Sarjoo Prosad, C. J.
1. This is a reference made by the Board of Sales Tax, Assam, under Section 32 (3) of the Assam Sales Tax Act (Act XVII of 1947), hereinafter called the Act.
2. The reference has been made at the instance of the petitioners assessees whose head office is situated in Calcutta. The petitioners are dealers in motor vehicles and their spare parts of various kinds. They opened a branch at Gauhati on 1st April, 1949. Until the opening of this branch, it appears that M/s. Nagarmal Gaurishankar, Fancy Bazar, Gauhati, were acting as agents of the petitioners and sold goods on their behalf. But, on the opening of their office at Gauhati, M/s. Nagarmal Gaurishankar ceased to be their selling agent. On receipt of information about the petitioner's business, the Superintendent of Taxes, Gauhati, entered upon their place of business and seized certain books of account on 21st January, 1950, The petitioners thereafter filed an application on 24th January, 1950, for registration under the Act, and they duly obtained a certificate of registration from the Superintendent of Taxes, Gauhati. The application appears to have originally contained the words 'with head office at Dibrugarh', But these words have been penned through, and it is said in the statement of case submitted by the Board that this was done with the consent of the petitioners because of the fact that their Dibrugarh office was started long after the opening of their office at Gauhati. It is also stated by the Board that this Dibrugarh office existed only for a short period and it does not appear that the petitioners had at any stage thereafter objected to their being registered at Gauhati. It appears that later on they, in fact, got themselves registered separately for their business at Dibrugarh. It is admitted on all hands that there was no written requisition by the Superintendent of Taxes requiring the petitioners to get themselves registered. After registration, the Superintendent of Taxes, Gauhati, issued a notice on 31st January, 1950, under Section 16(2) of the Act, directing the petitioners to submit returns of their total turnover for the return period ending with September, 1949. Pursuant to that notice, the petitioners filed their return on 7th February, 1950, for the period ending with September, 1949. They also submitted two other returns on 3oth June, 1950 -- one for 1st October, 1949, to 3Oth December, 1949, and another for 1st January, 1950, to 31st March, 1950. All these returns covered a period beginning from April, 1949, when the business admittedly commenced at Gauhati, and ending with 31st March, 1950 ; and there is no doubt, on these returns, that the gross turnover of the petitioners during each of these periods was much beyond the taxable quantum. Later, it appears that the petitioners submitted revised returns on 14th October, 1950, -- one for the period ending on 3Oth September, 1949, and another for the period ending on 31st March, 1950.
3. It is perhaps necessary to point out here that, in the application for registration certificate, the petitioners stated that they maintained accounts in the English language, and the year observed by them for this purpose was the calendar year beginning from the 1st of January and ending with the 31st of December. In the returns also, which they originally filed, they showed their turnovers during the relevant periods, treating the calendar year as the year for the purpose of accounting. The revised returns were, however, submitted by the petitioners on the footing that their system of accounting was on the basis of the financial year. These returns referred to two periods -- one from April, 1949, to September, ]1949, and another from October, 1949, to March, 1950. The Superintendent of Taxes, by his order, dated 8th April, 1953, assessed the petitioners for the revised return periods at certain rates. In making the assessment, the officer was of opinion that the books of account produced by the dealers did not represent the correct and true position of certain transactions made by them. He, therefore, partially rejected the books of account produced and made assessment on the basis of the turnover shown in the original bills and the sales of vehicles to M/s. Nagarmal Gaurishankar.
4. The petitioners appealed to the Assistant Commissioner of Taxes against the order of assessment, and this officer disposed of the appeals by his order, dated 6th September, 1953. He substantially rejected the objections of the petitioners against the assessments, but directed the Superintendent of Taxes to give a further opportunity to the petitioners to establish their claim for deduction under Section 15 (1) (b) of the Act for the assessment period ending with 31st March, 1950. For the earlier period ending with 3oth September, 1949, the Assistant Commissioner was of opinion that, in view of the fact that the books of the petitioners had been virtually accepted, they should be accepted in respect of the turnover for other goods also, and a fresh assessment should be made for that period after ascertaining the turnover of other goods during the period as per account books of the petitioners. The questions substantially raised by the petitioners in appeal before that officer were:
(1) that the Superintendent of Taxes, Gauhati, had no jurisdiction to assess the petitioners; and
(2) that the petitioners having started business only in April, 1949, and their taxable turnover having reached the taxable quantum only in 1949-50, they were liable to pay tax under Section 3 (2) of the Act with effect from 1st July, 1950, and not earlier.
5. These grounds did not appeal to the Assistant Commissioner. The petitioners then applied for revision of the order, under Section 31 of the Act, by the Commissioner of Taxes, but without any success. Their application was rejected by an order, dated 8th February, 1955. The grounds taken before the Assistant Commissioner were, in substance, repeated before him, but the Commissioner of Taxes decided all the points against the petitioners. It was then that the petitioners applied to the Board, leading to the present reference.
6. They appear to have formulated a number of points for reference to this Court, but the Board rightly observed that the questions required to be referred had been framed in a rather diffused manner, and most of them were essentially questions of fact, on which no reference could be made. The Board has to be circumspect in making references to this Court and not unduly encumber the legitimate issues at the desire of parties. The points which the Board has formulated for reference and which we have to answer in the present case, are as follows : --
(1) Whether Section 29 of the Assam Sales Tax Act is ultra vires ?
(2) If Section 29 of the said Act is intra vires, whether the dealer is liable to be assessed to sales tax in respect of his turnover prior to 1st January, 1950, the calendar year in which he was registered, that is to say, in respect of his turnover from 1st April, 1949, to 31st December, 1949 ?
(3) Whether, for the purpose of making a dealer liable to assessment under Section 29 of the Act, it is incumbent on the Commissioner or the Superintendent of Taxes to make a requisition in writing requiring the dealer to register when the dealer himself applies for registration either suo motu or on verbal requisition ?
(4) Whether, in the facts and circumstances of the case, the dealer could be validly assessed -- (1)by the Superintendent of Taxes at Gauhati in general, and (2) by Shri N. G. Das Purkayastha, in particular ?
(5) Whether Section 52 (2) (1) of the Assam Sales Tax Act and rule 74 of the Sales Tax Rules made thereunder are ultra vires ?
(6) If these are intra vires, whether the application for revision filed before the Commissioner and arising out of the appellate orders passed by the Appellate Assistant Commissioner, was liable to be assessed to fee under Sub-clause (a) or Sub-clause (d) of Rule 74 of the Assam Sales Tax Rules?
7. In fact, the first question is the most important question of law which arises for consideration on this reference. The Board concedes that in the case of a special statute like the Sales Tax Act, where the jurisdiction of the Civil Court is expressly excluded, the question of the vires of any particular provision bearing on the assessment, must be decided by the machinery constituted by the statute itself. This position cannot be doubted in view of the decision of the Privy Council in Raleigh Investment Co. Ltd. v. Governor-General in Council  15 I.T.R. 332; A.I.R. 1947 P.C. 78. Lord Uthwatt there observed :
Jurisdiction to question the assessment otherwise than by use of the machinery expressly provided by the Act, would appear to be inconsistent with the statutory obligation to pay arising by virtue of the assessment.
8. Therefore, where the scheme of the Act is to set up a particular machinery, by the use of which alone the total income assessable to tax is to be ascertained, it is that particular machinery which should also consider whether the assessment is founded upon some ultra vires provision of the Act, or is otherwise valid. There was thus nothing to prevent the taxing officers or the Sales Tax Board, who are creatures of the Act, from deciding the question now before us, namely, whether Section 29 of the Act is ultra vires. The Board, however, has decided the point against the petitioners, for reasons which I shall presently discuss.
9. The contention of the assessee is that Section 29 of the Act is ultra vires, being inconsistent with Section 297(1)(b) of the Government of India Act and Article 304(a) of the present Constitution of India. It is also inconsistent with Article 14 of the Constitution as being discriminatory in its character and inconsistent with the right of equal protection of law to dealers who import goods from outside.
10. The Sales Tax Act is an Act of 1947, and if it is held that the impugned section contravenes or is in violation of Section 297 of the Government of India Act, 1935, it must be held that the legislation is to that extent unauthorised and invalid, and could not be sustained. The relevant portion of Section 297 runs thus :
No Provincial Legislature or Government shall --
* * * *
(b) by virtue of anything in this Act, have power to impose any tax, cess, toll, or due which, as between goods manufactured or produced in the Province and similar goods not so manufactured or produced, discriminates in favour of the former, or which, in the case of goods manufactured or produced outside the Province, discriminates between goods manufactured or produced in one locality and similar goods manufactured or produced in another locality.
(2) Any law passed in contravention of this section shall, to the extent of the contravention, be invalid.
We have, therefore, to see whether, as an effect of enacting Section 29, the Provincial Legislature has imposed any tax which, as between goods manufactured or produced in the Province and similar goods hot so manufactured or produced, discriminates in favour of the former. Article 304 of the present Constitution also provides for a similar safeguard in the Constitution. It says :
Notwithstanding anything in Article 301 or Article 303, the Legislature of a State may, by law --
(a) impose on goods imported from other States any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced....
11. It is unnecessary to quote the other parts of the Article. The contention of the petitioners is that Section 29 of the Act does violate the principles underlying these constitutional safeguards. Section 29 may be fully reproduced here :
Where a dealer, not ordinarily liable to registration under the provisions of this Act, sells goods which he has obtained from outside the Province, he shall, when so required by the Commissioner, be liable to registration, and after such registration, he shall also be liable to be taxed on all sales as if he were a registered dealer:
Provided that such dealer shall not be liable to be taxed on sales which occurred prior to the year during which he becomes liable to registration.
12. It is clear that this provision enables the Commissioner to require a dealer not ordina.rily liable to registration under the Act, who sells goods which he has obtained from outside the State, to get himself registered, and after such registration, to pay tax on sales as any registered dealer. It applies, therefore, to dealers (i) who sell goods obtained from outside the State, and (ii) who are not ordinarily liable to registration under the Act. Let us, therefore, examine in what cases a dealer is ordinarily liable to registration or payment of tax under the Act. The liability to tax arises under Section 3 of the Act. Section 3 of the Act, it should be stated at the outset, was amended in 1954, but the assessment orders in these cases relate to periods long prior to the amendment and, therefore, we shall discuss Section 3 as it stood at the relevant time, and not as it stands at present. Sub-section (i) of Section 3 refers to a class of dealers whose total gross turnover during the year immediately preceding the commencement of the Act amounted to or exceeded the sum of Rs. 10,000 (taxable quantum). Such dealers, according to this sub-section, are liable to pay tax under the Act on all sales effected after the date notified by the Government. The exceptions provided therein are with reference to sales outside the State of Assam or in the course of export and import or in the course of inter-State trade or commerce. Sub-section (2) of that section refers to another class of dealers to which Sub-Section (1) does not specifically apply. These dealers are made liable to pay tax under the Act with effect from three months after the commencement of the year immediately following that during which their total gross turnover first amounts to or exceeds the taxable quantum. It is somewhat curious that the exceptions incorporated in Sub-section (1) have not been incorporated in Sub-section (2). Except for the change in the configuration of the sub-sections, the anomaly persists in the section even as it now stands. Sub-section (2) may now be read as Sub-section (3), and the taxable quantum has been raised to Rs. 12,000. But those exceptions, being constitutional exceptions, and having been already indicated in Sub-section (1), it is probably to be presumed that the exceptions were meant to apply even to the case of dealers governed by Sub-section (2). Non-liability to tax in respect of sales referred to in those exceptions is imposed by the Constitution itself, and the State Legislature has no power to tax such sales. For the present, therefore, we may assume that subject to those exceptions, the dealers mentioned in the above two sub-sections refer to two distinct classes: (1) dealers whose total gross turnover amounted to or exceeded the taxable quantum during the year immediately preceding the date of Government notification, and (2) dealers who are liable to pay tax with effect from three months after the commencement of the year immediately following that during which their total gross turnover amounts to or exceeds the taxable quantum.
13. The petitioners who commenced their business admittedly in April, 1949, would ordinarily fall under the class of dealers contemplated by Sub-section (2) of Section 3 ; and if they were liable to be taxed at all, their liability to taxation would arise three months after the commencement of the year 1950-51, following immediately the year 1949-50, during which their gross turnover admittedly amounted to or exceeded the taxable quantum. In other words, if the year preceding is taken as the calendar year, then their liability to taxation under Sub-section (2) of Section 3 would arise only from 1st April, 1950. But if it is taken to be the financial year, as the Department contends, or as it has been found by the Board, then their liability to taxation would arise, under this provision, from July, 1950. That is to say, under Section 3 (2) of the Act, they would not be liable for any assessment during the periods for which they have been assessed. The Department, therefore, falls back upon Section 29 of the Act to support the orders of assessment made against the petitioners.
14. It is not disputed that the petitioners sell goods which they obtain from outside the State and, as such, Section 29 of the Act would govern dealers of this class. But the petitioners point out that the discrimination made by this section as against such dealers, taxing the goods which they obtain for sale from outside the State, when otherwise they would not have been liable to tax for sale of similar goods, if manufactured or produced in the State, is discriminatory, and not permissible under the Constitution, -- whether under Section 297 of the Government of India Act, 1935, or under Article 304(a) of the present Constitution. In construing the section, it is not necessary to think of any particular commodity, because the section, in general terms, covers all classes of goods or commodities which may be obtained from outside the State. The dealer, who obtains from outside any such goods, is liable to be taxed under Section 29, whereas if he sells these things manufactured or produced in the State, he would not be liable under the section, unless he is otherwise ordinarily liable to be taxed under the provisions of the Act. It thus clearly makes a discrimination as against the dealer in respect of goods obtained from outside the State and creates a situation to his detriment; and is obviously hit by the constitutional bans referred to above.
15. The Board appears to think that the difference in treatment is based upon a reasonable classification and is intended to protect the interest of smaller non-importing dealers, as it calls them, who have to buy their requirements locally on payment of sales tax and are thus likely to be undersold by importing dealers to the extent of the tax; and Section 297(1) of the Government of India Act only prohibits discrimination in favour of goods manufactured or produced in the Province as against goods not so manufactured or produced. This observation loses sight of the distinction which I have pointed out earlier, namely, whereas a dealer who sells goods manufactured or produced in the Province is not liable to pay sales tax unless his liability arises under Section 3 of the Act, a dealer who obtains such goods from outside the State is made liable, by virtue of this section, to the payment of tax, merely on that account, even though he may not have been ordinarily liable under Section 3 of the Act. The supposed hardship of the 'small non-importing dealers', to which reference has been made by the Board, does not, in substance, exist, because the ordinary liability to payment of tax under Section 3 of the Act is a liability which is common to all dealers -- dealers who obtain goods for sale from outside or dealers who obtain goods for sale produced or manufactxired within the State -- and the law in that respect has placed them all on the same footing. But even if such a hardship exists, it was not for the Provincial Legislature to usurp the function of taxing goods brought for sale from outside the State, by incorporating the offending and discriminatory provision of the Act, but to leave the matter to the discretion of the Parliament or of the President, as provided by Article 304 of the Constitution. S.R. Das, C.J., when dealing with a similar contention in Bengal Immunity Co. Ltd. v. State of Bihar A.I.R. 1955 S.C. 661, scuttled the argument thus:
If there is any real hardship of the kind referred to, there is Parliament which is expressly invested with the power of lifting the ban under Clause (2), either wholly or to the extent it thinks fit to do. Why should the Court be called upon to discard the cardinal rule of interpretation for mitigating a hardship, which after all may be entirely fanciful, when the Constitution itself has expressly provided for another authority more competent to evaluate the correct position to do the needful ?
16. He also observed that the argument failed to take into account the benefit which the consuming public derives from the free flow of goods from one State to another resulting in lower prices.
17. The Board further opines that a sales tax is essentially a tax on sales and not a tax on goods manufactured or produced, and for that reason also, Section 29 of the Act is not hit by Section 297(1) of the Government of India Act. This reasoning, again, in my opinion, appears to be fallacious, and is calculated to by-pass the inhibition contained in Section 297. Sales tax levied on dealers is not a tax merely on sales, but in substance, a tax on the goods. One has to look to the substance of the matter, and not merely the form. Though the tax is formally laid on sales, its incidence is aimed at the consumers in the State, and is actually a tax on the goods sold. Discussing the true nature of a duty of excise and a tax on the sale of goods, Gwyer, C.J., observed in In the matter of the Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act, A.I.R. 1939 F.C. 1 at p. 7..it is common ground that the Courts are entitled to look at the real substance of the Act imposing it, at what it does and not merely at what it says, in order to ascertain the true nature of the tax. Since writers on political economy are agreed that taxes on the sale of commodities are simply taxes on the commodities themselves, it is possible to regard a tax on the retail sale of motor spirit and lubricants as a tax on those commodities....
18. It follows, therefore, that a sales tax is a tax on the commodities. It is thus a tax on the goods obtained for sale from outside the State. Again in M.M. Welton v. State of Missouri (1876) 23 L. Ed. 347 : 91 U.S. 275, it was held that:
A licence tax required for the sale of goods is, in effect, a. tax upon the goods themselves.
19. The case in question has an instructive value, as the facts show. A statute of Missouri, which required the payment of a licence tax from persons who dealt in the sale of goods, wares and merchandise which were not the growth, produce or manufacture of the State, by going from place to place to sell the same in the State, and required no such licence tax from persons selling in a similar way goods which were the growth, produce or manufacture of the State, was held to be in conflict with the power vested in Congress to regulate commerce with foreign nations and among the several States. The learned Judges observed that the power was vested in Congress to insure uniformity of commercial regulation against discriminating State legislation. It covered property which was transported, as an article of commerce, from foreign countries or amongst the States, from hostile or interfering State legislation until it has mingled with and become a part of the general property of the country, and protected it, even after it had entered a State, from any burdens imposed by reason of its foreign origin. The inaction of Congress in prescribing rules to govern inter-State commerce is equivalent to its declaration that such commerce shall be free from any restriction. The above observations appear to be quite apposite in their application to the present case. The tax, therefore, which purports to be levied on the dealer who sells goods obtained from outside the State, under Section 29 of the Act is, in substance, a tax on those goods, and directly attracts the inhibitions prescribed by Section 297 of the Government of India Act, 1935, or Article 304 of the present Constitution, because of its discriminatory character in favour of goods produced or manufactured in the State. I am, therefore, constrained to hold that Section 29 of the Act is ultra vires.
20. It may be pointed out that the learned Senior Government Advocate has not been able to show that any such provision exists in any of the other Sales Tax Acts in India. In order to avoid the apparent discrimination contemplated by Section 29 of the Act, the learned Advocate suggests that even under Section 29, the dealer is not liable to the payment of tax unless he fulfils the requirements of Section 3 of the Act. This argument unfortunately overlooks the plain language of Section 29 itself which opens with the words, 'where a dealer not ordinarily liable to registration under the provisions of this Act....' Besides, if the ordinary liability was there, then Section 3 of the Act was comprehensive enough in its application to all classes of dealers, whether selling goods obtained from outside the State or goods manufactured and produced in the State. That being so, there was no necessity for the existence of Section 29 on the statute at all. Mr. Medhi, therefore, unfortunately had to face the horns of a dilemma in assuming that there was no discrimination intended by Section 29 of the Act because the liability for tax had as well to be established under Section 3 of the Act.
21. It is contended that Section 29 of the Act is also repugnant to Article 14 of the Constitution and denies equality before the law or the equal protection of the laws to dealers of the class to which the petitioners belong. It not only marks out dealers who sell goods 'obtained from outside the State' for purposes of registration and taxation under the law, though not ordinarily so liable, but even in that class of dealers, it gives a wide, unrestricted and arbitrary discretion to the Commissioner of Taxes to select any dealer he likes calling upon him to be registered and to pay tax. It is irrespective of the nature of the commodity in which he deals and irrespective of any taxable quantum. As between the dealers in the same class of commodity or goods, the officer can pick out, at his discretion, any one for registration and taxation, leaving others free to carry on their business without any such obligation. The section arms the officer indeed with such naked and arbitrary power that he can, by the exercise of an unjust discrimination, act to the serious prejudice of one dealer in preference to another. There is no principle or policy indicated in the body of the section, or indeed anywhere else in the law, on which the Commissioner is to act. All that it says is that a dealer of the class indicated above, who is not ordinarily liable to registration under the Act, can, within the provisions of the section be made so liable, if required by the Commissioner to get himself registered, and, after registration, to be taxed on all sales as a dealer. The only safeguard is the proviso to the section, but even the proviso does not affect the situation in regard to an arbitrary victimisation by the officer of an individual dealer for purposes of registration and taxation. It has been often recognised that the Legislature can confer upon a person or body of persons large powers for the purpose of administering an Act; but it must prescribe the principles according to which these powers are to be exercised. If there is complete absence of rules guiding and controlling the exercise of discretion by the person or body of persons, then the power conferred must be declared to be arbitrary and unreasonable. Therefore, the power conferred upon the Commissioner, by virtue of Section 29 of the Act, has the potency of being exercised with unjust discrimination, and whatever might have been the validity of such authority before the Constitution of India, such power, which is capable of being used with discrimination in favour of or against particular individuals, would be void and inoperative under Article 14 of the Constitution: See Bidi Supply Co. v. Union of India A.I.R. 1956 S.C, 479 and P.S. Joseph v. Assistant Excise Commissioner, Ernakulam A.I.R. 1953 T.C. 146. I must, therefore, hold on this ground as well, that Section 29 of the Act is ultra vires.
22. In view of my decision on the first question, it may be perhaps unnecessary to answer the other questions raised in this reference. But some of the questions appertain to the interpretation of Section 29 itself, and since we had ample opportunity of examining elaborately all the questions formulated by the Board, I think it right, in order to save further trouble and expense to parties, present or future, to deal with those questions as well, as compendiously as I can.
23. It will be convenient to dispose of the third question here, which is in this form :
Whether, for the purpose of making a dealer liable to assessment under Section 29 of the Act, it is incumbent on the Commissioner or the Superintendent of Taxes to make a requisition in writing, requiring the dealer to register when the dealer himself applies for registration either suo motu or on verbal requisition ?
24. The Board observes that Section 29 of the Act does not provide for any written requisition to be made by the Commissioner when he requires a dealer to be registered under this section. It points out that the Superintendent, who acted on powers delegated by the Commissioner, made an oral requisition for such registration on 21st January, 1950, when he inspected the office of the petitioners and seized some of their documents. The Board states that the fact of this oral requisition finds support from the circumstance that three days later, that is, on 24th January, 1950, the dealer himself made a formal application for registration. Therefore, where the dealer applies suo motu for registration, there is no need for further requisition by the Commissioner under Section 29 of the Act. Even if it be assumed that there was a verbal requisition by the Commissioner, it is for us to consider whether that would meet the requirements of Section 29. On the clear words of Section 29 itself, it is not possible for the dealer to assume when or how he becomes liable to registration ; for obvious reasons, he cannot make any such assumption because the section gives a wide discretion to the Commissioner to call upon any such dealer to be registered. Why the Commissioner calls upon him to do so is not for the dealer to determine or to anticipate beforehand. Therefore, there could be no question of any dealer voluntarily seeking registration within the meaning of Section 29 of the Act.
25. There is provision for voluntary registration under Section 11 of the Act, but 1 am unable to see how a dealer can assume, for himself, that, though he is not ordinarily liable for registration under the provisions of the Act, yet he should apply for registration. In fact, under Section 29, the Commissioner may call upon a dealer to be registered and pay tax even though his gross turnover is below the taxable quantum. That being so, voluntary registration or application for registration suo motu by the dealer, as suggested by the Board, is ruled out by the very language of Section 29. I also do not think that an oral requisition, in the circumstances, can be adequate in law. The assessee contends that there was not even an oral requisition in the case. But even if that contention is not accepted in view of the statement in the letter of reference, I still think that the words 'when so required by the Commissioner' clearly contemplate a case of written requisition stating under what circumstances the Commissioner required the dealer to be registered. The assessment or order of registration is open to question by the dealer in appeal or revision. Besides, the dealer would be deprived of any opportunity to show cause against his liability for registration or payment of tax unless he knew the reasons for the proposed requisition by the Commissioner. The assessment contemplated by Section 29 is of an extraordinary character, and that is all the more reason why in such a case, the Commissioner should definitely state the reasons in writing for calling upon the dealer to get himself registered. In the present case, there was no such requisition. The word 'required' as used in Section 29, therefore, contemplates a written requisition. We find the same expression used in Section 10 of the Act, where it is said :
The Commissioner may, in addition to taking any other action under the provisions of this Act, require any dealer who, in his opinion, is liable to registration but has not made an application in this behalf, to apply for registration....
26. Besides the words 'when so required by the Commissioner' in Section 29 are followed by the words 'be liable to registration', and it would be presently seen that these words 'liable to registration' are significant for the purposes of the proviso which is added to Section 29, as the dealer's liability to tax arises only from the date when he becomes liable to registration. These reasons inevitably lead one to think that a requisition for registration by the Commissioner must be in writing, and not an oral requisition, as suggested by the Board.
27. It is still a moot question whether the omission to serve a written requisition is a mere irregularity or an illegality which affects the validity of the registration itself and the liability of the dealer to payment of tax. As at present advised, it appears to me in view of the proviso to the section, that the liability to tax under the section depends upon the year during which he 'becomes liable to registration'; and when he 'becomes liable to registration' again, in its turn, depends upon the stage 'when he is so required by the Commissioner'. The written requisition, therefore, is the sine qua non of his liability for taxation, as otherwise, he has no such liability ordinarily under the Act. The omission, therefore, to serve a written requisition under the law would amount to an illegality affecting both registration and taxation.
28. In the present case, although the Board appears to imply that the registration of the dealer was under Section 29 of the Act and that he suo motu applied for registration under the said section, yet we find nothing, either in the registration application or in the registration certificate, to support that finding. The petitioners, on the contrary, assert that they applied for registration under Section 3 (2) of the Act and they were ordered to be so registered. The Board also suggests that 'a notice under Section 16 (2) was redundant' as there was no necessity for such a notice. But the fact that such a notice was issued by the Superintendent of Taxes and that the orders of assessment made by him nowhere showed that the assessment was under Section 29 of the Act amply supports the contention of the petitioners that at the stage of assessment, the proceedings started against him were not even contemplated as proceedings under Section 29 of the Act; and it was only when legal objections were raised to the assessment order that the Assistant Commissioner, at the appellate stage, sought to fortify the assessments under Section 29 of the Act. The relevant observation of the learned Assistant Commissioner, in his judgment, runs thus :
As to liability, the appellants contended that they having started business in 1949-50 and their turnover having reached the taxable quantum only during that year, was liable to pay tax only with effect from 1st July, 1950, under Section 3 (2). The case of the appellants being a case covered by Section 29, and not by Section 3 (2), I do not see how can the appellants claim exemption under that section. Further, the notice under Section 16 (2) having been served within the year in which the appellants were made liable, there was no irregularity in the assessment in that direction also.
29. As it will presently appear, the learned officer lost sight of the proviso in summarily introducing the section for the purpose of upholding the assessment. He also opined that notice under Section 16(2) was, in some sense, essential to justify the assessment -- a position which is now abandoned by the Board, apparently for the reason that such a notice, for the application of Section 29, was irrelevant. The notice under Section 16 (2) has a serious and positive implication, just as a notice under Section 23 (2) of the Indian Income-tax Act: see Bidi Supply Co. v. Union of India A.I.R. 1956 S.C. 479 atp, 483. The notice under Section 16 (2) of the Act presupposes that the total turnover of a dealer is, in the opinion of the Commissioner, of such amount as to render him liable to pay tax under the Act. Such a notice evidently has no application to a case arising under Section 29 where the turnover of the dealer is of no particular consequence.
30. I shall now turn to examine the second question, which proceeds upon the alternative assumption that Section 29 of the Act is held to be intra vires -- whether, even in that case, the petitioners were liable to be assessed to tax, and, if so, for what period In this context, several subsidiary questions emerge : (i) whether the dealers are protected under the proviso to Section 29 of the Act ; if so, to what extent (ii) whether they follow the calendar year for purposes of accounting, or they follow the financial year, and (iii) whether their case falls under Section 3 (2) of the Act, and, therefore, is beyond the purview of Section 29 All these points require careful examination, and I propose to deal with them in their order. The second point is incidentally involved in the other two, and must, of necessity, be dealt with along with them.
31. I may here reproduce the proviso to Section 29, which runs thus :
Provided that such dealer shall not be liable to be taxed on sales which occurred prior to the year during which he becomes liable to registration.
32. The dealer's liability to tax, therefore, arises only from the year during which he becomes liable to registration. As discussed earlier, the dealer becomes 'liable to registration' only when so required by the Commissioner under the earlier part of Section 29. In the instant case, it is admitted on all hands that the dealers were registered in January, 1950. Still it is important to find what is the year of accounting followed by them. The Board says that the returns submitted by the dealers and the assessment proceedings have all proceeded throughout on the basis of the financial year. This finding again has been seriously disputed on behalf of the petitioners as being illegal and baseless. If we assume it to be correct, in that event, the year during which the dealers become liable to registration extends from April, 1949, when they commenced business, to March, 1950, and, on the authority of the proviso to Section 29 of the Act, they may be liable to taxation for sales during the period. The dealers, however, submit that they follow the calendar year for purposes of accounting, and under the law, it is their option to choose the calendar year or the financial year. This is borne out by their application for registration wherein they specifically say that their accounts are maintained in the English language, and that the year observed by them is from the 1st January to the 31st of December. Their business actually commenced in April, 1949. Therefore, the accounting year, according to them, terminated on 31st December, 1949.
33. The returns which they originally filed are also on the basis of the same accounting year, namely, for the periods ending 30th September, 1949, then from 1st October, 1949, to 31st December, 1949, and lastly, from 1st January, 1950, to 31st March, 1950. But the revised returns were filed by them on the basis of the financial year. These returns were filed in October, 1950. The petitioners explain that they filed these returns on the basis of the financial year because they were misled by a wrong note in the rules which referred to the financial year. The definition of the word 'year' has been substituted in Section 2 (12) of the Act, by Amending Act XII of 1952, to mean the financial year ; but as it was, the petitioners had originally the option to choose their year, which, as shown in their registration certificate, was the calendar year. This is conceded by the Board when it says that' under the Sales Tax Act, as it stood prior to the amendment of 1952, a dealer had the option to choose, a year other than the financial year as his accounting year. It has been contended before me that the dealer, in fact, stated in his application for registration that, for purposes of accounting, his year ran from 1st January to 31st December.
34. The Board, however, erroneously assumed that the liability to assessment and liability to registration were practically co-extensive and, therefore, the dealers must be deemed to have been liable for registration under Section 29 from that date which it takes to be the date on which the dealers started business. This assumption was clearly unfounded, and completely ignored the effect and import of the proviso to Section 29. If, therefore, the choice lay with the dealers to choose the accounting year other than the financial year prior to 1952, I see no reason why, under the law the statement in their registration certificate should not have been adopted as conclusive on the point. It has not been shown or stated that the accounts actually showed a different basis of accounting, namely, the financial, and not the calendar year. Judged on that basis, under the said proviso to Section 29, the dealers were not liable to be taxed on sales which occurred prior to January, 1950, but could be assessed only on sales subsequent thereto.
35. The petitioners, however, contend that their case does not fall under Section 29 of the Act at all, even if that section is held valid. Section 29 applies only to 'a dealer not ordinarily liable to registration under the provisions of this Act'. The returns filed by the petitioners from April, 1949, to March, 1950, clearly show that during all this period, their total turnover was far in excess of the taxable quantum. Their case, therefore, came definitely under Section 3 (2) of the Act, The application for registration voluntarily filed by them, and the notice issued under Section 16 (2) of the Act, all lead to the same inference. Section 3(2), as admitted by the learned counsel for the department, applies to all classes of dealers, whether they deal in goods procured from outside the State or sell goods produced in the State. Indeed any other assertion is impossible. Under Section 3 (2), therefore, the dealers became liable to pay tax 'with effect from three months after the commencement of the year immediately following that during which their total gross turnover first amounts to or exceeds the taxable quantum.' In other words, if the preceding year is the accounting calendar year beginning from April, 1949, when the dealers commenced business, and ending with 31st December, 1949, the dealers' gross turnover, even at the start, during the period being much in excess of the taxable quantum under Sub-section (2) of Section 3, their liability to tax arose from April, 1950. If, on the other hand, the financial year is taken into account, as asserted by the department, their liability to tax does not arise before July, 1950. Therefore, in any event, the assessment orders are bad and without any warrant in law.
36. The fourth question relates to the jurisdiction of the Superintendent of Taxes, Gauhati, to assess the petitioners. The question, in my opinion, has been correctly answered by the Board. Rule 78 of the Assam Sales Tax Rules, of course, provides that when a dealer has more than one place of business, he should be assessed by the Superintendent within whose jurisdiction his head office or his chief place of business in Assam is situated. The object of the rule evidently is to avoid multiplicity of assessment proceedings and consequent anomalies that may arise with reference to the same dealer. As the first part of the Rule itself shows, it does not completely take away the jurisdiction, under the law, of those Superintendents within whose jurisdiction he has his place or places of business. The Board appears to be right in observing that the rule is directory and not mandatory, and was framed for the convenience of both the taxing officer and the assessees. Section 49 of the Act, on which the petitioners rely for their contention, does not help them. The relevant facts on this point have been clearly set out in the judgment of the Assistant Commissioner of Taxes. When the petitioners objected to assessment proceedings being started by the Sales Tax Superintendent at Gauhati on the ground that their head office was situated at Dibrugarh, the Superintendent of Taxes, Gauhati, directed the petitioners on 20th October, 1950, to submit returns etc., to the Superintendent of Taxes, Dibrugarh. The officer also requisitioned back the certificate of registration issued from his office for cancellation and asked the petitioners to obtain a certificate of registration from Dibrugarh in respect of their branch there. But on 24th October, 1952, the petitioners informed the Superintendent at Gauhati that their Dibrugarh office had been closed, and the registration certificate in respect of their Dibrugarh business had been surrendered on 22nd September, 1952. The petitioners further submitted that under the circumstances, any question of submission of their returns at Dibrugarh did not arise. The position then is that during the pendency of the assessment proceedings, the Dibrugarh office had been closed and the only office of the petitioners then existing was at Gauhati. Therefore, the Superintendent of Taxes, Gauhati, was the only officer having jurisdiction to assess them. That Mr. Purkayastha was one such Superintendent appointed to assist the Commissioner under Section 8(1) of the Act, is not disputed. That being so, he had complete jurisdiction to assess the petitioners, if otherwise the assessment was not illegal; and the point must, therefore, be answered against them. It has been already held by this Court that the Commissioner may have more than one assistant to assist him under the law, functioning simultaneously in the same area with concurrent jurisdiction. This would obviously depend upon the extent and volume of the work in a particular local area; and which of his assistants, having jurisdiction in that area, deals with which particular case, is not of any consequence in the eye of law.
37. I entirely agree with the Board that Section 52 (2) (i) of the Act and rule 74 framed thereunder are not ultra vires. The Act is otherwise a self-contained Act, and it is only for certain auxiliary purposes that it has relegated powers to administrative authorities. The delegation of power is neither unregulated, nor, in my opinion, a delegation of essential legislative functions. The Legislature has determined the forum of assessment, appeal and revision, and has delegated to the administrative authorities only the power to fix fees payable on petitions, certificates and other matters. The dictum of Patanjali Sastri, C.J., in Kathi Raning Rawat v. State of Saurashtra  S.C.R. 435, to which reference has been made by the Board, bears out the contentions of the department. It is unnecessary for me, in this reference, to go into the nice distinction of tax and fees.
38. The revision petition filed before the Commissioner in these cases was directed against the appellate order of the Assistant Commissioner, which did not affirm the orders of assessment passed by the Superintendent of Taxes. The Assistant Commissioner had, in fact, directed that the petitioners should be assessed afresh in the light of the orders passed by him. Therefore, the orders of assessment had not become final, and the petition for revision before the Commissioner was, in substance, against an order of remand. Such an order does not fall strictly under Clause (a) of rule 74. The clause refers specifically to 'a petition for revision of an order of assessment'. There being no order of assessment passed by the Appellate Assistant Commissioner in this case, the petition for revision before the Commissioner, in my opinion, fell under the residuary Clause (d) of the Rule which refers to 'a petition for revision of any other order ...', and the fee should have been levied accordingly. Even if two interpretations were possible, in the context, the one in favour of the assessee should be adopted. The Board is, therefore, not justified in holding that the case was rightly assessed to fee under Clause (a) of Rule 74, even if it is right in assuming that Clause (a) of the Rule must be deemed to include both original and appellate assessment orders.
39. The net result, therefore, is that questions 1, 2, 3 and 6 are answered in favour of the assessees, while questions 4 and 5 formulated by the Board in its letter of reference are answered against them ; but, in effect, the assessment proceedings in these cases are held unwarranted and unauthorised by law.
40. The petitioners are entitled to their costs; hearing fee Rs. 100, and also to a refund of the amount of fees paid in excess of the required amount on their revision petition before the Commissioner, in addition to any other refund to which they may be entitled under the law.
Ram Labhaya, J.
41. I agree to the answers proposed by my Lord the Chief Justice. I shall add a few words. The first question is crucial. The assessee has challenged the vires of Section 29 of the Assam Sales Tax Act, 1947. Section 29 reads as follows :
Where a dealer not ordinarily liable to registration under the provisions of this Act sells goods which he has obtained from outside the Province, he shall, when so required by the Commissioner, be liable to registration, and, after such registration, he shall also be liable to be taxed on all sales as if he were a registered dealer:
Provided that such dealer shall not be liable to be taxed on sales which occurred prior to the year during which he becomes liable to registration.
42. It is only dealers not ordinarily liable to registration under the provisions of the Act who may become liable to tax under Section 29. Dealers who are ordinarily liable are excluded from its operation in express terms. Dealers who are ordinarily liable to registration under the provisions of the Act are those who fall within the purview of Section 3 of the Act. This is the only charging section. It creates the liability to tax under the Act and specifies conditions of liability. Two classes of dealers are dealt with by it.
43. Section 3 as it stood before its amendment laid down that every dealer whose total gross turnover during the year immediately preceding the commencement of the Act amounted to or exceeded the sum of Rs. 10,000 would be liable to pay tax on all sales effected after the date notified in conformity with the provisions of Section 3 (1). Clause (2) of the section provided that a dealer to whom Sub-section (1) did not apply shall be liable to pay tax under the Act with effect from three months after the commencement of the year immediately following that during which his total gross turnover first amounts to or exceeds the taxable quantum. It would appear that for purposes of determining liability to tax dealers were divided into two aforesaid classes.
44. Clause (1-A) was added by Amending Act IV of 1951. This clause has no bearing on the question before us. In 1954 Section 3 was amended, by the Assam Sales Tax (Amendment) Act, 1954. Under Section 3 (1) every dealer, whose gross turnover from sales which have taken place either wholly in Assam or both in and outside Assam during the twelve months immediately preceding the date of the commencement of the Amending Act exceeded Rs, 12,000, shall be liable to pay tax on sales which have taken place or deemed to have taken place in Assam on and from the date of such commencement. Clause (1-A) was renumbered as Clause (2) of the section with which we are concerned. Clause (3) deals with the second category of dealers. It lays down that,
Every dealer to whom Sub-section (1) does not apply shall be liable to pay tax under this Act with effect from the first of April of the year during which his gross turnover from sales which have taken place either wholly in Assam or both in and outside Assam first amounts to or exceeds the 'taxable quantum' :
Provided that such dealer shall not be liable to pay the tax under this Act during such year in respect of his gross turnover up to the 'taxable quantum' specified in Sub-section (1).
45. It is clear that under the amended provision the original basis of classification of dealers made liable to tax has been adhered to. Under Clause (1) of Section 3 tax is leviable on sales which take place on and from the date of the commencement of the Act, though the liability is determined by the gross turnover of the year immediately preceding the commencement of the Act. Under Clause (3) liability arises if the taxable quantum is reached within a particular year after the commencement of the Act, and though the dealer may be assessed to tax in that year, his sales in that year upto the taxable quantum are exempt from taxation. The exemption upto the taxable quantum during the year places dealers of the second category more or less on a level with dealers whose cases may fall under Section 3(1).
46. A dealer whose case does not fall under any of the two categories dealt with by Section 3 would be a dealer not ordinarily liable to registration under the provisions of the Act. The word 'dealer' occurs in Section 3 as well as in Section 29. Its meaning in both the sections would be the same. Dealers would be persons who carry on the business of supplying goods in the State whether for commission, remuneration or otherwise, etc., according to the definition given in Section 2 (3).
47. If a dealer not ordinarily liable to registration under any part of Section 3 sells goods which he had obtained from outside the State, he shall when so required by the Commissioner be liable to registration. Sale of goods obtained from outside is a necessary condition for a requisition for registration under Section 29. But dealers even under Section 3 may and actually do sell goods obtained from outside the State. There would be a large number of dealers who sell goods obtained exclusively from outside the Province. Dealers falling under Section 3 are not persons who sell only goods manufactured or produced in the State. This condition thus does not provide a test for distinguishing dealers falling under Section 3 from dealers who may be made liable under Section 29. The only distinguishing feature of dealers who may fall under Section 29, it appears, is that they are dealers who incur no liability to taxation under Section 3. By limiting the applicability of Section 29 to dealers who sell goods obtained from outside the Province, exemption has been conferred on dealers who purchase goods inside the State but are otherwise not subject to tax under Section 3. Both Section 3 and Section 29 deal with dealers who deal in goods which are liable to tax under the Act. They make no distinction between goods manufactured or produced inside the State and those produced or manufactured outside the State.
48. The liability to registration under Section 29 arises when a dealer is required by the Commissioner to get himself registered. The liability to tax arises after he gets himself registered.
49. The language of the section does not impose any obligation on the Commissioner to require every dealer who sells goods received from outside to get himself registered. He may create the liability to registration which leads to liability to taxation by requiring any one or some of the dealers who sell goods obtained from outside the Province. In picking and choosing some he would not be contravening the provisions of the section. His acts would be in conformity with it. The provision therefore gives him unrestricted power to discriminate between one dealer and another even though both are dealers who are not liable to tax under Section 3 and are selling goods obtained from outside the Province. If selling goods obtained from outside the State, in cases not falling under Section 3, would have been enough to create liability under the section, all dealers in that class would become liable. There would then be no possibility of discriminating amongst them. But the section is so worded that liability to registration arises only when a dealer is required by the Commissioner to get himself registered. Before such a requisition issues, there is no liability to taxation. The Commissioner is left untrammelled in the exercise of his discretion or power so far as requisitions for registration are concerned.
50. The section provides no test or standard for determining which out of the dealers who are selling imported goods may be required to register. No objective standard is laid down for the guidance of the Commissioner. The power left to the Commissioner is not only large, it is unrestricted and is capable of arbitrary and capricious exercise. It is capable of use which may involve discrimination. It therefore fails to provide equal protection of the laws which is guaranteed to the citizen by Article 14 of the Constitution. Equal protection of the laws means the right to equal treatment in similar circumstances both in regard to privileges conferred and the liabilities imposed. The statute may not be in itself discriminatory but if it gives to an officer a power which is naked and arbitrary to require or not to require any person to do a thing, e.g., to get registered for purposes of Section 29 or not, the section would be void as involving a denial of equal protection.
51. In Balakrishnan v. State of Madras A.I.R. 1952 Mad, 565, it was held that 'if this discretion is completely unfettered it can be said that the provision conflicts with the right of equal protection conferred by Article 14'. Mr. Medhi however argued that the Commissioner under the Act is a responsible officer and it may not be presumed that he will make a discriminatory use of his discretion. But as observed by Rajamannar, C.J., in the case referred to above,
It would be unreasonable to gamble on the reasonableness of the Textile Commissioner. If the yard stick is only the personal opinion of the officer concerned, it is plainly a case of naked and arbitrary power.
52. These observations aptly apply to the case of the Commissioner under Section 29 of the Act. It is therefore both desirable and necessary that some objective standard or test should be laid down which should govern the exercise of discretion vested in the Commissioner.
53. In Joseph v. Assistant Excise Commissioner, Ernakulam A.I.R. 1953 T.C. 146, the decision in Balakrishnan v. The State of Madras A.I.R. 1952 Mad. 565 was followed and it was held that where power given to the officer is naked and arbitrary and has the potentiality of being exercised with unjust discrimination in the absence of any principle or standard guiding or regulating its exercise, the power or authority would be void and inoperative by reason of its repugnance to Article 14.
54. As indicated above dealers whose cases fall under Section 3 are not all persons who sell goods obtained from inside the State. Most of them sell goods obtained from outside. Certain privileges are given to dealers under that section even though they are selling goods obtained from outside. The dealers under Section 29 do not get any of those rights or privileges. There is an element of discrimination so far as treatment of dealers similarly circumstanced is concerned. The law itself discriminates between dealers who sell goods obtained from outside. Reasonable classification for purposes of legislation is permitted but it is necessary that there must be a nexus between the basis of classification and the object of the Act under consideration: vide Bidi Supply Co. v. The Union of India  29 I.T.R. 717 : A.I.R. 1955 S.C. 479. Such a nexus has not been shown to exist. Section 29 therefore is hit by Article 14 and therefore must be held to be void and of no effect.
55. Mr. Medhi has tried to read the privileges allowed to dealers under Section 3 in Section 29. He urged that even under Section 29 the liability would arise if conditions of Section 3 (3) were fulfilled. The language of Section 29 affords a complete answer to this contention. Besides, if the conditions of liability under Section 3 are to be read in Section 29, there would be no need for the provision. This contention does not deserve any serious notice.
56. The next important question is whether it is necessary that the Commissioner should send a written requisition to 9. dealer to get himself registered. The Commissioner performs a judicial function under Section 29, when he requires the dealer to get himself registered. The order is subject to revision under Section 31. Other remedies also may be available to a dealer who is asked to register himself under Section 29. Not only its terms, the very fact that there was a, verbal requisition may be disputed as in this case. The decision to require a person to get himself registered under Section 29 must therefore appear in writing; otherwise it would not be possible for the dealer to question its validity by any proceeding. It therefore may be treated as implicit in the section that the decision to require a dealer to get himself registered and its communication to the dealer both may not be oral. Even for the purposes of taxing authorities the record of the decision would be necessary in order to proceed further if the dealer does not comply with the requisition made under Section 29. A mere statement that a dealer was verbally asked to register would not satisfy the requirements of Section 29. The dealer must know under what section of the Act he is being asked to register himself. It does not appear that he was so told. Assessment in the circumstances of the case is vitiated by an illegal exercise of jurisdiction.
57. The validity of Section 52(2)(i) and rule 74 has also been challenged. The learned Chief Justice has found these provisions constitutionally valid. The same conclusion was reached in Banwarilal v. State of Assam A.I.R. 1955 Assam 195, when this contention was first raised in this Court. I was a party to that decision. The view then taken receives support from the judgment of my Lord the Chief Justice.