re-enacted. The facts of this cas~ are entirely diff"rent
from those in Deepch'Lnd's case ('). The extended
la.w did not depend on the repeal of the earlier law
for its . valjdity .. It. would have been operative,
even if the earlier law wa.s not repealed ; but the
earlier law was, in fact, repealed from December,
29, 1950, and no question of conflict between the
now and the old law ever arose. Parliament by
repealing the ·Ordinance rendered the ineffective
portion of the Notification a mere surplusage. The
necessary.result thus was that its operative part
survived and the Central Provinces and Berar
Sales Tax Act, 19!7 was validly extended to
Vindhya Pradesh, and was valid law as laid down
in Mithanlal's case (8 ). It did not suffer from the
defects pointed out by the this Court in Gannon
Dunkerley's case (4), as it. was not enacted or extended by the State Legislature.
It remains to consider the last argument on
this point, and it is that tbe Central Provinces and
Berar
Sales
Tax
Act
was
re-extended
to
Viridbya Pradesh by Act 6 of 1952; and thus
owed its existence to a law m<tde by a State Legislature w,Jiich was incompetent to enact a law that
building materials in a works. contract, which was
entire, were liable to sales tax. The preamble of the
Act shows that it was enacted to remove certain
doubts which were entertained as to whether the
extended Sales Tax Act beca.me operative only
from October 31, 1951 when Act 66 of 1951 WM
passed, or from an earlier date, viz., April 1, 1951,
from which date it was brought into force in
II) (1891) 140 T}, S. 54;; 15 L. Ed, 572.
(2) [JqS<J] Supp. 2 .~S.R, 8, 2+,
131 rI95'l]S,C.R.445.
\4)[l959JS,C.R,379.
1981
bliaiy i/'ll 8huk/a
v,
Staft of
1\Jadf~p1 Fradefh
Hiday ''utla~ .I.
zg01
BA.iva/•I .~hull•
v.
Stat.•!
Madh:to P••tU•h
Hld•7•tulloh J.
272
SUPREME COURT REPORTS [1962] SUPP.
Vindhya Pradesh by Notification No. 52 (Econ.),
dated .March 20, l!J51. To remove these doubts, the
Vindhya Pradesh Laws (Vilida.ting) Act, 1952, enacted with the RB8•'Ilt of the President, declared by e. 2
(already quoted) that the Central Provinces and
Ilerar Sales Tax Act had been and "shall be deemed
to be in force in Vindhya Pradesh from April
1, 1951." This declaration did not ~xtend proprio
vigore the Central Provinces and Berar Sales Tax
Act, but only declared that jt must be deemed to
be validly in force from April I, 1951.
Section 7,
on which much reliance ha.a been placed, may be
quoted again :
"Repeal and savinga !-As from the dates
of the actual enforcement of the Acts specified
in Section 2 of this Act the corr<>sponding laws
in force in Vindhya Pradesh immediately
before the said dates shall b" deemed to have
been repealed without pt>rj11dicfl to anything
done or suffered thereunder or any right,
privilege, obligation or liability acquired,
accrm·d or incurred thercundn before the
aforesaid dates "
It is said that, if the two sections are read to~ether
they mean that the Central Provinces R!ld Berar
Sales Tax Act was freFhly extt·nded from April
l, 1951 by the VindhyaPrad('sh Act and any Jaw
made by any authority earlier was freshly repealed
to make room for tlio extension. This argument,
in our opinion, is erroneous.
To begin with, the powers of the Vindhya
Pradesh .Legislature were circumscribed hy s. !?2 of
the Government of part C Stat<>s Act, 1951, quoted
earlier. Under that section, tl1e powers of the
State f.Rgislatures did not extend to making Jaws
repugnant to any law made by Parliament. The
Explanation defines the expreBBion "law made by
Parliamc,nt", and excludes a law which provides for
the extension to the State of any law in form!
•
...
2 S.C.R.
SUPREME COURT REPORTS
273
in any other part of the territory of India. The
Vindhya Pradesh Legislature, however, did not
repeal either s. 2 of the Part C States (Laws) Act or
the Notification, and all that the Legislature did
was to add its own authority by a declaration, to
the laws earlier extended. The law was extended
first by Notification S.R.O. No. 6 on December
29, 1950, but it was brought into force only by Notification No. 52 (Econ.) dated March 20, l!J50 from
April 1, 1951. The Notification, S. R. O. No. 6
had substituted for sub-s.(3) of s.l of the Central
Provinces and Berar Sales Tax Act, the following :
''(3) It shall come into force on such
date as may be notified by the Central
Government in the Official Gazette."
Till the Notification No. 52 (Econ.) was made, the
Act was extended but was not in force in Vindhya
Pradesh. There is a difference between the extension of
a law subject to its being brought into force latter
anti its coming into force on a later date. Section 7
of Act 6of1952 repealed only the lawsinforceprior
tn the date on which the Central Provinces and
Berar Sales Tax Act wa8 brought into force. It
speaks of "laws in force in Vindhya Pradesh immediately before April J, 1951 ", and the law which was
in force immediately before that date was not the
Central Provinces and Berar Sales Tax Act which
had not been brought into force, but might be
Ordinance 2 of 1949, if it had not been successfully
repealed earlier. The former Act wa,s extended on
December 29, 1950, but was not brought into force
till April 1, 1951, an<l the section speaks of '"laws
in force''.
The section, therefore, refers to Ordinan<'.e 2 of 1949, which would be in force immediately before April I, 1951, if not successfully repealed, but not to the Central Provinces and Berar
Sales Tax Act whic-h was only extended before that
date but had not been brought into force.
In other
words, s. 7 of the Act does no more than rep1ea
IHI
BltaiJalal Slouklo
. ..
Stat. of
Madlo,10 Produh
Hidip1.tull oh .T.
11'&1
BluJiy•lal Shul:la
v.
Stale of
M ad/oyd P.ad1>h
Hid.,.tuUoA J.
274 SUPREME COURT REPORTS [1962] SUPP.
from April I, 1951 (if repeal was at all necessary)
Ordinance :! of 1949, which might be supposed to
have continued as law till October 31, 1951, when it
was repealed by Act 66 of 1951.
In point of fact
and altio in law, it was really repealed from December 29, 1950 under the Repealing Act 66 of 1951.
The Vindhya Pradesh Act 6 of 1952 cannot, tht>refore, he said to havo enacted for tlw first time that
the CPntral Provinces and Berar Sales Tax Act
~hall come into force from April I, 1951 in Vindhya.
Prad<'sh. It only declared what was a legal fact
even without this declaration. Nor did the Central
Provinces and Berar Sales Tax Act owe its E'Xist·
ence to Act 6 of 19.)2. Act 6 of 1952 only dt•clart'd
what the re8Ult of the earlier laws was, and adde<l the
authority of the Vindhya Pradl'sh Li>gislature
to
removr do11hts and to save tho law from any attack
on the ground that the wrong Legi.slature had repeal·
ed tho Or1linance or extended th" Central Provinces
and Berar Sales Tax Aet. In our opinion, this argu·
mcnt cannot be aecepti>d.
Ont> further argument was advanced to which
we have not reforred so far, and which may now be
noti,,cd. It is th'lt after the reorgani€ation of the
States, Madhya Pradesh has as many as four Sales
Tax Act"· It is contended that a person belonging to
the are;i of the former State of M11dhya Pradesh is
not liable to sales tax on buildi11iz Jlllllt·rials in a
works contrac:t under the Central Provinces and
Iler:i.r Sales Tax Aet becaUo<' of the decision in
Pandit Rrmarsi Das's cast-('), but another person
living in the area forming part of the formn
Vindhyn Pradesh is liable to sales tax undn the
3am·1 At'!, as extended to Vinrlh~·a PradeHh.
This,
it is saiil, is patently contrary to the spirit of the
equal pr"tcction clau8o in Art. 14.
The laws in different portions of the new State
of Madhya Pradesh were enacwd by different Legis·
latnres, and under s.119 of the States R"'organiBation
~1JlJ95'1] S.C.R. 427.
r
2 S.C.R.
SUPREME COURT REPORTS
275
Aot, all laws in force are to continue until repealed
or altered by the appropriate Legislature. We
have already held that the sale tax law in Vindhya
Pradesh w\l.s validly enacted, and it brought its
validity with it under s.119 of the States Reorganisation Act, when it became a part of the State of
Madhya Pradesh. Thereafter, the different laws
in different parts of Madhya Pradesh can be sustained on the ground that the differentiation arises
from historical reasons, and a geographical classification based on historical reasons ha,s been upheld
by this Court in M. K. Prithi Rajji v, The State of
Rajasthan(') and again in The State of Madhya Pradesh
v. The Gwalior Sugar Oo. Ltd.( 2). The latter case
is important, because the sugarcane cess lev,ied in
the former Gwalior State but not in the rest of
Madhya Bharat of which it formed a part, was
challenged on the same ground as here, but was
upheld as not affected by Art. 14. We, therefore,
reject this argument.
In the result, the Writ Petitions fail, and are
dismissed; but in the circumstances of the case
we make no order about costs.
P etitians dismissed
(ll Civil Appeal No. 327of1956 decided on November 2, 1960.
(2) Civil Appeai. No!. 9R and 99of1%7 decided on ·November
30, 1960.
•
1961
Bh•iJ!•l•I Shuk/o
v.
Stoll of
Madhya Pradesh
Hidayatu//ah J