(1.) These groups of petitioners have challenged the vires of the U.P. Tax on Luxuries Ordinance, 1994 (U.P. Ordinance No. 8 of 1994) promulgated by the Governor of Uttar Pradesh on 14th May, 1994 and the Notification No. TT-2-1767/IX-9 (382)/93-U.P., dated 28th May, 1994, the Notification No. TT-2-1768/IX-9 (382)/93-U.P., dated 28th May, 1994 and Notification No. TT-2-2032/XI-9 (382), dated 15th June, 1994. The petitioners are either manufacturers, producers, sellers within and outside State of specific branded cigarettes, pan masala, zarda, chewing tobacco, khaini under branded or unbranded name also sellers of unmanufactured tobacco. The purchase and sale by all the petitioners are done within or outside the State. Some of the petitioners have specifically pleaded their sale of tobacco outside the State being up to 98 per cent. The validity of the Ordinance is challenged being violative of Articles 14, 19(1)(g), 213, 245, 246, 265, 269, 286, 301 and 304 of the Constitution of India and further being ultra vires of the Central Sales Tax Act, 1956 (hereinafter referred to as "the 1956 Act"). During the hearing of this case the impugned Ordinance was repealed and substituted by the U.P. Tax on Luxuries (Second) Ordinance, 1994 (Ordinance No. 22 of 1994) retrospectively with effect from 1st June, 1994 which is almost similar to the earlier Ordinance except some minor changes which we shall be referring to later hence, this is also challenged by an amendment. It is also relevant to mention that during the hearing, under Section 4 of the U.P. Ordinance No. 8 of 1994 by Notification No. TT 2-3355/XI-9 (383)-93 U.P. dated 24th September, 1994 with effect from 25th September, 1994 tobacco priced at Rs. 150 or less per kg. and pan masala by whatever name called with or without tobacco have been exempted from tax. By virtue of the deeming clause under Section 13(2) of the substituted Ordinance No. 22 the notification is deemed to be continuing. Thus even those petitioners on whom there is no liability of tax by virtue of this, still maintain their challenge as this notification being only prospective with effect from September 25, 1994.
(2.) It is urged that the impugned tax to the extent it levies tax on supply for consideration by way of sale of tobacco is nothing but a tax on sale falling within the definition of the expression
(3.) The Ordinance came into force from 1st June, 1994, in pursuance of notification dated May 28, 1994 issued under Section 1(2). By notification issued on the same day, i.e., May 28, 1994 under Section 3 of the Ordinance, a tax has been fixed at 15 per cent payable on the turnover of receipts of all classes of tobacco except pan masala, by every tobacconist. By subsequent notification dated June 15, 1994, pan masala was also included to be taxed at 15 percent as luxury tax. But again by notification dated September 24, 1994 as aforesaid "pan masala" tobacco priced at Rs. 150 or less per kg. have been exempted from tax from September 25, 1994. Thus liability of tax on these items is confined to the price from June 1, 1994 to September 24, 1994.
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