SUBBODHAYA CORPORATION Vs. STO TRIVANDRUM

JUDGEMENT

(1.) This appeal is by the Petitioners in O. P. 78 of 1956 of the Trivandrum Bench of this Court and is directed against the order of our learned brother T. K. Joseph, J. dismissing it.

(2.) The appellants are M/s. Subbodhaya Corporation, Building Contractors at Trivandrum. Their business consisted of shell-creting public roads under Government and local bodies and on basis of composite rates which covered both materials and labour which went into the making of the road. They were assessed to sales tax in respect of those works contracts for the year 1951-52 and 52-53 by the Sales Tax Officer, I Circle, Trivandrum, fixing their net turnover on figures supplied by the petitioners themselves at particular amount. Subsequently they filed appeal before the Deputy Commissioner of Agricultural Income Tax and Sales Tax claiming exemption for the entire turnover but without success. They then took the matter in revision before the Board of Revenue again without success. It was soon after, on 13-6-1956 that they filed the original petition herein praying for writ of certiorari to quash the order passed by the Sales Tax-Officer and further the orders of the higher departmental authorities in confirmation thereof and also for a writ of prohibition against the making of further assessments on the basis adopted.

(3.) Now the main plank in the arguments of the appellants successively before Deputy Commissioner, the Board of Revenue and before learned Single Judge was the decision of the Madras High Court in the Gannon Dunkerley case (1954) 5-S T.C. 216 decided on 5-4-1954, just after the Sales Tax Officer passed his order on 13-3-1954. Satyanarayana Rao and Rajagopalan, JJ. had there held that the amendment of the Sales Tax law introduced in 1947 by the Madras Legislature and relating to the taxing of Words contracts was ultra vires of the Madras Legislature. For its legislative power under the Government of India Act 1935 extended only to taxing transactions of sale of goods in the legal sense, eg., where there was an intention to pass the ownership in the materials for price agreed upon between the parties, as contrasted with a building contract work involved in the case, where the property in the materials passed only when they were fixed to the building and there was accordingly no element of sale of materials, at all. It happened later however that this decision along with others in other jurisdictions came up for consideration before a Bench of the Kerala High Court in a case involving the same contractors, but relating to their branch at Mattancherry-Gannon Dunkerley & Co. v. S.T. Officer, (1957) KLT 380. And the learned Judges (Sankaran and M. S. Menon, JJ) held that the principle of the Madras decision cannot apply to the Travancore-Cochin Sales Tax Act 1125 because on 5-1-1950 when it was passed and also on 17-1-1950 when it received the assent of H. H. The Rajpramukh, the Travancore-Cochin Legislature had plenary powers of legislation and by that time the Constitution had not also come into force so as to bring in the fetter of the entry 54 in List II of the Seventh Schedule therein corresponding to Entry 48 in the List. II of the Seventh Schedule of the Government of India Act 1935 which governed the Madras case. This case in 1957 KLT 380 was decided on 11-3-1957. So when the original petition came on for disposal before him on 25-7-1957, Joseph, J. had no difficulty in rejecting the contention as ultra vires based on the principle of the Madras case.