1. These are five cases of Reference under amended Section 113, Civil P. C., by a Small Cause Court Judge of Garhbeta arising out of five Small Cause Court suits filed in his court. The point referred by the learned Judge for decision by this Court is identical in all the cases and the plaintiff is also the same in all the suits. The facts of the cases are also similar. The relevant facts have been stated in the Letter of Reference made by the Judge and as between the different cases there is some variation only with regard to amounts, no useful purpose will be served by setting forth at length the facts of the different cases in detail. Briefly, the plaintiff who is a wholesale dealer sold sugar to retail dealers from his stock as on 23-10-46. Owing to certain reasons he could not realise excise duty on such sales from the defendant's retail dealers. He was, however, compelled to pay excise duty himself. He has accordingly brought the suits for the recovery from the retail dealers of the amount of excise duty realised from him by Government.
2. The learned Judge is of opinion that Section 3, Central Act 9 of 1947 is invalid because of the following reasons:
1. Provision has been made therein for recovery of excise duty with retrospective effect.
2. Such retrospective provision has been made in favour of a limited class viz., wholesale dealers without any corresponding provision for retail dealers, and
3. There was no compelling public necessity for such provision.
3. In support of such conclusion the learned Judge has purported to rely on the principles laid down by a Bench of this Court in the case of -- 'Subodh Gopal v. Behari Lal', : AIR1951Cal85 (A), when dealing with the validity or otherwise of certain provisions in the Bengal Sales (West Bengal Amendment) Act, 1950.
4. In order to appreciate the reasoning of the learned Judge it is necessary to refer to certain provisions of the Sugar (Temporary Excise Duty) Ordinance 1946 (Central Ordinance No. 25 of 1946) which was published in, the Gazette of India on 23-10-1946 and which became operative all over British India from that date (vide Section 1). Section 3 of the Ordinance provided that
'a duty of excise shall be levied and shall be payable to the Central Government en all sugar produced in any factory in British India before the commencement of this Ordinance and owned or possessed at the commencement of this Ordinance by the owner of the factory or by the wholesale dealer at the rate of Rs. 4/4 per standard maund.'
Section 5 lays down the mode of assessing the payment of duty and Section 6 deals with the mode of recovery of duty. The above Ordinance was followed by Central Act 9 of 1947 which became operative from 11-3-1947. The preamble of the Act explains its purpose and it runs thus:
'Whereas the duty of excise on sugar levied by the Sugar (Temporary Excise Duty) Ordinance, 1946, cannot be fully recovered before the expiry of the said Ordinance; And whereas it is expedient to make provision for the completion of the said duty, and for a certain incidental matter.'
By Section 1 (1) of the Act it was made applicable to the whole of British India. By Section 2 the provisions for recovering excise duty on sugar as laid down in the Ordinance were continued. Then comes Section 3 which deals with the effect of levy of duty on certain sales. It provides 'inter alia' that in certain circumstances as specified in the Section the seller of sugar provided that he has paid the excise duty or that there was included in the price which he himself has paid for the sugar the amount as aforesaid, be entitled to be paid such amount by the buyer and to sue for and recover such amount. This provision, therefore, governs to some extent the liability & incidence as between the buyer & the seller in regard to the excise duty on sugar. It is to be noted that the Section opens with the words
'without prejudice to the provisions of Section 64(A) of the Indian Sale of Goods Act 1940'.
Section 64(A) was inserted in the Indian Sale of Goods Act in 1940. It provides inter alia that if any excise duty is imposed after themaking of the contract for the sale of the goods and such duty is paid, the seller may add to the contract price so much as will be equivalent to the amount paid in respect of such duty and he shall be entitled to be paid and to sue for and recover such addition. The opening words, referred to above, of Section 3, Act 9 of 1947 show that the provision of law as contained in Section 64(A) of the Sale of Goods Act has not been cut down or modified. What Section 3 has done is to make explicit in regard to excise duty on sugar what was implicit in Section 64(A). It is apparent that it was put in by way of abundant caution. It does not take away the right which the retail dealer might have under the general law for passing on the incidence of the excise duty to the person to whom he in turn sells.
It cannot be said, therefore, that Section 3 of Act 9 of 1947 benefits only a limited class viz., the wholesale dealers and as such it comes within the mischief of the Constitution. On a proper construction of the relevant statutes, therefore, it cannot be held that the impugned provision viz., Section 3 of Act IX of 1947 affects substantive rights retrospectively and that as such it is open to question on the grounds set 'forth by the learned Munsif. The question of retrospective operation in the true sense of the term does not really arise in the present case and accordingly the reasons assigned by the learned Munsif stemming as they, do from that assumption are hardly applicable to the question of the validity or otherwise of the Section.
Section 3 which is after all an incidental provision in a fiscal statute cannot, therefore, be held to be invalid looked at from that standpoint. Moreover Ordinance 25 of 1947 and Act 9 of 1947 came into operation long before the Constitution of India came into force. It is now well settled that Article 13(1) of the Constitution can have no retrospective effect but is wholly prospective in its operation, with the result that even if the impugned Section be held to be inconsistent with any fundamental right under Article 19 of the Constitution it will exist for all past transactions and for enforcing all rights and liabilities accrued before the date of the Constitution. From this standpoint as well, Section 3 will stand.
5. The reasoning of the learned Judge in support of his view that Section 3 is invalid was assailed before us by the learned Government Pleader who appeared for the State as also by the learned Advocates who appeared on behalf of the plaintiff in some of the References on other grounds as well which we do not consider it necessary to examine in detail. What we have stated above in support of our conclusion about the validity of the impugned Section is sufficient to dispose of the Reference.
6. Our answer to the Reference is that Section 3 of Act 9 of 1947 is valid.
7. This order will govern all the connected References. It appears from the letter no. 487 dated 21-8-51 of the learned Judge that in S. C. C. Suit No. 36 of 1951 in regard to which reference no. 7 has been made, the plaintiff has filed a petition of full satisfaction. That Reference has, therefore, become infructuous. The other suits in which thesame question about the validity or otherwise of Section 3 of Act 9 of 1947 has arisen are still pending and the learned Judge will now proceed to dispose of them according to law in the light of our answer to the point mooted by him.
8. The References are disposed of accordingly.
9. There will be no order as to costs.
10. I agree.