B.L. Hansaria, J.
1. Every law has 'promises to keep'. The courts have to interpret the laws to advance the object of the enactment. The Assam Finance (Sales Tax) Act, 1956 (hereinafter called the Act), is one such statute. Section 24A(2) was inserted in it in 1967 'to give some relief to the manufacturing industries in the State' as stated in the Statement of Objects and Reasons. While examining the - controversy at hand, we shall have, therefore, to see whether the relief provided by this section has been curtailed by any action of the executive qua those for whom it was actually meant keeping in view the fact that the industrial spectrum of this State really consists of small-scale units. Rule 46A of the Assam Finance (Sales Tax) Rules, 1956, was first framed in 1969 to give effect to the legislative mandate in Section 24A(2). This rule was substituted by a new set of rules in 1971. It is this rule which is under challenge in these petitions. The gauntlet has been thrown by some 'dealers' registered under the Act. The definition of 'dealers' includes those who sell taxable goods manufactured, made or processed by them in Assam. In the discussion to follow, we shall also refer to Rule 46A as framed in 1969 as old Rule 46A, and the impugned provision as new Rule 46A
1A. To understand the challenge in the proper perspective, it would be apposite to first note Sections 24 and 24A of the Act, which read as below:
24. Refund.-(1) The Commissioner on being satisfied either on an application or on any other manner that the dealer has paid in excess of the sum due from him shall order, as soon as it may be, the refund of the sum so paid in excess:
Provided that the Commissioner may set-off such sum against other dues from the same dealer in respect of any other return period.
(2) Where a tax has been levied under this Act in respect of any declared goods which are subsequently sold in the course of inter-State trade or commerce the tax as levied shall be refunded to the dealer in the manner as may be prescribed.
(3) If for reasons of delay a refund, being other than a refund under Section 24A(2), due to a dealer is not made within ninety days of such refund being due, the State Government shall pay to such dealer simple interest at the rate of 6 per cent per annum on the amount refundable.
(4) Refund under this Act shall be deemed to be due-
(a) in cases where the tax assessed has been reduced on appeal or revision, etc., from the date the order of the appellate or revisional authority comes to the knowledge of the assessing authority ;
(b) in other cases on the date an application for refund is made by the party claiming the refund.
24A. Remission.-(1) The State Government, for reasons to be recorded in writing, may remit the whole or part of the amount of the tax or penalty payable in respect of any period by any registered dealer who has suffered heavy loss due to any natural calamity.
(2) The State Government may, by rules, provide that in such circumstances and subject to such conditions as may be specified, a drawback, set-off or refund of the whole or any part of the tax paid in respect of any purchase of raw materials under this Act for use by any dealer in the manufacture of goods for sale, be granted to such dealer.
1B. To specify the circumstances and conditions mentioned in Section 24A(2) old Rule 46A was framed which was published in the Assam Gazette (Part IIA) of 25th June, 1969, under Notification No. FTX. 62/68/69 dated 29th April, 1969. This notification stated :
In exercise of the powers conferred by Section 39 of the Assam Finance (Sales Tax) Act, 1956 (Assam Act XI of 1956), the Governor of Assam, after previous publication and on consideration of the objections and suggestions, is pleased to finalise the Assam Finance (Sales Tax) (Amendment) rules as follows :-
1. Short title and commencement.-(1) These rules may be called the Assam Finance (Sales Tax) (Amendment) Rules, 1968.
(2) They shall be deemed to have come into force from 1st January, 1968.
4. Insertion of Rule 46A.-After Rule 46 of the principal rules, the following shall be inserted as Rule 46A, namely :-
46A. (1) A dealer paying tax on the purchase of raw materials for manufacture of goods for sale shall be granted a drawback, set-off or a refund of the amount of tax so paid subject to the condition that the Commissioner is satisfied that the raw materials have actually been used within the State of Assam in the manufacture of the goods for sale.
(2) In allowing drawback, set-off or refund the provisions of Rules 39 and 46 shall apply.
2. This rule was substituted by new Rule 46A by Notification No. FTX. 134/71/13 dated 2nd November, 1971, as published in the Extraordinary Assam Gazette of the same day reading :
In exercise of the powers conferred by Sub-section (1) of Section 39 of the Assam Finance (Sales Tax) Act, 1956 (Assam Act XI of 1956), the Governor of Assam is pleased to make the following rule for the purpose of carrying into effect the said Act as amended, namely :-
The Assam Finance (Sales Tax) (Fourth Amendment) Rules, 1971
1. Short title and commencement.-(1) These rules may be called the Assam Finance (Sales Tax) (Fourth Amendment) Rules, 1971.
(2) Amendment of Rule 46A.-For the existing Rule 46A of the Assam Finance (Sales Tax) Rules, 1956, as amended, the following shall be deemed to have been substituted with effect from 1st January, 1968, namely:-
46A. (1) Where a dealer sells taxable goods in the manufacture, making, processing or production of which by him on small-scale within the State he has used raw materials in respect of the sale of which to him or any earlier sale thereon or, as the case may be, in respect of the purchase of which, by him or any earlier purchase thereon a tax is payable under the Act or under the Assam Sales Tax Act, 1947, or under the Assam Purchase Tax Act, 1967, the Superintendent may, subject to Sub-rule (3), on application pay to such dealer by way of drawback, set-off or refund an amount equal to the tax paid under any of the aforesaid Acts in respect of raw materials so used on production of a certificate in form XV from the Director of Industries, Government of Assam, or any other officer authorised by him in this behalf to the effect that the raw materials have been used and the tax has been actually paid as aforesaid:
Provided that the concession under this Sub-rule shall be admissible only to an industrial unit registered as small-scale industrial unit by the Director of Industries, Government of Assam.
Explanation.-For the purpose of this rule a dealer shall be deemed to be manufacturing, making, processing or producing taxable goods on a small-scale if the fixed capital investment in the industrial unit in which such manufacturing, making, processing or production is conducted does not exceed Rs. 5,00,000 (Rupees five lakhs).
(2) An application under Sub-rule (1) shall be made in form XV within three months from the date of sale of the taxable goods in the manufacture, making, processing or production of which the raw materials were used as specified in Sub-rule (1). Such application shall be accompanied by the certificate mentioned in the said Sub-rule.
(3) For the purpose of this rule the State Government may, by notification in the official Gazette, specify the class or classes of goods which shall be treated as raw materials.
(4) The amount payable. under Sub-rule (1) shall be paid as if it were a refund and the provisions of Rules 39 to 46 shall, to that extent, apply.
3. The substituted rule has been in force by now for a decade. Innumerable decisions must have been rendered relating to 'drawback, set-off or refund' payable to the dealers on the basis of the substituted rule. We have, therefore, to be cautious in our approach and not move with a crusader's spirit. The petitioners before us are apparently those whose investments in fixed capital exceed Rs. 5,00,000 (Rupees five lakhs) and who were excluded from the benefit available under the old Rule 46A by the amendment in 1971.
4. The challenge to the validity of new Rule 46A is on these grounds :
(1) The rule is void inasmuch as it was made without 'previous publication.
(2) This rule is invalid in any case as retrospective operation was given to it from 1st January, 1968.
(3) The provision in Sub-rule (2) requiring application 'within three months from the date of sale of the taxable goods... is violative of Article 19 being an unreasonable restriction.
(4) Sub-rule (3) is ultra vires Section 24A(2).
5. Before examining these grounds of challenge, it may be worthwhile to mention the changes brought about by the new Rule 46A. The main changes are these : (1) it conferred the benefit of 'drawback, set-off or refund' only to small-scale manufacturers ; and dealers having fixed investment not exceeding Rs. 5,00,000 (Rupees five lakhs) in their industrial units were to be regarded as small-scale manufacturers ; (2) the small-scale unit must be one registered by the Director of Industries, Government of Assam ; (3) a certificate in form XV from the Director of Industries, Government of Assam, had to accompany in an application for drawback, etc. ; (4) an application for drawback, etc., was required to be made within three months from the date of sale of taxable goods ; (5) power was given to the Government to specify the class or classes of goods which shall be treated as raw materials ; and (6) provisions of Rules 39 to 46 of the rules were made applicable to the exercise of refund. It may be mentioned that under the old Rule 46A, the only requirement was to the satisfaction of the Commissioner that the raw materials had actually been used within the State in the manufacture of the goods for sale, and the provisions of Rules 39 and 46 alone were made applicable in allowing drawback, etc.
The new Rule 46A thus laid down stringent conditions and circumstances. The large scale (or medium scale) manufacturers have mainly felt aggrieved with the provisions of the new rule ; and it is they who have taken up the cudgels. It has, however, not been contended before us that the Government could not have restricted the relief to the small units only. If it was so done to allow these units to survive and prosper, we cannot find any fault with the policy in the background of the mandate of Article 39(b) and (c) of the Directive Principles.
6. The last three grounds of challenge may be taken up first. So far as the retroactiveness of the new Rule 46A is concerned, it is clearly stated by the learned Advocate-General, Meghalaya, who has appeared on behalf of the respondents, that this could not have been done, as the Act has not conferred the power to make the rules with retrospective effect. When a statute does not so authorise, a rule-making authority cannot give retrospective effect to the rules.
This is a settled position of law as would appear from Income-tax Officer v. M. C. Ponnoose : 75ITR174(SC) , Hukam Chand v. Union of India : 1SCR896 , State of M. P. v. Tikamdas : AIR1975SC1429 and Accountant-General v. S. Doraiswamy : 2SCR155 . The only submission made by the learned Advocate-General, Meghalaya, in this regard is that by the same token, old Rule 46A could not have been brought into force with effect from 1st January, 1968. This submission is 'apparently right. Of course, a rule would not become invalid merely because retrospective effect has been given to the same, even though not permissible. The effect of the same would be that the retrospective part of the operation alone would be ineffective. This position has been clearly admitted by Shri Bhattacharjee on behalf of the petitioners. Thus new Rule 46A cannot meet its Waterloo because it was brought into effect on and from 1st January, 1968. As agreed to by both the sides the position in this regard would be that the new rule must be deemed to have started operating from 2nd November, 1971.
7. Qua the third ground of attack, the learned Advocate-General, Meghalaya, fairly states that a dealer could not have been asked to do what is impossible. As we have held that the rule started operating from 2nd November, 1971, the same would apply to sales taking place on or after 2nd November, 1971. So interpreted, submits Shri Bhattacharjee, the Sub-rule would not violate Article 19. We have no difficulty in holding that the period of three months mentioned in Sub-rule (2) has to apply to the sales taking place on or after 2nd November, 1971, only.
8. The last ground of attack is that though by virtue of Section 24A(2) of the Act a dealer would have been entitled to drawback, set-off or refund 'in respect of any purchase of raw materials', Sub-rule (3) has empowered the State Government to specify the class or classes of goods which shall be treated as raw materials, which power could be used even to exclude purchase of some goods or commodities which would otherwise be a raw material. As a rule-making authority cannot set at naught the provisions of a statute to give effect to which rules are framed, the power given under Sub-rule (3) cannot be used, according to us, to exclude any purchase of taxable goods, if the same be of 'raw materials' as ordinarily understood. We would rather think that power under Sub-rule (3) could perhaps be exercised to confer the benefit comtemplated by Section 24A(2) for those class or classes of goods which in ordinary parlance may not be regarded as 'raw materials'. Thus interpreted Sub-rule (3) cannot be regarded as ultra vires.
9. The hub of the controversy between the parties revolves round the first ground of attack which is that new Rule 46A having been inserted without 'previous publication', which expression has its technical connotation in view of what had been stated in this regard in Section 25 of the Assam General Clauses Act, 1915, the same is void. By referring to Bhopal Municipality v. M.Hasan : 3SCR353 , Shri Bhattacharjee contended that the requirement of previous publication has to be regarded as mandatory, inasmuch as the same is in consonance with notions of justice and fair play as it enables persons likely to be affected to be informed so that they may take such steps as may be open to them to have the wisdom of a proposal duly debated and considered before it becomes final. There is no serious challenge to this legal proposition, though a. feeble attempt was made by the learned Advocate-General, Meghalaya, by referring to Atlas Cycle Industries v. State of Haryana AIR 1979 SC 1149 that the requirement of previous publication may not be mandatory. That case has, however, dealt with the requirement of 'laying' and the ratio of the same cannot be made applicable to the pre-condition of previous publication, especially in view of what has been held in Bhopal Municipality's case : 3SCR353 .
10. The real question is whether the new Rule 46A did require previous publication. The answer to this depends on as to whether the rule was made in exercise of the powers under Section 39 of the Act or Section 24A(2). If it be the former, the rule-making power could have been exercised only after satisfying the condition of previous publication as clearly mentioned in Sub-section (1) of that provision. On the other hand, if the rule could have been framed by virtue of what is provided in Section 24A(2), absence of previous publication would not affect the validity. It is also not in dispute that if Section 24A(2) can be read to contain the rule-making power, this provision would prevail over the general rule-making power conferred by Section 39 inasmuch as in case of conflict between specific provision and general provision, the former prevails as stated, inter alia, in J. K. Cotton Spinning and Weaving Mills v. State of U. P. : (1961)ILLJ540SC .
11. We have, therefore, to find out whether conferment of rule-making power can be read in Section 24A(2). At this stage we may note Section 39 of the Act also :
39. Power to make Rules.-(1) The State Government may, subject to the condition of previous publication, make rules for the carrying out the purposes of this Act.
(2) Without prejudice to the generality of the foregoing power, such rules may, in particular, prescribe-
(a) all matters required by this Act to be prescribed ;
(b) the classes and duties of officers appointed for the purpose of enforcing the provisions of this Act;
(c) the procedure to be followed and the forms to be adopted in proceedings under this Act;
(d) the intervals at which, and the manner in which, the tax under this Act shall be payable ;
(e) the dates by which and the authority to which returns shall be furnished ;
(f) the manner in which refunds shall be made ;
(g) the fees, if any, for petitions, certificates and other matters ; (h) the nature of accounts to be maintained by a dealer; and
(i) for any other matter necessary for giving effect to the purpose of this Act.
12. In this connection the submission of the learned Advocate-General, Meghalaya, is that as in the Act first enacted, Section 24A (dealing with remission) had not found place, the legislature did not visualise making of the rules relating to remission under Section 39 of the Act. Then, while inserting Section 24A, no corresponding amendment was made in Section 39(2), which would show that the legislature did not contemplate making of rules relating to Section 24A by invoking power under Section 39. It is further submitted that Section 39(1), which is a general rule-making power, visualises making of rules for carrying out the purposes of the Act, which according to the learned Advocate-General is, as would appear from the preamble to the Act, to impose tax and not to deal with refund or remission. As such, the argument proceeds, no rule relating to remission could have been framed under Section 39. Our attention is also invited to the fact that though some other sections of the Act have used the word 'prescribed', or some such expressions, whenever anything was desired to be left to the rule-making authority, Section 24A(2) has used a different language and has specifically stated that the Government may by rules specify the circumstances and conditions under which drawback, etc., can be given. It is contended that we have to give some meaning to the use of different expressions under Section 24A(2).
13. The contention of Shri Bhattacharjee, on the other hand, is that Section 39(1) is the all comprehensive power to make rules for the carrying out of the purposes of the Act, one of which is also related to refund or remission. The fact that Section 39(2) was not amended particularising that rules could be framed dealing with remission is not material, according to the counsel, inasmuch as the instances mentioned under Sub-section (2) cannot take away the general power conferred by-Sub-section (1). It is also contended that Clause (f) of subSection (2) authorising making of rules to deal with 'the manner in which refunds shall be made' would cover rule like 46A. We are also reminded that in fact new Rule 46A had been made by invoking power under Section 39(1) of the Act.
14. To us it appears that the operation of Section 39(1) cannot be ruled out on the thin ground that while inserting Section 24A in the Act no corresponding provision was made in Section 39(2) empowering making of rules relating to remission. We do not think it necessary for the case at hand to decide whether the drawback, set-off, etc., provided for in Sub-section (2) of Section 24A are really in the nature of 'remission' or 'refund'. We only note that according to the learned Advocate-General, Meghalaya, it is a part of remission as would appear from the heading of the section, while according to Shri Bhattacharjee, Sub-section (2) itself had used the word 'refund' along with 'drawback and set-off', and marginal note of the section cannot control the meaning of a clear expression. Even if nothing specific has been said about the power of making rules relating to remission in Section 39(2), we have no doubt that the genera] rule-making power under Section 39(1) could cover the same, because granting of remission or refund has to be regarded as one of the purposes of the Act. As to the relative width and scope of Sub-sections (1) and (2) of Section 39, reference may be made to Emperor v. Sibnath where the rule-making power was conferred in a similar language and it was held by the Privy Council that the function of a provision like Sub-section (2) is illustrative and not restrictive. It was also stated in Om Parkash v. Union of India : AIR1971SC771 that:
(1) it is a well-established proposition of law there where a specific power is conferred without prejudice to the generality of the general powers already specified, the particular power is only illustrative and does not in any way restrict the general power.
15. We cannot however decide the controversy merely on the ground that the notification inserting new Rule 46A had mentioned about Section 39(1). Wrong quoting of power has never been regarded as decisive. Shri Bhattacharjee fairly admits this position.
16. What is important and significant is that Section 24A(2) has departed from the terminology used in this connection in other sections of this Act, to wit, Sections 5, 7, 8, 10, 20A, etc., which have used the expression 'prescribed', or 'as prescribed' or 'in the manner as may be prescribed', etc. Section 24A(2), however, has specifically stated that the State Government may by rules provide for the circumstances and conditions under which drawback, set-off or refund may be granted. This departure in the language has to be given some meaning and according to us it would be difficult to say that Section 24A(2) itself did not confer the rule-making power. Shri Bhattacharjee himself saw this point and he had therefore pleaded that none the less Section 39 would come into operation, as it dealt with how to exercise the rule-making power. Now reference to Section 39 shows that it is concerned with 'power to make rules', though it is hedged with some pre-conditions. It may be that to do away with the rigour of Section 39(1), the legislature allowed the State Government to make rules under Section 24A(2) without previous publication. There can be no denial that a stautute may contain different provisions conferring rule-making powers, see Defence of India Acts,' 1962, or 1971, to which our attention was fairly drawn by Shri Bhattacharjee.
17. Because of all the above, we hold that the proper section to be invoked while making Rule 46A was Section 24A(2) of the Act. As such new Rule 46A cannot be held to be invalid on the ground of lack of previous publication. The first ground of challenge cannot, therefore, be sustained. In view of this it is not necessary for us to examine the submission of the learned Advocate-General, Meghalaya, that even if we were to hold that new Rule 46A was invalid on the ground of lack of previous publication, old Rule 46A could not also operate, to substantiate which plea, the learned counsel referred to Firm A. T. B. Mehtab v. State of Madras : AIR1963SC928 and Koteswar v. K. R. B. & Co. : 3SCR40 , which have pointed out that the process of substitution consists of two steps, first, the old provision is made to cease to exist, and next, a new provision is brought into existence in its place ; and so even if the new provision is invalid, the old provision, which is to cease to exist, does not get revived. This submission was countered by Shri Bhattacharjee by relying on State of Maharashtra v. C. P. Manganese Ore : 1SCR1002 , which has pointed out that substitution does not necessarily or always connote two severable steps, one of repeal and another of a fresh enactment, even if it implies two steps-the intention in this regard being required to be gathered from the use of words in the enacting provisions seen in the light of the procedure gone through. We have mentioned this aspect for the sake of completeness only. It may also be stated that old Rule 46A is not a subject-matter of our scrutiny.
18. In the result, the attack on the validity of new Rule 46A is negatived. This is subject to our interpretation of Sub-rules (2) and (3). But as we have held that this rule could not have operated with retrospective effect, i. e., beyond 2nd November, 1971, the respondents are directed to grant drawback, set-off or refund to the petitioners up to the return period ending 30th September, 1971, on the basis of the old Rule 46A.
19. The petitions stand disposed of as aforesaid. We have disposed of these applications by a common judgment, as they involve common questions of law and facts.
K. Lahiri, J.
20. I agree.