PUNJAB STATE Vs. SUKH DEV SARUP GUPTA

JUDGEMENT

(1.) THIS appeal under Clause 10 of the Letters Patent by the Punjab State and two others is directed against the order of learned Single Judge whereby he accepted the petition under Articles 226 and 227 of the Constitution of India filed by Sukh Dev Sarup Gupta respondent and quashed the orders of the Sales Tax authorities assessing the respondent with liability to pay sales-tax.

(2.) THE respondent is running a factory for manufacturing spirituous and medicinal preparations containing alcohol at Jind in district Sangrur under the name and style of K. Pharmaceutical Works. Before the coming into froce of the Constitution of India on 26th January, 1950 the manufacture of medicinal or toilet preparations containing alcohol was liable to excise duty under Clause (c) of Sub-section (6) of Section 3 of the Punjab Excise Act (1 of 1914 ). The item of medicinal preparations containing alcohol was included in the Provincial Legislative list at No. 40 in the seventh schedule of the Government of India Act, 1935. Punjab General Sales Tax Act came into force in 1948, and according to its provisions sales-tax was levied on sale of goods except articles which were exempted from payment of such tax. Entry No. 37 of Schedule 'b' of the Sales Tax Act exempted "all goods on which duty is or may be levied under the Punjab Excise Act 1914" from payment of sales tax. As medicinal or toilet preparations containing alcohol were subject to excise duty under the Punjab Excise Act, the same were exempt from sales-tax. Under the Constitution the item of medicinal and toilet preparations containing alcohol was transferred to the Union List at entry No. 84 in List I of seventh Schedule to the Constitution. In view of the provisions of Article 277 of the Constitution the State Government continued to levy excise duty on medicinal and toilet preparations containing alcohol even after 26th January 1950. In 1955 the Union Parliament enacted Medicinal and Toilet Preparations (Excise Duties) Act (hereinafter referred to as the Central Act) dealing with the subject of the imposition of excise duty on medicinal and toilet preparations containing alcohol. The object of this enactment was to bring about a uniformity as regards the rate of imposition of excise duty on alcoholic preparations and to have a uniform procedure and regulation regarding the export and import thereof from one Stale to another. Section 21 of the Act provided that if, immediately before the commencement of the Act, there was in force in any State any law corresponding to the Act. that law was thereby repealed. Although the rates of excise duty were made uniform by the above Act, the collection of the excise duty continued to be done by the State Government authorities and the duties so collected went to the State exchequer. Notices were issued to the respondent by Sales Tax authorities for assessment of the sales-tax in respect of medicinal preparations containing alcohol and he was assessed for payment of various amounts as sales-tax for the years 1959-60. 1960-61 and 1961-62. The respondent thereupon filed petition under Articles 226 and 227 of the Constitution of India on the allegation that no sales-tax was payable in respect of medicinal preparations containing alcohol as was the position before the enactment of the Central Act.

(3.) THE petition was resisted by the appellants and the only point which seems to have been agitated before the learned Single Judge was about the effect of the enforcement of the Central Act. The case of the appellants was that as the excise duty was being imposed on medicinal preparations containing alcohol not under the provisions of the Punjab Excise Act but under the provisions of the Central Act the respondent could not take advantage of the exemption granted by entry No. 37 in Schedule 'b' of the Punjab General Sales Tax Act. This contention was repelled by the learned Single Judge and he in this connection relied upon provisions of Section 8 of the General Clauses Act. The petition of the respondent was, consequently, allowed and the demand notices issued to the respondent as well as the assessment orders were quashed.