PETITIONER:
STATE OF JAMMU & KASHMIR AND OTHERS
Vs.
RESPONDENT:
CALTEX INDIA (LTD.)
DATE OF JUDGMENT:
17/12/1965
BENCH:
RAMASWAMI, V.
BENCH:
RAMASWAMI, V.
GAJENDRAGADKAR, P.B. (CJ)
WANCHOO, K.N.
HIDAYATULLAH, M.
SATYANARAYANARAJU, P.
CITATION:
1966 AIR 1350 1966 SCR (3) 149
CITATOR INFO :
R 1969 SC 343 (13)
RF 1970 SC 306 (10)
F 1975 SC 887 (6)
ACT:
Sales Tax-Petrol sent under contract from Punjab to Jammu &
Kashmir-Sales whether inter-State in character-Chargeability
under Jammu & Kashmir Motor Spirit (Taxation of Sales) Act
2005, s. 3 Sales Tax Laws Validation Act, 1956, effect of-
Constitution of India Art. 286(2).
HEADNOTE:
Petrol and allied products were supplied by the respondent
company from its depot in Punjab to the State Mechanized
Farm at Nandpur in Jammu & Kashmir State under a contract
with the Director-General of Supplies, Delhi. The sales
were taxed under the Jammu & Kashmir Motor Spirit (Taxation
of Sales) Act, 2005 for the period January 1955 to May 1959
by a single assessment order. The assessment was challenged
by the respondent by a writ petition filed in the High
Court, as being beyond the taxing power of the State owing
to the ban imposed by Art. 286(2) as interpreted by this
Court in the Bengal Immunity case, as also the provisions of
the Central Sales Tax Act, 1956 passed by Parliament after
the amendment of Art. 286 by the Constitution Sixth
Amendment Act, 1956. The respondent’s plea was accepted by
a single judge of the High Court as regards the period after
September 6, 1955; as regards the period before and upto
that date the learned Judge held that the sales were taxable
because the ban on taxation of inter-State sales in, Art.
286(2) was lifted in respect of that period by the Sales Tax
Laws Validation Act,, 1956. In Letters Patent Appeal the
Division Bench held that. the assessment order for the whole
period from January 1955 to, May 1959 was one composite
whole and being bad in part was infected throughout and must
be treated as wholly invalid. The State appealed, to this
Court by special leave.
HELD : (i) The sales in question were inter-State sales as
both the conditions laid down in the Bengal immunity case
for a sale to be an inter-State sale that (1) there should
be a sale of goods and (2) the goods must be transported
under the contract of sale from one State to another, were
fully satisfied in the present case. The sales could not
therefore be taxed for the period not covered by the Sales
Tax Laws Validation Act, 1956. [156 C-D]
Bengal Immunity Co. Ltd. v. State of Bihar, [1955] 2 S.C.R.
603, referred to.
(ii) The last mentioned Act however validated the St-ate
laws which levied tax on inter-State sales for the period
before September 6. 1955. Hence the sales before that date
could be validly taxed as held by the single Judge. [159 F]
150
(iii) The fact that the respondent had no place of
business or storage in Jammu & Kashmir was not material
because it was not a condition for taxation under the Jammu
JUDGMENT:
should be such a place of business or storage. Section 3 of
the Act purports to tax all “retail sales”. Nor is the
holding of a licence under s. 6 which is a machinery section
only, a condition of liability to pay sales-tax under the
Act. [158 C-D]
(iv) The Division Bench was wrong when it held that because
there was one assessment order for the whole period from
January 1955 to May 1959, the whole of it was vitiated.
Sales-tax is in ultimate analysis imposed on receipts from
individual sales or purchases of goods and it was possible
to separate the assessment of receipts derived from the
sales for the period up to September 6, 1955 and to allow
the taxing authorities to enforce the statute with respect
to the sales taking place during ‘this period and also
prevent them by grant of a writ from imposing the tax with
regard to sales for the exempted period, [159 G-160 E]
State of Bombay v. United Motors India Ltd. [1953] S.C.R.
1069, relied on.
Bennett & White (Calgary) Ltd. v. Municipal District of
Sugar City No. 5, [1951] A.C. 786, distinguished.
&
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 864 of
1964.
Appeal from the judgment and order, dated July 10, 1962 of
the Jammu & Kashmir High Court in L. P. Appeal No. 4 of
1962.
S. V. Gupte, Solicitor-General, Raja Jaswant Singh, Advo-
cate-General for the State of Jammu and Kashir, N. S.
Bindra,R. H. Dhebar, and R. N. Sachthey, for the appellants
Nos. 1 and 2.
M. C. Setalvad, and D. N. Gupta, for the respondent.
The Judgment of the Court was delivered by
Ramaswami, J. This appeal is brought on a certificate
against the judgment of the Division Bench of the High Court
of Jammu & Kashmir at Srinagar, dated July 10, 1962 holding
that the respondent is not liable to pay Sales tax for the
period from January, 1955 to May, 1959 under the Jammu &
Kashmir Motor Spirit (Taxation of Sales) Act, 2005 (1948
A.D.).
The Director-General of Supplies, Delhi entered into a con-
tract with General Manager, Caltex India (Ltd.) at Bombay
(hereinafter called the respondent) for the supply of
petrol, HSD and Power Kero to the State Mechanized Farm at
Nandpur located in the State of Jammu & Kashmir. In
pursuance of this contract the respondent directed its depot
at Pathankot situated in the Punjab State to supply petrol
to the Nandpur Farm.
151
The procedure adopted was as follows. The Officer in charge
of the Nandpur farm placed indents with the Pathankot depot
for supply of specified quantities of petrol to the farm and
on receipt of the indents, the Pathankot depot transported
the petrol in its own tank-lorries to Nandpur and delivered
the petrol to the farm. The petrol was measured by means of
dipping rods and approved by the indenting officer at
Nandpur farm and thereafter the petrol was delivered to the
Nandpur farm through pumps which belonged to the respondent.
The price of petrol so supplied was paid to the respondent
at Delhi by the Director-General of Supplies. The Petrol
Taxation Officer at Srinagar considered that the sales of
petrol to Nandpur farm were liable to be taxed under the
Jammu & Kashmir Motor Spirit (Taxation of Sales) Act, 2005
and called upon the respondent to furnish returns of sales
between 1952 to 1959. The respondent, however, furnished
returns only for the period January, 1955 to May, 1959. On
the basis of the returns the Petrol Taxation Officer
assessed the respondent to pay sales tax to the extent of
Rs. 39,619.75 in respect of sales of petrol from January,
1955 to May, 1959. The respondent thereafter moved the High
Court under s. 103 of the Constitution of Jammu and Kashmir
for grant of a writ to quash the assessment of sales tax and
to restrain the State of Jammu and Kashmir and the Petrol
Taxation authorities (hereinafter called the appellants)
from levying the tax. It was contended on behalf of the
respondent that the sales tax could not be imposed as the
sales took place in the course of inter-State trade and
commerce. Syed Murtaza Fazl Ali, J. held that the
respondent was liable to pay sales tax in respect of the
sales which took place during the period January, 1955 to
September, 1955. Regarding the rest of the period of
assessment, the learned Judge held that the appellants were
not entitled to levy tax and accordingly issued a writ
restraining the appellants from levying the tax for the
period from October, 1955 to May, 1959. The appellants took
the matter in Letters Patent appeal and the respondent also
filed Cross-objection with regard to the liability to tax
for the period from January,, 1955 to September, 1955. The
Division Bench dismissed the appeal in Letters Patent and
allowed the cross-objection of the respondent, holding that
the appellants were not entitled to levy sales tax for the
entire period from January, 1955 to May, 1959 and accord-
ingly quashed the assessment of sales tax, dated October 3,
1960.
It is necessary, at this stage, to indicate the legislative
development in the State of Jammu and Kashmir which provides
the setting for the questions to be investigated in this
case.
152
Article 286 of the Constitution, as it was originally
enacted, read as follows :
“(1) No law of a State shall impose, or
authorise the imposition of, a tax on the sale
or purchase of goods where such sale or
purchase takes place–
(a) outside the State; or
(b) in the course of the import of the goods
into, or export of the goods out of, the
territory of India.
Explanation.-For the purpose of sub-clause
(a), a sale or purchase shall be deemed to
have taken place in the State in which the
goods have actually been delivered as a direct
result of such sale or purchase for the
purpose of consumption in that State,
notwithstanding- the fact that under the
general,law relating to sale of goods the
property in the goods has by reason of such
sale or purchase passed in another State.
(2) Except in so far as Parliament may by
law otherwise provide, no law of a State shall
impose, or authorise the imposition of, a tax
on the sale or purchase of any goods where
such sale or purchase takes place in the
course of inter-State trade or commerce :
Provided that the President may be order
direct that any tax on the sale or purchase of
goods’ which was being lawfully levied by the
Government of any State immediately before the
commencement of this Constitution shall,
notwithstanding that the imposition of such
tax is contrary to the provisions of this
clause, continue to be levied until the
thirty-first day of March, 1951.
(3) No law made by the Legislature of a
State imposing, or authorising the imposition
of, a tax on the sale or purchase of any such
goods as have been declared by Parliament by
law to be essential for the life of the
community shall have effect unless it has been
reserved for the consideration of the
President and has received his assent.”
Article 286 therefore imposes four bans upon the legislative
power of the States. Clause (1) prohibited every State from
imposing or authorising the imposition of, a tax on outside
sales and on sales in the course of import into or export
outside the territory
153
of India. By cl. (2) the State was prohibited from imposing
tax on the sale of goods where such sale took place in the
course of inter-State trade or commerce. But the ban could
be removed by legislation made by the Parliament. By cl.
(3) the Legislature of a State was incompetent to impose or
authorise imposition of a tax on the sale of any goods
declared by the Parliament by law to be essential for the
life of the community, unless the legislation was reserved
for the consideration of the President and had received his
assent. But Art. 286 of the Constitution did not apply to
the State of Jammu & Kashmir till May 14, 1954, because the
Constitution (Application to Jammu & Kashmir) Order 1950
made by the President of India on January 26, 1950 excepted
Art. 286 from its applicability to the State of Jammu &
Kashmir. Reference, in this connection, may be made to the
Second Schedule to the Constitution (Application to Jammu &
Kashmir) Order 1950, relevant excerpt from which is
reproduced below :
“THE SECOND SCHEDULE
(See paragraph 3)
Provisions of the Exceptions Modifications
constitution appli-
cable.
Part XII Articles 264 and 265 1.Articles 266 shall
use (2) of Art. 267, apply only in so far
Articles 268 to 281 as it relates to the
Clause (2) of Art. Consolidated Fund of
283, Articles 286 to India and the public
291, 293, 295, 296 account of India.
and 297.
2. Articles 282 and 284
shall apply only in so
far as they relate to
the Union or the public
account of India.
3. Articles 298, 299
and 300 shall apply
only in so far as
they relate to the
Union or the Govt.
of India.”
But Art. 286 was applied to the State of Jammu & Kashmir by
the Constitution (Application to Jammu & Kashmir) Order,
1954 which came into force on 14th day of May, 1954. In The
Bengal Immunity Company Ltd. v. State of Bihar(f) this Court
held that the operative provisions of the several parts of
Art. 286, namely cl. (1) (a), cl. (1) (b), cl. (2) and cl.
(3), were intended to deal with different topics and one
cannot be projected or read
(1) [1955] 2 S.C.R. 603.
L9 Sup. CI/66-11
154
into another, and therefore the Explanation in cl. (1) (a)
cannot legitimately be extended to cl. (2) either as an
exception or as a proviso thereto or read as curtailing or
limiting the ambit of cl. (2). This Court further held that
until the Parliament by law, made in exercise of the powers
vested in it by cl. (2) of Art. 286, provides otherwise no
State may impose or authorise the imposition of any tax on
sales or purchases of goods when such sales or purchases
take place in the course of inter-State trade or commerce,
and therefore the State Legislature could not charge inter-
State sales or purchases until the Parliament had otherwise
provided. The judgment of the Court in the Bengal Immunity
Company’s case(1), was delivered on September 6, 1955. The
President issued the Sales Tax Laws Validation Ordinance,
1956, on January 30, 1956, the provisions of which were
later embodied in the Sales Tax Laws Validation Act, 1956.
By this Act notwithstanding any judgment, decree or order of
any Court, no law of a State imposing, or authorising the
imposition of, a tax on the sale or purchase of any goods
where such sale or purchase took place in the course of
inter-State trade or commerce during the period between the
1st day of April, 1951 and the 6th day of September, 1955,
shall be deemed to be invalid merely by reason of the fact
that such sale or purchase took place in the course of
inter-State trade or commerce; and all such taxes levied or
collected or purported to have been levied or collected
during the aforesaid period shall be deemed always to have
been validly levied or collected in accordance with law.
The Parliament thus removed the ban contained in Art. 286(2)
of the Constitution retrospectively but limited only to the
period between April 1, 1951 and September 6, 1955. All
transactions of sale, even though they were inter-State
could for that period be lawfully charged to tax. But Art.
286(2) remained operative after September 6, 1955 till the
Constitution was amended by the Constitution (Sixth
Amendment) Act, i.e., September 11, 1956. By the amendment,
the explanation to cl. (1) of Art. 286 was deleted and for
cls. (2) and (3) the following clauses were substituted :
“(2) Parliament may by law formulate
principles for determining when a sale or
purchase of goods takes place in any of the
ways mentioned in clause (1).
(3) 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
(1) [1955] 2 S.C.R. 603.
155
of special importance in inter-state trade or
commerce be subject to such restrictions and
conditions in regard to the system of levy,
rates and other incidents of the tax as
Parliament may by law specify.”
By cl. (2) of Art. 286 as amended, Parliament was authorised
to formulate principles for determining when a sale or
purchase of goods takes place in any of the ways mentioned
in cl. (1), namely, outside the State or in the course of
the import into, or export out of the territory of India.
By the Constitution (Sixth Amendment) Act, Parliament was
entrusted with power under Art. 269(3) to formulate
principles for determining when a sale or purchase of goods
takes place in the course of inter-State trade or commerce;
and to effectuate the conferment of that power, in the
Seventh Schedule, Entry 92A was added in the First List and
Entry 54 in the Second List was amended. The Parliament
enacted, in exercise of that power, the Central Sales Tax
Act 74 of 1956 to formulate principles for determining when
a sale or purchase of goods takes place in the course of
inter-State trade or commerce or outside a State or in the
course of import into or export from India, and to provide
for the levy, collection and distribution of taxes on sales
of goods in the course of inter-State trade or commerce and
to declare certain goods to be of special importance in
inter-State trade or commerce etc. Article 286, as amended
by the Constitution Sixth Amendment Act, 1956, was applied
to the State of Jammu & Kashmir on 16th January 1958 by the
Constitution (Application to Jammu & Kashmir) Amendment
Order 1958. The Central Sales Tax Act (Act 74 of 1956) was
enacted by Parliament on December 21, 1956 but it was
applied to the State of Jammu & Kashmir on March 23, 1958 by
Act 5 of 1958.
The questions presented for determination in this appeal are
(1) whether sales tax could be imposed on the respondent
for the period from October, 1955 to May, 1959 in view of
the prohibition contained in Art. 286(2) of the Constitution
as it stood before its amendment, (2) whether sales tax
could. be validly levied on sales taking place between
January 1, 1955 to September 6, 1955 in view of the
provisions of Sales Tax Validation Act, 1956 (Act 7 of
1956).
As regards the first question, it is admitted by the parties
that petrol was transported from Pathankot in the State of
Punjab to Nangpur in the State of Jammu & Kashmir under the
contract of sale. The petrol was kept in storage at a depot
of the respondent
156
at Pathankot and it was carried in the trucks of the
respondent from Pathankot and delivered to the Nandpur farm
in the State of Jammu & Kashmir. The price of the petrol
supplied was paid to the respondent at Delhi by the
Director-General of Supplies. Upon these facts it is
manifest that there was movement of goods from the State of
Punjab to the State of Jammu & Kashmir under the contract of
sale and there was completion of sale by the passing of
property and the delivery of the goods to the purchaser. As
pointed out by Venkatarama Ayyar, J. in the Bengal Immunity
Company case(1) :
“A sale could be said to begin the course of
interState trade only if two conditions concur
: (1) A sale of goods, and (2) a transport of
those goods from one State to another under
the contract of sale. Unless both these
conditions are satisfied, there can be no sale
in the course of inter-State trade.”
In the present case, both these conditions have been
satisfied and the transactions of sale made between the
parties were unquestionably in the course of inter-State
trade. Indeed, the Solicitor-General on behalf of the
appellants did not seriously challenge the finding of the
High Court on his point.
We proceed to consider the next question, viz., whether the
respondent was liable to pay sales tax for the period from
January 1, 1955 to September 6, 1955 in view of the lifting
of the finding of the High Court on this point.
On behalf of the respondent Mr. Setalvad put forward the
argument that the Sales Tax Validation Act by itself did not
empower any State to levy any tax on sales or purchases in
the course of inter-State trade but it merely liberated
Sales Tax Acts of several States from the fetter imposed by
cl. (2) of Art. 286 of the Constitution and left the State
Act to operate in its own terms. It was submitted that if
there was no law in a State empowering the levy of a tax on
sales or purchases in the course of inter-State trade or
commerce, the State could not derive any advantage from the
Sales Tax Validation Act. It was contended that the
Explanation to Art. 286 (1) (a) of the Constitution did not
confer any taxing power on any State Legislature. On the
contrary, it was intended to place a limitation on the State
taxing power and therefore the mere lifting of the ban under
cl. (2) of Art. 286 did not enable the State to impose the
tax on sales in the course of inter-State trade and such
levy of tax could be made
(1) [1955] 2 S.C.R. 603.
157
only when the taxing statute of the State expressly provides
for it. In our opinion, the argument of Mr. Setalvad is
well-founded. The question, therefore, arises whether the
Jammu & Kashmir Motor Spirit (Taxation of Sales) Act, 2005
(hereinafter called the Act) applies to the sale of petrol
made by the respondent between January 1, 1955 to September
6, 1955 and whether the appellants can validly assess the
respondent to sales tax with regard to these transactions.
The preamble of the Act states that it is expedient to
provide for the levy of a tax on the retail sale of motor
spirit. Section 2 (g) of the Act defines “retail sale” to
mean a sale by a retail dealer of any motor spirit to a
consumer or to any other person for any purpose other than
resale. Section 2(f) defines “retail dealer” to mean any
person who, on commission or otherwise, sells any motor
spirit to a consumer or to any other person for any purpose
other than resale or keeps any motor spirit for sale to
consumers or to any other persons for purposes other than
resale. Under s. 2(h) of the Act the words “sale” and
“sell” include exchange barter and also the consumption of
motor spirit by the retail dealer himself. Section 3 deals
with the imposition of tax and reads as follows :
“3. There shall be levied and paid to the
Government on all retail sales of motor spirit
a tax at the rate of four annas for each
imperial gallon of motor spirit or at such
other rate as the Government may prescribe
from time to time.”
Section 6 of the Act deals with the licensing
of the retail dealers and states that after
the expiry of a period of two months from the
commencement of the Act no person shall carry
on business as a retail dealer unless he is in
possession of a valid license. Section 7
relates to the procedure for grant of licence.
Section 7 (4) states as follows :
“No license under this Act shall be granted to
any person who does not hold a license for the
storage of dangerous petroleum under the
Petroleum Act, 1998, and if any such license
granted under that Act is cancelled, suspended
or is not renewed any license granted under
this Act to the holder thereof shall be deemed
to be cancelled, suspended or not renewed, as
the case may be.”
It was contended on behalf of the respondent that no tax
could be levied under the Act unless the assessee has his
place of business
158
or storage of motor spirit within the State of Jammu &
Kashmir. It was pointed out that no retail dealer was
permitted to carry on business as a retail dealer of motor
spirit unless he holds a license for storage of petroleum
under the State Petroleum Act. It is admitted that the
respondent had no storage depot or place of business within
the State of Jammu & Kashmir at the material time. It is
also conceded that the respondent did not hold any licence
for storage of petrol within the State. Mr. Setalvad
therefore contended that the appellants were not authorised
to levy sales-tax under the provisions of the Act. We are
unable to accept this contention as correct. The charging
section s. 3 authorises the Government to levy tax on ”all
retail sales of motor spirit” at the rate of four annas for
each imperial gallon of motor spirit or at such other rate
as the Government may prescribe from time to time. The
charging section does not require that for the purpose of
assessment of tax the assessee should have his place of
business or his storage depot within the State of Jammu &
Kashmir. Nor is it a requirement of the section that the
assessee should hold a licence of a retail dealer under the
Act. The provisions in regard to licence contained in ss. 6
and 7 deal with the machinery of collection and it is not
permissible, in our opinion. to construe the language of s.
3 of the Act with reference to ss. 6 and 7 or to place any
restriction on the scope and effect of the charge of tax in
the context of these sections. We may, in this context,
refer to the provisions of S. 10 of the Act which states
“10.whoever contravene the provides of section
6 shall be, punishable with fine which may
extend to one thousand rupees or to a sum
double the amount of tax due in respect of the
sale of any motor spirit conducted by or on
behalf of such person, whichever is gr
eater.”
It is evident from the section that a person who trades in
petrol without taking out a licence under s. 6 of the Act is
liable to pay double the amount of tax due from him. In
other words. the requirement of s. 6 is only a matter of
machinery and does not affect the liability of the person
who trades in petrol to pay tax in accordance with the
charging section. It follows therefore that the respondent
will be liable to pay sales-tax if it is shown that it has
made retail sales of motor spirit within the meaning of s. 3
of the Act. This takes us to the question whether the
transactions of sale between January 1, 1955 to September 6,
1955 were “retail sales of motor spirit” within the meaning
of S. 3 of the Act. As observed earlier, the procedure for
supply of petrol was that the officer in-charge of the
Nandpur
159
farm placed indents on the Pathankot depot of the respondent
for supplies of specified quantities of petrol to the farm.
On receipt of the indent the Pathankot depot transported the
petrol in its own tank-lorries to Nandpur within the State
of Jammu and Kashmir and decanted the petrol in its own
underground tanks where it was measured by means of dipping
rods and approved by the indenting officer and was then
delivered to Nandpur farm. In this state of facts it was
contended by the Solicitor-General that the property in the
petrol passed to Nandpur farm inside the State of Jammu &
Kashmir. It was submitted that the sales were, therefore,
liable to be taxed under s. 3 of the Act for the period from
January 1, 1955 to September 6, 1955 when the ban was
removed. On behalf of the respondent Mr. Setalvad said that
there was appropriation of the goods to the contract at the
bulk depot of the, respondent at Pathankot and therefore the
property of the goods passed to the Nandpur farm at
Pathankot outside the State of Jammu & Kashmir. No such
argument appears to have been advanced on behalf of the
respondent before the High Court which decided the case on
the assumption that there was appropriation of the goods to
the contract at Srinagar when the petrol was transferred
from the tank-lorries of the respondent for delivery to
Nandpur farm and measured by means of dipping rods and
approved by the indenting officer. The question as to
passing of title of goods is essentially a question of fact
and we must deal with the present case on the same basis as
the High Court has done, viz., that there was passing of
title inside the State of Jammu & Kashmir. We accordingly
hold that s. 3 of the Act applies to transactions of sale of
petrol made by the respondent for the period from January 1,
1955 to September 6, 1955 and assessment of sales-tax made
by the taxing authorities for this period is legally valid.
It was lastly contended by the Solicitor-General that the
High Court was in error in taking the view that the taxing
authorities were not entitled to levy sales-tax for the
period from January 1, 1955 to September 6, 1955, because
the assessment was one composite whole relating to the
entire period from January 1, 1955 to May, 1959, and the
assessment which was bad in part was infected throughout and
must be treated as invalid. In our opinion, the criticism
of the Solicitor-General on this point is well-founded and
must be accepted as correct. It is true that there was one
order of assessment for the period from January 1, 1955 to
May, 1959 but the assessment can be easily split up and
dissected and the items of sale can be separated and taxed
for differ-
160
ent periods. In reading the conclusion that the entire
assessment was invalid the High Court has relied on the
decision of the Judicial Committee in Bennett & White
(Calgary) Ltd. v. Municipal District of Sugar City No. 5(1)
in which Lord Reid observed as follows at page 816 of the
Report :
“When an assessment is not for an entire sum,
but for separate sums, dissected and earmarked
each of them to a separate assessable item, a
court can sever the items and cut out one or
more along with the sum attributed to it,
while affirming the residue. But where the
assessment consists of a single undivided sum
in respect of the totality of property treated
as assessable, and when one component (not
dismissible as “de minimis”) is on any view
not assessable and wrongly included, it would
seem clear that such a procedure is barred,
and the assessment is bad wholly.”
But the principle has no application in the present case
because the sales-tax is imposed, in ultimate analysis, on
receipts from individuals sales or purchases of goods
effected during the entire period and it is possible to
separate the assessment of the receipts derived from the
sales for the period from January 1, 1955 to September 6,
1955 and to allow the taxing authorities to enforce the
statute with respect to the sales taking place in this
period and also prevent them by grant of a writ from
imposing the tax with regard to sales for the exempted
period. In other words, the assessment for the period from
January 1, 1955 to September 6, 1955 can be separated and
dissected from the assessment of the rest of the period and
the High Court was in error in holding that the assessment
for the entire period was invalid in toto. The view that we
have expressed is borne out by the decision of this Court in
The State of Bombay v. The United Motors (India) Ltd. (2).
For these reasons we allow this appeal in part and order
that the respondent should be granted a writ in the nature
of mandamus directing the appellants not to realise sales-
tax with regard to transactions of sale between the period
from September 7, 19 55 to May, 1959 but the respondent will
not be entitled to any writ with regard to transactions of
sale between January 1, 1955 to September 6, 1955. The
appeal is accordingly allowed to this extent but the parties
will bear their own costs.
Appeal allowed in part.
(1) [1951] A.C. 786.
(2) [1953] S.C.R. 1069 at p. 1097.
161