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Ram Co Coke Industries and anr. Vs. Commissioner of Sales Tax and anr. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAllahabad High Court
Decided On
Case Number Civil Misc. Writ Petition Nos. 932, 933, 938, 942, 944, 946, 947, 948 and 966 of 1984
Judge
Reported in[1986]61STC212(All)
AppellantRam Co Coke Industries and anr.
RespondentCommissioner of Sales Tax and anr.
Appellant Advocate C.L. Pandey and ; Rakesh Kumar, Advs.
Respondent Advocate The Standing Counsel
DispositionPetition allowed
Excerpt:
- - whereas in the unamended section 8-c no discretion was vested in the assessing authority to fix up the amount of security, such discretion has been clearly vested in the assessing authority by the amending act of 1984. so the question is when section 8-c was materially amended by the amending act, 1984, whether still the decision of this court in the case of kulbhushan chawla (printed at page 215 infra) 1984 alj 125 will hold the field. the courts do not possess the power to say that its view of the law will hold good from a date of its choice or for a period of time that set by itself, that will in substance amount to amending the law from time to time. but this principle does not hold good when the legislature alters the law especially when it is altered with retrospective effect......8-c, sub-section (2), of the uttar pradesh sales tax act, 1948 (for short 'the act of 1948'), the assessing authority has to satisfy as to what amount of security for proper use of form xxxi is required td be furnished by a dealer and that such power cannot be exercised by the commissioner. the aforementioned circulars having been issued by the commissioner fixing the amount of security are said to be invalid for this reason. a perusal of the act of 1948 shows that section 8-c was substantially amended retrospectively by the u.p. sales tax (amendment) act, 1984 (u. p. act no. 22 of 1984), published in the u.p. gazette dated 1st october, 1984 (hereinafter referred to as the amending act of 1984). the amended section 8-c(2) empowered the assessing authority to determine the amount of.....
Judgment:

Om Prakash, J.

1. These writ petitions raise a common question and, as such, are being decided by a common order.

2. The short question for consideration in these writ petitions is whether the circulars dated 11th October, 1983, 16th November, 1983, and 11th May, 1984, issued by the Commissioner of Sales Tax, U.P., fixing the amount of security to be furnished for proper use of forms are invalid and inoperative.

3. The contention of the petitioners is that under Section 8-C, Sub-section (2), of the Uttar Pradesh Sales Tax Act, 1948 (for short 'the Act of 1948'), the assessing authority has to satisfy as to what amount of security for proper use of form XXXI is required td be furnished by a dealer and that such power cannot be exercised by the Commissioner. The aforementioned circulars having been issued by the Commissioner fixing the amount of security are said to be invalid for this reason. A perusal of the Act of 1948 shows that Section 8-C was substantially amended retrospectively by the U.P. Sales Tax (Amendment) Act, 1984 (U. P. Act No. 22 of 1984), published in the U.P. Gazette dated 1st October, 1984 (hereinafter referred to as the amending Act of 1984). The amended Section 8-C(2) empowered the assessing authority to determine the amount of security to be furnished by a dealer for proper use of forms within the meaning of Clause (b) of Section 8-C(2). This provision enjoins upon the assessing authority to form an opinion as to how much security is to be furnished by a dealer for proper custody or use of forms. Such power was not conferred on the assessing authority by the unamended Section 8-C. The petitioners were required to furnish security for using form XXXI. By the circular dated 11th October, 1983, the Commissioner directed the authorities to take security of Rs. 300 for each form XXXI but this amount was increased to Rs. 375 under the circular dated 11th May, 1984. The contention of the petitioners is that when by the amended Section 8-C(2) jurisdiction is vested in the assessing authority to form an opinion as to what security is to be furnished by a dealer for the proper use of form XXXI, then that jurisdiction can be exercised only by the said authority and not by the Commissioner or by any other authority. It is, therefore, argued that the Commissioner had no jurisdiction to fix up the limit of security at Rs. 375 or at any other figure to be furnished by a dealer. The argument is that the circulars issued by the Commissioner virtually substituted his decision for the discretion of the assessing authority. The question is when the Act requires the satisfaction of the assessing authority regarding the amount of security, whether the Commissioner can give any direction to the assessing authority to demand security of a specified amount. In our view when jurisdiction is vested in the assessing authority to record a satisfaction as to what amount of security is to be furnished by a dealer for proper use of form XXXI under Section 8-C(2) and when that provision does not confer concurrent jurisdiction on the Commissioner in this behalf, the latter will have no jurisdiction to determine the amount of security. To support our view-point, we rely on a decision of the Supreme Court in Commissioner of Police v. Gordhandas AIR 1952 SC 16. The facts in the said case were that the respondent wanted to build a cinema house in a part of Greater Bombay. He obtained the necessary permission from the Commissioner of Police in exercise of the discretion vested in him to grant a licence under Section 22 of the City of Bombay Police Act, 1902. Later the permission was suspended by the Commissioner and the respondent was told to obey the orders of the Government. Thereafter the Commissioner sent a communication to the respondent in the following words:

I am directed by the Government to inform you that the permission to erect a cinema granted to you is hereby cancelled.

4. Then the question arose whether the discretion to be exercised by the Commissioner of Police could be interfered with by the Government. The Supreme Court held that under the Rules, the only person vested with the authority to grant or refuse a licence for the erection of a building to be used for purpose of amusement, was the Commissioner of Police and not the State Government and, therefore, that power could only be exercised by him at his discretion and no other person or authority can do it. This authority is squarely applicable to the facts and circumstances of the instant case. The discretion to fix the amount of security having been vested in the assessing authority by the amended Section 8-C(2) of the Act of 1948 we hold that the Commissioner had no jurisdiction to issue circular specifying the amount of security to be furnished by the dealers for proper custody or use of form XXXI or any other forms.

5. Then the argument of the learned standing counsel is that the validity of the circular dated 11th October, 1983, has already been upheld by a Division Bench of this Court in the case of Kulbhushan Chawla v. Commissioner of Sales Tax, U.P. (printed at page 215 infra) 1984 ALJ 125 and that judicial properiety demands that earlier decision of this Court holding the circular dated 11th October, 1983, to be valid, should be followed. We have carefully perused the unamended Section 8-C which was interpreted by this Court for deciding the case of Kulbhushan Chawla (printed at page 215 infra) 1984 ALJ 125 and the amended, Section 8-C. Whereas in the unamended Section 8-C no discretion was vested in the assessing authority to fix up the amount of security, such discretion has been clearly vested in the assessing authority by the amending Act of 1984. So the question is when Section 8-C was materially amended by the amending Act, 1984, whether still the decision of this Court in the case of Kulbhushan Chawla (printed at page 215 infra) 1984 ALJ 125 will hold the field. In Deep Chand Jain v. Board of Revenue, U.P., Allahabad 1966 ALJ 112 this Court held :

The courts while deciding cases do not make law. When the courts interpret any law they only explain what the pre-existing law is. They do not create or impose it. The courts do not possess the power to say that its view of the law will hold good from a date of its choice or for a period of time that set by itself, that will in substance amount to amending the law from time to time. That is a power which vests exclusively in the law-making authority and not in the courts.

The true rule appears to be that the courts' declaration is co-extensive with the life of the law. It is effective for the whole of the time that that law remains in force.

6. In Ram Niranjan Singh v. Ram Awadh Singh 1974 ALJ 6 this Court held :

It is true that normally a judgment which has become final operates as res judicata between the parties to the litigation on the points already decided.But this principle does not hold good when the legislature alters the law especially when it is altered with retrospective effect. Retrospective legislation has the necessary consequence that the law which was construed by the court before its amendment ceases to exist. In such a situation the declaration of the law made by the court loses its value and efficacy and such declaration cannot operate as res judicata between the parties after the law itself has been amended.(emphasis supplied)

7. Relying on the aforesaid authorities, we hold that the rule laid down by this Court in the case of Kulbhushan Chawla (printed infra) 1984 ALJ 125 has lost its value and efficacy after the retrospective legislation came into force. This being so, we are not violating any judicial propriety in not following the decision of this Court.

8. In the light of the aforesaid discussion, we hold that the circulars dated 11th October, 1983, 16th November, 1983, and 11th May, 1984, inasmuch as they are in conflict with the statutory provision conferring the discretion on the assessing authority to fix up the amount of security to be furnished for proper custody or use of the forms, are invalid and inoperative. These writ petitions are, therefore, allowed and all the aforesaid three circulars are quashed. It is, however, made clear that it shall be open to the assessing authority to act in accordance with Section 8-C(2) of the U.P. Sales Tax Act, 1948.

9. A copy of this order may be supplied to counsel for the parties on payment of usual charges within a week.


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