BABU RAM JAGDISH KUMAR Vs. STATE OF PUNJAB

JUDGEMENT

(1.) In these appeals by special leave we are called upon to pronounce on the validity of Section 31 of the Punjab General Sales Tax Act, 1948 (hereinafter referred to as 'the Act'), the Notification dated the 15th January, 1968 issued thereunder by the Government of Punjab and the liability of the appellants to pay purchase tax under the Act in respect of the turnover relating to the purchases of paddy made by them during the relevant period.

(2.) The appellants are dealers in paddy and engaged in the business of millers in the State of Punjab. They buy paddy from growers or katcha adatias, convert it into rice and sell rice. Most of the rice manufactured by them is purchased by the State Government under food procurement orders.

(3.) A brief history of the relevant provisions of the Act is as follows:- Under the Act as it was orginally enacted, there was no provision levying tax on the purchase turnover of the goods dealt with a by a dealer as defined in the Act. The Act was amended by Punjab Act N. 7 of 1958 which received the assent of the Governor on April 18, 1958 and the amending Act came into force at once. The amending Act brought about the following changes in the Act:- In the long title of the Act, after the word "sale", the words "or purchase" were inseted. Clause (d) of Section 2 of the Act which defined the expression 'dealer' was amended so as to bring within the scope of that expression a person who purchased any goods in the course of trade or business. The turnover relating to purchases made by a dealer subsequent to the commencement of the amending Act of certain goods was made liable to payment of tax. The word 'purchase' was defined by clause (ff) of Section 2 which was introduced by the amending Act as follows:-