The petitioner is a partner of the firm M/s. Gopinath Hari Krishna which carried on business during the years 1957-58 and 1958-59 and has since been dissolved. The firm dealt in foodgrains and oil-seeds. On 15th April, 1957, it applied to the Sales Tax Officer, Etawah, for exemption of its turnover of foodgrains from sales tax for the assessment year 1957-58 under the U.P. Sales Tax Act, the application being pursuant to rule 20-B of the U.P. Sales Tax Rules. A sum of Rs. 150 was deposited with the application towards the first instalment of the exemption fee. Subsequently, on 10th September, 1957, the firm made another application for exemption, and deposited two further amounts towards the exemption fee. The Sales Tax Officer held that the firm had not complied with the requirements of rule 20-B and was, therefore, not entitled to an exemption certificate. Acting under rule 20(3) he assessed the turnover of foodgrains to sales tax for the assessment year 1957-58 by his assessment order dated 28th March, 1962. By that assessment order he assessed the turnover of oil-seeds also, applying a rate of three pies per rupee. The firm proceeded in appeal. The Assistant Commissioner (Judicial) Sales Tax, allowed the appeal on the ground that the Sales Tax Officer had not investigated whether even if the firm was not entitled to exemption from the commencement of the assessment year, it was entitled to exemption from any subsequent date in the assessment year. Upon that he set aside the assessment order and remanded the case by his order dated 4th May, 1965. The firm then applied in revision against the order of remand and a number of contentions were raised before the Additional Judge (Revisions) Sales Tax. Among them, the firm urged that the turnover of oil-seeds was not liable to assessment because there was no valid notification laying down the rate of tax in respect of such turnover, that no fresh assessment could be made pursuant to the remand order because of the bar of limitation, and that the Sales Tax Officer, Etawah, had no jurisdiction to assess the firm. These contentions were rejected by the Additional Judge (Revisions) Sales Tax. The petitioner now prays for certiorari against the orders of the sale tax authorities.
Following the assessment made under the U.P. Sales Tax Act, the Sales Tax Officer assessed the firm under the Central Sales Tax Act also for the assessment year 1958-59. Similarly assessments were also made on the firm for the assessment year 1958-59 under the U.P. Sales Tax Act and the Central Sales Tax Act. The history of these three assessments is substantially the same as that relating to the assessment for the year 1957-58 under the U.P. Sales Tax Act. In fact, the revision applications in respect of the four cases were disposed of by the Additional Judge (Revisions) by a common order dated 28th April, 1967. The instant writ petition, Writ Petition No. 2967 of 1967, relates to the case for the assessment year 1957-58 under the U.P. Sales Tax Act, and the connected petitions relate to the remaining three cases.
The petitioner contends before us that the turnover of oil-seeds is not liable to assessment because there is no valid provision of law specifying the rate of tax applicable to such turnover. Article 286(3) of the Constitution provides :-
"Any law of a State shall, in so far as it imposes, or authorises the imposition of, a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter-State trade or commerce, be subject to the restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament may by law specify."
Parliament enacted the Central Sales Tax Act, 1956, and section 14 of that Act specified the commodities which were of special importance in inter-State trade and commerce. These included oil-seeds. Section 15 of the Act imposed the conditions that those commodities would not be taxed at more than one stage and at a rate not exceeding two per cent. of the sale price. Then the U.P. Sales Tax (Amendment) Act, 1956 (U.P. Act No. 19 of 1956) inserted a new section 3-AA in the parent Act in the attempt to bring it into accord with article 286(3) of the Constitution and the requirements of sections 14 and 15 of the Central Sales Tax Act. The new section 3-AA provided that notwithstanding anything contained in section 3 or 3-A the turnover of oil-seeds and the other commodities mentioned therein would not be liable to tax except at the point of sale by the dealer to the consumer and that the rate of tax would not exceed two naye paise per rupee. Section 3-AA came into effect from 1st April, 1956. The section was amended from time to time and in respect of the assessment years 1957-58 and 1958-59 sub-section (1) of section 3-AA provided :
"Notwithstanding anything contained in section 3 or section 3-A, the turnover in respect of the following goods shall not be liable to tax except at the point of sale by a dealer to the consumer, and the rate of tax shall not exceed two per cent.
Notification No. ST-2933/X-902(7)-56 dated 1st August, 1958, declared :
"In pursuance of the provisions of section 3-AA of the U.P. Sales Tax Act, 1948 (U.P. Act No. 15 of 1948), as amended up-to-date, the following is hereby notified for the information of all concerned :
The turnover in respect of jute, iron and steel and oil-seeds as defined in the said section 3-AA and which under the said section are liable to tax only at the point of sale by a dealer to the consumer shall as with effect from 1st April, 1956, continue to be subject to tax at the rate of three pies per rupee."
It will be noticed that the notification was brought into effect from 1st April, 1956. Thereafter, Notification No. ST-1357/X-990-1956 dated 1st April, 1960, was published. It notified that in supersession of the notification of 1st August, 1958, the turnover in respect of oil-seeds would be liable to tax under section 3-AA at the rate of two paise per rupee with effect from 1st April, 1960. The turnover of oil-seeds assessed in the hands of the firm for the assessment years 1957-58 and 1958-59 would be governed by the notification dated 1st August, 1958. The petitioner contends that upon the terms of section 3-AA(1) as it then stood, the notification is ultra vires because nowhere does section 3-AA(1) empower the making of a notification fixing a rate of tax. A similar contention was raised in Ram Niwas Sant Lal v. Sales Tax Officer, Basti, and Another ( 15 S.T.C. 523), and was accepted by this court. It was held that section 3-AA(1) did not lay down a rate of tax and it also did not lay down by whom or how the rate of tax could be fixed. After the decision of this court in that case, the U.P. Legislature enacted the Uttar Pradesh Bikri Kar (Sanshodhan) Adhiniyam, 1964, which amended section 3-AA(1) so that it now reads :
"(1) Notwithstanding anything contained in section 3 or section 3-A, the turnover in respect of the following goods shall not be liable to tax except at the point of sale by the dealer to the consumer, and the rate of tax shall be such, not exceeding two naye paise per rupee, as may be declared by the State Government by notification in the official Gazette."
Section 3 of the Amendment Act declared :
"3. Validation of certain notifications and action taken in pursuance thereof. - Any notification declaring the rate of tax issued before the commencement of this Act purporting to be under section 3-AA of the principal Act shall be deemed to have been issued under that section as amended by this Act, and notwithstanding any judgment, decree or order of any court -
(a) any such notification shall be deemed always to have been valid; and
(b) anything done or any action taken including any order made, proceeding taken, direction issued, jurisdiction exercised, assessment made and tax levied or collected, purporting to have been done or taken in pursuance of any such notification shall be deemed to have been validly and lawfully done or taken."
The effect of section 3 is that the notification dated 1st August, 1958, shall be considered to have been issued under the amended section 3-AA(1) and such notification shall be deemed always to have been valid. It is not possible, therefore, to contend now that the notification is invalid because there was no power in the State Government under section 3-AA(1) to issue a notification specifying the rate of tax.
It is next urged that even if the notification be deemed, by virtue of the Amendment Act of 1964, to have been made under section 3-AA of the principal Act as now amended, it was still invalid on two grounds. One ground is that it has been made with retrospective effect, namely with effect from 1st April, 1956, and it is urged that there was no power in the State Government to make that notification with retrospective effect. The other ground is that it is not a notification made by the State Government and does not purport to be so. It is apparent on the terms of the notification that although made on 1st August, 1958, the rate of tax of three pies per rupee is levied under it with effect from 1st April, 1956. It cannot be disputed that it has been made with retrospective effect. It has been laid down by this court in Modi Food Products Ltd. v. Commissioner of Sales Tax, U.P. ( 6 S.T.C. 287) and in Commissioner of Sales Tax v. Moti Lal Arun Kumar (S.T.R. No. 37 of 1961 decided by Desai, C.J., and Pathak, J., on December 21, 1962), that the State Government acting in the exercise of powers delegated to it by the Legislature cannot exercise those powers with retrospective effect, unless the Legislature empowers the State Government to do so. In fact in Modi Food Products Ltd. ( 6 S.T.C. 287), the learned Judges appeared to have doubted whether the Legislature could even do so. Now, that being so, the notification dated 1st August, 1958, must be held to be invalid. In my opinion such a notification cannot be treated as operative even prospectively, namely, from the date on which it is published. The point of time from which any legislation, principal or subordinate, will take effect is an essential ingredient of the legislation. When the author of the legislation states that it will come into operation from a specified point of time, it is from that point of time alone that it can take effect. It can take effect either from that point of time or not at all. It is not open to a court construing or applying the legislation to substitute another point of time for the one specified by the author of the legislation. Therefore, if the notification is bad because it has been made with retrospective effect, it is not open to this court to say that in any event it can be treated as valid for the period following the date on which it was made, namely 1st August, 1958. In my opinion, as a vital ingredient constituting as essential element of the notification is without authority, the entire notification must fall. On behalf of the revenue it is urged that the notification must be considered to have been validated by reason of section 3(a) of the aforesaid Amendment Act of 1964. To appreciate that contention it is necessary to analyse the provisions of the Amendment Act. As its preamble suggests, the Amendment Act was made with a view "further to amend the U.P. Sales Tax Act, 1948, for certain purposes." The sole purpose expressed in the preamble is the amendment of the principal Act. That amendment has been effected by enacting section 2 of the Amendment Act which, therefore, is the key provision of that Act as it expresses its primary purpose. Section 2 provides that section 3-AA(1) of the principal Act shall be amended so that for the words "shall not exceed two ..................... paise per rupee", the words "shall be such, not exceeding two paise per rupee, as may be declared by the State Government by notification in the official Gazette" and these words shall be deemed always to have been substituted. Then follow sections 3 and 4. Section 3 is in three parts. The first part declares that any notification declaring the rate of tax purporting to be under section 3-AA of the principal Act, issued before the commencement of the Amendment Act, shall be deemed to have been issued under that section as amended. The second part provides that notwithstanding any judgment, decree or order of any court any such notification shall be deemed always to have been valid. The third part validates anything done or any action taken in pursuance of such notification. On behalf of the revenue it is said that under the second part the notification dated 1st August, 1958, must be treated as valid, no matter what the ground be for assailing its validity. I am unable to accept that contention. Considering the context of the surrounding statutory provisions it seems clear that the notification has been protected from attack on the ground that it was made under the unamended section 3-AA of the principal Act and inasmuch as the unamended section did not lay down the rate of tax nor laid down by whom and how the rate of tax was to be fixed it was invalid. The words "notwithstanding any judgment, decree or order of any court" which precede clause (a), are significant. It is important to remember that the ground of attach from which the notification is now protected by clause (a) was the ground upon which this court found the notification to be invalid in Ram Niwas Sant Lal ( 15 S.T.C. 523). Reference may also be made to the Statement of Objects and Reasons indicating the historical circumstances in which the Bill leading to the Amendment Act was placed before the Legislature. The Statement of Objects and Reasons declares :
"Under section 3-AA of the U.P. Sales Tax Act, 1948, the State Government has issued some notification declaring the rates of tax on the goods mentioned in that section. In a recent judgment, the High Court has observed that section 3-AA as it stands does not confer upon the State Government the power to declare the rates of tax on the goods mentioned in that section. For the removal of doubts it is considered necessary to amend the aforesaid section and specifically confer upon the State Government this power which under the existing provision was implied. It is also proposed to validate the proceedings so far taken under the said section."
The Bill was published in the U.P. Gazette Extraordinary dated 8th May, 1964, by a notification of the same date. The judgment of this court in Ram Niwas Sant Lal ( 15 S.T.C. 523) was delivered on 2nd April, 1964. The notification was validated by clause (a) to give full effect to the declaration contained in the opening words of section 3 that the notification would be deemed to have been issued under section 3-AA as amended. To complete the process of validation, the mantle of validity was extended to cover everything done or all actions taken including orders made, proceedings taken, directions issued, jurisdiction exercised, assessments made, and levies and collections of tax which purported to have been done or taken in pursuance of such notification. There still remained a class of cases to which the benefit of the Amendment Act did not yet reach. Those were cases where before the Amendment Act a court or authority had set aside or modified the assessment, levy or collection of tax merely on the ground that the notification referred to in section 3 of the Amendment Act was invalid. To enable a party to the proceeding or the Commissioner of Sales Tax to have the effect of such decision abrogated, a right was given under section 4 of the Amendment Act to apply to the court or authority for a review of the proceeding, and the court or authority was empowered to review the proceeding and to make such order as was necessary "to give effect to the provisions of this Act". Viewed in this context it appears that the notification dated 1st August, 1958, has been validated by section 3(a) of the Amendment Act only to cure the defect arising because of the omission in the unamended section 3-AA which was sought to be removed by the amendment. It was not validated to cure any other defect from which it might suffer. In this view of the matter, the submission of the petitioner that the notification is invalid because it was made with retrospective effect must prevail. In the circumstances, it is not necessary to consider the other ground on which the notification of 1st August, 1958, is assailed.
Now, if the notification dated 1st August, 1958, is invalid the result is that no rate of tax has been fixed in respect of oil-seeds for the assessment years 1957-58 and 1958-59 under section 3-AA of the U.P. Sales Tax Act and, therefore, that turnover cannot be assessed. Section 3-AA is a special provision of the U.P. Sales Tax Act which provides for the rate and point of levy of tax in respect of the commodities specified in the section and they include oil-seeds. The turnover of oil-seeds must be taxed strictly according to the provisions of that section. The turnover can be taxed only at the point of sale by the dealer to the consumer and only at the rate declared by the State Government by notification in the official Gazette. If there is not valid notification declaring the rate, the turnover of oil-seeds cannot be taxed. Section 3 will not be attracted, because it is the rate notified in the official Gazette under section 3-AA which alone can be applied. Therefore, the turnover of oil-seeds for the assessment years 1957-58 and 1958-59 cannot be assessed to tax.
The petitioner has also contended that no fresh assessment can be made on remand inasmuch as the limitation for making the assessment has expired. The remand order was made on 4th May, 1955, by the Assistant Commissioner (Judicial), and I am unable to see how the assessment proceeding pursuant to that order can be said to be barred by limitation. Section 21(2) provides that the period of limitation for making an assessment order is four years from the end of the assessment year, while the second proviso to that sub-section states that the period of limitation within which an assessment may be made will not apply to an assessment or reassessment made in consequence of, or to give effect to, any finding or direction contained in an order under section 9. It is beyond dispute that the remand order was made under section 9. In my opinion, it cannot be said that the assessment proceeding on remand is barred by limitation.
The last contention of the petitioner is that the Sales Tax Officer, Etawah, has no jurisdiction of take assessment proceedings in the case. Section 2(a) of the U.P. Sales Tax Act defines an assessing authority as "any person authorised by the State Government to make any assessment under this Act." A Sales Tax Officer has been defined by rule 2(h) of the U.P. Sales Tax Rules to mean "a Sales Tax Officer of the circle appointed by the State Government to perform the duties and exercise all powers of an assessing authority in such circle". A circle has been defined by rule 2(c) to mean "a sales tax circle notified under sub-rule (1) of rule 3." Rule 3 empowers the State Government to fix the limits of a circle and to appoint officers to the circle. It is clear, therefore, that a Sales Tax Officer is appointed in respect of a circle to perform the duties and exercise the powers of an assessing authority in such circle. The jurisdiction of the Sales Tax Officer in a circle is defined by rule 6. Under clause (a) he is the assessing authority in respect of dealers carrying on business within the limits of his jurisdiction. Clauses (b) and (c) of rule 6 refer to cases where the dealer carries on business within the limits of the jurisdiction of more than one Sales Tax Officer or where the principal place of business is situated outside Uttar Pradesh. Clause (d) provides that whenever there is any doubt the Commissioner will determine the Sales Tax Officer who will be the assessing authority in respect of any dealer.
Admittedly, the firm carried on business within the limits of the jurisdiction of the Sales Tax Officer, Mainpuri, and, accordingly, it should have been assessed by that Sales Tax Officer. But the cases of the firm were transferred by the Commissioner to the Sales Tax Officer, Etawah. The power of transfer has been conferred by rule 81 which provides :
"81. Transfer of cases. - (1) The Commissioner may transfer any case or class of cases pending before any Sales Tax Officer to another Sales Tax Officer ...........
Apparently, it was in the exercise of that power that the Commissioner transferred the cases of the firm from the Sales Tax Officer, Mainpuri, to the Sales Tax Officer, Etawah. The petitioner urges that rule 81 enables the transfer of a case from the Sales Tax Officer of the circle to another Sales Tax Officer of the same circle. There is no power under the rule, it is urged, to transfer a case from one circle to another circle. Now, if regard be had to the language of rule 81(1), there is nothing in it which confines the Commissioner to transferring a case from one Sales Tax Officer to another Sales Tax Officer in the same circle. The language is of the widest amplitude. Moreover, the Commissioner of Sales Tax exercises jurisdiction throughout the State. It is only if there is an express provision in the Act or under the Rules limiting the territorial exercise of that jurisdiction or such limitation can be necessarily implied, that a restriction on it can be construed.
It is then urged that rule 81 is ultra vires because it confers an unlimited power upon the Commissioner of Sales Tax in the matter of transfer of cases. An argument such as this was raised by the assessee in Pannalal Binjraj and Another v. The Union of India and Others ( 31 S.T.C. 565 (S.C.)). It was urged that section 5(7A) of the Income-tax Act, 1922, invested the Commissioner of Income-tax and the Central Board of Revenue with naked and arbitrary power to transfer any case from one Income-tax Officer to another without any limitation in point of time, that it was unguided and uncontrolled and discriminatory in its nature entitling the Commissioner of Income-tax or the Central Board of Revenue to pick out the case of one assessee from those of others in a like situation and transfer the same from one State to another or from one end of India to the other without specifying any object and without giving any reason, thus subjecting a particular assessee to discriminatory treatment whereas the other assessees similarly situated with him would continue to be assessed at the place where they reside or carry on business under section 64(1) and (2) of the Act. The contention was repelled on the ground that although prima facie it appeared that an assessee was entitled under section 64(1) and (2) to be assessed by the Income-tax Officer of the particular area where he resides or carries on business, and the convenience of the assessee was the main consideration in determining the place of assessment, the exigencies of tax collection had to be considered and the primary object of the Act, namely, the assessment, had got to be achieved, and it was observed :
"In other to assess the tax payable by an assessee more conveniently and efficiently it may be necessary to have him assessed by an Income-tax Officer of an area other than the one in which he resides or carries on business. It may be that the nature and volume of his business operations are such as require investigation into his affairs in a place other than the one where he resides or carries on business or that he is so connected with various other individuals or organizations in the way of his earning his income as to render such extra-territorial investigation necessary before he may be properly assessed. These are but instances of the various situations which may arise wherein it may be thought necessary by the income-tax authorities to transfer his case
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from the Income-tax Officer of the area in which he resides or carries on business beyond it." It was pointed out that the right of the assessee to be taxed according to the provisions of section 64(1) and (2) was hedged in with the limitation that it had to yield to the exigencies of tax collection. It was also pointed out that the infringement of such a right by an order of transfer was not a material infringement but only a deviation of a minor character from the general standard and did not necessarily involve a denial of equal rights for the simple reason that even after such transfer the case was dealt with under the normal procedure prescribed under the Act. As to the contention that section 5(7A) violated article 14 on the ground that it conferred a naked and arbitrary power unguided and uncontrolled by any rules, the Supreme Court observed that the purpose of the Act was to levy income-tax, assess and collect the same, that all the provisions in the Act had been designed with the object of achieving the purpose, and that the power of transfer was intended to be exercised in a manner which was not discriminatory. While a dealer under the U.P. Sales Tax Act has the right ordinarily to be assessed in accordance with the provisions of rule 6 of the U.P. Sales Tax Rules, the power to transfer a case which is vested in the Commissioner of Sales Tax has been provided to serve the exigencies of tax assessment and collection. All that was said by the Supreme Court in relation to the power of transfer under section 5(7A) of the Income-tax Act applies with equal force to the power of transfer vested in the Commissioner of Sales Tax by rule 81(1) of the U.P. Sales Tax Rules. In my opinion rule 81(1) is not ultra vires on the ground raised by the assessee. These are all the contentions raised on behalf of the petitioner before us. In view of my opinion that the notification dated 1st August, 1958, in respect of oil-seeds is invalid, there can be no assessment proceeding in respect of the turnover of oil-seeds when the Sales Tax Officer commences reassessment proceedings consequent upon the order of remand. In the result the petitions are partly allowed. The order of the Assistant Commissioner (Judicial) Sales Tax, remanding the case for fresh assessment is quashed to the extent that it directs the reassessment of the turnover of oil-seeds. Similarly the order of the Additional Judge (Revisions) is quashed to the extent that it affects the turnover of oil-seeds. The remaining reliefs are refused. In the circumstances the parties shall bear their own costs. GULATI, J. - I agree Petitions partly allowed.