2S.C.R.

SUPREME COURT REPORTS 469

S. KHADER SHERIFF

MUNNUSWAMI GOUNDER AND OTHERS.

[S. R. DAs, ACTING C. J. and VENKATARAMA

AYYAR J.]

Election Dispute-Non-disclosure by returned candidate of sums paid to party funtis in his return of elet;_tion expenses-Such sums, if' spent for purposes of election-Commencement of candidature- Expense in excess of the prescribed limit-Election declared void by Tribunal-Resulting disqualification-Finding, if must be after notice-Representation of the People Act (No. XLIII of 1951), ss. 79(b), 99 proviso, 123(7), 140.

The appellant, who fought and won the election as a Congress candidate, had applied to the Tamil Nad Congress Committee on 12-9-51 for party nomination stating his desire "to contest as a Congress candidate in the forthcoming election" and paid a sum of Rs. 500 of which Rs. 100 was subscription for membership and Rs. 400 a deposit, liable to be r.efunded in case the application was refused. On 23-9-51 he paid another sum of Rs. 500 as donation to the District Congress Committee. On 13-11-51 he was adopted by the Congress as its candidate.

His nomination paper for the election was filed on 16-11-51.

The charge against him in the election petition was that he had failed to include these two sums in his return of election expenses and with the addition of these sums the maximum limit of election expenses prescribed for the constituency would be exceeded. The Tribunal found that both these sums were paid for election purposes and the maximum prescribed had been exceeded and, therefore, s. 123(7) had been contravened and declared the election void under s. 100(2)(b) of the Act.

The Tribunal also recorded a finding that the appellant was liable to the disqualifications specified in s. 140, clauses (l)(a) and (2).

Held, affirming the decision of the Tribunal, that the exact point of time from which a person must be deemed to be a candidate within the meaning of s. 79(b) of the Representation of the People Act is the time when, with the election in prospect, he himself decides to stand as a candidate and communicates such decision to others leaving no manner of doubt as to his intention.

This must be an act of his own volition and no.t that of other persons or bodies adopting him as their candidate.

The Lichfield case, [1895] 5 O'M. & H. 1, referred to.

That the applicant was a candidate from the date of his application to the Tamil Nad Congress Committee and the two sums were election expenses incurred by him and should have been shown in his return.

S. Khadar Sheri.ff

Munnuswami Coundn and othlrs

That the con1mencement of candidature in a particular case is a question of fact to be determined by the Tribunal and its decision in this regard is not liable to be reviewed by the Supreme Court in an appeal by special leave.

That whether a particular sum paid at the time or on the eve of the election was a donation, an act of charity or an election ex~ pense must depend on whether or not such payment was open to the charge of having been made in order to induce the voters to vote in favour of the donor. This again is a question of fact to be decided by the Tribunal.

The Wigan case, [1881] 4 O"M. & H. 1, and The Kingston case [1911] 6 O' M. & H. 274, relied on.

The Kennington case, (1886] 4 O'M. & H. 93, held inapplicable. 1"hat it was not necessary for the Tribunal to serve a notice under the proviso to s. 99 of the Act on the appellant, a party to the election petition, to enable the Tribunal to record his liability to disqualification under s. 140 of the Act in respect of the charge levelled against him.

CIVIL

APPELLATE

J URISDIC1'ION : Civil Appeal No. 26 of 1955.

Appeal under Article 136 of the Constitution of .India from the Judgment and Order dated the 28th February, 1953, of the Election Tribunal, Vellore, in Election Petition No. 84 of 1954.

N. C. Chatterjee, (R. Ganapathy Iyer, with him), for the appellant.

N aunit Lal, for respondent No. 1.

1955.

September, 15.

The Judgment of the Court was delivered by

VENKATARAMA

AYYAR J.-This is an appeal by

pecial leave against the order of the Election Tribunal, Vellore, declaring - the election of appellant to the Legislative Assembly void on the ground that there had been a violation of section 123(7) of the Representation of the People Act No. XLIII of 1951.

Under that section, it is a major corrupt practice for a candidate or his agent to incur or authorise the incurring of expenditure in contravention of the Act or any rule made thereunder.

Rule 117 provides that: "No expense shall be incurred or authorised by a

candidate or his election agent on account of or in respect of the conduct and management of an election in any one constituency in a State in excess of the maximum amount specified in respect of that Constituency in Schedule V."

Under Schedule V, the maximum expenses specified for election to the Madras State Legisfature from a single-member constituency, such as Ranipct, is Rs. 8,000.

The return of the expenses lodged by the appellant showed that he had spent in all Rs. 7, fXl3 for the election, and that was within the limit allowed.

The charge against him in the petition was that he had failed to disclose in his return two sums of Rs. 500 each, spent for election purposes, and that with the aadition of those amounts, the maximum specified had been exceeded. As regards the first amount, the facts found are that on 12-9-1951 the appellant applied to the Tamil Nad Congress Committee for permission to contest the election as a Congress candidate, and along with his application he paid Rs. 500 out of which Rs. 100 was subscription for membership and Rs. 400 deposit, which was liable to be returned under the rules, in case the applicant was not adopted. as the candidate, but not otherwise. In fact. the appellant was adopted as the Congress candidate, and it was on that ticket that he fought and won the election.

The second payment of Rs. 500 was on 23-9-1951 to the North Arcot District Congress Committee, which was in charge of the Ranipet Constituency.

The Tribunal held that both these sums were paid for purposes of election and should have been included in the return made by the appellant, that if they were so included, the maximum prescribed was exceeded, and that therefore section 123(7) had been contravened, and accorqingly declared the election void under section 100(2) (b) of the Act. The appellant disputes the correctness of this order. The Tribunal also recorded as part of the order a finding that the appellant had become subject to the disqualifications specified in section 140, sub-clauses ( 1) (a) and (2). The appellant attacks this finding on

S. Eluzthr S'"'i/f ,,.

M-111ami G-4n and olltm

Ynikalarama

.d.uar J.

S. K/ilukr S""if!

Munnunoami G=uler and othm

the ground that it was given without notice to him, as required by the proviso to section 99.

The points that arise for decision in this appeal arc ( 1) whether on the facts found, there was a contravention of section 123(7) of Act No. XLIII of 1951 ; and (2) whether the finding that the appellant had become disqualified under section 140 is bad for want of notice under the proviso to section 99 of the Act. ( 1) Taking first the sum of Rs. 500 paid by the appellant to the Tamil Nad Congress Committee on 12-9-1951, the contention of the appellant is that section 123(7) and Rule 117 have reference only to expenses incurred by a candidate or his agent, that the appellant was nominated as a candidate only on 16-11-1951, and that as the payment in question was made long prior to the filing of the nomination paper, the provisions aforesaid had no application.

That raises the question as to when the appellant became a 'candidate' for purposes of section 123(7).

Section 79(b) of Act No. XLIII of 1951 defines a candidate thus:

"Candidate" means a person who has been or claims to have been duly nominated as a candidate at any election, and any such person shall be deemed to have been a candidate as from the time when, with the election in prospect, he bagan to hold himself out as a prospective candidate".

Under this definition which applies to section 123(7), all election expenses incurred by a candidate from the time when, with the election in prospect, he holds himself out as a prospective candidate and not merely from the date when he is nominated, will have to enter into the reckoning under Rule 117 read with Schedule V. That the election was in prospect when the amount of Rs. 500 was paid is clear from the very application of the appellant dated 12-9-1951 wherein he states that he desires "to contest as a Congress candidate in the forthcoming election".

That is not disputed by the appellant. What he contends is that though the election was in prospect, he had not become a prospective candidate at that time, and that he became so only when the Congress

adopted him as its candidate on 13-11-1951.

It was argued that it was open to the Congress Committee either to adopt him as its candidate or not, that if it did not adopt him, he could not, under the rules to which he had subscribed, stand for election at all, that until he was actually adopted therefor, his candidature was nebulaus and uncertain, and that the application w:is consequently nothing more than a preliminary step-in-aid of his becoming a prospective candidate.

The question when a person becomes a candidate must be decided on the language of section 79(b ).

Under that section, the candidature commences when the pe1son begins to hold himself out as a prospective candidate.

The determining factor therefore is the decision of the candidate himself, no the act of other persons or bodie~ adopting him as their candidate.

In The Lich field case(1) at page 36, Baron Pollock observed:

"I think the proper mode of judging a question of this kind is to take it from the point of view of the candidate himself.

Every man must judge when he wi!l throw himself into the arena .... But it is his own choice when he throws down the glove and commences his candidature".

When, therefore, a question arises under section 79(b) whether a person had become a candidate at a given point of time, what has to be seen is whether at that time, he had clearly and unambiguously deciared his intention to stand as a candidate, so that' it could be said of him that he held himself out as a prospective candidate.

That he has merely formed an intention to stand for election is not sufficient to make him a prospective candidate, because it is of the essence of the matter that he should hold himself out as a prospective candidate.

That can only be if he communicates that intention to the outside world by declaration or conduct from which it could be inferred that he intends to stand as a candidate.

Has that been established in this case ?

When the appellant made the payment of Rs. 500 to

11)5 0.' M. & H. l. 12-83 S. C. India/59

1955 s. Khaur Shniff

Munnuswa•i Goundtr and olhws.

V tnktttarama

Ayyar J.

S. lfluldw SMtjf/

M- G-mr atul .,,,,,,

the Tamil Nad Congress Committee, did he merely evince an intention to stand as a candidate, or did he hold himself out as a prospective candidate? The application contains a clear declaration of his intention to contest the election, and that declaration is backed by the solemn act of payment of Rs. 500.

The appellant had thus clearly and unambiguously conveyed to the Committee his intention to stand as a candidate, and he thereby became a prospective candidate within the meaning of section 79(b). The possibility that the Congress might not adopt him as its candidate does not, as already mentioned, affect the position, as the section has regard only to the volition and conduct of the candidate.

It is true that if the Congress did not adopt him, the appellant might not b, e able to stand for election.

But such a result is implicit in the very notion of a prospective candidate, and does not militate against his becoming one from the date of his application.

It was also urged for the appellant that the declaration was made nor to the constituency in the North Arcot District but to the Central Committee at Madras, and that unless there was proof of holding out to the electorate, the requirements of section 79 (b) were not satisfied.

It may be that the holding out which is conte; nplated by that section is to the Constituency; but if it is the Central Committee that has to decide who shall be adopted for election from the concerned constituency, any declaration made to the Committee is, in effect, addressed to the constituency through its accredited representative.

The question when a candidature commences is, as has, been held over and over again, one of fact, and a decision of the Tribunal on that question is not liable to be reviewed by this Court in special appeal.

In the present case, the Tribunal has, in a well-considered judgment, formulated the correct principles to be applied in determining when a candidature commences, examined the evidence in the light of those principles, and recorded a finding that the appellant was a prospective candidate when he made the payment of

Rs. 500 on 12-9-1951, and we do. not find any ground for differing from it.

Then, there is the payment of Rs. 500 made to the North Arcot District Congress Committee on 23-9-1951.

The contention of Mr. Chatterjee with ref- .crence to this payment is that unlike the payment dated 12-9-1951, this was not spent for purposes of dection but was donation made to the Committee out of µi-iilanthropic motives.

It has been frequently pointed out that while it is meritorious to make a <lonation for charitable purposes, if that is made at the time or on the eve of an election, it is open to the charge that its real object was to induce the electors to vote in favour of the particular candidate,, and that it should therefore be treated as election expense.

In The Wigan Case(1), Bowen, J. observed :

" ...... I wish to answer the suggestion that this was merely charity.

Charity at election times ought to be kept by politicians in the background ...... In truth, I think, it will generally be found that the feeling which distributes relief to the poor at election time, though those who are the distributors may not be aware of it, is really not charity, but party feeling following in the steps of charity, wearing the dress of charity, and mimicking her gait".

In The Kingston Case(2), Ridley, J. said:

"Now assume for the moment that a man forms a design, which at the time is in prospect, for that is the point; yet if circumstances alter, and an election becomes imminent, he will go on with that design at his risk".

ft would again be a question of fact whether the payment of Rs. 500 by the appellant on 23-9-1951 was a pure act of charity or was expense incurred for election purposes.

It was admitted by the Secretary of the North Arcot District Congress Committee that it was usual for the Tamil Nad Congress Committee to consult the local Committee in the matter of adoption of candidates, and that at the time the payment \_'\'as made, it was known that the appellant had applied to be adopted by the Congress. Exhibit A(7)

(') 4 0.'M & H. I.

(1) 6 O'M. & H. 374.

S. Khader Sheriff

Munnuswami GOUflder and other

V enkatarama

i{yyar J.

S. Khader Sheriff

MunnuJwami Gowukr and oJhrs

Vtnkatarama

A~J!Yar ].

which 1s a statement of receipts and payments of the North Arcot District Congress Committee for the period 24-9-1951 to 24-5-1952 shows that the Committee started with an opening balance of Rs. 7-12-2, and that various amounts were collected including the sum of Rs. 500 paid by the appellant and utilised for election expenses.

The Tribunal held on a consideration of these facts that the payment in question could not be regarded as innocent, and "not motivated by the desire to obtain the recommendations of the North Arcot District Congress Committee for candidature of the first respondent".

No ground has bcCll shown for differing from this conclusion.

It was finally contended for the appellant that the two payments dated 12-9-1951 and 23-9-1951 could not be said to be expenses incurred on account of the conduct and management of an election, and reliance was placed on the decision in The Kennington Case('), where it was held that payments made for the running of a newspaper started for supporting a candidate were not expenses incurred in the conduct and management of an election.

The facts of the present case have no resemblance to those found in that case, and the following comment on that decision in Parker's Election Agent and Returning Officer, Fifth Edition, page 241 is instructive:

"But this decision could not be safely followed except where the facts are precisely similar".

On the findings recorded above, the expenses incurred by the appellant come to Rs. 8,06.3, and the corrupt practice specified in section 123(7) has been committed.

The election was therefore rightly set aside under section 100(2) (b) of Act No. XLIII of 1951.

(2) It is next contended for the appellant that the Tribunal was in error in recording as part of the order a finding that by reason of the contravention of section 123(7), the appellant had become subject to the disqualification specified in section 140, without giving notice to him as required by the proviso to section

(') 4 0' M. & H. 93.

2S.C.R.

SUPREME COURT RE.l'ORTS 477

91. The question whether a party to an election pet~

tion is entitled to a notice under the proviso in respect of the very charges w!Hch were the subject-matter of enquiry in the petition itself, has been considered by this Court in Civil Appeal No. 21 of 1955, and it has been held therein that if the party had opportunity given to him in the hearing of the petition to meet the very charge in respect of which a finding is to be re- -corded under section 99( 1) (a), then he is not entitled to a further notice in respect of the same matter, under the proviso.

In the present case, the finding under section 99(1)(a) relates to the very payments which were the subject-matter of enquiry in the election petition, and therefore no notice was required to be given to the appellant under the pro1iso. This objection also fails, and the appeal must accordingly be dismissed.

The respondent has stated through his counsel Shri Naunit Lal that he does not propose to contest the appeal.

There will accordingly be no order as to costs.

Appeal dismissed.

CHATTANATHA KARAYALAR

"· RAMACf{A.NDRA

IYER

AND

ANOTHER.

{V1v1AN BnsE, VENKATARAMA AYYAR and B. P. SINHA JJ.]

Election Dispute-Returned candidate alleged to be disqualified for being chosen as a member-Hindu fathe1 entering into Government conttact, if does so en behalf of the undivided family-Presumption ef Hindu Law-Finding of benami, if liable to be intei'fered with in

Special appeal-Representation of the People Act (XL!Il of 1951),

SS. 7(d), 9(2}.

There is no presumption in Hindu Law that a business standing in the name of a member of the Hindu joint family is joint family business, even when that member is the manager or the father.

There is this difference between the position of the father starting new business and a mere manager doing so that while the debts r.ontracted by the father in such business are binding on the sons on the theory of a son's pious obligation to pay his father's debt, those contracted by the latter are not binding on the other

S. Khat/er S/tn'il

v. , .\funnruwami Gounder and others

V enkatarama

AY, var J.

S1ptemb11 19

469

S. KHADER SHERIFF

MUNNUSWAMI GOUNDER AND OTHERS

S. R. DAs

Representation of the People Act

ss. 79(b), 99

Tamil Nad Congress Committee

District Congress Committee

Congress

s. 123(7)

s. 100(2)(b)

s. 140

s. 79(b)

Representation of the People Act

Lichfield

S. Khadar Sheri.ff

Munnuswami Coundn

Supreme Court

Wigan

Kingston

Kennington

s. 99

s. 140

Article 136

N. C. Chatterjee

R. Ganapathy Iyer

N aunit Lal

section 123(7)

Representation of the People Act

Schedule V

Schedule V

Madras

Ranipct

North Arcot District Congress Committee

Ranipet

section 123(7)

section 100(2)

section 140

S. Eluzthr

section 99

section 123(7)

section 140

section 99

section 123(7)

section 123(7)

Section 79(b)

section 123(7)

Schedule V

section 79(b )

Pollock

section 79(b)

Ayyar

section 79(b)

Arcot

section 79

Chatterjee

Bowen

Ridley

S. Khader

Munnuswami GOUflder

MunnuJwami Gowukr

Parker

section 123(7)

section 100(2)

section 123(7)

section 140

section 99( 1)

section 99(1)(a)

Naunit Lal

CHATTANATHA KARAYALAR

VENKATARAMA AYYAR

B. P. SINHA

SS. 7(d), 9

.\funnruwami Gounder


2S.C.R.

SUPREME COURT RE.l'ORTS 477

91. The question whether a party to an election pet~

tion is entitled to a notice under the proviso in respect of the very charges w!Hch were the subject-matter of enquiry in the petition itself, has been considered by this Court in Civil Appeal No. 21 of 1955, and it has been held therein that if the party had opportunity given to him in the hearing of the petition to meet the very charge in respect of which a finding is to be re- -corded under section 99( 1) (a), then he is not entitled to a further notice in respect of the same matter, under the proviso.

In the present case, the finding under section 99(1)(a) relates to the very payments which were the subject-matter of enquiry in the election petition, and therefore no notice was required to be given to the appellant under the pro1iso. This objection also fails, and the appeal must accordingly be dismissed.

The respondent has stated through his counsel Shri Naunit Lal that he does not propose to contest the appeal.

There will accordingly be no order as to costs.

Appeal dismissed.

CHATTANATHA KARAYALAR

"· RAMACf{A.NDRA

IYER

AND

ANOTHER.

{V1v1AN BnsE, VENKATARAMA AYYAR and B. P. SINHA JJ.]

Election Dispute-Returned candidate alleged to be disqualified for being chosen as a member-Hindu fathe1 entering into Government conttact, if does so en behalf of the undivided family-Presumption ef Hindu Law-Finding of benami, if liable to be intei'fered with in

Special appeal-Representation of the People Act (XL!Il of 1951),

SS. 7(d), 9(2}.

There is no presumption in Hindu Law that a business standing in the name of a member of the Hindu joint family is joint family business, even when that member is the manager or the father.

There is this difference between the position of the father starting new business and a mere manager doing so that while the debts r.ontracted by the father in such business are binding on the sons on the theory of a son's pious obligation to pay his father's debt, those contracted by the latter are not binding on the other

S. Khat/er S/tn'il

v. , .\funnruwami Gounder and others

V enkatarama

AY, var J.

S1ptemb11 19

ChaJtanatha

Karoyalar

"• Ramachandra Iyer and another.

mcn1bers of the family unless, at least, it can be shown that the starting of the business was necessary.

Ram Nath v. Chiranii Lal, ([1934] l.L.R. 57 AIL 605), Chhotey Lal Chaudhury v. Dalip Narain Sing/,., ([1938] l.L.R. 17 Patna 386), Hayat Alia Shah v. Nern Chand (A.LR. [1945] Lah. 169), referred to.

But this distinctive position of the father docs not by itself make the new business started by him a joint business of the andivided family.

The question of benaru; is a question of fact and \Vhcrc there is. evidence to support a finding that a person is a bcnamidar for another, the Supreme Court in a Special appeal will not interfere with it.

Consequently, in a case where an election was challenged on the ground that the candidate returned was intcrt:sted in a contqct entered into by his father, bcnami in the name of another, with the Government for felling trees and transporting timber, and as such disqualified to stand ior election under s. 7(d) read with s. 9(2) of the Representation of the People Act and the Tribunal found on evidence that the father was the real contracting party but without consid_cring the evidence on the other point which, if believed,. might sustain a finding that the father was acting on behalf of the fa.mily, presumed as a matter of law that the son had -interest in the contract and declared the election void.

Held, that the Tribunal took an erroneous view of the law and made a wrong presumption, so its decision must be set aside, and as the findings are not sufficient for disposal of the matter the case must be remitted back for rehearing on the evidence on record.

CML

APPELLATE Jua1soicnoN: Civil Appeal No. 136 of 1955.

Appeal by Special Leave from the Judgment and Order dated the 15th November 1954 of the Election Tribunal, Quilon, Travancore-Cochin, in Election Petition No. 18 of 1954.

S. Mohan Kumara Mangalam, H. /. Umrigar and Ra; inder Narain, for the appellant.

T. R. Balakrishnan, for respondent No. 1.

1955.

September 19.

The Judgment of the Court was delivered by

VENKATARAMA

AYYAR J.-This is an appeal by special leave against the order of the Election Tribunal, Quilon declaring the election of the appellant to the Legislative Assembly oi the State of. Travancore-

Cochin from the Shencottah Constituency void on the ground that he was diSA.ualified to stand for election under section 7(d) read with section 9(2) of Act No.

XLIII of 1951. .

Under section 7(d), a person is disqualified for being chosen as a member of the Legislative Assembly of a State, if he is interested in any contract for the supply of goods or for the execution of any works for the Government of that State.

Section 9(2) declares that if any such contract has been entered into by or on behalf of a Hindu undivided family, every member thereof shall be subject to the disqualification mentioned in section 7(d); but that if the contract has been entered into by a member of an undivided family carrying on a separate business in the course of such business, other members of the family h2ving no share or interest in that business shall not be disqualified under section 7 ( d).

The contract in the present case was for felling trees in a Government forest and transporting them for delivery at the places specified therein.

There is now no dispute that this contract is one that falls within section 7 ( d) of the Act.

The point in controversy is simply whether the contract with the Government was entered into on behalf of the joint family, of which the appellant is a member.

The ap; reement stands in the name of one Kuppuswami Karayalar, and the allegations in the petition are that he is a mere name-lender for one - Krishnaswami Karayalar, who is the manager of a joint family consisting of himself and his sons, the appellant being one of them, and that he entered into the contract in question on behalf of and for the benefit of the joint family.

The case of the appellant, on the other hand, is that Kuppuswami whose name appears in the contract was the person solely entitled to the benefits thereof, that he was not a name-lender 'for Krishnaswami Karayalar, and that further neither he nor the joint family had any interest in the contract. Certain other pleas were also put forward by him, but they are not now material.

Chaltanatlia

Earayalar

RamJJ<handra ljer and anothl'

V enkalarama

A"ar ].

C/rJJU-tq

Eulf10/• v.

Rltatlra l.Jtr ""'1 nPl/itr

Ymk•,.,•m• ..i_,_,., ].

The following issues were framed on the above contentions:

"(2) Is the said 1omt family the owner of the right and benefits of the contract for the felling and removal of timber from Coupe No. 4, Nedumangad Taluq, entered into with the Forest Department, Travancore-Cochin State?

Has the joint family any interest in the said contract ?

(3) Is Mr. Kuppuswami Karayalar whose name appears as the contractor only a name-lender for the joint Hindu family of which the respondent is a member?" ' On issue 3, the Tribunal found that Krishnaswami Karayalar was the real contracting party, and that Kuppuswami was a benamidar for him, and on issue 2, that the contract was entered into on behalf of the iomt family, of which the appellant was a member.

On these findings, it held that the appellant was disqualified under section 7(d) read with section 9(2), and declared his election void.

The appellant questions the correctness of this order firstly on the ground that the finding that Kuppuswarni is a benamidar for Krishnaswami Karayalar is not warranted by the evidence, and secondly on the ground that the finding that Krishnaswami entered into the contract on behalf of the joint family is based on a mistake of law, and is unsustainable.

On the first question, Mr . Kumaramangalam for the appellant adits that there .is evidence in support of the conclusion that Kuppuswami was a benamidar for Krishnaswami, but contends that it is meagre and worthless.

The question whether a person is a benamidar or not, is purely one of fact, and a finding thereon cannot be interfered with in special appeal, if there is evidence on which it could be based.

We must, therefore, accept the finding of the Tribunal that it was Krishnaswami, the father of the appellant, who was the real contracting party to the agreement with the Government.

The next question is whether Krishnaswami entered into the contract in h.is own personal capacity or as manager of the joint family.

The Tnbunal found

as a fact that the business started by Krishnaswami

arayalar was a new venture, and instead of _proceedmg next to consider on the evidence whether in entering into the contract he acted for himself or for the joint family, it entered into a discussion whether under the Hindu law there was a presumption that a business started by a coparcener was joint family business.

After observing that there was no such presumption "in the case of an ordinary manager", it held that "the law is different when the manager happens to be also the father".

It then referred to -certain decisions in which it had been held that the

sons were liable for the debts incurred by the father for a new business started by him, and held "on the .ibove authorities that the joint family of he respondent is the owner or the right and benefit of the preiCnt contract".

The appellant contends that tJie statement of law by the Tribunal that there is a presumption that a new business started by the father is joint family business is erroneous, and that its finding that the joint family of which the appellant was a member had an interest in the contract of Krishnaswami could not be supported, as it was based solely on. the view which it took of the law.

This criticism is, in our ?Pinion, well founded.

Under the Hindu law, there 1s no presumption that a business standing in the name of any member is a joint family one even when that member is the manager of the family, and it makes no difference in this respect that the manager is the father of the coparceners.

It is no doubt true that with reference to a trade newly started there is this difference between the position of a father and a manager, that while the debts contracted therefor by the former would be binding on the sons on the theory of pious obligation, those incurred by a manager would not be binding on the members, unless at least there was necessity for the starting of the trade, as to which see Ram Nath v. Chiranji Lal(t ), Chotey Lal v.

Dt1lip Narain(') and Ha}'at Ali v. Nem Chand( 8 ). But (') [1934] I.L.R. 57 All. 605.

(1) [1938] I.L.R. 17 Patna 386. (')A.LR. 1945 Lah. 169.

Chauanalha

Karayalar

Ramochantlra Jy" and another

Venkafarama

.1'Jar J.

Ckallll1Ullha

Karaya/M

y, Ramaehandra Jyar and another

Vmkatorama

~.,,., J.

it is one thing to say that the sons are liable for the debts contracted by the father in the trade newly started by him, and quite another thing to treat the trade itself as a joint family concern.

We arc therefore unable to accept the finding of the Tribunal that the contract of Krishnaswami Karayalar should, as a matter of law, be held to be a joint family business' of himself and his sons.

This conclusion, however, is not sufficient to dis-· pose of the matter.

The case of the respondent that Krishnaswami entered into the contract with the Government of Travancore-Cochin on behalf of thejoint family rests not merely on a presumption of law but on evidence as to facts and circumstances which, if accepted, would be sufficient to sustain a finding in. his favour: In the view it took of the law on the question, the Tribunal did not discuss the evidence bearing on this point or record a finding thereon. It. is therefore necessary that there should be a remittal of the case for a consideration of this question on the evidence.

The appellant contends that there is only the evi-· dence of the respondent in rnpport of the plea that the contract was entered into by Krishnaswami on behalf of the joint family, and that this Court could itself record a finding thereon.

But it is argued by the respondent that there are in the judgment of the Tribunal several observations which would support the conclusion that the contract was entered into on behalf of the joint family.

Thus, it is. pointed outthat in para 5 of the judgment the Tribunal observes that Krishnaswami Karayalar started this new bu, iness with a view to discharge the family debts.

It further observes in para 6 that the business required an initial investment of about Rs. 25,000 to Rs. 30,000, and that while there is evidence that about Rs. 7,000 had been borrowed by Krishnaswami Karayalar,. there is no evidence how the balance was made up.

The contention of the respondent is that this must have proceeded from the joint family funds, and that this is implicit in the finding of the Tribunal.

It is also mentioned in the judgment of the Tribunal that'

K.rishnaswami was anxious to support his son, the present appellant, and that many of the witnesses whom the respondent was obliged to examine;, were really anxious to help the appellant. (Vide para 12).

We do not, however, desire to express any opinion on these contentions, as we propose to leave them to the decision of the Tribunal.

We accordingly set aside the order f the Tribunal, and direct that the Election Commission do reconstitute the Tribunal to hear and decide the question whether Krishnaswami Karayalar entered into the contract with the Government of Travancore-Cochin on behalf of the joint family or for his own personal benefit, on a consideration of the evidence on record.

It is made clear that no further evidence will be allowed. The parties will bear their own costs in this Court.

Appeal allowed.

Case remitted for hearing.

M/S. RAM NARAIN SONS LTD.

ASST. COMMISSIONER OF SALES TAX

AND OTHERS

(and other cases)

(S. R. DAS, ACTING c. J., BHAGWATI, JAGANNADHA-

DAS, JAFER IMAM and CHANDRASEKHARA AIYAR JJ. l

Constitution of India-Article 286(2)-Pro11iso thereto-Whether the proviso is meant to lift the ban only under Article 286(2) an4 no other-And thus does not lift the ban under Article 286{1)(a) read with the Explanation-Assessment consisting of a single undi11idetl sum in respect of totality of property-Wrongful inclusion therein of certain item of property expressly exempted from taxation-Legnl effect thereof-Central Pro11inces and Berar Act 1947 (XXI of J.947) -Explanation II to Section 2(g) as originally enacted-before its amendment by Madhya Pradesh' Act IV of 1951-Whether offended Article 286(1)(a) read with the Explanation-Whether the Presidents order issued under the proviso to Article 286(2) protected the same.

Held, per S. R. DAs

ACTING CHIEF JusTICE, BHAGWa\TI, JAFER IMAM and

CHANDRASEKHARA

AIYAR JJ.

(JAGANNADHADAS J.

Chattanlllho.

Karo,>alar , ..

R(JtnJJ(; handra l)'ar and another

Venkatarama

/glr].

~20

section 99( 1)

section 99(1)(a)

Naunit Lal

CHATTANATHA KARAYALAR

RAMACf{A.NDRA

IYER

AND

ANOTHER

B. P. SINHA JJ.

S. Khat

.\funnruwami Gounder

ChaJtanatha

Karoyalar

Ramachandra Iyer

Supreme Court

s. 7(d)

s. 9(2)

Representation of the People Act

S. Mohan Kumara Mangalam

inder Narain

T. R. Balakrishnan

VENKATARAMA

AYYAR

section 7(d)

section 9(2)

section 7(d)

Section 9(2)

section 7(d)

section 7

section 7

Kuppuswami Karayalar

Krishnaswami Karayalar

Kuppuswami

enkalarama

Rltatlra

section 7(d)

section 9(2)

Kuppuswarni

Krishnaswami

Kumaramangalam

Krishnaswami

arayalar

Chauanalha

Ramochantlra Jy

Government of Travancore-Cochin

K.rishnaswami

Election Commission

RAM NARAIN SONS LTD

S. R. DAS

BHAGWATI

JAGANNADHA-

JAFER IMAM

CHANDRASEKHARA AIYAR

Constitution of India

Article 286(2)

Article 286(2)

Article 286

Berar Act 1947

Section 2(g)

Article 286(1)(a)

Article 286(2)

CHANDRASEKHARA

AIYAR

JAGANNADHADAS


2 S.C.R.

SUPREME COURT REPORTS 483

K.rishnaswami was anxious to support his son, the present appellant, and that many of the witnesses whom the respondent was obliged to examine;, were really anxious to help the appellant. (Vide para 12).

We do not, however, desire to express any opinion on these contentions, as we propose to leave them to the decision of the Tribunal.

We accordingly set aside the order f the Tribunal, and direct that the Election Commission do reconstitute the Tribunal to hear and decide the question whether Krishnaswami Karayalar entered into the contract with the Government of Travancore-Cochin on behalf of the joint family or for his own personal benefit, on a consideration of the evidence on record.

It is made clear that no further evidence will be allowed. The parties will bear their own costs in this Court.

Appeal allowed.

Case remitted for hearing.

M/S. RAM NARAIN SONS LTD.

ASST. COMMISSIONER OF SALES TAX

AND OTHERS

(and other cases)

(S. R. DAS, ACTING c. J., BHAGWATI, JAGANNADHA-

DAS, JAFER IMAM and CHANDRASEKHARA AIYAR JJ. l

Constitution of India-Article 286(2)-Pro11iso thereto-Whether the proviso is meant to lift the ban only under Article 286(2) an4 no other-And thus does not lift the ban under Article 286{1)(a) read with the Explanation-Assessment consisting of a single undi11idetl sum in respect of totality of property-Wrongful inclusion therein of certain item of property expressly exempted from taxation-Legnl effect thereof-Central Pro11inces and Berar Act 1947 (XXI of J.947) -Explanation II to Section 2(g) as originally enacted-before its amendment by Madhya Pradesh' Act IV of 1951-Whether offended Article 286(1)(a) read with the Explanation-Whether the Presidents order issued under the proviso to Article 286(2) protected the same.

Held, per S. R. DAs

ACTING CHIEF JusTICE, BHAGWa\TI, JAFER IMAM and

CHANDRASEKHARA

AIYAR JJ.

(JAGANNADHADAS J.

Chattanlllho.

Karo,>alar , ..

R(JtnJJ(; handra l)'ar and another

Venkatarama

/glr].

~20

M/s. R4m Nar.O.

Sons IJd.

~'J' CommissiOIJl'I' .t S.US T.,, and

o//ws

dissenting). The bans imposed by Article 286 of the Constitution on the taxing powers of the States are independent and separate and each one of them has to be got over before a State Legislature can impose tax on transactions of sale or purchase of gs. The Expla~ nation to Article 286(i)(a) determines by the legal fiction created therein the situs of the sale in the case of transactions coming with~ in that category and once it is deterl'nined by the application of the Explanation that a transaction is outside the State it follows as a matter of course that the State, with reference to which the transac~ tion can thus be predicated to be outside it, can never tax the trans-- action.

The ban under Article 286(i)(a) read with the Explanation is effective independently of the fact that the transaction may have taken place in the course of inter-State trade or commerce or with reference 'lo goods as have been declared by Parliament by law to bet essential for the life of the community.

The ban imposed under Article 286(2) is an independent and separate one and looks at the transactions entirely from the point of view of their having taken place in the course of inter-State trade or commerce.

Even if such transactions may also fall within the category of transactions covered by Article 286( I) (a) and the Explanation thereto or Article 286( 3) the moment Article 286(2) is attracted by reason of the transactions being in the course of inter-State trade or commerce, the ban under Article 286(2) operates and such transactions can never be subjected to tax at the instance of a State Legislature except in so far as Parliament by law may otherwise provide or such power of taxation is saved by the President's order conten1plated in the proviso.

The ban under Article 286(2) may be saved by the President's order hue that does not affect or lift the ban under Article 286(1)(a) read with the Explanation.

Apart from the aforesaid construction put upon the several clauses of Article 286 in The Bengal Immunity Co. case the terms of the proviso to Article 286(2) itself make it abundantly clear that the proviso is meant only to lift the ban under Article 286(2) and no other.

It is a carJinal rule of interpretation that a proviso carves out an exception to the main provision to which it is enacted as a proviso and to no other.

This is made further clear by the nonohstante clause which states in express terms that it is enacted only with reference to "this clause" i.e. Article 286(2).

The proviso cannot be extended to any of the other provisions -0£ Article 286 and it has, therefore, not the effect of lifting the ban which is imposed by Article 286( I) (a) and the Explanation thereto.

Therefore, so far as the post.Constitution period is concerned the ban impose<l by Article 286(l)(a) and the Explanation _thereto could not be ri.; moved by the President's order which was issued under the proviso to Article 286(2) in the present case.

Expianation II to Section 2(g) of the. Central l'rovmces and Berar Sales Tax Act, 1947 offended Article 286(I)(a) read with the

Explan<1tion to the same and the State of Madhya Pradesh was therefore, not entitled tO\ tax the transactions of sale in which goods had actually been delivered as a direct result of such sale for purposes of consumption outside Madhya Pradesh and the said Explanation was not protected by the President's order issued under the proviso to Article 286(2).

Where an assessment consists of a single undivided sum in res- . pect of the totality of the property treated as assessable, the wrongful inclusion in it of certain items of property which by virtue of a provision of law were expressly exempted from taxation, renders the assessment invalid in toto.

Bennett & White (Calgary) Ltd. and Municipal District of Sugar City No. 5 (1951 Appeal Cases 786 at.p. 816), referred to.

JAGANNADHADAS J. (Dissenting)-The two bans under Articles 286(1) (a) and 286(2) arc overlapping and the fact that they arc imposed from different angles cannot obscure the result, 11iz., that they bring about the demarcation of the same--or substantially the same -field of no taxation.

To construe the two bans as independently and cumulatively operative is to impute to them some kind of picturesque potency and is to miss the reality, viz.,. that all the bans under Article 286 are meant to serve the same purpose, 11iz., that of imposing restrictions and thereby demarcating the fields of no taxation.

The bans and the proviso are parts of the same Article and have to be harmoniously construed. The unequivocal and positive language of one part, cannot be taken to have been obliterated by the negative language of the other part so as to result in futility.

The result of consruing the proviso and by parity of reasoning the saving clause, as merely removing the ban of a particular na-. turc leaving another overlapping ban to operate, would be to render both the saving clause in, and the proviso to, Article 286(2) virtually nugatory.

A non-obstante clause does not normally add to or substract from the main provision of which it is a part. It is often enough inserted by way of extra caution.

But it does not have the effect of limiting the operation of the main provision. The suggestion that the Presidential action lifts the ban only as regards the inter-State sales would be to read the phrase "notwithstanding that" as meaning "in so far". There is no warrant for any such reading.

CIVIL Nos. 132, of 1954.

APPELLATE JuR1so1cTION : Civil Appeals 133 and 137 of 1955 and Petition No. 567

Appeals under Article 132(1) of the Constitution of India from the Judgment and Order dated the 18th October 1954 of the Nagpur High Court in Misc. Pcti

M/s. Ram NaraiR

Sons Ltd. v . .Asst. Commission<'

of Sales Tax anli

others

M/s. Ram Narain

Sons Ltd. v • • 4Jrt. 0Jtnmissioner 11l Salts Tax and .,,,,,,

tions Nos. 265, 348 and 275 of 1953 respectively and Petition under Article 32 of the Comritutic:n for the enforcement of fundamental rights.

C. Setalvad, Aitorney-General of India (R. M.

Hajarnavis and G. C. Mathur, with him) for theappellant in C. A. No. 132 of 1955.

N. C. Chatterji, (R. M. Hajarnavis and G. C.

Mathur, with him) for Intervener No. 1 in (;. A. No. 132 of 1955.

R. M. Hajarnavis and G. C.

Mathur, for Intervener No. 2 in C. A. No. 132 of 1955.

R. M. Hajarnavis and G. C. Mathur, for the appellant in C. A. No. 133 of 1955

R. M. Hajarnavis and G. C. Mathur, for the appellant in C. A. No. 137 of 1955.

M. Adhikari, Deputy Advocate-General of Madhya Pradesh and I.

Shroff, for respondents in all .appeals.

M. C. Setalvad, Attorney-General of India and C. K.

Daphtary, Solicitor-General 6f India (A. P. Sen, /. B.

Dadachanji and Rajinder Narain, with them) for the petitioner in Petition No. 567 of 1954.

T. L. Shevde, Advocate-General of Madhya Pradesh (M. Adhikari, Deputy Advocate-General of Madhya Pradesh and I. N. Shroff, with him) for respondents.

/. B. Dadachanji, R. M. Hajarnavis and Rajinder .Narain, for the Intervener.

1955.

Septembe:- 20.

The judgment of

S. R.

Das, Acting Chief Justice, Bhagwati, Jafer Imam and Chandrasekhara Aiyar JJ. was delivered by Bhagwati J.

Jagannadhadas J. delivered a separate judgment

Civil Appeals Nos. 132, 133 and 137 of 1955

BHAGWATI J.-These 3 appeals with certificate under article 132(1) of the Constitution involve the interpetition of the proviso to articl~ 286(2) and raise a common question as to whether that proviso also saves

the transactions 0£ sale or purchase covered by the Explanation to article 286(1) (a) from the ban imposed therein.

The Appellants in Civil Appeal No. 132 of 1955 are Messrs Ramnarain Sons Ltd., a firm registered as a "dealer" under the Central Provinces and Berar Sales Tax Act, 1947, and carrying on business at Amravati and at other places in Madhya Pradesh.

After the Cotton Control Order, 1949, came into force on the 12th September, 1949, the Appellants entered into Agreements with several mills situated outside Madhya Pradesh by which they undertook to purchase kapas in the various markets in Madhya Pradesh as their agents on their account and on their behalf.

The kapas after purchase was to be ginned and pressed into bales and sent to the mills. All the expenses involved in the process were to be borne by the mills which were also to be credited with the sale proceeds of the cotton seeds and the Appellants were only entitled to commission on a percentage basis.

The Appellants worked as such agents for the period 1st October, 1949 to 30th September, 1950. By his order dated the 30th June, 1953 the Assistant Commissioner of Sales Tax, Amravati, Respondent No. I, included the transactions valued at Rs. 72,86,454-5-10 with the said mills in the Appellants' turnover and ordered the Appellants to pay Rs. 1,13,850-13-6 as sales tax on the said transactions.

The Appellants filed an appeal to the Commissioner of Sales Tax, Madhya Pradesh, Respondent No. 2, on the 30th July, 1953.

The appeal was, however, entertained by the Deputy

C', ommissioner of Sales Tax, Madhya Pradesh, Respondent No. 3, who ordered the Appellants to pay Rs. 25,000/- by the 31st August, 1953.

The Appellants thereupon filed a petition under Article 226, being Misc. Petition No. 265 of 1953, in the High Court of Judicature at Nagpur, asking inter alia for the quashing of the order of 30th June, 1953, passed by Respondent No. 1 and for consequential reliefs.

The Respondents filed a return denying the contentions of the Appellants and praying for the dismissal of the petition with costs.

M/s. Ram Narain

Sons Lid.

Asst. Commissiont'f'

of Salts Taxan.1

others

Bhagwati J.

M/s. Ram Narain

Sons Ltd. v.

Asst. Commissiontr

rJj Salts Tax an:!

others

Rhagwali J.

The Appellants in Civil Appeal No. 133 of 1955 arc the Eastern Cotton Company, a firm registered as a "dealer" under the Central Provinces and Berar Sales Tax Act, 1947 and carrying on business at Amravati and at other places in Madhya Pradesh.

They also, during the period 1st October, 1949 to 30th September, 1950, worKed as agents of certain mills situated outside Madhya . Pradesh, procured kapas for them in Madhya Pradesh and sent it to the mills for consumption outside the State.

By his order dated the 9th September, 1953, the Respondent No. 1 included the transactions valued at Rs. 33,47,405-5-0 with the said mills in the Appellants' turn-over and ordered the Appellants to pay Rs. 52,303-4-0 as tax on the said transactions.

These Appellants also field a petition under article 226, being Misc. Petition No. 348 of 1953, fo the High Court of Judicature at Nagpur for quashing the order dated the 9th September, 1953, passed by Respondent No. 1 and for consequential reliefs.

The Respondents filed a return denying their contentions.

The Appellants in Civil Appeal No. 137 of 1955 arc the firm, Ramdas Khimji Brothers, Bombay, registered as a "dealer" under the Central Provinces and Berar Sales Tax Act, 1947, and carrying on business as cotton dealers in Madhya Pradesh. During the period 1st October, 1950 to 30th September, 1951, the Appellants sold cotton worth Rs. 6,01,949-1-9 to various persons out side Madhya Pradesh.

The cotton was delivered to the buyers for consumption outside Madhya Pradesh as a direct result of such sales.

By his order dated the 29th December, 1952, the Sales Tax Officer, Amravati, in the assessment, of the Appellants for the same period, included the said transactions in the Appellants' turn-over and assessed sales tax thereon.

The Appellants filed an appeal to Respondent No. l but the same was dismissed by an order dated the 10th July, 1953. The Appellants filed on 22nd August, 1953, a revision before the Commissioner of Sales Tax, Madhya Pradesh.

The Appellants also filed a petition under Article 226, being Misc. Petition No. 274 of 1953, in the High Court of Judicature at

Nagpur, asking for a writ of certiorari quashing the order of Respondent No. 1 passed by him in Sales Tax Appeal No. 13-A dated the 10th July, 1953, and for consequential reliefs.

The Respondents filed a return denying the contentions of the Appellants and asking that the petition be dismissed with costs.

These petitions came up for hearing and final disposal before the High Court of Judicature at Nagpur along with Misc. Petitions No. 288 of 1953 and No. 132 of 1954.

A considered judgment was delivered in Miscellaneous Petition No. 132 of 1954 and the reasoning contained therein governed the decision in the connected Petitions Nos. 265, 274 and 348 of 1953.

The High Court held that the Explanation II to section 2(g) of the Central Provinces and Berar Sales Tax Act, 1947, as amended by the Central Provinces and Berar Act XVI of 1949 having been declared invalid from its inception by the High Court in Messrs Shriram Gulabdas

v. Board of Revenue

(I.L.R. 1953 Nagpur 332) and by this Court in 1954 S.C.R. 1122, the original Explanation remained in force until the 1st April, 1951, when it was amended by the Madhya Pradesh Act IV of 1951.

Explanation II originally enacted was in the terms following:- "Notwithstanding anything to the contrary in the Indian Sale of Goods Act, 1930, the sale of any goods which are actually in the Central Provinces and Berar at the time when the contract of sale as defined in that Act in respect thereof is made, shall wherever the said contract of sale is made, be deemed for the purpose of this Act to have taken place in the Central Provinces and Berar".

The Appellants contended that this Explanation offended article 286(1)(a) read with the Explanation to the same and the State. of Madhya Pradesh was, therefore, not entitled to tax the transactions of sale in which goods had actually been delivered as a direct result of such sale for the purpose of consumption outside Madhya Pradesh.

The Respondents, on the other hand, contended that the said Explanation was protected until the 31st March, l951, by the Sales Tax Continuation Order No. 7 of 1950 issued by the 13-83 S. C. India/59.

M/•. R21nNami11

Sonr lJti.

Asst. Commis.; iontr

of Saks Tax anti

othlrs

Bhagwati ].

M/1. Ram NaraU.

Sons Lid.

v. sst. CommP"Sionnof Saks T """"" olhns

Bliagwali].

President on the 26th January, 1950, under the proviso to article 286(2).

The High Court was of the opinion that the original Explanation was validly enacted as the assent of the Governor-General to the enactment was given on the 23rd May, 1947, and that under that Explanation the ta.x prior to the commencement of the Constitution was lawfully levied on the sales of goods wherever the contracts of sale took place if the goods were actually in the State at the time of contracts of sale were made.

This power could be exercised by the State even if the sales took place during the course of inter-State trade or commerce and the goods were delivered as a direct result of the sales for the purpose of consumption outside the State. This was because the situs of the goods constituted a sufficient nexus between the transactions and the taxing State which was the foundation for taxation prior to the commencement of the Constitution.

This positio~ continued until the com- .mencement of the Constitution and on the 26th January, 1950, the President issued the Sales Tax Continuation Order No. 7 of 1950 in exercise of the powers conferred by the proviso to article 286(2).

The sales in question had taken place in the course of inter-State trade or commerce and accordingly they were covered by article 286(2) and would, therefore, be liable to tax even after the commencement of the Constitution Ly virtue of the President's order.

Reliance was further placed on the majority judgment of this Court in The State of Bdmbay v. The United Motors (India) Ltd. (1953 S.C.R. 1069) where it was held that the transaction vis-a.vis the delivery State lost its inter-State character if it fell within the Explanation to article 286(1) (a) and was accordingly made liable to taxation by the delivery State.

So far, however, as the exporting State was concerned, it retained its character of an inter-State transaction and would not, therefore, be liable to taxation by that State, vide article 286(2).

The President's order, however, removed this ban and the exporting State was entitled to tax the transaction by virtue of the power derived by it from the same. On a construction of

the relevant provisions of article 286(1) and article 286(2) the High Court was of the opinion that it would be making the proviso to article 286(2) nugatory if it was held that article 286(1) overrides it and takes away the taxing power of all States in inter-State trade or commerce except the delivery State.

The High Court accordingly dismissed the petitions with costs.

The learned Attorney-General appearing for the Appellants before us contended that so far as the post-Constitution period is concerned, the position is governed by our judgment in The Bengal Immunity Co. Ltd. v.

The State of Bihar delivered on the 6th September, 1955.

He urged that the bans in1posed on the powers of the State Legislatures to levy taxes on the sale or purchase of goods in the several clauses of article 286 are independent and separate and that the transactions of sale or purchase referred to in the various clauses must be looked. at from different viewpoints.

Even if a transaction might fall within the category of inter-State sale or purchase and the President's order under the proviso to article 286(2) might enable the State to levy any tax on such sale or pUTchase which was being lawfully levied by the State immediately before the commencement of the Constitution, such transaction had also to surmount the ban imposed under article 286(1) (a) and the Explanation thereto so that, if, as a direct result of such sale, the goods were actually delivered for the purpose of consumption in another State, the exporting State (to use the phraseology of the Nagpur High Court) or the title-State (to use the phraseology adopted in some of the judgments in The Bengal Immunity Co.'s Appeal) would not be entitled to levy a ta.~ on sud~ sale the transaction being fictionally outside the State by reason of the Explanation and therefore coming within the ban of article 286(1) (a).

It was, however, urged on behalf of the State of Madhya Pradesh that the President's order not only saved the transactions from the ban of article 286(2) but also from the ban of article 286 (1) (a), because the transactions covered by the Explanation to article

M/s. Ram Narain

Sons Ltd.

Asst. Commilsiolltl'

of Sales T 41< and

others

Bhagwati].

M/s. Ram Narain

Sons LJd.

v. .4.rst. C<mJmissiontr

of Sales Ta. and

othtrs

Bhagwati].

286 ( 1 )(a) were of the same category as transactions coveted by article 286(2) and were all in the course of inter-State trade or commerce.

It was further urged that if the transactions covered by the Explanation to article 286(1) (a) were not saved from the ban by the President's order, the whole intention of the Constitution-makers in maintaining the status quo qua the taxes on sales or purchases of goods which were being lawfully levied by the State immediately before the commencement of the Constitution would be frustrated, because the transactions covered by the Explanation to article 286( 1 )(a) being necessarily in the course .of inter-State trade or commerce the President's order would be rendered nugatory and the exporting State or the title State would be restrained from levying tax on such transactions in spite of the ban having been lifted by the president's order.

We are unable to ac<;.ept this contention. As held by the majority Judges in The Bengal Immunity Co.'s Appeal, the bans imposed by article 286 on the taxing powers of the States are independent and separate and each one of them has to be got over before a State Legislature. can impose tax on transactions of sale or purchase of goods.

These bans have been imposed from different view-points, and, even though the transactions of sale or purchase may in conceivable cases overlap so far as these different viewpoints are oncerned, each of those bans is opentive and has to be enforced.

So far as article 286( 1) (a) is concerned, the Explanation . determines by the legal fiction created therein the situs of the sale in the case of transactions coming within that category and when a transaction is thus determined to be inside a particl1lar State it necessarily becomes a transaction outside all other States.

The only relevant enquiry for the purposts of article 286(1)(a), therefore, is whether a transaction is outside the State and once it is determined by the application of the Explanation that it is outside the State it follows as a matter of course that the Stte with reference to which the transaction can thus be predicated to be outside it can never

tax the transaction. This ban is effective independently of the fact that the transaction may also have taken place in the course of inter-State trade or commerce or with reference to goods as have been declared by Parliament by law to be essential for the life of the community.

The ban imposed under article 286 (2) is an independent and separate one and looks at the transactions. entirely from the point of view of their having taken place in the course of inter-State trade or commerce. Even if such transactions may also fall within the category of transactions covered by article 286(1) (a) and the Explanation thereto or article 286(3), the moment article 286(2) is attracted by reason of the transactions being in the course of inter- State trade or commerce, tpe ban under article 286 (2) operates and such transactions can never be subjected to tax at the instance of a State Legislatur.:: except in so far as Parliament by law may otherwise provide or such power of taxation is saved by the President's order contemplated in the proviso.

The ban under article 286(2) may be saved by the President's order but that does not affect or lift the ban undQ" article 286 ( 1) (a) read with the Explanation.

Apart from the construction thus put upon the several clauses of article 286 by the majority of the Judges in The Bengal Immunity Co.'s Appeal as above, the terms of the proviso itself make it abundantly clear that the proviso is meant only to lift the ban under article 286(2) and no other. It is a cardinal rule of interpretation that a proviso to a particular provision of a statute only embraces the field which is covered by the main provision.

It carves out an exception to the main provision to which it has been enacted as a proviso and to no other.

Even if the non-obi-tante. clause: "Notwithstanding that the impos1t1on of such tax is contrary to the provisions of this clause": had not been enacted in the proviso, the proviso could only have been construed as operating upon the field enacted in article 286(2) and could not be extended to any of the other provisions of article 286.

The non-obstante clause, however, makes it abundantly and further clear and states in

M/1. Ram Narain

Sons Ltd. v.

Asst. Commissionn

of Saks T OJt an4 .,,,,,,,

Bhagwali].

M/s. Rom Narain

Sons IJd.

v. bst. Commissionn

ef Sale1 T .. and

Ot/rns - Bhapati J.

explicit terms that it is enacted only with reference to "this clause", i.e., article 286(2).

The President's order may direct tha~ 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 the Constitution was to continue to be levied until 31st March, 1951, but the effect of that order was to raise the ban in so far as it was imposed by the provisions of "this clause".

The President's order, therefore, only lifted the ban in so far as the transactions took place in the course of inter-State trade or commerce and could not be projected into the sphere of any other clause of article 286. It had, therefore, not the effect of lifting the ban which was imposed by article 286(1) (a) and the Explanation thereto, even though the transactions covered by the Explanation to article 286(1) (a) by and large fell within the category of transactions which took place in the rourse of inter-State trade or commerce. The ban imposed by article 286(1)(a) was independent and separate and could. not be lifted by the President's order which had operation only in regard to the intcr- Statecharacter of the transactions.

The moment it was determined that the transactions were outside the State by virtue of the Explanation to article 286(1) (a) the ban imposed by article 286(1)(a) attached to the same and could not be lifted by the President's order which operated only on the inter- State character of the transactions and saved only those inter-State transactions which did not come within the Explanation.

If the contention urged on behalf of the State of Madhya Pradesh is accepted it would mean that we should re-write or amend the proviso to article 286(2) in order to effectuate the supposed intention of the Constitution-makers.

The supposed intention of the Constitution-makers was alleged to be to preserve to the States all the taxes on sale or purchase of goods which were being la".l'fully levied by them immediately_ before the commencement of the Constitution by having resort to the territorial connection or nexus theory.

We have no evidence before us of this

supposed intention of the Constitution-makers. Whatever their intention was can only be gathered from the language which they have used and where the language is plain there is no scope whatever for speculation in that behalf.

When the Constitutionmakers themselves used the words "Notwithstanding that the imposition of such a tax is contrary to the provisions of this clause" it would not be legitimate for us to go behind the plain words and try to read into the proviso something which would involve either a deletion of the non-obstante clause or a re-writing thereof as suggested.

Whatever be the effect of our judgment on the treasuries of the exporting or title- States we cannot assist them by reading something into the proviso which is not warranted by any canon of construction.

The proviso has reference only to article 286(2) and cannot be projected into any other clause of article 286.

The untenability of the contentions of the Respondents will be clear from the following illustration:- Suppose the goods are in the State of Madhya Pradesh at the time the contracts of sale of those goods are made in, say, the State of Bombay. Suppose further that the property in the goods has by reason of such sales passed in the State of Bombay but the goods as a direct result of such sales have been delivered for consumption in the State of Madras.

According to the Respondents, the President's order made under the proviso to article 286(2) saves the transactioqs from the ban of article 286(1)(a) read with the Explanation. Then the State of Madras will be able to tax by virtue of article 286(1) (a) read with the Explanation or on the nexus theory by reason of the goods being delivered there for consumption; the State of Bombay will be able to tax because the title to the goods passed there; and the State of Madhya Pradesh will also be able to tax under the Explanation . II to section 2(g) of the Act because the goods were in the State of Madhya Pradesh at the time when the contracts of sale were made in the State of Bombay. Nobody will say that the Constitution. makers intended to perpetuate multiple taxation of

M/s. Ram Naraia

Sons .lid. .... ..bst. Commissionu

of Salts T OJI and

others

BhagwatiJ.

Mf•· Ram NMain

Son1 l.Jt!.

Asst. Commissionlr

of Sak• T .. and

otlins

Bhagwati].

this kind and yet that will be the result if we were to accede to the arguments advanced by the Respon-- dents.

The result, therefore, is that so far as the Post-Constitution period is concerned the ban which is imposed by article 286(1)(a) and the Explanation thereto cannot be removed by the President's order which was issued under the proviso to article 286(2) and the High Court was in error when it construed the proviso to article 286(2) as projecting into the field of article 286(1) (a) and lifting the ban imposed therein.

On .. the above reasoning, Civil Appeal No. 137 of 1955 filed by the firm of Ramdas Khimji Brothers, Bombay, which relates only to the post-Constitution period will be allowed and the order of assessment dated the 29th December, 1952, will be set aside. The Respondents will pay the costs of the Appellants here as well .as in the Court below.

As regards Civil Appeals Nos. 132 of 1955 and 133 of 1955, however, the assessments therein relate not only to the post-Constitution period but also the pre- Constitution period to which different considerations would apply.

The validity of the assessment in regard to the same would have to be canvassed having regard to the various contentions of law and fact which could be urged against the same by the Appellants.

There are two Ol!tstanding questions which have ben mooted before us by the learned Attorney- General in regard to this period, viz., (1) a question of fact, as to whether the Appellants were agents of the various miils in regard to the transactions which were the subject-matter of the assessment, and (2) a question of law, whether the law under which the tax was levied, viz., Explanation II to section 2(g) of the Act was validly enacted.

Both these contentions, though they are also relevant to the Post-Constitution period were not specifically pressed before us because the argument based on the proviso to article 286(2) was considered sufficient to set aside the assessment for that period.

They would, however, appropriately arise and be urged by the appellants when the liability to assessment for the pre-Constitution

period is to be determined and if we were to determine that liability we would have tc deal with the same.

The necessity for doing so is, however, obviated by reason of the fact that the assessment is one composite whole relating to the pre-Constitution as well as the post-Constitution periods and is invalid in toto.

There is authority for the proposition that when an assessment consists of a single undivided sum in respect of the totality of the property treated as assessable, the wrongful inclusion in it of certain items of property which by virtue of a provision of law were expressly c:xempted from taxation renders the assessment invalid in toto.

The Privy Council have observed in Bennett & White (Calgary) Ld. And Municipal District of Sugar City No. 5 (1951 Appeal Cases, 786 at page 816) :-

"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.

That matter is covered by authority.

In Montreal Light, Heat & Power Consolidated v. City of Westmount ((1926) S.C.R. (Can.) 515 the court (see especially per Anglin, C. J.) in these conditions held that an assessment which was bad in part was infected throughout, and treated it as invalid.

Herc their Lordships are of opinion, by parity of reasoning, that the assessment was invalid in toto".

It was, therefore, urged that on the facts of this case the assessment was invalid in toto and that it should be set aside.

The learned Deputy Advocate-General of Madhya Pradesh did not seriously contest this position and the result, therefore, is that the order of assessment dated , the 30th June, 1953, in Civil Appeal No. 132 of 1955 and the order of assessment dated the

M/s. Ram Narain

Suns LJd.

Asst. Commission# of Salts Tax and

others

Rhagwati].

M/1, Ram Narain

Son' Ltd.

•• .AsJt. Commissioner

of Saler Ta. and

otlurs

Bhagwatij.

9th September, 1953, in Civil Appeal No. 133 of 1955 are liable to be set aside.

The appeals will therefore be allowed the orders of assessment will be set aside and the matters will go back to the Assessment Officer for re-assessment of the Appellants in accordance with law.

The Appellants will be at liberty to urge before the Assessment Officer the contentions of law and fact available to them in the fresh assessment proceedings including those adverted to above.

The Respondents will pay the costs of these Appellants here as well as in the Court below.

Petition No. 567 of 1954

BHAGWATI J.-This petition under article 32 of the Constitution . also involves the interpretation of the proviso to article 286(2) and raises the same question as to the meaning, scope and operation of the proviso as was raised in the Civil Appeals Nos. 132, 133 and 137 of 1955 just disposed of.

The facts giving rise to this Petition may be shortly stated. The petitioners are a partnership firm carrying on business of manufacturing bidis at Jabal pur and registered as a "dealer" under the Central Provinces and Berar Sales Tax Act, 1947. The petitioners had their branches at Lucknow, Kanpur, Faizabad, Agra, Bombay and Bhopal.

They had also their selling agents at various places in Uttar Pradesh and elsewhere outside the State of Madhya Pradesh.

Thev also entered into transactions direct with merchats in U ttar Pradesh.

The transactions in question which were the subject-matter of assessment at the instance of the Sales Tax authorities were for the period of assessment 21st October, 1949 to 9th November, 1950, and pread over two periods, viz., ( 1) the period between 21st October, 1949, to 25th January, 1950, which may be called the pre-Constitution period, and (2) the period subsequent to the inauguration of the Constitution on the 26th January, 1950, up to the 9th November, 1950, which may be called the post- Constitution period. The petitioned gross turn-over was determined to be Rs. 49,40,140-6-9 and the

amount of Sales Tax assessed on the transactions was Rs. 1,51,291-13-0 as per . the order of the Deputy Commissioner, Sales Tax, Madhya Pradesh, Respondent No. 3, dated the 14th July, 1954, in Sales Tax Appeal No. 6/ A-1.6.54.

The petitioners preferred a second appeal to the Respondent No. 2 against the said order.

The Respondent No. 2, however, refused to admit or register the appeal unless the amount of tax assessed was paid up.

The petitioners paid about Rs. 91,000/- towards the amount of tax assessed but finding it difficult to pay the balance filed this Petition against the State of Madhya Pradesh, Respondent No. 1, the Commissioner of Sales Tai, Madhya Pradesh, Respondent No. 2, and the Deputy Commissioner of Sales Tax, Madhya Pradesh, Respondent No. 3, for a wm of certiorari quashing the said order dated the 14th July, 1954, made by Respondent No. 3 and for consequential reliefs. The Respondents filed a return denying the contentions of the petitioners and maintaining that the Sales Tax was lawfully assessed by them against the petitioners.

The position as regards the petitioners' turn-over for the period OE assessment was as stated below :- Nature of tht Parties.

Sales Prices of goods Rs.

(a) Direct to seliing agents on orders. .......... ..... 6,15,236- 3o

(b) Direct to merchants on orders. 3,99,450- 2o ( c) Direct to destinations other than branches or depots but accounted for against branches and depots. 6,20,996- 14o

(d) Direct to Stations or destinations having branches or depots owned by the proprietors of this registered firm-Kanpur, Bombay, Luck:iow and Faizabad. ......... 31,06,739-13o

M/1. Ram Narain

SonsUd.

Alst. Commission#

of Saks T aJt and

otlurs

Bhagwati].

M/s. Ram Narain

Son1 Lltf.

Assl. Commissionnof Saks Tax and

others

Bhagwati].

The Sales Tax authorities treated all these transactions as transactions of sale coming within the deli nition contained in Explanation II to section 2(g) of the Act and assessed the petitioners to sales tax in respect of the same, negativing the contentions of the petitioners that they were in any event sales effected by them outside the State of Madhya Pradesh and that the State of Madhya Pradesh was therefore, not entitled to impose a tax on those transactions by virtue of the provisions of article 286(1)

(a) and the Explanation thereto.

The learned Attorney-General who appeared for the petitioners contended that the bidis manufactured by the petitioners were all actually delivered as a direct result of the transactions of sale for the purpose of consumption in the State of Uttar Pradesh and that after the inauguration of the Constitution on the 26th January, 1950, it was only the State of Uttar Pradesh which was the delivery State that alone had the right to impose the tax on these transactions notwithstanding the fact that under the general law relating to the sale of goods the property in the goods might have passed in the State of Madhya Pradesh. He, therefore, urged that these transactions were sales outside the State of Madhya Pradesh and that the State of Madhya Pradesh was not entitled to impose a tax on such sales.

The learned Advocate-General of Madhya Pradesh on the other hand contended that these were purely intra-State transations entered into by the petitioJlers within the State of Madhya Pradesh and that the Explanation to article 286(1)(a) did not come into play at all because the goods were not actually delivered as a direct result of such sales for the purpose of consumption in the State of Uttar Pradesh. He, therefore, maintained that even for the post-Constitution period there was no ban on the State of Madhya Pradesh imposing the sales tax on what were purely "inside sales".

It is necessary in view of these rival contentions to ascertain the true nature of the transactions in question.

In paragraph 15 of the Petition, the petitioners

had averred that the bidis manufactured by the firm were all delivered in the State of Uttar Pradesh for consumption in that State and that after the 26th January, 1950, the delivery State, viz., the State of Uttar Pradesh, had alone the right to impose tax on the sales of the commodity.

They had further submitted that the State of Madhya Pradesh where the bidis were manufactured :.nd from where they were sent could not any more exercise its right to levy a tax on such transactions of sale taking place elsewhere by reason of the inhibition contained in article 286.

In the return filed by the Respondents, they did not deny the allegation made by the , Petitioners in their Petition that the bidis manufactured by the firm were all delivered in the State of Uttar Pradesh for consumption in that State.

In substance, they contended that in spite of the State of Uttar Pradesh being the delivery State within the meaning of the Explanation

to article 286(1)(a), the liability of these transactions to sales tax at the instance of the State of Madhya Pradesh was saved by the President's order made under the proviso to article 286(2) and that the imposition of such tax at the instance of the State of Madhya Pradesh was lawful and did not contravene the provisions of article 286(1) (a) read with the Explanation thereto.

Both the order which was made by the Assistant Commissioner of Sales Tax, Jabalpur, in the original assessment case No. 16 of 1950-51, dated the 7th August, 1953, and the order which was made in Sales Tax Appeal No. 6/ A-1.6.54 by the Deputy Commissioner of Sales Tax, Madhya Pradesh, Respondent No. 3, dated the 14th July, 1954, proceeded on the basis that even though the transactions in question were transactions of sale where the goods had actually been delivered as a direct result of such sales for the purpose of consumption in the State of Uttar Pradesh the President's order made under the proviso to article 286(2) saved the transactions also from the ban of article 286(1) (a) and the Explanation thereto and that the State of Madhya Pradesh was, therefore, entitled to impose a tax on the same.

It \\'.as never

M/s. Ram Narain

Sons Ltd. v.

Asst. Commisswnw

of Sales Tax and

others

Bhagwati ].

M/1. Ram N"'ain

San1 LJd.

Alll. Cammissionlr

of Sain Talt and

olWI

BhaguiaJi J.

contended before either of them that the sales were purely "inside sales" and that the Explanation to article 286(l)(a) did not come into play at all under the circumstances of the case.

The facts as found by the Sales Tax authorities also emphasized that these transactions fell within the definition of sale contained in the Explanation II to section 2(g) of the Act and that so far as the post-Constitution period was concerned they were saved from the ban of article 286 ( 1) (a) and the Explanation thereto by the President's order made under the proviso to article 286(2).

It was, however, urged by the learned Advocate-General of Madhya Pradesh that the transactions were pure "inside sales" entered into by the petitioners in Madhya Pradesh on orders received by them from outside the State.

These orders were accepted by the petitioners in the State of Madhya Pradesh and goods were appropriated to the contracts and the property in the goods passed within the State of Madhya Pradesh and that, therefore, they were pure intra-

State sales or "inside sales" which it was within the competence of the State of Madhya Pradesh to tax.

This contention of the learned Advocate-General of Madhya Pradesh is untenable. So far as direct supplies to. selling agents on orders and direct supplies to merchants on orders covered by items (a) and.

(b) above are concerned, it was found that these supplies were made to the merchants buying the goods on commission basis or profit on their previous orders, instructions or indents which were either in printed forms or in ordinary letters and the sale prices were realised by sending bills and railway receipts through some scheduled banks. The very fact that the bills and the railway receipts were sent through the sche- . duled banks went to show that the petitioners reserved the right of disposal of goods covered by those railway receipts and the property in the goods passed in the State of Uttar Pradesh only after the relative bills were either accepted or honoured by the purchasers and the railway receipts delivered by the scheduled banks to them.

It is clear, therefore, that

in those cases the sales were completed in the Stat~ of Uttar Pradesh and were not intra-State sales or "inside sales" qua the State of Madhya Pradesh. As regards the direct supplies to destinations other than branches or depots but accounted for against the branches or depots being item ( c) above, it was found that the petitioners despatched the goods and hilled them to depot npnagers who were responsible for the collection of the orders and then the railway receipts and bills were sent there.

The managers prepared other bills adding incidental or other charges and delivered the railway receipts to the customers to whom the goods were sent from the State of Madhya Pradesh.

Here also the despatches of the goods were made from the State of Madhya Pradesh by the petitioners to their depot managers and it was the depot managers who in their turn prepared and submitted their own bills and handed over the railway receipts to the respective customers appropriating the goods themselves to the contracts of sale which had been entered into by them with the latter and completing the sales in the State of Uttar Pradesh. These transactions also were, therefore, sales effected in the State of Uttar Pradesh and did not fall within the category of intra-State sales or "inside sales" qua the State of Madhya Pradesh.

The direct supplies to Stations or destinations having branches or depots owend by the proprietors of the firm, Kanpur, Bombay, Lucknow and Faizabad being item (b) above, also were outside sales qua the

State of Madhya Pradesh inasmuch as the branch managers asked the petitioners to send stocks of goods to execute t~ orders which they had obtained from the customers to make their own supplies to them.

As a matter of fact it was found that several consolidated indents were placed by the depot managers with the petitioners in respect of the previous orders which had been collected by them and tlie petitioners supplied the goods to the depots or branches in pursuance of such indents.

If this was the true position qua these supplies, these sales also were completed in

M/1. Ram Narain

Sons LU.

Aul. Commitsioner

of Salts Tax and

olhtrs

Blaagwati J.

M/s. Ram NOTain

Sons IJd. v.

Asst. Commissioner

of Saks Tax and

others

BhagwatiJ.

the State of Uttar Pradesh by the depots or branches supplying the goods in their turn to several customers.

There could be no sales as such between the petitioners on the one hand and their depots or branches on the other hand and the State of Madhya Pradesh could certainly not be at all in a position to tax the same.

The whole theory, therefore, or "inside sales" falls to the ground and the only thing which we are left with is that these transactions were inter-State transactions in which as a direct result of such sales the goods were actually delivered for the purpose of consumption in the State of Uttar Pradesh. The Explanation to article 286(1) (a) determined the State of Uttar Pradesh to be the State in which the sales took place and which alone was entitled to tax these transactions, the State of Madh}a Pradesh becoming an "outside" State for the purpose.

Apart from the ban imposed on the State of Madhya post-Constitution period, therefore, is invalid and thereto, these trans2ctions were also in the course of inter-State trade or commerce and were hit by the ban of article 286(2).

The President's order no doubt lifted that ban but was not competent to lift the ban under article 286(1)(a) and the Explanation diereto with the result that in spite of that order the State of Madhya Pradesh was not in a position to impose a tax on these transactions during the post-Constitution period.

The assessment of th.:se transactions to tax for the post-Constitution period, therefore, is invalid and cannot be sustained. The assessment, moreover, is a composite one coverin11: the pre-Constitution period as well. The case, therefore, falls within our judgment in Civil Appeals Nos. 132, 133 and 137 of 1955 just delivered, and following the reasoning contained therein, we are of the opinion that the order dated the 14th July, 1954, made by the Deputy Commissioner, Sales Tax, Madhya Pradesh, Re&pondent No. 3, in Sales Tax Appeal No. 6/ A.-1.654 should be set aside.

We accordingly allow the Petition, set aside the

said order dated the 14t.1i July, 1954, and the matter will go back to the Assessment Officer for re-assessment of the petitioners in accordance with law.

The petitioners will be at liberty tu urge before the Assessment Officer the content; ons of law and fact available to them in the fresh assessment proceedings.

The Respon<lents will pay the costs of the petition.

JAGANNADHADAS J.-1 regret I feel constrained to differ from the view taken by my learnt>d brothers as regards the construction of proviso to article 286(2) and the effect of the Presidential order issued thereunder.

There is no' dispute that the proviso has to be construed as part of article 286(2).

It is meant to empower the President to keep the ban arising thereunder in temporary abeyance so that the States may continue to levy taxes on sales by virtue of their pre-

Constitution sales-tax laws (if then lawful) for a limited period. It is urged, however, that the proviso (meaning thereby also the Presidential order thereunder) is effective to lift only the ban under article 286(2) and that the ban under article 286(l)(a) is operative nonetheless.

Now, it may be correct to say that these two bans are imposed from different angles and are ir. that sense independent. But there can be no doubt that they are substantially overlapping in operation. A transaction which brings about an outside sale is also an inter-State transaction (barring, if at all, a few ingeniously conceived and illustrated cases).

The effect of each of the bans under article 286 is to demarcate the fields within which the taxing power of the States on sales c.tnnot operate. If, as I conceive, the two bans under articles 286(1) (a) and 286(2), are overlapping, the fact . that they arc imposed from different angles cannot obscure the result, viz., that they bring about the demarcation of the same-or substantially the same-field of no taxation.

It appears to me that it is in this light that the proviso and the Presidential order issued thereunder have to be construed.

N'lw, the proviso (with the Presidential order) declares the field covered by sales in the course I .f.-83 S. C. lndia/59.

Mis. Ram Narain

Sons Ltd. v.

AsJt. Cornmissiorur

of Sales TtJJt and

ol/urs

Bhagwati].

M/t, Ram Narain

Sons IJd. v.

Asst. Contmissian1r

of Salts Tiu anJ

others

JagaftnaJJaada1 J.

of inter-State trade and commerce as taxable for a limited period by stating positively and emphatically 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 the Constitution shall continue to be levied until the 31st day of March, 1951".

There is no d')ubt the non-obstanti: clause which will be dealt with presently, and which only emphasises the fact tl1at this is a proviso to article 286(2).

But there is no mistaking the positive and mandatory terms of the proviso. The effect of this is clearly and unequivocally to make the whole field of inter-State trade and commerce temporarily taxable in respect of the sales which take place in the course thereof. If this be so, it appears to me to be implicit therein that no other ban on such taxation can operate, for the time being, within that very field. To construe the two bans as independently and cumulatively operative is to impute to them some kind of picturesque potency and is to miss the reality, viz., that all the bans under article 286 are meant to serve the same purpose, viz., that of imposing restrictions and thereby demarcating the fields of no taxation.

The bans and the proviso are parts of the same article and have to be harmoniously construed.

The unequivocal and positive language of one part, cannot be taken to have been obliterated by the negative language of the other part so as to result in futility.

A similar situation as that contemplated by the proviso would also arise with reference to the saving clause in article 286(2).

If the proviso is to be construed in tlie way suggested by the learned Attorney- General, it would seem to follow that when and as the Parliament lifts the ban under article 286(2), the lifting of that ban would equally become futile by virtue "of article 286(1)(a). The Parliament has not in terms been given the power to lift the latter ban.

This, therefore, will lead to the extraordinary result that though the Constitution has in terms provided tl1at the ban on taxation of sales in tlie course of inter-State trade and commerce can be lifted, by the Parliament generally, and by the President for a

limited period, the exercise of both these powers would become ineffective and still-born by virtue of article 286(1) (a).

It appears to me unreasonable to impute any such intention as inevitably arising from the language used.

It appears to me, with great respect, that, whether it is by parliamentary legislation or by the Presidential action that the ban on taxing sales in the course of inter-State trade and commerce is lifted, the principle of harmonious construction of article 286 taken as an integral whole, requires that the lifting of the ban is to be construed as laying open for taxation the entire field covered by article 286(2) and to carry with it the implication that no other overlapping ban will be operative.

No doubt, it has been suggested that so far as lifting of the ban under article 286(2) by the Parliament is concerned, the same would be at least partly operative by virtue of article 286(1) (a) taken with the Explanation under which the consumption-delivery State may well be free to tax.

This was the view expressed by the learned dissenting Judge in the case in The State of Bombay v. The United Motors (India) Ltd.(1).

But the majority in the recent decision in the Bengal Immunity Co. Ltd. v. State of Bihar(2) including the said learned Judge, have left that question open.

It is problematical whether having regard to the inevitable extra-territorial operation of the levy of such a tax and the consequent harassment to the business community which looms large, the Explanation will receive that construction again and not receive the strict construction preferred in the dissenting judgment in the case in State of Travancore-Cochin v.

Shanmugha Vilas Cashew Nut Factory( 8 ). The result, therefore, of construing the proviso and by parity of reasoning the saving clause, as merely removing the ban of a particular nature leaving another overlapping ban to operate, would be to render both the saving clause in, and the proviso to, article 286(2) virtually nugatory.

(ll [1953) S.C.R. 1069.

(2) Sup,.., me Court Judgment in Civil Appeal No. 159 of 1953.

(3) [1954) S.C.R. 53.

M/1. Ram Narain

Soni Lid.

AW. Commiuion1r

o/Sol11 TIJll and

olhm

JagalUllJdhadas J.

M/s. Ram Narain

Sons LJd.

Asst. CommiJsioner

of Sales Tax and

others

Jagannadhadas ].

The argument based on the non-obstante clause in the proviso, viz. "Notwithstanding that the imposition of such tax is contrary to the provisions of this clause" remains to be considered.

It is urged that this clause clearly indicates the intention that the operation of the proviso is to be confined to the sole purpose of lifting the ban arising under article 286(2) With respect, I am unable to agree. The non-obstante clause undoubtedly affirms the fact that the proviso is operative in respect of article 286(2).

But it does not purport to limit the efkct of the proviso, which a reasonable construction thereof may justify.

A non-obstante clause does not normally add to or subtract from the main provision of which it is a pa.rt.

It is often enough inserted by way of extra caut10n.

But it dx> not have the effect of limiting the operation of the main provision. (See Astvini India v. Shrinbai A. Irani(') ). The suggestion that Kumar Ghosh v. Arabinda Bose(') and The Dominion of the Presidential action lifts the ban only as regards the inter-State sales would be to read the phrase "notwithstanding that" as meaning "in so far as".

I can see no warrant for any such reading.

In my view, therefore, the pre-Constitution salestax laws, if then lawful, are not hit by article 286( 1) (a)-at least to the extent that the ban under article 286(1) (a) overlaps with - that under article 286(2). In this view, the orders of assessment in these cases cannot be set aside and the validity of the relevant pre- Constitution laws will have to be considered and the . further facts gone into.

But it is now not necessary to do so in these cases in the view taken by my learned brothers and the order propo>ed by them will govern these cases.

Cl) \1953] S.C.R. 1, 21 and 24.

(2) 1955] I S.C.R. 206 213.

K.rishnaswami

Election Commission

Krishnaswami Karayalar

Government of Travancore-Cochin

M/S. RAM NARAIN SONS LTD

ASST. COMMISSIONER OF SALES TAX

AND OTHERS

ASST. COMMISSIONER OF SALES TAX AND OTHERS

S. R. DAS

BHAGWATI

JAFER IMAM

CHANDRASEKHARA AIYAR JJ.

Constitution of India

Article 286(2)

Article 286(2)

Article 286

Berar Act 1947

Section 2(g)

Article 286(1)(a)

Article 286(2)

CHANDRASEKHARA

AIYAR

JAGANNADHADAS

Venkatarama

Article 286

Article 286(i)(a)

Article 286(i)(a)

Parliament

Article 286(2)

Article 286( I)

Article 286( 3)

Article 286(2)

Article 286(2)

Article 286(2)

Article 286(1)(a)

Article 286

Bengal Immunity Co.

Article 286(2)

Article 286(2)

Article 286(2)

Article 286

Article 286( I)

Article 286(l)(a)

Article 286(2)

Section 2(g)

Berar Sales Tax Act, 1947

Article 286(I)(a)

State of Madhya Pradesh

Article 286(2)

Bennett & White (Calgary) Ltd.

Municipal District of Sugar City No. 5 (1951 Appeal Cases 786

Articles 286(1)

Article 286

Article 286(2)

Article 132(1)

Constitution of India

Ram NaraiR

Sons Ltd.

Ram Narain

Article 32

C. Setalvad

R. M.

Hajarnavis

G. C. Mathur

N. C. Chatterji

R. M. Hajarnavis

G. C.

Mathur

M. Adhikari

M. C. Setalvad

C. K.

Daphtary

A. P. Sen

B.

Dadachanji

Rajinder Narain

T. L. Shevde

I. N. Shroff

B. Dadachanji

Rajinder .Narain

S. R.

Das

Jafer Imam

Chandrasekhara Aiyar

Bhagwati

Jagannadhadas

article 132(1)

article 286(1)

Ramnarain Sons Ltd.

Central Provinces and Berar Sales Tax Act, 1947

Amravati

12th September, 1949

1st October, 1949

30th September, 1950

30th June, 1953

Commissioner of Sales Tax, Madhya Pradesh

Article 226

High Court of Judicature at Nagpur

Rhagwali

others

Rhagwali J.

The Appellants in Civil Appeal No.

Eastern Cotton Company

Madhya . Pradesh

9th September, 1953

By his order dated the 9th September, 1953, the Respondent No.

article 226

the Central Provinces and Berar Sales Tax Act, 1947

the Central Provinces and Berar Sales Tax Act, 1947

Ramdas Khimji Brothers, Bombay

1st October, 1950

30th September, 1951

29th December, 1952

Article 226

High Court of Judicature at

Nagpur

section 2(g)

Berar Act XVI of 1949

1st April, 1951

Pradesh Act IV of 1951

article 286(1)(a)

State. of Madhya Pradesh

Ram NaraU.

article 286(2)

26th January, 1950

article 286(2)

article 286(2)

article 286(1)

article 286(2)

article 286(1)

article 286(2)

article 286(2)

article 286(1)

6th September, 1955

article 286

article 286(2)

article 286(1)

Nagpur High Court

article 286(1)

article 286(2)

article 286

article 286(2)

article 286(1)

article 286( 1 )(a)

article 286

article 286( 1)

article 286(1)(a)

article 286

article 286(1)

article 286(3)

article 286(2)

article 286

article 286(2)

article 286

article 286

article 286(2)

article 286(2)

article 286

Rom Narain

Bhapati

article 286(2)

article 286

article 286(1)

article 286(1)

article 286(1)(a)

article 286(1)

article 286(1)(a)

article 286(2)

article 286(2)

article 286

Bombay

Madras

article 286(2)

article 286(1)(a)

State of Madras

article 286(1)

State of Bombay

section 2(g)

Ram Naraia

Ram NMain

article 286(1)(a)

article 286(2)

article 286(2)

article 286(1)

Ramdas Khimji Brothers

section 2(g)

article 286(2)

Anglin

Ram Narain

Ram Narain

Son' Ltd.

article 32

article 286(2)

Jabal

Lucknow

Kanpur

Faizabad

Agra

Bhopal

Uttar Pradesh

U ttar Pradesh

21st October, 1949

9th November, 1950

25th January, 1950

State of Madhya Pradesh

14th July, 1954

section 2(g)

article 286(1)

State of Uttar Pradesh

article 286(1)(a)

article 286

State of Uttar Pradesh

article 286(1)(a)

article 286(2)

article 286(1)

Jabalpur

7th August, 1953

article 286(2)

article 286(1)

Ram Narain

Sons Ltd.

It \\'.as never

M/s. Ram Narain

Sons Ltd. v.

Asst.

Ram N"'ain

BhaguiaJi

article 286(l)(a)

section 2(g)

article 286

article 286(2)

State of

State of Madhya Pradesh

Blaagwati

Ram NOTain

State of Uttar Pradesh

article 286(1)

State of Madh}a Pradesh

State of Madhya

article 286(2)

article 286(1)(a)

article 286(2)

article 286(2)

article 286(2)

article 286(l)(a)

article 286

articles 286(1)

Sons Ltd.

article 286(2)

article 286

article 286(2)

article 286(2)

article 286(1)(a)

article 286(1)

article 286

article 286(2)

article 286(2)

article 286(1)

article 286(2)

article 286(2)

article 286(2)

article 286( 1)

article 286(1)

article 286(2)