B SHAMA RAO Vs. UNION TERRITORY OF PONDICHERRY

JUDGEMENT

(1.) On August 16, 1962 the administration of Pondicherry, became vested in the Govermnent of India by virtue of de jure transfer. The Pondicherry Administration Act, XLII of 1962 constituted that territory as a separate centrally-administered unit and under the Union Territories Act, XX of 1963 a legislative assembly was set up for that area. The assembly under that Act acquired the power of enacting laws in respect of items in Lists II and III of the Seventh Schedule to the Constitution. The assembly thereafter passed the Pondicherry General Sales Tax Act, X of 1965 (hereinafter referred to as the Principal Act) which was published on June 3, 1965 after receiving the President's assent on May 25, 1965. Section 1(2)of that Act provided that the Act would come into force on such date as the Government may by notification appoint. Section 2 (1) provided that

(2.) The petitioner is a merchant carrying on business in liquor and would be a dealer within the meaning of the Madras Act. Upto March 1966 he was liable and was paying certain taxes similar to the sales tax under the French regulations till then in force in Pondicherry. With the coming into force of the Principal Act he was served with a notice to register himself as a dealer. Thereupon he filed this petition challenging the validity of the Principal Act.

(3.) Mr. S. T. Desai for the petitioner contended that the Principal Act was void and was a still-born legislation by reason of the Pondicherry legislature having abdicated its legislative function in favour of the Madras State Legislature, that such abdication resulted from the wholesale adoption of the Madras Act as in force in the State of Madras immediately before the commencement of the Principal Act and that