# Ro.Uishor1 lAl v. KonNl Jl•Niti

- **Citation:** [1963] Supp. 2 S.C.R. 435
- **Court:** Supreme Court of India
- **Decided:** 1963
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/ro-uishor1-lal-v-konnl-jl-niti-2781
- **Pages:** 13

## Headnote

2 S.C.R.
SUPREME COURT REPORTS
435
to Shri Ramchandra Swamy temple, set aside the
judgment and decree of the High Court and send
the case back to the High Court for disposal of the
appeal, after deciding the other issues in the suit
that require to be decided for its proper disposal.
Costs will abide the result.
Appeal allowed.
FIRM A. T. B. MEHTAB
MAJID AND CO.
"·
STATE OF MADRAS AND ANOTHER
(S. K. DAB, J. L. KAPUR, A. K. SARKAR,
M. HIDAYATULLAH and RAGHUBAB DAYAL, .U,)
8alM Tax-Tannw hidu and ski11 imporld from o!IUitk
and •old in.aide tht State-Hide8 and •l<i,.. la11n"1 and •old
in.aide tht State-Saka Tax higher "" tht WIUr-If diM:riminatory-OIJ. nde Mll>Blituted by new rule-Old nde '°'8 not ,..,; ..
when new ruks declar"1 invalid-0""8titvtiol& of India, Arta.391,
304-Madras Genenil Salt.a Tax Aol (IX of 193"), ••· 3,5, 19Jladraa General Salu Tax Rulu, r. 16.
This is a petition under Art. 32 of the Constitution, the
petitioners are dealers in hides and skins in the State of
Madras. The impugned sales tax assessment relates to turnover of sales of tanned hides and skins which had been obtained
from outside the Su.te of Madra•. The main contention of
the petitioners is that the tanned hides and skins imported
from outside and sold inside the State arc, under r. 16 of the
Madras General Sales Tax Rules, subject to a higher rates of
tax than the tax imposed on hides and skins tanned and sold
within the State and this discriminatory taxation offended
Art. 304 (a) of the Constitution.
The respondents contentions were (a) sales tax doc. not
come within the purview of Art. 304 (a) as it is not a tax on
the import of gogd.1 at the point of entry, (b) the impugned
1961
Ro.Uishor1 lAl
v.
KonNl Jl•Niti
IJu C.,to, J.
1962
N.-.61r 21,
1962
Fi"" A.T.B. M<k·
tab Mo}id a.,,d Co.
v.
Stall of Madras
436 SUPREME COURT REPORTS [1963] SUPP.
rule is n<.t a law made by the State legislature,
(c) the
impugned mle by itself does not impose the tax but fixes the
single point at which the tax is imposed by ss. 3 and 5 of the
Act is to be levied. (d) The impugned rule was not made
with an eye on the place of origins of the goods.
Held, that it is now well settled that taxing laws can he
restrictions on trade, commerce and intercourse, if thev hamper
the flow of trade and if they are not what can be termed to be
compensatory taxes or regulating measures. Sales Tax, of the
kind under consideration, cannot be said to he a measure,
regulating any trade, or a compensatory tax levied for the
use of trading facilities, Sales Tax which has the effect of
discriminating between goods of one State and goods of
another, may affect the free flow of trade and it will then
offend against Art. 301 and will be valid only if it comes
within the terms of Art. 304 (a).
Atiabari Tea Co. Lf.d. v. State of Assam, [1961] I S. C. R.
809, A'lllomobile Tramport,Rajasthan Lul. v. S1<1te of Rajastlian,
[1963] IS. C.R. 491, followed.
Article 304 (a) allows the legislature of a State to impose
taxes on goods imported from other States and does not
support the contentions that the imposition must be at the
point of entry.
Stction 19 (5) of the Madras General Sales Tax Act
provides that the rules made thereunder shall have effect as
if enacted in the Act and r. 16 of the Madras General Sales
Tax Rules would fall within a law
made by the State
Legislature. What that rule provides is a step necessary for
the imposition of tax in view of ss. 3 and 5 and therefore the
impugned rule is a part of the enactment which imposes the
tax. The fact that the impugned rule was made in view of
ss. 385, in order to prescribe the single point in seri~.s of sales
does not justify its discriminatory character, Rule 16 (2) disi:riminates •!("inst the imported hides or skins which had been
purchased or tanned ontside
and therefore it contravenes
Art. 304 (a) of the Constitution.
Once an old rule has heen substituted by a new rule, it
ceases to exist and it does not get revived when the ne\v rule is
held in

## Text

2 S.C.R.
SUPREME COURT REPORTS
435
to Shri Ramchandra Swamy temple, set aside the
judgment and decree of the High Court and send
the case back to the High Court for disposal of the
appeal, after deciding the other issues in the suit
that require to be decided for its proper disposal.
Costs will abide the result.
Appeal allowed.
FIRM A. T. B. MEHTAB
MAJID AND CO.
"·
STATE OF MADRAS AND ANOTHER
(S. K. DAB, J. L. KAPUR, A. K. SARKAR,
M. HIDAYATULLAH and RAGHUBAB DAYAL, .U,)
8alM Tax-Tannw hidu and ski11 imporld from o!IUitk
and •old in.aide tht State-Hide8 and •l<i,.. la11n"1 and •old
in.aide tht State-Saka Tax higher "" tht WIUr-If diM:riminatory-OIJ. nde Mll>Blituted by new rule-Old nde '°'8 not ,..,; ..
when new ruks declar"1 invalid-0""8titvtiol& of India, Arta.391,
304-Madras Genenil Salt.a Tax Aol (IX of 193"), ••· 3,5, 19Jladraa General Salu Tax Rulu, r. 16.
This is a petition under Art. 32 of the Constitution, the
petitioners are dealers in hides and skins in the State of
Madras. The impugned sales tax assessment relates to turnover of sales of tanned hides and skins which had been obtained
from outside the Su.te of Madra•. The main contention of
the petitioners is that the tanned hides and skins imported
from outside and sold inside the State arc, under r. 16 of the
Madras General Sales Tax Rules, subject to a higher rates of
tax than the tax imposed on hides and skins tanned and sold
within the State and this discriminatory taxation offended
Art. 304 (a) of the Constitution.
The respondents contentions were (a) sales tax doc. not
come within the purview of Art. 304 (a) as it is not a tax on
the import of gogd.1 at the point of entry, (b) the impugned
1961
Ro.Uishor1 lAl
v.
KonNl Jl•Niti
IJu C.,to, J.
1962
N.-.61r 21,
1962
Fi"" A.T.B. M<k·
tab Mo}id a.,,d Co.
v.
Stall of Madras
436 SUPREME COURT REPORTS [1963] SUPP.
rule is n<.t a law made by the State legislature,
(c) the
impugned mle by itself does not impose the tax but fixes the
single point at which the tax is imposed by ss. 3 and 5 of the
Act is to be levied. (d) The impugned rule was not made
with an eye on the place of origins of the goods.
Held, that it is now well settled that taxing laws can he
restrictions on trade, commerce and intercourse, if thev hamper
the flow of trade and if they are not what can be termed to be
compensatory taxes or regulating measures. Sales Tax, of the
kind under consideration, cannot be said to he a measure,
regulating any trade, or a compensatory tax levied for the
use of trading facilities, Sales Tax which has the effect of
discriminating between goods of one State and goods of
another, may affect the free flow of trade and it will then
offend against Art. 301 and will be valid only if it comes
within the terms of Art. 304 (a).
Atiabari Tea Co. Lf.d. v. State of Assam, [1961] I S. C. R.
809, A'lllomobile Tramport,Rajasthan Lul. v. S1<1te of Rajastlian,
[1963] IS. C.R. 491, followed.
Article 304 (a) allows the legislature of a State to impose
taxes on goods imported from other States and does not
support the contentions that the imposition must be at the
point of entry.
Stction 19 (5) of the Madras General Sales Tax Act
provides that the rules made thereunder shall have effect as
if enacted in the Act and r. 16 of the Madras General Sales
Tax Rules would fall within a law
made by the State
Legislature. What that rule provides is a step necessary for
the imposition of tax in view of ss. 3 and 5 and therefore the
impugned rule is a part of the enactment which imposes the
tax. The fact that the impugned rule was made in view of
ss. 385, in order to prescribe the single point in seri~.s of sales
does not justify its discriminatory character, Rule 16 (2) disi:riminates •!("inst the imported hides or skins which had been
purchased or tanned ontside
and therefore it contravenes
Art. 304 (a) of the Constitution.
Once an old rule has heen substituted by a new rule, it
ceases to exist and it does not get revived when the ne\v rule is
held invalid.
The tax imposed in the present ca'° has not been imposed by misconstruing the provisions of a valid Act but it
has been imposed without jurisdiction by reason of the invalidity of r. 16.
2 S.C.R.
SUPREME COURT REPORTS
437
Ujjam Bai v. SfJlte of U. P., [1963] I S. C.R. 778,
distinguished.
ORIGINAL JURISDICTION: Petition No. 147 of
1959.
(Under Article 32 of the Constitution of India
for the enforcement of Fundamental Rights).
8. T. Desai and 8. Venkat.akrishnan, for the
petitioner.
A. Ranganadham Ohetty and A. V. Rangam,
for respondents Nos. 1 and 2.
R. V. 8. Mani, for the intervener.
1962. November, 22. The Judgment of the
Court was delivered by
1962
l frm A.T.B. MM
t4b Majid aJtd Co.
y.
Stat1 of Matlra
RAGHUBAR DAYAL, j.-This petition under Ragllubar DO)al, J.
Art. 32 of the Constitution raises the question of the
validity of r. 16 of the Madras General Sales Tax
(Turnover & Assessment} Rules, 1939, hereinafter
called the niles. The impugned rule was published
on September 7, 1955, and was substituted in the
place of old r. 16. The new rule was to be effective
from April 1, 1955.
The petitioner is a dealer in hides and skins.
He sells hides and skins tanned outside the State of
Madras, as well as those tanned inside the state. The
Deputy Commercial Tax Officer, I, Moore Market
Division, Madras, assessed the petitioner to sales tax
for the year
1955-56 on a turnover of Rs.
29,89,624-15-11.
Out
of this
a
turnover of
Rs. 28, L0,625-2-0 represented sales of tanned hides
and skins which had been obtained from outside the
State of Madras.
Sales tax was levied on hides and skins under
the provisions of the Madras General Sales Tax Act,
1962
Firm A.T.B. M1h·
loi Majid and C..
v.
Sl•llO/ JII1',.,
R.,bt"' Da,.J, J,
438 SUPREME COURT REPORTS [1963] SUPP.
lg39 (Act IX of 1939), hereinafter called the Act.
Section 3 is the charging section and its relevant portions read:
"3. ( 1) Subject to the provisions of this Act,-
( a) every dealer shall pay for each year a tax
on his total turnover for such year; and
(b) the tax shall be calculated at the rate of
three pies for every rupee in such turnover :-
x
x
x
x
x"
Section 5 of the Act. provides for exemptions and
reductions of tax in certain cases. Clause (vi) thereof provides that the sale of hides and skins, whether
tanned or untanned, shall be liable to tax under
section 3, sub-section (1), only at such single point
in the series of sales by successive dealers as may be
prescribed.
Section 19 empowers the State Government to
make rules to carry out the purposes of the Act.
The new rule 16, whose validity is challenged
for the petitioner, reads :
"16.(1) In the case of untanned hides and/or
skins the tax under section 3(1) shall be levied
from the dealer who is the last purchaser in the
State not exempt from taxation under section
3(3) on the amount for which they are bought
by him.
(2) (i) In the case of hides or skins which have
been tanned outside the State the tax under
section 3(1) shall be levied from the dealer who
in the State is the first dealer in such hides or
skins not exempt from taxation under section
3(3) on the amount for which they are sold by
him.
2 S.C.R. SUPREME COURT REPORTS
430
(ii) In the case of tanned hides or skins
which have been tanned within the State, the
tax under section 3( 1) shall be levied from
a person who is the first dealer in such hides or
skins not exempt from taxation under section
3(3) on the amount for which they are sold by
him:
Provided that, if he proves that the tax ha~
already been levied under sub-rule (1) on the
untanned hides and skins out of which the
tanned hides and skins had been produced, he
shall not be so liable.
(3) The burden of proving that a transaction
is not liable to taxation under this rule shall be
on t_he dealer."
It is contended for the petitioner that the effect
of this rule is that tanned hides or skins imported
from outside the State and sold within the State are
subject to a higher rate of tax than the tax imposed
on hides or skins tanned and sold within the State,
inasmuch as sales tax on the imported hides or skins
tanned outside the State is on their sale price while
the tax on hides or skins tanned within the State,
though ostensibly on their sale price, is, in view of
the proviso to cl. (ii) of sub-r. (2) of r. 16. really on
the sale price of these hides or skins when they are
purchased in the raw condition and which is substantially less than the sale price of tanned hides or
skins.
Further, for similar reasons, hides or skins
imported from outside the State after purchase in
their raw condition and then tanned inside the State
are also subject to higher taxation than hides or skins
purchased in the raw condition in the State and
tanned within the State, as the tax on the former is
on the sale price of the tanned hides or skins and
on the latter is on the sale price of the raw hides or
skins. Such a discriminatory taxation is said to
1962
Fi,.. A.T.B. M11r1ab lvlajid end Co.
v.
Stak of Madras
1962
Firm A.T.B. Mehl•b Majid and C..
"'
S1a11 oj Mo,rt11
Raz!iu6ar IJtJ,Jal, J.
440 SUPREME COURT REPORTS [1963]SUPP.
offend the provisions of Art. 304(a) of the Constitution. Similar are the contentions for the interveners
in the case.
The contentions for the respondents are : ( l)
Sales tax does not come within the purview of
Art. 304(a) as it is not a tax on the import of goods
at the point of entry.
(2) The impugned rule is not
a law made by the State Legislature. (3) The
impugned rule, by itself, does not impose the tax,
but fixes the single point at which the tax imposed
by ss. 3 and 5 of the Act is to be levied. ( 4) The
impugned rule was not made with an eye on the
place of origin of the goods but as a matter of necessity, in view of the requirements of the statutory
provisions to the effect that hides or skins, raw or
tanned, came within one category and that the tax
on them could be levied at a single point only. The
impugned rule, therefore, fixed that single point with
respect to the sale of raw hides or skins at the last
purchase by the dealer in the State and with respect
to the sale of tanned hides or skins at the first sale of
such tanned hides or skins by the dealer in the State.
I~ the former case, the tax was levied on the price
the purchaser paid while in the latter case it was on
the price at which the seller sold.
Article 301 of the Constitution which provides
for trade, commerce and intercourse throughout the
territory of India to be subject fo the other provisions
of Part XIII, has been construed by this Court in
Atiabari Tea Co. Ltd. v. TM State of Asaam and
Ot11£rs·(') and in Automobile Transport (Rajasthan)
Ltd. etc. v. The State of Raja8f/han and Ors.(1)
:
The majority view in the Atiabari Tea Co.
Case(') which-lias been accepted in the Automobile
Transport Case (2) is, as expressed ~y Gajendragad·
kar, J., at p. 860 :
"Thus considered we think it would be reason·
able and proper to hold that restrictions1'reedom
(I) ll961) I. s.c.R. 809.
l2) ll1163J I S.C.R. 491.
2 s.c.R. SUPREME COURT REPORTS
441
from which is guaranteed by Art. 301, would
be such restrictions as directly and immet:liately
restrict or impede the free flow or movement
of trade. Taxes may and do amount to restrictions; but it is only such taxes as directly
and immediately restrict trade that would fall
within the purview of Art. 301. ........ We arc
therefore satisfied that in determining the limits
of the width and amplitude of the freedom
guaranteed by Art. 301 a rational and workable
test to apply would be : Does the impugned
restriction operate directly or immediately on
trade or its movement ? ...... Our conclusion
therefore is that when Art. 301 provides that
trade shall be free throughout the territory
of India it means that the flow of trade shall
run smooth and unhampered by any restriction
either at the boundaries of the States or at any
oth~r points inside the States themselves. It is
the free movement or the transport of goods
from one part of the country to the other that
is intended to be saved, and if any Act imposes
any direct restrictions on the very movement
of such goods it attracts the· provisions of
Art. 301, and its validity can be sustained
only if it satisfies the r~uirements of Art. 302
or Art. 304 of Part XIII.
In the majority judgment in the Automobile
Transport Caae (')
~t was said at p. 1424 :
"The interpretation which was accepted by
the majority in the Atiabari Tea Co. Case is
correct, but subject to this · clarific~tion.
Rcg'ulatory measures or measures
impCJiliJ/.g
compensatory taxes for the use of trading facilities. 10 not come_ within Jhe purview of the
r~trtctions contemplated by Art. 301."
Earlier in the judgment it was observed, at p.1422 :
"Sueh regulatory measurc1 as do not impede
(I) [1963) I S.C.B.. 491,
1962
Firm A· T.B. M,/r
tu Mojii .. , C..
v.
St1t1 •I M1iru
R11hubar Da,.1, I.
1962
Firm A..T.8. M1,,_
Id Majid ond C..
v.
Si.11 .JMMhr
R.izlwba1 DaJd, J.
442 SUPREME COURT REPORTS [1963] SUPP.
the freedom of trade, commerce and intercourse and compensatory taxes for the use of
trading facilities are not hit by the freedom
declart>d by Art. 301. They are excluded from
the purview of the provisions of Part XIII of
the Constitution for the simple reason that
they do not hamper trade, commerce and intercourse but rather facilitate them ....
Subba Rao J., concurred in this view and said at
p. 1436:
"{l) Art. 301 declares a right of free movement
of trade without any obstructions by way of
barriers, inter-State or intra-State, or other
impediments operating as such barriers. (2) The
said freedom IS not impeded, but, on the other
hand, promoted, by regulations creating conditions for the free movement of trade, such as,
police regulations, provision for services, maintenance of roads, provision for aerodromes,
wharfs etc., with or without compensation."
It is therefore now well settled that taxing laws
can be restrictions on trade, commerce and intercourse, if they hamper the flow of trade and if they
are not what can be termed to be compensatory taxes
or regulatory measures.
Sale~ tax, of the kind under
consideration here, cannot be said to be a measure
regulating any trade or · a compensatory tax levied
for the use of trading facilitit;i. Sales tax, which
has the effect of discriminating between goods of one
State and goods of another, may affect the free flow
of trade and it will then offend against Art. 301
and will be valid only if it comes within the terms
of Art. 304 {a).
Article 304{a) enables the Legislature of a State
to make laws affecting trade, commerce and intercourse. It enables the imposition of taxes on goods
from other States if similiar goods in the State are
2 S.C.R.
SUPREME COURT REPORTS
443
subjected . to similiar taxes, so as not to discriminate
between the goods manufactured or produced in
that State and the goods which are imported from
others States. This means that if the effect of the
sales·tax on tanned hides or skins imported from
outside is that the latter becomes subject to a higher
tax by the application of the proviso to sub-rule of
r. 16 of the Rules, then the tax is discriminatory
and unconstitutional and must be struck down.
We do not agree with the contentions for the
respondents. The contention that Art. 304 (a) is
attracted only when the impost is at the border, i.e., ·
when the goods enter the State on crossing the bor·
der of the State, is not sound. Art. 304(a) allows
the Legislature of a State to impose taxes on goods
imported from other States and docs not support the
contention that the imposition must be at the point
of entry only.
Section 5 (vi) provides that the sale of hides
or skins, whether tanned or untanned, shall be liable to
tax under s. 3(1) only at such single point in the series
of sales by successive dealers as may be prescribed.
'Prescribed' means 'prescribed by rules made under
the Act.' Ruic 16 prescribes such single point. This
rule was made by the Governor in the exercise of
power
conferred on him under s. 19 of the Act and
would therefore have statutory
force.
In
fact,
sub-s. ( 5) of s. 19 provides that the rules shall have
effect as if enacted in the Act. We therefore do not
agree that r. 16 is not a law which would fall within
a law made by the State Legislature.
It is true that the impugned rule, by itself, does
not impose the tax, but fixes the single point at which
the tax imposed by ss. 3 and 5 is to be levied. What
the rule provides is a step necessary for the imposition
of the
tax,
in view of ss. 3
and
5
and
therefore the impugned rule is a part of the enactment
which imposes the tax.
1962
Ffrm .4. T.B. M1ft.
'46 Majid .. , Co.
Y,
St•ll •f Muros
Ra1A•bar Do,.,, J.
19i2
l"lmt A. T.B. M1/r1ab Majid and Ce.
v.
Stat• •I Ma4ru
lldihu6a• D•.:μI, J,
444 SUPREME COURT REPORTS [1963] SUPP.
The fact that the impugned rule was made in
order to prescribe the single point in the series of
sales by successive dealers at which the tax on sale
of hides or skins was to be levied, in view of ss. 3
and 5 of the Act, does not justify the making of such
a rule which descriminates between the tax imposed
on goods imported from outside the State and the
goods produced or manfactured in the State.
Now, the only question that remains for consideration is whether this rule discriminates between
hides or skins imported from outside the State and
those manufactured or produced in the State.
Sub-rule ( 1) of the rule deals with the sale of
raw hides and skins. The tax is levied from the
dealer who is the last purchaser in the State. Its
virea is not challenged. Clause (i) of sub-r. (2)
provides for the levying of tax on the sale of hides
and skins which had been tanned outside the State.
The tax is levied from the dealer who, in the State,
is the first seller of such hide or skins. The result is
that a dealer in hides or skins which have been
tanned outside the State has to pay the tax on the
amount for which such hides or skins are sold by
him. Clause (ii) of this sub-rule is in indentical
terms with respect to the sale of tanned hides or skins
which have been tanned within the State. The tax
is to be levied from the person who is the first dealer
in such hides or skins and is levied on the amount for
which they are sold.
The descrimination. it is
argued, comes in on account of the proviso to this
sub-cl. (ii). The proviso is to the effect that if the
dealer of hides or skins which had been tanned within
the State proves that tax had already been levied on
those hide or skins in their raw condition, in accor·
dance with sub-r. (1), he will not be liable to the
tax under sub-cl. (ii) of sub-r. {2). The result therefore is that the sale of hides or skins which had been
purchased in the State and then tanned within the
2 S.C.R.
SUPREME COURT REPORTS
445
State is not subject to any further tax. Hides and
skins tanned within the State are mostly those which
had been purchased in their raw condition in the
State and therefore on which tax had already been
levied on the price paid by the purchaser at the time
of their sale in the raw condition. If the quantum
of tax had been the same, there might have been. no
case for grievance by the dealer of the tanned hides
and skins which had been tanned outside the State.
The grievance arises on account of the amount of
tax levied being
different on account of the existence of a substantial disparity in the price of the raw
hides or skins and of those hides or skins after they
had been tanned, though the rate is the same under
s. 3 (1) (b) of the Act. If the deiller has purchased
the raw hide or skin in the State, he does not pay
on the sale price of the tanned hides or skins, he pays
on the purchase price only. If the dealer purchases
raw hides or skins from outside the State and tans
them within the State, he will be liable to pay salestax on the sale price of the tanned hides or skins.
He too will have to pay more for tax even though
the hides and skins are tanned within the State,
merely on account of his having imported the hides
and skins from outside, and having not therefore
paid any tax under sub-r. (1). It is true that dealers,
though few, selling hides and skins which had been
tanned within the State will also have to pay similar
tax if no tax had been paid previously, they having
not purchased the raw hides and skins at all as they
were from the carcasses of animals owned by them;
but this does not affect the discriminatory nature of
the tax as already indicated.
It is urged for the respondent State that to con·
sider discrimination between the imported goods and
goods produced or manufactured in the State, circumstances and situations at the taxable point must
be similar and that the circumstance of hides or skins
tanned within the State and on which tax had been
1962
Firm A. T.B. Mllr·
let M•jid ,.4 C.,
v.
Stell of Mura
Ra1lwbar DoμI, J.
1962 -
Finii A.T.11. M1h·
Id Majid and Co.
v.
Si.11 of ~ladras
&1hubar Da:1tll, J.
446 SUPREME COURT REPORTS [1963] SUPP.
paid earlier at the time of their purchase in the raw
condition is sufficient to consider such hides or skins
to be different from the hides or skins which had
been tanned outside the State. We do not consider
that the mere circumstance of a tax having been paid
on the sale of such hides or skins in their raw condition justifies their forming goods of a different kind
from the tanned hides or skins which had been impor·
ted from outside. At the time of sale of those
hides or skins in the tanned state, there was no
difference between them as goods and the hides or
skins tanned outside the State as goods. The simila·
rity contemplated by Art. 304 (a) is in the nature of
the quality and kind of the goods and not with res·
pect to whether they were subject of a tax already
or not.
We are therefore or opinion that the privisions
of r. 16 (2) discriminate against the imported hides or
skins which had been purchased or tanned outside the
State and that therefore they contravene the provisions of Art. 304 (a) of the Constitution.
It has been urged for the respondent that if the
impugned rule be held to be invalid; old r. 16 gets
revived and that the tax assessed on the petitioner
will be good. We do not agree. Once the old rule
has been substituted by the new rule, it ceases to exist
and it does not automatically get revived when the
new rule is held to be invalid.
Lastly, we may refer to the Preliminary
objection raised on behalf of the respondent to the
maintainability of this petition, in veiw of the decision of this Court in Ujjam Bai v. State of Uttar
Pradesh {1). This petition does not come within that
decision. This is not a case in which the tax has
been levied by the Deputy Commercial Tax Olficer
by mis-construing certain provisions of a valid Act,
but is a case where the taxing officer had no jurislll'.[19631 I. S.C.R. 778.
2 s.c.R.
SUPREME COURT REPORTS
447
diction to assess the tax on account of the invalidity
of the rule under which the tax was assessed.
We therefore allow this petition with costs
holding the impugned rule 16 (2) invalid and order
the is.,ue of a writ of mandamus to the State of
Madras and the Sales Tax Authorities under the Act
to refrain from enforcing any of the provisions of
r. 16 (2) and direct them to refund the tax illegally
collceted from the petitioner.
Petition Allowed.
GOUR CHANDRA ROUT & ANOTHER
ti.
THE PUBLIC PROSECUTOR, CUTT ACK
(S. J. buv, K. SUBBA RAo, N. R.uAGOPALA
AYYANGAR and J. R. MuDHOLKAR, JJ.)
Oriminal Proadurt-Aulkoriaation by GotJtmM GtntralAulhMi•<Jtion, whetAor contemp/4ted-Ootl.e of Oriminal Procedure
1898 (V of 1898), "" <Jmttuktl by Oriminal Procedure Ood«
(A,,..ndmtnt) Act, 1955(XXVI of 1955), a. 198-B(l), (3)(1l).
The appellann were the editor, printer and publisher of
an Oriya Daily Newspaper called "Matrubhumi". In the issue
of May 31, 1958, the views expressed by Dr. Ram Manohar
Lohia concerning the Political situation created in Orissa by
reason of the resignation of the Congress Ministry and its
immediate non-acceptance by the Governor were published.
During the Press Conference he remarked that the Governor had
played as a toy in the hands of the ·Congress and that his one
near relation had secured employment with the help of the
congress party. After it came to the notice of the Governor,
he got it translated into· English and sent to the Government
for taking such action as may be necessary. Shortly thereafter,
the Home Secretary to the Government passed an order pur•
ported to be a sanction under s. 1988 of the Code of Criminal
Fi"" A.T.B. M1ft.
r.6 Majid •' C•.
y,
Sl•t. of M•dr.s
Ratlwbar D•Jdl, J.
1962
N_,,,., 13.