MEGHA SINGH AND CO Vs. STATE OF PUNJAB

JUDGEMENT

(1.) THESE cases raise common questions and may be disposed of by one judgment. The petitioners are licencees, having the right to vend country liquor, under the Punjab Excise Act and the Punjab Excise Rules. They object to the imposition of tax on the sale of country liquor by various Panchayat Samitis in the State of Punjab. They question the demands made on them for payment of the tax.

(2.) THE principal submission of Shri H. L. Sibal, learned counsel for the petitioners, was that the notifications issued by the Government of Punjab under Section 67 (5) of the Punjab Panchayat Samitis and Zila Parishads Act notifying the imposition of tax on the sale of country liquor by Panchayat samitis were contrary to the express provisions of Section 6 read with Entry 37 of Schedule B of the Punjab General Sales Tax Act and the legislative policy underlying them. Shri Sibal urged that there was a legislative injunction, in section 6, that no tax shall be payable on the sale of goods specified in the first column of Schedule B, and since country liquor fell within Entry 37 of Schedule b, the notifications imposing tax, on the sale of country liquor were in clear violation of the legislative mandate, Entry 37 was 'all goods', except 'foreign liquor' as defined in sub-paragraph (2) of paragraph (2) of the Punjab Excise liquor Definitions, 1054, on which duty is or may be levied under the Punjab excise" Act, 1914 or the Opium Act, 1878. Shri Sibal submitted that the general legislative policy discernible from Entry 37 was that goods on which excise duty was leviable was not to 'be subject to Sales Tax. The notifications imposing tax on the sale of country liquor were contrary to this legislative policy. Shri Sibal argued that it was not for a delegate like the Government or for a sub-delegate like a Panchayat Samiti to contravene a legislative direction or known legislative policy. It was argued by Shri Sibal that there was an impermissible delegation by A delegate. According to him, the Government was the delegate and, the panohayat Samiti was the sub-delegate. Though he did not expressly say so, we take it that he meant to attack the very vires of Section 66 of the Punjab panchayat Samitis and Zila Parishads Act on the ground of improper delegation by a delegate. Shri Sibal referred us to the general principles laid down by the supreme Court in Raj Narain Singh v. Patna Administration Committee, AIR 1954 SC 569. It was further contended that the Punjab Panchayat Samitis (Sale of Liquor) Rules, 1976, were not validly made as they were not laid before the legisature as prescribed by Section 115 (4) of the Punjab Panchayat Samitis and Zila Parishads Act.

(3.) IT will be useful to notice the relevant statutory provisions at this stage. Section 6 of the Punjab General Sales Tax Act is as follows:-"