R S JOSHI SALES TAX OFFICER GUJARAT J S JOSHI SALES TAX OFFICER GUJARAT Vs. AJIT MILLS LTD:IDAR TALUKA SAHAKARI

JUDGEMENT

(1.) ):- This bunch of appeals brought by the State of Gujarat certificate has a pan-Indian impact, as the sales-tax project which has been struck down by the High Court may adversely affected cousin provisions in like statutes in the rest of the country. Contradictory verdicts on the constitutionality of a certain pattern of sales-tax legislation, calculated to counter consumer victimisation by dealers, have been rendered by different High Courts and what complicates the issue is that reasonings in the prior rulings of this Court on the topic have been pressed into service by both sides. This slippery legal situation makes it necessitous for the Constitution Bench of this Court (numerically expanded, almost to breaking point, by the recent 42nd Constitution Amendment) to declare the law with relative certitude, reviewing, in the process, its previous pronouncements and overruling, if required, the view of one High Court or the other so that the correct position may finally be restated. The certainty of the law is the safety of the citizen and, having regard to the history of judicial conflict reflected in the rulings we will presently unravel, an authoritative decision is overdue.

(2.) A prefatory caveat. When examining a legislation from the angle of its vires, the Court has to be resilient, not rigid, forward-looking, not static, liberal, not verbal in interpreting the organic law of the nation. We must also remember the constitutional proposition enunciated by the U. S. Supreme Court in Munn v. Illinois (1876) 94 US 113 (quoted in Labor Board v. Jones and Laughlin, (1936), 301 US 1, 33-34 - Corwin, Constitution of the U. S. A., Introduction, p. xxxi) viz., 'that courts do not substitute their social and economic beliefs for the judgment of legislative bodies'. Moreover, while trespasses will not be forgiven, a presumption of constitutionality must colour judicial construction. These factors, recognised by our Court, are essential to the modus vivendi between the judicial and legislative branches of the State, both working beneath the canopy of the Constitution.

(3.) The meat of the matter - rather, the core of the dispute - ignoring, for the moment, minor variations among the several appeals which we may relegate for separate treatment - is as to whether it is permissible for the State Legislature to enact, having regard to the triple Lists of the Seventh Schedule and Articles 14 and 19, that sums collected by dealers by way of sales tax but are not exigible under the State law - and, indeed, prohibited by it- shall be forfeited to the public exchequer punitively under Entry 54 read with Entry 64 of List II. the Gujarat State whose law, in this behalf, was held ultra vires by the High Court, has, in its appeal by certificate, raised this issue squarely and argued for an answer affirmatively. The law we are concerned with is the Bombay Sales Tax Act, 1959 (Bombay Act LI of 1959) (for short, the Act) applicable during the relevant period to the Gujarat State, although the State of Maharashtra itself has since modified the law, as pointed out by Shri Nariman, who intervened on behalf of that State, to supplement and substantiate the validity of the legislation.