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Seth Kushiram Beharilal Represented by Its Partner Sri Tirathdas and anr. Vs. the State of Tamil Nadu, Represented by Secretary, Agricultural Department and ors. - Court Judgment

LegalCrystal Citation
SubjectOther Taxes
CourtChennai High Court
Decided On
Reported in(1975)1MLJ367
AppellantSeth Kushiram Beharilal Represented by Its Partner Sri Tirathdas and anr.
RespondentThe State of Tamil Nadu, Represented by Secretary, Agricultural Department and ors.
Cases ReferredKeshavan Madhavan Menon v. State of Bombay
Excerpt:
- .....to this effect. for the words, ' the market committee shall levy a cess by way of sales tax on any notified agricultural produce bought or sold' the words 'the market committee shall, in the case of notified agricultural produces (other than notified agricultural produces which are declared goods) levy a cess by way of sales tax on such notified agricultural produces bought or sold ' shall be substituted. the rest of the amended provisions need not be set out for present purposes. consistent with this amendment, section 3 provides for validation and it is in the usual form. we extract below this section:notwithstanding anything contained in any judgment, decree or order of any court or other authority, all cess levied or collected or purporting to have been levied or collected under the.....
Judgment:

K. Veeraswami, C.J.

1. The only point raised in these two appeals is that, after the expiry of Madras Act XVIII of 1970, the notices issued under Section 18 of the Tamil Nadu Agricultural Produce Markets Act, 1959 on 14th October, 1970 and on 15th October, 1970 demanding, or proposing to assess, tax by way of cess thereunder were without jurisdiction. This Court struck down the validity of Section 18 of the parent Act, in so far as it related to charge of sales tax by way of cess on declared goods. Ordinances Nos. 2 and 3 of 1970 followed and they were replaced by Madras Acts XVIII and XIX of 1970. Those Acts were enacted and published on 29th September, 1970. Sub-section (2) of Section 1 of Act XVIII of 1970 is rather unusual inasmuch as it says that Section 2 shall be deemed to have come into force on 22nd October, 1962 and shall remain in force till such date as the State Government may, by notification, appoint. The purpose of the Act appears to be to recast Section 18 as it stood before the amendment in order to remove the constitutional objections thereto. So, the amendment was to this effect. For the words, ' The market committee shall levy a cess by way of sales tax on any notified agricultural produce bought or sold' the words 'the market committee shall, in the case of notified agricultural produces (other than notified agricultural produces which are declared goods) levy a cess by way of sales tax on such notified agricultural produces bought or sold ' shall be substituted. The rest of the amended provisions need not be set out for present purposes. Consistent with this amendment, Section 3 provides for validation and it is in the usual form. We extract below this section:

Notwithstanding anything contained in any judgment, decree or order of any Court or other authority, all cess levied or collected or purporting to have been levied or collected under the principal Act on the sale or purchase or agricultural produces which are declared goods by any market committee during the period commencing on the 22nd October, 1962 and ending with the 18th August, 1970 (both days inclusive), shall, for all purposes, in so far as such levy or collection is consistent with the provisions of Section 2, be deemed to be, and to. have always been validly levied or collected in accordance with law as if Section 2 had been in force at all material times when such cess was levied or collected and accordingly....

(a) all acts, proceedings or things done or taken by any authority, officer or person in connection with the levy or collection of such cess shall, for all purposes, be deemed to be and to have always been done or taken in accordance with law;

(b) no suit or other proceeding shall be maintained or continued in any Court for the refund of any cess so paid ;

(c) no Court shall enforce any decree or order directing the refund of any cess so paid.

This validation, it may be noted, related to cess levied or collected or purported to have been levied or collected under the principal Act for the period 22nd October, 1962 to 18th August, 1970 when the Ordinances were promulgated. In passing, we may mention that Section 18 was with effect from 1st January, 1971 amended by Madras Act XIX of 1970, so as to convert the sales tax by way of cess into a fee.

2. The argument before us is that Madras Act XVIII of 1970 like the Ordinances, which led to it, being a temporary statute in the sense that it was to have force only upto the date fixed by the Government, the principles applicable to temporary or expiring statutes should be extended to the instant cases so that prohibition may issue against further proceedings pursuant to the notices. It is perfectly true that any act done or omitted to be done by way of offences, or which gives rise to a liability, cannot be proceeded with, or original action be initiated after the expiry of such a statute. This is particularly so in the case of temporary Acts which created offences. This principle has been extended also to the field of taxation. Craies on Statute Law in the Seventh Edition puts it thus:

As a general rule, and unless it contains some special provision to the contrary, after a temporary Act has expired, no proceedings can be taken upon it, and it ceased to have any further effect. Therefore, offences committed against temporary Acts must be prosecuted and punished before the Act expires, and as soon as the Act expires any proceedings which are being taken against a person will ipso facto terminate.

This principle has been reiterated and applied in Keshavan Madhavan Menon v. State of Bombay 1951 S.C.R. 228. No one can question the correctness of this principle which is so well established. It is pressed upon us, therefore, that Madras Act XVIII of 1970 having expired on 31st December, 1970 which substituted Section 18 as aforesaid, and as the new sub-section as introduced by Act XIX of 1970 would not apply to the instant case as a charge of sales tax for purposes of raising a cess, the impugned notices could no longer be proceeded with. It seems to us that the point that really arises in this case is not as to the application of the principles relating to the expiry of temporary statutes, but rather to the true effect and ambit of the amendment brought about by Madras Act XVIII of 1970 to Section 18 of Madras Act XXIII of 1959. Section 18 as it originally stood started with a non-obstante clause and said: 'the market committee shall levy a cess by way of sales tax on any notified agricultural produce bought or sold in the notified market area....' These words have not been substituted. But what Section 2 of Madras Act XVIII of 1970 substituted in substance was not those words already existing, but by the introduction of the words 'other than notified agricultural produces which are declared goods.' The effect of this is so obvious, to wit, to remove the objections which prevailed with this Court earlier and which led therefore to the striking down of that section in so far as it related to charge on declared goods. That being, in our opinion, the effect in substance of the substitution made by Section 2 of Madras Act XVIII of 1970, the principle relating to expiry of temporary statutes has no application. The charge on non-declared goods, which is the case in the instant case, always stood' and it was never sought to be changed until 31st December, 1970.

3. In the construction of amending statutes which are claimed to be temporary, the object of the amendment and the legislative purpose in the context of the facts preceding will have to be borne in mind. De hors the context, not unoften, the amending text read by itself is likely to lead to misleading results. The governing purpose of the Amending Act XVIII of 1970, like the related Ordinances being to validate assessments made under the section as it stood originally, and to remove the objections pointed out by this Court to the validity of the section, the amendment was introduced. That being the limited purpose of the amendment, we do not regard the charge itself made by Section 18 as it originally stood as having been rendered a temporary or expiring statutory provision by means of Madras Act XVIII of 1970. To read so would, in our opinion, be to miss the whole purpose and the objective of the amendment. Section 18 as it originally stood Was not a temporary one. Any liability, therefore, which was incurred under it could be pursued and the tax could be charged, assessed, quantified and collected.

4. On the view we take as already outlined, it is not necessary to deal with the other argument of the learned Counsel for the appellants that the scope of Section 33 of Madras Act XVIII of 1970, was not to permit continuance of proceedings or initiate new proceedings for assessment under Section 18. That question, in our opinion, does not arise in this case.

5. The appeals are therefore dismissed with costs in each of them. Counsel's fee Rs. 250 in each of them.


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