D esai, C.J:— This is a case referred by the Judge (Revisions) Sales Tax, U.P under Sec. 11(1) of the U.P Sales Tax Act, at the assessee's instance, insisting this court to answer the following two questions:—

(1) Whether the word “Successive” used in Sec. 3-A of the U.P Sales Tax Act includes the first dealer?

(2) Whether in view of Secs. 14 and 15 of the Central Sales Tax, Sec. 7 of the Additional Duty of Excise (Goods of Special Importance) Act and the definition of ‘Sugar’ as given in the Central Excise Act, the U.P Government could impose tax on Khandsari sugar for the periods (1) 1-4-1958 to 30.9.1958 and (2) 1.10.1958 to 28-2-1959?

2. The associated references except Sales Tax Reference No. 9 of 1964 are similar to this and the same questions have been referred. In Sales Tax Reference No. 9 of 1964 the facts are similar but the question referred is:—

“Whether in view of Sec. 7 taxation of sugar as defined by Sec. 2(c) would include khandsari sugar and whether in interpreting the phrase sugar the definition of sugar as given at the relevant item of the Central Excise and Salt Act in the First Schedule shall be borrowed in spite of the notification No. M.F (R.D) 11-C-Exc. dated 19-7-1952 issued by the Central Government.”

3. All references arise out of assessment to sales tax for the assessment year 1958-1959 on the assessees, who are manufacturers of Khandsari sugar by means of power.

4. Under Sec. 3 of the Sales Act, sales tax is payable at a certain rate by every dealer for each assessment year on his turnover of the year. The State Government is authorised by Sec. 3A to declare, by notification in the official gazette, that the turnover in respect of any goods shall not be liable to tax except at such single point “in the series of sales by successive dealers” as it may specify and to declare the rate at which it shall be liable. In exercise of this power the State Government issued notification no. 418.X-902(9)-52 dated January 31, 1957 declaring that with effect from 1-2-1957 the turnover in respect of Khandsari sugar manufactured in Uttar Pradesh shall be liable to tax only at the point of sale by the manufacturer and at the rate of 3 pies per rupee. Art. 226(3) of the Constitution, as it was in force after the amendment of 1956, provided that any State law, so far as it imposed a tax on the sale of goods declared by Parliament “to be of special importance in inter-State trade or commerce” was to be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament might by law specify. Under Sec. 3 of the Central Excise and Salt Act of 1944 duties of excise were levied and collected on sugar (defined in Item 8 of the First Schedule as “any form of sugar containing more than ninety per cent, of sucrose”) produced in factory ordinarily using power in its production, including khandsari sugar (defined as “sugar in the manufacture of which neither a vacuum pan nor a vacuum evaporater is employed”), at certain rates. In 1956 Parliament enacted the Central Sales Tax Act imposing sales tax on sales effected by a dealer in the course of inter-State trade or commerce. Under Sec. 14 of it certain goods including sugar, as defined in the Central Excise and Salt Act, were declared to be “of special importance in inter-State trade or commerce”. These goods are known as “declared goods”. Sec. 14 was enacted in order to enable Parliament to impose, in exercise of the powers conferred by Art. 286(3) restrictions and conditions in regard to the system of levy, rates and other incidents of sales tax imposed on sale of sugar by a State Sales Tax Act. Sec. 15 (as stood after its amendment on 4-6-1957) was to the effect that every sales tax law of a State imposing a tax on the sale of declared goods was subject to the restrictions and conditions that it could be levied “only in respect of the last sale … inside the State and not exceed two per cent, of the sale …. price” and could not be levied even in respect of the last sale if the goods were intended for sale in the course of inter-State trade or commerce. On 24-12-1957 Parliament passed the Additional Duties of Excise (Goods of Special Importance) Act no. 58 of 1957 in order to provide for collection of additional duties of excise on sugar and certain other goods and the distribution of a part of the net proceeds thereof among the States in pursuance of the principles of distribution formulated, and recommendations made, by the Finance Commission in its report dated 30-9-1957 and for declaring the goods to be of special importance in inter-State trade or commerce. Sugar was defined in Sec. 2(c) of the Act to have the meaning assigned to it in Item no. 8 of the First Schedule to the Central Excise and Salt, Act 1944. Sec. 3 provided that duties of excise at the rate of Rupees 3.31 per cwt. were to be levied and collected in respect of sugar manufactured in India in addition to the duties of excise chargeable on it under the Central Excise and Salt Act, 1944 or any other law for the time being in force; these duties were known as “additional duties”. By Sec. 7 it was declared that sugar and certain other goods were “of special importance in inter-State trade or commerce and every sales tax law of a State shall, in so far as it imposes …. a tax on the sale .. of the declared goods, be subject as from the 1st day of April, 1958, to the restrictions and conditions specified in Sec. 15 of the Central Sales Tax Act, 1956”. The result was that with effect from 1-4-1958 the sales tax imposed on sugar by the U.P Sales Tax Act could not exceed two per cent, of the sale price thereof and could not be levied except on the last sale.

5. On December 13, 1957 it became known to the States, through publication in the Gazette of India of the Bill of the Additional Duties of Excise Act (no. 58 of 1957) that sugar was going to be declared to be of special importance in inter-State Trade or commerce and that with effect from 1-4-1958 they would not be able to levy sales tax on sugar at more than one stage and exceeding two per cent, of the sale price. So the State Government of U.P issued on 14-12-1957 notification no. 4485.X amending the earlier notification no. 413, dated January 31, 1957 and directing that no sales tax shall be payable with effect from 14-12-1957 by dealers in respect of sugar including Khandsari sugar provided that the additional central exise duties leviable on it from the closing of business from December 13, 1957 had been paid and the dealers thereof had furnished proof to the satisfaction of the assessing authority about the payment.

6. The Central Sales Tax Act was amended by Act No. 31 of 1958 with effect from 16-9-1958. Sec. 15 was amended and under the amended provision every sales tax law of State was subject to the restrictions and conditions that the tax payable under it in respect of any sale of declared goods could not exceed 2 per cent, of the sale price and could not be levied at more than one stage. By another provision of the Amendment Act Sec. 7 of the Additional Duties of Excise Act was repealed because the purpose behind it was achieved by the amendment of Sec. 15. Sec. 14 of the Central Sales Tax Act specifies certain goods (including sugar) as goods of special importance in inter-State trade or commerce so that a State law taxing sales of them inside the State should not exceed a certain percentage and should not be levied at more than one stage (by virtue of Sec. 15). Sec 7 of the Additional Duties of Excise Act was enacted with the object of bringing more goods within the meaning of “declared goods.” By the amendment of Sec. 14 by Act No. 31 of 1958 all the goods mentioned in Sec. 7 of the Additional Duties of Excise Act were included in it and consequently it became redundant. The amendment also achieved the object of altering some of the restrictions imposed on the State laws.

7. The liability of the assessees in all these references arises out of the notification No. 418 dated 31-1-1957. It is challenged by them on several grounds. One is that it was ultra vires the State Government because under it sales by the manufacturer were taxed whereas it could select sales by any of “successive dealers.” The argument was that the Phrase “successive dealers” does not include a manufacturer because he is the very first dealer and means dealers “succeeding a dealer,” that successive dealers are those who succeed a dealer such as a manufacturer-dealer and that a manufacturer being the first dealer cannot be said to be a successive dealer on account of there being no dealer preceding him and he not succeeding any other dealer. This interpretation of “successive dealers” must be rejected; it confounds “successive” with “succeeding.” Murray's dictionary gives the following meanings of the word “successive”:—

“1(a) With pl. or compound sub: Coming one after another in an uninterrupted sequence; following one another in order.”

and gives the following instances of the meanings:—

“Three successive Bishops, John, Benedict and Clement … excommunicated him; “Fury always delivers the author into successive mischiefs”; “A view of the successive changes of the English coin to the present time”; “Multiplication of all the successive numbers from 1 upto some high number”).

(b) With sing, sub: Following another of the same kind in a regular sequence or series. Somewhat rare.”

8. It is the first meaning (e.g 1(a)) that is to be given when the word occurs with a plural substantive and the second meaning is to be given when it is used with a singuar substantive. When it is used in the first meaning it means the whole series including the first of it and it is only when it is used in the second meaning that it means something which follows another thing of the same kind. Another thing can be said to be successive thing only when the word “successive” is used in the second meaning. The instances of the first meaning make it clear that the very first of a series is included in it and that it is not essential to have a thing of the same kind before the series begins. “Numbers from 1 upto some high number” includes No. 1 and there is no number prior to No. 1; still the words used are “successive numbers from 1 upto some high number.” In another instance, all the mischiefs into which the author of fury is delivered are included’ in the phrase “successive mischiefs”; it is not necessary that some mischief must precede the series of mischiefs occasioned by the fury. It is obvious that “successive changes of the English coin” includes the very first change and the very premise that it is the first change means that there has been no change prior to it. The word “successive” in the phrase under consideration is used with a plural substantive (“dealers”) and, therefore, is to be given the first meaning. A manufacturer dealer is one of “successive dealers” and could be selected by the State Government for being taxed. Question No. 1 is about this ground of attack and must be answered in the affirmative.

9. Another ground of attack was that under Sec. 15 of the Central Sales Tax Act sales tax could be levied by a State only on the last sale if the sugar was intended for sale in the course of inter-State trade. The contention of the assessees was that they being the manufacturers sales by them were the first sales and not the last sales. Whether a sale is a first sale or the last sale is a question of fact and the Judge (Revisions) has not said in the statements of cases that the sales by the assessees were not the last sales. The very first sale can be the last sale; if there is only one sale it is both the first and the last sale. If the sales by the assessees were the only sales in U.P they were the first sales but they were also last sales in U.P and could be taxed. Merely because they were the first sales it could not be said as a matter of law that they were not the last sales. The fact that a sale is the first sale does not prevent its being the last sale; it cannot help being the last sale if another sale does not succeed it. The assessees themselves never contended before the Judge (Revisions) that the sales by them were not the last sales in U.P

10. Another way of looking at the matter is that the question of selecting the sale to be taxed arises only if there is a series of sales in the State; it is then only that the last sale is to be taxed. If there is only one sale the question of selection simply does not arise and if sales tax has to be levied it has to be levied on that Sale. If it is not levied on it, it would result in no sales tax being levied at all even though it must be levied. Hence in the case of a single sale in U.P the question of applying the restriction that the last sale should be taxed does not arise.

11. Various provisions of the Central Sales Tax Act came into force on different dates notified by the Central Government in the exercise of the power conferred by Sec. 1(3). The provisions of Sec. 15 came into force on 1-10-1958 under notification No. G.S.R 521 dated June 10, 1958. Sec. 7 of the Additional Duties of Excise Act made a tax on sale of declared goods to be subject to the restrictions and conditions specified in Sec. 15 of the Central Sales Tax Act. (References to Secs. 7 and 15 in what follows are to Sec. 7 of the Additional Duties of Excise Act and Sec. 15 of the Central Sales Tax Act respectively). It was argued that so long as Sec. 15 did not come into force, i.e prior to 1-10-1958 it could not be read at all and that consequently Sec. 7 did not apply prior to 1-10-58. This argument, which confuses reading a provision with applying or enforcing it, must be rejected. Sec. 7 required us to read Sec. 15 only to ascertain what restrictions and conditions are specified in it and nothing prevented our reading it prior to 1-10-1958. So long as it was on the statute it could be read; it was immaterial whether it was in force or not. A provision can always be read even though it has not come into force. Parliament, instead of reproducing in Sec. 7 the restrictions and conditions specified in Sec. 15, as it could have done, simple asked us to obtain them from Sec. 15. It is noteworthy that Sec. 7 uses the word “specified” and not “imposed”. Had the latter word been used it could be argued that so long as Sec. 15 did not come into force the restrictions and conditions specified in it could” not be said to have been “imposed”. Enforcement of Sec. 15 might be required for finding what restrictions and conditions were imposed but not for finding what restrictions and conditions were specified in if.

12. It is staged in Craies on Statute Law, 6th Edition:—

“The effect of bringing into a latter Act, by reference, sections of an earlier Act is to introduce the incorporated sections of the earlier Act into the later Act as if they had been enacted in it for the first time.” (Page 223).

“Where a statute is incorporated by reference into a second statute, the repeal of the first statute by a third does not affect the second, as the incorporated provisions have become part of the second statute.” (P. 360 relying upon Clark v. Bradlaugh 1881 8 Q.B.D 63..)

Sometimes an Act of Parliament, instead of expressly repeating the words of a section contained in a former Act, merely refers to it, and by relation applies its provisions to some new state of things created by the subsequent Act. In such a case …. the repeal of the first statute by a third does not affect the second.” (p. 416)

“It is but common sense that), where a second Act in effect re-enacts an older Act, the second Act must be expressly repealed as well as the older Act, otherwise it must be taken to remain in force.” (P. 417) Quoting from Blackburn, J. in R v. Smith 1873 L.R 8 Q.B 146, 151..

13. What applies to repeal applies also to the non-enforcement of a statute. A repealed statute ceases to be in force after the repeal whereas a statute passed but not yet brought into force before a certain date is not in force up to that date. The effect of a statute not being brought into force on another statute which refers to a provision of it is exactly the same as that of its repeal. Therefore, the fact that Sec. 15 was not brought into force prior to 1-10-1958 does not mean that Sec. 7 could not be given effect to. As the effect of reference in Sec. 7 to the provisions of Sec. 15 is the same as that of reproduction of the provisions of Sec. 15 in Sec. 7, what is material is the coming into force of Sec. 7 and not the coming into force of Sec. 15. As soon as Sec. 7 came into force one could refer to the provisions of Sec. 15, even though it itself had not come into force, for ascertaining the restrictions and the conditions. What is relevant is not Sec. 1(3) of the Central Sales Tax Act but Sec. 1 of the Additional Duties of Excise Act, which did not prescribe a date for the coming into force or it and thereby left it to come into force on the date of it publication in the gazette (e.g 26-12-1957). Sec. 15 was amended by Act XXXI of 1958, which came into force on 16-9-1958; so it was the amended provision that came into force on 1-10-1958. But the restrictions and conditions specified in the unamended section were made applicable by Sec. 7 because they were the restrictions and conditions specified in Sec. 15 at the time when Sec. 7 was enacted. The subsequent amendment to Sec. 15 did not affect the restrictions and conditions which were made applicable by Sec. 7 just as the very repeal of Sec. 15 would not have affected them. The words “as amended from time to time” were not added after the words “Sec. 15 of the Central Sales Tax Act, 1956” in Sec. 7.

14. Sec, 7 of the Additional Duties of Excise Act remained in force only up to 15-9-1958 (because it was repealed by Act XXXI of 1958 with effect from 16-9-1958). Up to 15-9-1958 it was the unamended Sec. 15 of the Central Sales Tax Act that existed on the statute book. Consequently Sec. 7, which itself was repealed before Sec. 15 was amended, could not possibly have referred to the amended provisions of Sec. 15. In Dilip Kumar Mukherjee v. Commercial Tax Officer A.I.R 1965 Cal. 498., D. Basu, J. stated on page 503 that a State Sales Tax Act not complying with the restrictions and conditions specified in Sec. 15 became unconstitutional and void with effect from 1-10-1958 and not 1-4-1958 because prior to 1-10-1958 Sec. 15 had not come into force. The learned Judge seems to have lost sight of the fact that Sec. 7, by which the restrictions and conditions specified in Sec. 15 were made applicable to a State Sales Tax Act, itself did not exist with effect from 16-9-1958. He also seated at page 504:—

“So long as Sec. 15 itself was not brought into force, there was no prohibition effectively introduced by Sec. 7 of the Act of 1957, and the fact) that it specified the date 1-4-1958 as the date of commencement of the prohibition was of no effect.” With great respect, I do not agree. The learned Judge then said:—

“Sec. 15 of the Act of 1958, as amended by the Central Sales Tax (Second Amendment) Act of 1958 …. Provides as follows:—

(a) the tax payable under that law in respect of any sale … of such goods inside the State shall be levied in respect of the last sale … inside the State and shall not exceed two per cent, of the sale price thereof, and such tax shall not be levied at more than one stage;” There seems to be some mistake because Sec, 15 as amended by the Central Sales Tax (second Amendment) Act No. XXXI of 1958 simply lays down that tax must not be levied at more than one stage and instead of fixing the stage leaves it at the option of the State. Sec. 19 of the Sea Customs Act authorises the Central Government to prohibit or restrict the bringing of goods of any specified description into India across any customs frontier. Sec. 8 of the Foreign Exchange Regulation Act authorises the Central Government to prohibit the bringing into India of any gold or silver and Sec. 23-A lays down that the prohibition contained in Sec. 8 shall be deemed to have been imposed under Sec. 19 of the Sea Customs Act and that all provisions of that Act would have effect accordingly. Sec. 178-A was introduced in the Sea Customs Act in 1955 to shift the burden of proving that goods believed to be smuggled were not really so on the person from whose possession they were seized. In Collector of Customs v. Sampathu Chetty A.I.R 1962 S.C 316., the Supreme Court rejected the contention that it was the Sea Customs Act (which was in force in 1947) that became incorporated in the Foreign Exchange Regulation Act and that the subsequent amendment to it by introduction of Sec. 178-A could not affect, modify or enlarge the scope of the incorporated Sea Customs Act. It repelled the theory of incorporation because the effect of Sec. 23-A was simply to treat a notification issued by the Central Government under Sec. 8 of the Foreign Exchange Regulation Act as if it had been issued under Sec. 19 of the Sea Customs Act. It was obvious that if Sec. 19 of the Sea Customs Act were Co. be repealed the penal provisions of that Act would no longer be applicable to contravention of a notification under Sec. 8 of the Foreign Exchange Regulation Act; this confirms that provisions of Sec. 19 were not incorporated in the Foreign Exchange Regulation Act. This case is, therefore, no authority for the view that Sec. 15 was not incorporated in Sec. 7.

15. Another argument advanced by Sri Raja Ram Agarwal was that Act XXXI of 1958 amending Sec. 15 should be deemed to do so retrospectively and Craies at page 391 was relied upon. The argument is untenable. There is nothing in the language of Act XXXI of 1958, which necessarily implies that it was intended to be given retrospective operation. No retrospective operation was called for in the interest of the Central Sales Tax Act. The argument was advanced only as an alternative reply to the argument) that Sec. 15 was not in force prior to 1-10-1938 and that consequently the restrictions and conditions specified in it could not be read for the purposes of applying Sec. 7. I have already rejected the latter argument.

16. Another ground of attack on the notification dated 31-1-1957 was that it became a dead letter on the enactment of Sec. 7 with effect from 26-12-1957, that it was not revived on 16-9-1958, when Sec. 7 was repealed by Act XXXI of 1958, and that without a fresh notification no sales tax was leviable on a sale by a manufacturer of khandsari sugar. The very premise that the notification became dead on the enactment of Sec. 7 is incorrect. It is Art. 286(3) of the Constitution that gave the alleged effect to the notification but it did not render it non-existent once for all and only made it) subject to the restrictions and conditions specified in Sec. 7 (read with Sec. 15). It remained valid and continued to exist) in the eye of law; such provisions of it as were inconsistent with the provisions of Sec. 15 could not be given effect to and this was all that happened on the enactment of Sec. 7. Provisions of it which were not inconsistent with those of Sec. 15 were to be given effect to; this confirms that it remained valid. It was not repealed either by the State Government issuing it or by Parliament. It was not even eclipsed because provisions of it, which were not inconsistent with those of Sec. 15, could be given effect to. The utmost that could be said was that it was only eclipsed and when the inconsistency between it and the provisions of Sec. 15 was removed by the amendment of Sec. 15 by Act XXXI of 1958 all its provisions again became enforcible. The effect of Sec. 15 read with Sec. 7 and Art. 286(3) on a State Sales Tax Act was stated by the Supreme Court to be this:—

“The meaning of the intention of Cl. (3) of Art. 286 is not to destroy all charging sections in the Sales Tax Acts of the States which are discrepant with Sec. 15(a) of the Central Sales Tax Act, but to modify them in accordance therewith. The law of the State is declared to be subject to the restrictions and conditions contained in the law made by Parliament and the raise in the State Act would pro tanto stand modified.”

17. See Modi Spinning and Weaving Mills v. The Commissioner of Sales Tax A.I.R 1965 S.C 957 961..

18. A notification issued in exercise of a power conferred by a statute has statutory force and validity and its provisions are to be treated as if they were contained in the statute itself; see Kailash Nath v. State of U.P 1957 8 S.T.C 358 at p. 360. per Govinda Menon, J. (Kailash Nath was overruled in Ujjam Bai v. State of Uttar Pradesh A.I.R 1962 S.C 1621. but this statement of Govinda Menon, J. was not dissented from). Therefore, whatever is the effect on a State Sales Tax Act is the effect on a notification issued in the exercise of a power conferred by it.

19. It was contended that Art. 286(3) made a State Sales Tax Act subject to the restrictions and conditions specified by Parliament by law only so far as it related to tax on inter-State sales. Because the words used in the sub-article were “declared … to be of special importance in inter-State trade” it was contended that the sub-article applied only in relation to inter-State sales and that inter-State sales were not affected by it. The contention arises out of a misreading of the provisions of the sub-article. The words “inter-State trade” are used only with reference to the declaration by Parliament and not with reference to the imposition of a tax by a State Sales Tax Act. What is required for the applicability of the provision is a declaration by Parliament that certain goods are of special importance in inter-State trade. Once the declaration has been given a State Sales Tax Act imposing a tax on sale of the goods becomes subject to the restrictions and conditions specified in an Act enacted by Parliament; it becomes subject to the restrictions and conditions regardless whether a particular sale is an inter-State sale or an intra-State sale. In deciding whether a State Sales Tax Act is subject to the restrictions and conditions specified in an Act enacted by Parliament it is irrelevant to consider whether a particular sale is interstate sale or intra-State. The word “inter-State” qualifies the words “trade or commerce” and there is no reference in the sub-article to inter-State sale or intra-State sale. The only reference to a tax on sale is “a tax on the sale … of goods;” all sales of goods are within the scope of these words if they are declared goods. Sugar is declared goods and, therefore, the U.P Sales Tax Act, imposing a tax on all sales of it, and not merely on inter-State sales of it, is subject to the restrictions and conditions specified in an Act enacted by Parliament.

20. Sri Raja Ram referred us to Abdul Malik & Co. v. Comml. Tax Officer 14 S.T.C 214. and Hajee Abdul Shukoor & Co. v. State of Madras A.I.R 1964 S.C 1729. a but I find nothing of assistance in them; they do not deal with the questions that have been raised before us. In Abdul Shukoor & Co. the argument was that hides and skins were declared goods and that consequently the State of Madras had no power to levy a tax on sales of hides and skins in the course of inter-State trade. It was this argument that was repelled by the Supreme Court on the simple ground that the Act was within the competence of the State legislature.

21. Under notification No. 4485 dated December 14, 1957 no sales tax was payable with effect from 14-12-1957 by dealers in respect of sugar provided that the additional Central Excise Duties leviable thereon from the closing of business on December 13, 1957 have been paid.” It is obvious that the State Government assumed that the Central Excise Duties would become leviable on sugar with effect from December 14, 1957; they assumed this because of the Bill of the Additional Duties of Excise Act published on 13-12-1957. If the additional Central Excise duties were payable on sugar no sales tax would be payable if the additional Central Excise Duties were paid to the satisfaction of the assessing authority. If the additional Central Excise Duties were not paid or the payment was not proved, to the satisfaction of the assessing authority sales tax remained payable. If the Additional Central Excise Duties Act did not impose additional Central Excise Duty on sugar the modification done through the notification did not apply and the original notification dated 31-1-1957 continued to apply, i.e sales tax. continued to apply, i.e under it. The notification dated 14-12-1957 applies to Bidis just as ill applies to sugar. No additional Central Excise Duty was leviable on hand-made Bidis. In Chhotabhai Jethabhai Patel v. State of Uttar Pradesh A.I.R 1962 S.C 1614. no additional Central Excise Duty was paid on hand-made Bidis by an assessee and the Supreme Court held that he was not entitled to the benefit of the notification. A notification similar to the notification dated 14-12-1957 issued by the State of Andhra Pradesh was considered by the Supreme Court in Innamurt Gopalam v. State of Andhra Pradesh 1963 14 S.T.C 742.. That notification also used the words “goods in respect of which additional duties of excise are leviable by the Central Government” and the exemption was subject to the conditions that the dealer should prove to the satisfaction of the assessing authority that the additional Central Excise Duty had been paid and that in default of the proof he was liable to pay the sales tax. The goods involved in that case were textile goods but they were not subject to the additional Central Excise Duties. The Supreme Court held that the dealer came within the operative words of the notification granting the exemption, that the condition regarding the proving of the payment of the additional Central Excise Duties was not applicable and that the operation of the exemption was, therefore, unaffected by the condition. The learned Judges did not notice the earlier decision in Chhotabhai Jethabhai Patel. The Andhra Pradesh notification is materially different from the U.P notification dated 14-12-1957. The provision in the former is:

“the Governor …. hereby exempts from the tax …. the sale … of any of the goods …:

Provided that in the case of any class of such goods in respect of which additional duties of excise are leviable by the Central Government ….. the exemption shall be subject to the following conditions.” The provision in the latter is:

“In partial modification of the notifications …. No. S.T 418 … dated January 31, 1957 …. no tax shall be payable under the aforesaid Act with effect from …. in respect of the following classes of goods provided that the additional Central Excise Duties …. have been paid a …. and that the dealers … furnish proof …”

22. The structure of the sentence in one notification is different from that of the other. The exemption in one notification is general and the proviso applies only in respect of certain goods; the exemption in the other notification is only in respect of certain goods and subject to a certain condition. In one case the proviso to which the general exemption is subject, is applicable only in respect of certain goods and makes the exemption applicable only if in respect of them certain conditions are fulfilling. The question of fulfilling the conditions arises only in respect of a particular class of goods; in respect of other goods the proviso itself does not apply and consequently there is no question of seeing whether the conditions are fulfilled or not if the proviso does not apply the general exemption remains intact. In effect, the notifications (i) grants exemption (ii) removes it in respect of certain goods and (iii) re-grants it in respect of those goods if certain conditions are fulfilled. In respect of other goods the proviso itself does not apply and there is no question of fulfilling the conditions. In the other notification, the exemption is in respect of particular” goods subject to certain conditions and leaves the earlier notification (C.I of 31-1-1957) intact otherwise with the result that a case not governed by it remains governed by the earlier notification. The exemption is subject only to the conditions of payment of the additional Central Excise Duty leviable on the goods and of the proof of the fact. The word “leviable” is obviously used to mean “which may be levied” i.e “which may be levied, if there is a law for the levy.” Neither is there general exemption nor is there regrant of exemption in respect of goods excluded from the general exemption. In the former case, a case not governed by the proviso remains governed by the general exemption while in the latter case a case not governed by the proviso is not governed by the notification at all and remains governed by the earlier notification. Therefore, the instant case is governed by the decision in Chholabhai Jethabhai Patel and not that in Inndmuri Gopalam.

23. There was a controversy at the bar whether the assessees are entitled to raise the question discussed just above. The Judge (Revisions) has not discussed it at all; it was admittedly not pressed before him in this and the associated references barring reference No. 9 of 1964. Sri S.C Khare stated that he had raised the question but in view of the decision in Chhotabhai Jethabhai Patel he did not press it. There is a reference to notification dated 14-12-1957 in the grounds of revision, vide ground No. 2 of the revision application in the instant case. So I take it that the ground was taken in the revision applications but was not pressed in view of the Supreme Court decision. In the circumstances it may be said that it arises out of the order passed by the Judge (Revisions) even though it does not deal with it. In reference No. 9 of 1964 it was pressed but the Judge (Revisions) refused to refer the question. Question No. 2 referred by him is, however wide enough to include all questions relating to the liability to pay sales tax on Khandsari sugar. The ‘answer has to he given after considering all relevant law even it some of the law was not relied upon by the assessees before the Judge (Revisions). The question that we have to answer is whether sales tax is payable or not), i.e whether it is payable or not in accordance with law and not whether it is payable according to the law pressed by the two parties nor whether such and such provisions of law make it not payable. If according to all the law applicable sales tax is not payable we cannot answer the question in the affirmative simply because the law which makes it not payable was not relied upon by the assessees before the Judge (Revisions) and consequently he had not discussed it. I have therefore, considered the argument based on the notification dated 14-12-1957 (but found no merit in it).

24. My answer to question No. 2 is in the affirmative.

25. A copy of this judgment should be sent to the Judge (Revisions) Sales Tax, U.P and the Commissioner of Sales Tax, U.P under the seal of the Court and the signature of the Registrar as required by Sec 11(6) of the Sales. Tax Act, The Commissioner of Sales Tax shall get his costs in this reference which may be assessed at Rs. 50/-. Counsel's fee may be assessed at Rs. 50/-.

26. S.C Manchanda, J.:— I agree.

Questions answered.