# JVlrlle v. White

- **Citation:** [1958] 1 S.C.R. 1422
- **Court:** Supreme Court of India
- **Decided:** 1955-09-06
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/jvlrlle-v-white-1431
- **Pages:** 74

## Headnote

1958
JVlrlle
v.
White
K(:pur J.
1958
March 11.
1422
SUPREME COURT REPORTS
(1958]
the inclination and conduct of the wife. On the otaer
hand her conduct as shown by the evidence is so entirely consistent with her guilt as to justify the conclusion of her having committed adultery with respondent No. 2 and therefore the finding of the Courts
below as to the guilt should be reversed.
We would therefore, allow this appeal, set aside
the judgment and decree of the High Court and pass
a decree nisi for dissolution of marriage. As adultery
has been proved respondent No. 2 shall pay the costs
in this Court and in the Courts below.
Appeal allowed.
M. P. V. SUNDARARAMIER & CO.
v.
THE STATE OF ANDHRA PRADESH
& ANOTHER
(with connected petitions)
(S. R. DAS C. J., VENKATARAMA AlYAR, S. K. DAS,
A. K. SARKAR
and
VIVIAN
BosE JJ.)
Sales Tax-Inter-State sales-Sale outside State but goods
delivered for consumption within State-Competence of States to
levy tax-Conditional legislation-Power of Parliament to authorise such· taxation-President's Adaptatiori Order-Scope of-
}
Nature of-Retrospective operation-Enactment unconstitutional
in part-Effect-Madras General Sales Tax Act, 1939 (Mad. 9
of 1939), as adapted to Andhra, ss. 2(h), 22-.Sales Tax Laws
Validation Act, 1956 (7 of 1956), s. 2-.Constitution of India,
Arts. 246, 286, 301, 372, Sch. VII, List I, Entry 42, List II,
Entry 54.
The petitioners were dealers cai;rying on business in the City
of Madras in the sale and purchase of yarn. The dealers in the
State of Andhra used to place orders for the purchase of yarn
with the petitioners in Madras, where the contracts were concluded
and the goods were delivered ex-godown at Madras and thereafter
despatched to the purchasers who would take delivery of them
within their State. The present dispute related to sales in which
property in the goods sold passed outside the State of Andhra,
but the goodi theiruelves were actually delivered as a result
S.C.R.
SUPREME COURT REPORTS
1423
of the sale for consumption within that State.
After the coming
1958
into force of the Constitution of India the President in the·
-
exercise of the powers conferre4 by Art. 372(2) made Adaptation M. P. v. SundaraOrders with reference to the Sales Tax Laws of all the States,
ram/er &: Co.
and as r~gards the Madra5 General Sales Tax Act, 1939, he issued
•·
an Ame11dment inserting a new section, s. 22 in that Act, which
The State oJ
was a verbatim reproduction of the Explanation to Art 286( 1 )(a) Andhra Praderh
of the Constitution.
On July 13, 1954, the Board of Revenue
(Commercial Taxes) in the State of Aqdhra, acting on the decision
in The State of Bombay and another v. The United Motors (India)
Ltd., and others, {1953] S.C.R. 1069, called upon dealers in the
State of Madras to submit returns of their turnover of sales in
which goods were delivered in the State of Andhra for consumption. Thereupon they filed the present petitions under Art. 32 of
the Constitution challenging the demand on the grounds, inter aUa,
that the sales proposed to be taxed were inter-State sales and
that they were immune from taxation under Art 286(2) of the
Constitution. While the petitions were pending the Supreme
Court pronounced on September 6, 1955, its judgment in The
Bengal Immunity Company Umited v. The State of Bihar and
others, [1955] 2 S.C.R. 603, according to which the petitioners
were not liable to be taxed. But before final orders were passed
on the petitions Parliament passed Sales Tax Laws Validation Act,
1956, s. 2 whereof provided that no law of a State imposing or
authorising the imposition of tax on inter-State sales during the
period between April 1, 1951, and September 6, 1955, shall be
deemed to be invalid or ever to have been invalid merely by
reason of the fact that the sales took place in the course of the
inter-State trade.
That section further provided that taxes levied
or collected on such sales during the aforesaid period shall be
deemed to have been validly levied or co

## Text

_Characters 0–39,595 of 168,206. This is a partial read: ask again with offset=39595 for what follows._

1958
JVlrlle
v.
White
K(:pur J.
1958
March 11.
1422
SUPREME COURT REPORTS
(1958]
the inclination and conduct of the wife. On the otaer
hand her conduct as shown by the evidence is so entirely consistent with her guilt as to justify the conclusion of her having committed adultery with respondent No. 2 and therefore the finding of the Courts
below as to the guilt should be reversed.
We would therefore, allow this appeal, set aside
the judgment and decree of the High Court and pass
a decree nisi for dissolution of marriage. As adultery
has been proved respondent No. 2 shall pay the costs
in this Court and in the Courts below.
Appeal allowed.
M. P. V. SUNDARARAMIER & CO.
v.
THE STATE OF ANDHRA PRADESH
& ANOTHER
(with connected petitions)
(S. R. DAS C. J., VENKATARAMA AlYAR, S. K. DAS,
A. K. SARKAR
and
VIVIAN
BosE JJ.)
Sales Tax-Inter-State sales-Sale outside State but goods
delivered for consumption within State-Competence of States to
levy tax-Conditional legislation-Power of Parliament to authorise such· taxation-President's Adaptatiori Order-Scope of-
}
Nature of-Retrospective operation-Enactment unconstitutional
in part-Effect-Madras General Sales Tax Act, 1939 (Mad. 9
of 1939), as adapted to Andhra, ss. 2(h), 22-.Sales Tax Laws
Validation Act, 1956 (7 of 1956), s. 2-.Constitution of India,
Arts. 246, 286, 301, 372, Sch. VII, List I, Entry 42, List II,
Entry 54.
The petitioners were dealers cai;rying on business in the City
of Madras in the sale and purchase of yarn. The dealers in the
State of Andhra used to place orders for the purchase of yarn
with the petitioners in Madras, where the contracts were concluded
and the goods were delivered ex-godown at Madras and thereafter
despatched to the purchasers who would take delivery of them
within their State. The present dispute related to sales in which
property in the goods sold passed outside the State of Andhra,
but the goodi theiruelves were actually delivered as a result
S.C.R.
SUPREME COURT REPORTS
1423
of the sale for consumption within that State.
After the coming
1958
into force of the Constitution of India the President in the·
-
exercise of the powers conferre4 by Art. 372(2) made Adaptation M. P. v. SundaraOrders with reference to the Sales Tax Laws of all the States,
ram/er &: Co.
and as r~gards the Madra5 General Sales Tax Act, 1939, he issued
•·
an Ame11dment inserting a new section, s. 22 in that Act, which
The State oJ
was a verbatim reproduction of the Explanation to Art 286( 1 )(a) Andhra Praderh
of the Constitution.
On July 13, 1954, the Board of Revenue
(Commercial Taxes) in the State of Aqdhra, acting on the decision
in The State of Bombay and another v. The United Motors (India)
Ltd., and others, {1953] S.C.R. 1069, called upon dealers in the
State of Madras to submit returns of their turnover of sales in
which goods were delivered in the State of Andhra for consumption. Thereupon they filed the present petitions under Art. 32 of
the Constitution challenging the demand on the grounds, inter aUa,
that the sales proposed to be taxed were inter-State sales and
that they were immune from taxation under Art 286(2) of the
Constitution. While the petitions were pending the Supreme
Court pronounced on September 6, 1955, its judgment in The
Bengal Immunity Company Umited v. The State of Bihar and
others, [1955] 2 S.C.R. 603, according to which the petitioners
were not liable to be taxed. But before final orders were passed
on the petitions Parliament passed Sales Tax Laws Validation Act,
1956, s. 2 whereof provided that no law of a State imposing or
authorising the imposition of tax on inter-State sales during the
period between April 1, 1951, and September 6, 1955, shall be
deemed to be invalid or ever to have been invalid merely by
reason of the fact that the sales took place in the course of the
inter-State trade.
That section further provided that taxes levied
or collected on such sales during the aforesaid period shall be
deemed to have been validly levied or collected. It was the contention of the State of Andhra that by reason of the aforesaid
provision it had the right to impose tax on inter-State sales during
the aforesaid period. On the other hand the petitioners contended, inter alia, that ( 1) s. 22 of the Madras General Sales Tax
Laws Validation Act, 1956, which gave validity to laws which
imposed a tax, did not authorise the imposition, (2) the Sales Tax
Laws Validation Act was ultra vires Art. 286(2), (3) s. 22 of the
Madras Act was not a "law of a State" within Art. 286(2) ands. 2
of the impugned Act, ( 4) the impugned Act only validated levies
already made and did not authorise the initiation of fresh proceedings for imposing tax, (5) s. 22 having been unconstitutional,
when it was enacted and therefore void, no proceedings could be
taken thereunder on the basis of the Validation Act, as the effect
of unconstitutionality of the law was to efface it out of the
statute book, and ( 6) the proposed levy was bad as infringing the
Rule which provided that the sale of yam could be taxed only at
one point. It was also contended that under the Constitution it
was only the Parliament that has the competence to impose tax
on inter-State sales and that the Sales Tax Laws Validation As:st
1424
SUPREME COURT REPORTS
[1958)
1958
was bad in that it 11:ave validity to the laws of the State to impose
the tax:
M. P. V. SundaraHeld (Sarkar J. (iissenting), thats. 22 of the Madras General
ramter & Co.
Sales Tax Act, 1939, did in fact impose a tax on the class of sales
v.
covered by the Explanation to Art. 286(1)(a) but that it was
ThtJStateof
conditional on the ban enacted on Art 286(2) being lifted by law
Andhra Pradesh of Parliament as provided therein, and that it was therefore
validated by s. 2 of the Sales Tax Laws Validation Act. 1956.
.
The construction put upon the Explanation to Art. 286( 1) (a)
of the Constitution in The Bengal Immunity Company case that it
merely prohibited the outside States from imposing a tax on the
class of sales falling within the Explanation and did not confer on
the delivery State any power to impose a tax on such sales has
no application to a taxing statute of a State the object of which
was primarily to confer power on the State to levy and collect
tax.
Section 22 and s. 2(h) of the Madras General Sales Tax Act
must be read together as defining the sales which are taxable
under the Act.
Mettur Industries Ltd. v. State of Madras, A.I.R. 1957 Mad.
362, The Mysore Spinning an(l Manufacturing Co. Ltd. v. Deputy
Commercial Tax Officer, Madras, A.I.R. 1957 Mad. 368 and Dial
Das v. P. S. Talwalkar, A.J.R. )957 Bom. 71, approved.
Mathew v. Travancore-Cochin Board of Revenue, A.LR. 1957
T. C. 300, Cochin Coal Co. Ltd. v. The State of TravancoreCochin, (1956) 7 Sales Tax Cases 731 and The Government of
Andhra v. Nooney Govindarajulu, (1957) 8 Sales Tax CllSCs 297,
disapproved.
Queen v. Burah, (1878) 5 I.A. 178 and In re The Drihi £awg
Act, 1912, etc. [1951] S.C.R. 747, relied on:
Held (Per S. R. Das, C. J., Venkatarama Aiyar, S. K. Das
and Vivian Bose, JJ.) that (I) the Sales Tax Lawa Validation
Act, 1956, is in substance one lifting the ban on taxatiOn of interState sales and is within the authority conferted on .P .trliament
under Art 286(2) and further that under that provision it waa
competent to Parliament to enact a law with retrospective operation.
P11njab Province v. Dau/at Singh, (1946) L.R. 73 I.A. 59,
distinguished.
The United Province v. Atiqa Begum, (1940] F.C . .R. 110,
applied.
(2) the Adaptation Order made by the President under Art.
372(2) is valid and is not open to attack on the ground that it
goes 1!4yond the limits contemplated by that Article.
(3) the eiqiression "law of a State" in Art. 286(2) ands. 2
of the Sales Tax Laws Validation Act means whatever operatoS
as law in the State, and that s. 22 of the Madras General Sale&
Tax Act is a law within those enactments.
S.C.R.
SUPREME COURT REPORTS
1425
( 4) s. 2 of the Sales Tax Laws Validation Act validates not
only the levies already collected but also authorises the imposition of tax on sales falling within the Explanation which had
taken place during the period specified in s. 2. The Act is not a
temporary Act though its operation is limited to sales taking place
within a specified period.
Dial Das v. P. S. Talwalkar, A.I.R. 1957 Born. 71, in so far as
it held that it was not competent to the State to start fresh proceedings for assessment, disapproved.
(5) though s. 22 of the Madras General Sales Tax Act was
unconstitutional when · enacted the effect of the unconstitu·
tionality was not to efface it out of the stawte books. Unconstitutionality might arise either because the law is in respect of a
matter not within the competence of the legislature or because
the matter itself being within the competence., its provisions
offend some constitutional restrictions. While a law which is not
within the competence of the legislature is a nullity a law on a
topic within its competence but repugnant to any constitutional
prohibition is only une!lforceable. In the latter class of legislation
when once the constitutional prohibition is removed the law
becomes enforceable without re-enactment. Where an enactment
is unconstitutional in part but valid as to the rest, assuming that
the two portions are severable, it cannot be held to have been
wiped out of the statute book, as admittedly it must remain there
for the purpose of enforcement of the valid portion.
Moreover in
the view that the impugned law is conditional legislation it
cannot be held to have become non est.
Behram Khurshed Pesikaka v. The State of Bombay, [1955] 1
S.C.R. 613 and A. v, Fernandez v. State of Kerala, [1957] S.C.R.
837, distinguished.
Bhikaji Narayan Dhakras and others v. The State of Madhya
Pradesh and another, [1955] 2 S.C.R. 589, relied on.
(6) under Entry 42 in List I, Sch. VII of the Constitution,
legislation with respect to inter-State trade and commerce is exclusively within the competence of Parliament.
Under Entry 54,
List II, taxes on sale of goods is within the exclusive competence
of the State Legislature, and reading the two Entries together
Entry 42 must be construed as excluding the power to tax sale
of goods,
The scheme of the Entries in the Lists is that taxation
is regarded as a distinct matter and is separately set oot.
Entry
42, List I, must therefore be construed as not including the power
to impos~ tax on inter-State sales.
(7) the proposed imposition does not infringe the rule that
the sales of yams should be subject to taxation at a single point
because the proposed levy is by the State of Andhra and the rule
in question prohibits only multiple taxation in the same State.
Per Sarkar J .-The Sales Tax Act does not authorise the
taxation of a sale under which goods are delivered in the State of
1958
M. P. V. Sundara·
r.amier & Co.
v.
The State of
Andhra Pradesh
1426
SUPREME COURT
REPORTS
(1958]
I 958
Andhra but the property in them passes putside that State.
The
Explanation in s. 22 of the Act only contemplates a State other
n-t. P. V. Sundara· than Andhra as the State inside which a sale shall be deemed to
ramler & Co.
have taken place.
The words "for the purposes of clause (a) (i)"
v.
have the same meaning in the Explanation in Art. 286( I) as in
The State of
the Explanation in s. 22 of the Act, and the present case is not
Andhra Pradesh distinguishable from the decision in The Bengal Immunity Company Limited v. The State of Bihar and others, [11955] 2 S.C.R.
603.
ORIGINAL JURISDICTION : Petitions Nos. 220, 222,
240 and 380 to 395 of 1955.
Petitions under Article 32 of the Constitution of
India for the enforcement of Fundamental Rights.
1957. Dec. 10, II, 1'2, 13, 17, 18, 19.
1958. Jan.
7,
8, 9.
D. Narsa Raju, Advocate-Genera/for the State of
Andhra Pradesh and T. M. Sen, for the respondent. The
petitions are premature and incompetent as the· facts
-0f each transaction of sale are yet to be investigated
.and it is not possible to know the character of each
sale, nor can it be determined which sales can be and
which cannot be taxed by Andhra Pradesh.
(CHIEF JUSTICE.
You should be reasonably satisfied
that the sales are of such a nature that you can levy
tax on them before you issue a notice.
BOSE J.
You must state the facts on which you
think you can tax the sales.
S. K. DAS J. Your stand is that all transactions
could be taxed by the delivery State.]
D. Narsa Raju. My State is taxing under the decision of this Court in the United Motors case ((1953]
S.C.R. 1069).
(Upon the counsel for the petitioners stating that
if)
he would confine his arguments to the imposition of
tax on Explanation sales only, which some, of the
transactions indisputably were, the Court indicated
that it would hear the petitions.]
K. S. Krishnaswami Iyengar, N. Srinivasan and
R. Ganapathy Iyer, for the petitioners. The Andhra
(Madras) Act does not seek to tax Explanation sales
S.C.R.
SUPREME COURT REPORTS
1427
at all. It talks of "property passing" only and as
19ss
such A:ndhra can tax only such sales where property M. P. v. Sundarapasses m Andhrfl. See Poppatlal Shah v. . State of ra,;,ier & co.
Madras,
([1953) S..C.R. 677). Section · 22 does not
v.
enlarge the · definition of sales; it only restricts · the
TllL State of
power of teh State to tax. The explanation to s. 22, Andhra Pradesh
like the explanation to Art. 236(1), is merely for th'e
purpose of defining what is an outside sale and not for
determining what is an. inside sale. See Bengal Immunity Company case ([1955) 2 S.C.R. 603 at 640). The
power of the President under Art. 372(2) being merely
to bring the State laws into conformity with Art. 286,
s. 22,·which was introduced by the Presidential Adaptation Order under Art. 372(2), cannot be construed
as permitting the imposition of tax on Explanation
sales which was prohibited by Art. 286. If s. 22 was
construed to permit such imposition it was unconstitutional, illegal and void and must be deemed to be non
est; See Bengal Immunity Company case ((1955] 2
S.C.R. 603 at 667). What did not exist could not be
validated.
·
The Sales Tax Laws (Validation) Act, 1956, was not
valid legislation under Art. 286(2). Article 286(2) only
empowers Parliament to lift the ban on the imposition
of tax on inter-State sales and after it has lifted the
ban the State legislature may impose the tax. Parliament is not competent to impose sales tax; such power
is vested only in the State legislatures. Article 286.(2)
does not give Parliament power to validate or ratify
laws of the State legislatures. The power under
Art. 286(2) can be exercised only once and finally and
fully, not partially. Parliament can only lift the .ban
as from the day the power is exercised and not retrospectively. Punjab Province v. Daulat Singh, (73 I.A.
59); Behram Khurshed Pesikaka v. The State of Bombay ([1955) 1 S.C.R. 613, 654 and 655). The case of
Dial Das v. Talwalkar (A.l.R. 1957 Born. 71) has been
wrongly decided. But even this decision helps the
petitioners in so far as it lays down that where tax
had neither been collected nor levied the Validation
Act did not confer power to assess or levy. The Whole
1428
SUPREME COURT REPORTS
[1958}
19ss
pelicy of the Validation Act was to save the State
from disgorging the tax illegally collected. Both levy
M. P. V. sundara- and collection must be within the period specified in
ramhr&Co.
s. 2 of the Act. Mettur Industries Ltd. v. The State of
Th• ;,~1• of
Madras (A.LR. 1957 Mad. 362) and Mysore ,.Spinning
Andhra Pradesh anil Manufacturing Co. Ltd. v. Deputy Commercial Tax
Officer (A.l.R. 1957 Mad. 368) are against the petitioners.
R. Ganapathy Iyer followed.
Section 22
of the
Andhra (Madras) Act did not enlarge the powers of
taxation. Mathew v. Travancore-Cochin Board of Revenue (A.I.R. 1957 T.C. 300). The validation being
for a temporary period which expired on September 6,
1955, no action can be taken after that date under the
validated laws. Kesavan Madhava Menon v.
The
State of Bombay, ([1951] S.C.R.
228, 234, 235),
S. Krishnan v. The State of Madras,
([1951] S.C.R.
621), and State of Punjab v. Mohar Singh, ([1955] 1
S. C. R. 893). The tax being a single point tax under
the Act, and the petitioners having already paid the
tax at the time of the purchase of the yarn from the
Mills, no second tax was payable. TheAndhra (Madras)
Act being a new Act the tax on yarn is hit by the
Essential Commodities Act
(52 of 1952) read with
Art. "286(3) of the Constitution. Petitioners are not
dealers in Andhra Pradesh and cannot be assessed.
There are no sales in Andhra;
all sales being in
Madras.
V. L. Narasimhamoorthy, J. B. Dadachanji and
Rameshwar Nath, for the Mysore Spinning & Mfg. Co.,
Ltd., and Minerva Mills Ltd., (Interveners), supported
the petitioners. Section 22 does not authorise the
imposition of tax on Explanation sales. It could not
have been the intention of the President to allow the
State to add a new category of sales-the .Explanation Sales-to be taxed. The language of Art. 286(2)
indicates that the lifting of the ban is a condition precedent to legislation by the States imposing tax on
inter-State sales. Alternatively,
the power to tax
inter-State sales is with Parliament under Entry 97 of
List I of Schedule VII of the Constitution. Section 22
was wiped out and obliterated by the judgment in the
/
\
S.C.R.
SUPREME 'COURT REPORTS
. 1429
'
. \
Bengal Immunity Company case. ,See
Behr,am Khur1958
shed Pesikaka v.
The State of' Bombay, ([1955] 1
-
S.C.R. 613) Newberry v. United States, (65 L. Ed 913). M. P. _v. SundaraTh
.
.
t b
. .
t
h
l
ram1er & Co.
e same mterpretat10n mus
e given o t e exp av.
nation to s. 22 as has been given to the explanation to
The State of
Art. 286(1)(a). The non-obstante clause in s. 22 has
A11dhraPradesh
only the effect of subtracting something from the
power to tax and not of adding td it. Ram
Narain
Sons Ltd. v .. Asst. Commissioner of Sales Tax ([1955]
2 S.C.R. 483); Aswini Kumar Ghosh v. Arbinda Bose
([1953] S.C.R. 1, 22, 24); A. V. Fernandez v.
The
State of Kera/a, ([1957] S.C.R. 837) ..
N. A. Palkhiwala, J. B. DadachanJi and Rames!iwar
Nath, for Tata Iron & Steel Co., Ltd., (Intervener).
There must be a factual levy before Parliament
can validate it.
Section 22(ii) removes inter-State
sales from the purview of the Act. Fernandez's case
supports this contention. On a proper construction of
Art. 286(2), according to the decision in the Bengal
Immunity Company case, there was no levy on interState sales and there was nothing for Parliament to
lift the ban for ([1955] 2 S.C.R. 603, 621, 662, 667).
There is a vital difference between retrospective and
retroactive operation. There is no power in Parliament •
to validate ex post facto a violation of Art. 286(2).
Parliament must first lift the ban and then the State
legislation may come imposing tax on inter-State sales.
Parliament is competent to prevent what otherwise
would have been a violation of the Constitution, but
it is not competent to condone an accomplished violation. Section 2 of the Validating Act will operate
only where taxes have already been collected or have
been been finally assessed.
P. N.
Bhagwati and I. N. Shroff, for Pashebbhai
Patel & Co., Ltd., (Intervener) supported the petitioners.
D. Narsq Raju, Advocate-General of Andhra Pradesh
and T. M. Sen, for the respondents. Article 372(2)
must take regard of the provision of the Constitution
to bring the State laws into conformity with which the
power of adaptation is to be exercised. That provision
1430
SUPREME COURT REPORTS
[1958}
1958
is Art. 286. Implicit in Art.
286(1) is the recog-
-
nition that the delivery State alone may tax. The
M. P .. v. Sundara- President would be acting within his power to enable
ramier 4c Co.
·h d l"
S
S h
· ·
d
t e e 1very tate to tax- uc
power is m accor -
The ;;ate of ance with the provisions of the Constitution. The
(
Andhra Pradesh power of the legislature to bring the laws in accordance with the Constitution is conferred upon the
President. Consequently, the explanation to s. 22 can
be read along with the definition of sale and it does
add to that definition by bringing Explanation sales
within it.
K. V. Subramania Iyer,
D. N. Mukherjee and
B. N. Ghosh, for Madura Mills Co., Ltd., (Intervener).
The Adaptation Order made by the President is not
'law of a State' within the meaning of the Validating
Act. 'Law of a State' in the Validating Act must
mean the same thing as in Art. 286(2). The President
exercising power under Art. 372(2) is .not controlled
by Art. 286; he exercises a power which belongs to
the President and not a power on behalf of the State.
Section 22 of the Andhra (Madras) Act is not law
made by the State Legislature and is not validated by
the Validating Act. The power of imposition of sales
•
tax on inter-State sales was taken away from the
States. The ban under Art. 286(2) is only in respect
of existing laws; there is no power in the States to
enact laws imposing tax on inter-State sales. The
power to impose tax on inter-St&te sales is within the
exclusive domain of Parliament under Entry 42 of
List I of the Seventh Schedule of the Constitution
and Entry 54 of List II must be construed as not
including such power. A reference to Art. 301 reinforces this interpretation. The freedom under Art. 301
includes freedom from sales tax. See The Commonwealth v. The State of South Australia,
(38 C.L.R.
408). The Validation Act is not legislation within
Entry 42. See Bank of N. S. W. v.
The Commonwealth, (76 C. L. R. l, 381), Robbins v. Taxing
District of Shelby County ([1877] 30 L. Ed. 694);
McLeod v. Dilworth Co. ([1944] 88 L. Ed. 1304).
C. K.
Daphtary, Solicitor-General of India. G. N.
\
S.C.R.
SUPREME COURT REPORTS
1431
Joshi and T. M. Sen, for the Union of India (Intert9ss
vener). The Sales Tax Laws Validation Act, 1956, is
-
valid legislation under Art. 286(2). In effect and in M. P. !'· Sundara·
substance the Validation Act is a law which removes
ramier &: Co.
the ban imposed by Art. 286(2), and is not really a
The s;~te of
Validating Act. Article 286(2), in respect of existing Andlzra Pradesh
laws, merely said that they should not be effective or
operative. It did not take away the competency of
the legislatures to make laws providing for taxes on
inter-State sales. Such a law may be
against the
· provision of the Constitution, but that does not
repeal or obliterate it. It is only in abeyance. See
Bhikaji Narain Dhakras and others v. The State of
Madhya Pradesh and another;([1955]-2 S.C.R. 589, 600).
Legislative power generally includes the power to
legislate retrospectively. There is no limitation in
Art. 286(2) as
respect~ retrospective legislation.
Parliament could,
therefore, lift the ban retrospec:-
tively. Section 22 is a piece of conditional legislation. As soon as the ban under Art. 286(2) was
lifted by Parliament it came into operation. The
Validation Act is .not a temporary statute. A temponary statute is one which says that it is to be effective
for a particular period. The Validating Act operates
even now and is effective, though it is in respect of
sales of a particular period. It is open to the States
to initiate proceedings now for taxing the Explanation sales made during the period mentioned in s. 2
even tl\ough no such proceedings had been taken
during that period. Entry 42 of List I which reads :
"Inter-State trade and commerce" does not confer
any power of taxation on Parliament. In the scheme
. of our Constitution a general Entry does not include
the power of taxation. Taxes, duties, etc., are enumerated in a separate group in Entries 82-92 in List I.
V. K. T. Chari, Advocate-General for the State of
Madras, B. R. Gopalakrishnan and T. M. Sen for the
State of Madras (Intervener). In construing s. 22.
of the Andhra (Madras) Act regard rrrust be had to
the law as it stood till September 6, 1955, when judgment was delivered in the Bengal Immunity Company
case. In view of the decision in the United Motors
1432
SUPREME COURT REPORTS
[1958]
19ss
case ([1953] S.C.R. 1069, 1085, 1086, 1093, 1094),
-
Explanation sales were regarded as 'inside sales' in the
M. P. !'· Sundara· delivery State, and the delivery State was entitled to
ramier & Co.
al
Th ]
f
S
h. h ·
d
v.
tax s es.
e aw o a tate w 1c . impose tax on
The State of
Explanation sales would remain on the statute book,
Andhra Pradesh in spite of the decision in The Bengal Immunity
Company case, but could not be enforced. See Bhikaji
Narain Dhakras and others v. The State of Madhya
Pradesh and another ([1955] 2 S.C.R. 589); Ulster
Transport Authority v. James Brown & Som;
Ltd.
([1953] Northern Ireland Reports 79).
Section 2 of
the Validating Act refers to such a law.
Mahabir Prasad, Advocate-General for the State of
Bihar, Rajeshwar Prasad and S. P. Varma, for the
State of Bihar (Intervener); G. C. Mathur and C. P.
Lal, for the State of Uttar Pradesh (intervener)
supported the respondents and the Union of India.
R. Ganapathy Iyer, for the petitioners, replied.
K. V. Subramania Iyer, for Madura Mills Co., Ltd.,
(Intervener), also replied with the permission of the
Court.
1958. March 11. The judgment of Das C. J., Venkatarama Aiyar, S. K. Das and Vivian Bose, JJ. was
delivered by
Venkatarama
Aiyer J.
Sarkar J.
delivered a separate judgment.
Venkatarama
VENKATARAMA AIYAR J.-The petitioners are dealAiya~ J.
ers carrying on business in the City of Madras in the
sale and purchase of yarn, and they have filed the
present applications under Art. 32 of the Constitution
for the issue of a writ of prohibition or other appropriate writ restraining the State of Andhra from taking
proceedings for imposing tax on certain sales effected
by them in favour of merchants who· are residing or
carrying on business in what is now the State of
Andhra Pradesh, on the ground, inter alia, that the
said sales were made in the course of inter-State
trade, and that no tax could be levied on them by
· reason of the prohibition contained in Art. 286(2) of
the Constitution.
The course of dealings between the parties resulting
(
S.C.R.
SUPREME COURT REPORTS
1433
in the above sales has been set out in para. 5 in Peti1958
tion No. 220 of 1955. It is therein stated that the
dealers in Andhra would place orders for the purchase M. P .. v. Sundaraof yarn with the petitioners in Madras, that the conramie::~ Co.
tracts would be ·concluded at Madras, that the goods
The state of
would be delivered ex-godown at Madras and would Anilhra Pradesh
thereafter be despatched to the purchasers either by
lorries or by rail as might be directed by them, that
Venkatarama
when the goods were sent by rail, the railway receipts
Aiyar J.
would be taken either in the name of the consignees,
and sent to them by post or in the name of the consignor and endorsed to the purchasers and delivered to
them in Madras or sent to them by post endorsed in
favour of a bank and the purchasers would take delivery of those receipts after payment to the bank. It
is said that in all cases price of the goods was paid in
Madras.
-
On the above ~llegations, it is manifest that the
sales mentioned therein are not all of the same kind,,
and in point of law, the incidents attaching to them
might be different. A consideration of the validity
of the imposition with reference to the several classes
of sales mentioned abqve would be wholly airy and
pointless without a determination of the facts relating
to them, which, however, have not been investigated.
Counsel for the pe_titioners, however, concedes that the
dispute in these proceedings is confined to the proposed imposition of tax, in so far as it relates to sales
of the character mentioned in the Explanation to
Art. 286(1)(a), that is to say, sales in which the property
in the goods sold passed outside the State of Andhra
but the goods themselves were actually delivered as· a
result of the sale for consumption within that State.
These sales have been referred to in the arguments
before us as •'Explanation sales", and it will be convenie~t. to adopt that expression in ref erring to them
in this judgment.
It will be seen that the above sales would all of
them have been intra-State, so long as the Andhra
State formed part of the composite State of Madras
and questions of the character now agitated before us.
could not then have arisen. On September 14, 1953,
M2SC (1)/61--6
1434
SUPREME COURT REPORTS
[1958]
1958
Parliament en~aJed the Andhra State Act (30 of 1953),
whereby a separate State called the State of Andhra
M. P. v. Sundara- was constituted incorporating therein territories which
ram/er v"' co.
had previously thereto formed part of the State of
{
The s1;1, of Madras, and this Act came into force on October l,
Andhra Pradesh 1953. Under s. 53 of the Andhra State Act, the laws
in force in the territories in the Andhra State prior to
Venkataroma
its constitution are to continue to be in force even
Aiyar J.
thereafter and one of those laws is the Madras
General Sales Tax Act (Madras 9 of 1939),
hereinafter referred to as the Madras Act. Section 54 of the
Andhra State Act conferred on the Government a
power to adapt laws for the purpose of facilitating
the application of any law previously made, and in
exercise of the power conferred by this section, an
Adaptation Order was passed on November 12, 1953,
whereby the word "Andhra" was substituted for the
word "Madras" in the Madras Act. We shall hereafter refer to the Madras Act as continued and
applied in the State of Andhra as the Andhra (Madras)
Act.
It will be convenient at this stage to refer to the
relevant provisions of this Act. The preamble to the
Act states that "it is expedient to provide for the
levy of a general tax on the sale of goods in the State
of Madras". "Sale" is defined in s. 2(h),
omitting
what is not material, as meaning "every transfer of
the property in goods by one person to another in the
course of trade or business for cash or for deferred pay·
ment or other valuable consideration." Section 2(i)
defines "turnover" as "the aggregate amount for
which goods are either bought by or sold by a dealer,
whether for cash or for deferred payment or other
valuable consideration". Section 3 is the charging
section and provides that every dealer shall pay for
each year tax on his total turnover for such year. By
the Madras General Sales Tax (Amendment) Act
,
No. 25 of 1947, a new Explanation was added to the
definition of "sale", and it is as follows :
Explanation 2 :
"Notwithstanding anything to
the contrary in the Indian Sale of Goods Act, 1930,
the sale or purchase of any· goods shall be deemed, for
S.C.R.
SUPREME COURT REPORTS
1435
19S8
the purposes of this Act, to h~ve taken place in this
Province, wherever the contract of sale or purchase
might have been madeM. P. v. sumJar:ir.amier & Co.
(a) if the goods were actually in this Province at
v.
the time when the contract of sale or · purchase in
The siate of
respect thereof was made, or
Andhra Pradesh
(b) in case the contract was for the sale or purchase of future goods by description, then, if the goods
are actually produced in this Province at any time
after the contract of sale.or purchase in respect thereof
was made."
This amendment came into force on January 1, 1948.
In Poppatlal Shah v. The .State of Madras(1), this
Court had to consider the scope of the definition of
"sale" in s. 2(h) and of Explanation 2, and it was
therein held that though the power to tax a sale was
really a power to tax a transaction of sale and a -law
imposing such tax would be competent if any of the
ingredients of sale had taken place within the State,
the Madras Act had, by its definition of "sale" in
s. 2(h) prior to the enactment of Explanation 2,
imposed a tax only when the property in the goods
passed within the State, and that in respect of sales
which had taken place prior to the amendment, the
tax would be unauthorised if the property in the goods
passed outside the State of Madras.
It was also
observed that after the amendment came into force, a
tax on a sale which came within Explanation 2 would
be valid. That was the position in law under the
Madras Act prior to the enactment of the Constitution.
It is now necessary to ref er to the changes effected
in the law by the Constitution, Article 286, which is
relevant for the present purpose, is as follows ·:
·
286(1). "No law of a State shall impose, or
authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes
place-
( a) outside the State; or
(b) in the course of the import of the goods into,
or export of the goods out of, the territory of India.
(t) [ 1953] S. C.R. 677.
18a
Venkatarama
AiyarJ.
1436
SUPREME COURT REPORTS
[1958]
1958
Explanation.-For the purposes of sub-clause (a),
-
a sale or purchase shall be deemed to have taken
M. P .. v. Sundara- place in the State in which the goods have actually
ramier & Co.
b
d 1·
d
d"
1
f
h
I
v.
een e ivere as a 1rect resu t o sue sa e or purThe state of chase for the purpose of c0,nsumption in that State,
Andhra Pradesh notwithstanding the fact that under the general law
relating to sale of goods the property in the goods
Venkararama
has by reason of such sale or purchase passed in
Aiyar J.
another State.
(2) Except in so far as Parliament may by law
otherwise provide, no law of a State shall impose, or
authorise the imposition of, a tax on the sale or purchase of any goods where such sale or purchase takes
place in the course of inter-State trade or commerce :
Provided, that the President may by order direct
that any tax on the sale or purchase of goods which
was being lawfully levied by the Government of any
State immediately before the commencement of this
Constitution shall, notwithstanding that the imposition of such tax is contrary to the provisions of this
clause, continue to be levied until the thirty-first day
of March, 1951.
(3) No law made by the Legislature of a State
imposing, or authorising the imposition of, a tax on
the sale or purchase of any such goods as have been
declared by Parliament by law to be essential for the
life of the community shall have effect unless it has
been reserved for the consideration of the President
and has received his assent."
1o~
Article 372(2) enacts that,
"For the purpose of bringing the provisions of
any law in force in the territory of India into accord
with the provisions of this Constitution, the President
may by order make such adaptations and modifications of such law, whether by way of repeal or amendment, as may be necessary or expedient, and provide
that the law shall, as from such date as may be specified in the order, have effect subject to the adaptations
and modifications so made, and any such adaptation
or modification shall not be questioned in any court
of law."
In exercist> of the power conferred by this provision.
S.C.R.
SUPREME COURT REPORTS
1437
the President made Adaptation Orders with reference
19ss
to the Sales Tax of Laws all the States, and as regards
-
the Madras Act, he issued on July 2, 1952, the Fourth M. P .. v. SundaraAmendment inserting a new section, s. 22 in that Act.
ranuer &: Co.
It runs as follows :
The ;,~te of
"Nothing contained in this Act shall be deemed AndhraPradesh
to impose or authorise the imposition of a tax on the
sale or purchase of any goods where such sale or
Venkatarama
purchase takes placeAtyar J.
(a) (i) outside the State of Madras, or
(ii) in the course of import of the goods into
the territory of India or of the export of the goods
out of such territory, or
(b) except in so far as Parliament may by law
otherwise provide, after the 31st March, 1951, in the
course of inter-State trade or commerce, and
the
provisions of this Act shall be read and construed
accordingly.
Explanation :-For the purposes of cl. (a) (i) a sale
-0r purchase shall be deemed to have taken place in
the State in which the goods have actually been
delivered as a direct result of such sale or purchase
for the purpose of consumption in that State, notwithstanding the fact that under the general law relating
to sale of goods the property in the goods has by
reason of such sale or purchase passed in another
State."
It will be noticed that the Explanation to Art. 286
_-<
(l)(a) is reproduced verbatim in s. 22 of the Madras
Act. The true meaning and scope of this Explanation
came up for consideration before this Court in The
State uf Bombay and another v. The United Motors
India Ltd., and others (1). Therein, it was held by a
majority that though the sales falling within the
Explanation would, in fact, be in the course of interState trade, they became, by reason of the fiction
introduced therein,
invested with the character of
intra-State sales, and would be liable to be taxed by
the State within which the goods were delivered for
consumption. Acting on this judgment, the Board of
Revenue (Commercial Taxes) Andhra State, issued a
(1) I19Sll s.c.R. 1069.
1438
SUPREME COURT REPORTS
[1958J
1958
notification on July 13, 1954, calling upon dealers to
submit returns of their turnover of sales in which
M. P._ v. Sundara- goods were delivered in the Andhra State for consumpramier v & co. tion, and a copy thereof was sent to the Madras Yarn
The 81~1, of Merchants' Association, of which the petitioners arP,
Andhra Pradesh members. The Association disputed the liability of
the Madras dealers to pay any tax in respect of the
Venkalarama
sales to the Andhra dealers, and after some corresAiyar J.
pondence, the Andhra State finally issued on June 30,
1955, notices to the petitioners to send their returns
of turnover by July 15, 1955, failing which it was
stated that assessments would be made on the best
judgment basis, and that, further, the dealers would
be liable to the penalties prescribed by the law (Vide
Annexure H to the petition). Thereupon, the petitioners have filed the present petitions challenging the
validity of the demand made by the Andhra State on
the ground, inter alia, that the sales proposed to be
taxed were inter-State
sales, and that they were
immune from taxation under Art. 286(2). These
petitions were filed on various dates in July and
Augnst, 1955.
While they were pending, the question of the true
scope of the Explanation to Art. 286(1)(a) came up
again for consideration before this Court in The Bengal
Immunity Company Limited v. The State of Bihar and
others (')- By its judgment dated September 6, 1955
this Court held, again by a majority, that the sales
falling within the Explanation being inter-State
in
character, could not be taxed by reason of Art. 286(2),
unless Parliament lifted the ban, that
the Explanation to Art. 286(l)(a) controlled only that clause
and did not limit the operation of Art. 286(2), and
that the law had not been correctly laid down in The
United Motors case (2).
On the decision in The Bengal
Immunity Company case(') it cannot be doubted that
the claim of the Andhra State to tax Explanation
sales would be unconstitutional, and indeed, that was
admitted by the State in a statement filed on October
21, 1955, wherein it was stated that having regard
(1) [1955] 2 S.C.R. 603.
(2) [1953] S.C.R. 1069.
"-
;
'
• ..
S.C.R.
SUPREME COURT REPORTS
1439
to the decision aforesaid, the petitions might be allow1958
ed but without costs. Before final orders were passed
--
on the petitions, however, the Sales Tax Validation M.P._v. SundaraOrdinance No. III of 1956, was promulgated on
ramier & Co . .
v.
January 30, 1956, and that was later replaced by the
The State of
Sales Tax Laws Validation Act (7 of 1956) and that Andhra Pradesh
came into force on March 21, 1956.