Mangat Ram and Others vs The Government of Jammu and Kashmir and Others

I.K. Kotwal, J.—We propose to dispose of this bunch of writ petitions by a common judgment as they raise common questions of law.

Except Mangat Ram, the petitioner in Writ Petition No. 37 of 1978, who is running a dhaba, all other petitioners are halwais by profession. Till

11th October, 1972, all dhabawallas, lohwallas, tandoorwallas, tea-stall holders and halwais were exempt from payment of sales tax under entry

No. 68 of Schedule II to SRO No. 157 dated 15th May, 1965, issued by the Government in exercise of its powers u/s 5 of the Jammu and

Kashmir General Sales Tax Act, 1962, hereinafter to be referred to as the Act, which had undergone many changes from time to time till then; the

last amendment in it being made on 8th October, 1971, by SRO No. 525. On 11th October, 1972, the Government by virtue of SRO No. 729,

withdrew the exemption enjoyed till then by halwais, dhabawallas, tandoorwallas, lohwallas and tea-stall holders. Entry No. 34 was added to

Schedule I to the basic SRO No. 157 relating to taxable goods which read as under :

Sales made by dhabawallas, tandoorwallas, lohwallas, tea-stall holders and halwais. 2 per cent.

Alongside, entry No. 68 of Schedule II was suitably amended, which after its amendment, read as under :

(iii) Articles of food and drink sold in boarding houses conducted for the exclusive use of students or canteens run exclusively for the use of

employees of factories or armed forces.

In its last para, the first two provisos were also substituted by the following :

Provided that in relation to dealers who run hotel, restaurant, cafe and other similar establishments wherein food preparations including coffee and

tea (but excluding liquor and beer) are served, the maximum turnover not liable to tax shall be Rs. 25,000 :

Provided further that in relation to dhabawallas, tandoorwallas, lohwallas, tea-stall holders and halwais, maximum turnover not liable to tax shall be

Rs. 40,000.

The obvious effect of this SRO being the withdrawal of exemption from payment of sales tax on the goods sold by dhabawallas, tandoorwallas,

lohwallas, tea-stall holders and halwais whose annual turnover exceeded Rs. 40,000, its constitutional validity was challenged by one of the

petitioners herein, namely, Sain Dass in Writ Petition No. 99 of 1972, titled Sain Dass v. State of J. & K. [1974] 34 STC 426 j&k (FB). The

challenge was based upon the grounds : firstly, that Section 4(1) of the Act was itself ultra vires of the Constitution, in that, it gave unguided and

uncanalized power to the Government to select the articles to be taxed and to fix the rate of tax to be charged on them ; and secondly, that the

SRO was also violative of the rules of equality enshrined in Article 14 of the Constitution, inasmuch as halwais and bakery wallas being similarly

situated, by taxing halwais alone, it had subjected them to hostile discrimination. This writ petition along with another Writ Petition No. 93 of 1972

titled Glacier Cold Storage and Ice Mills v. Assessing Authority, Sales Tax, Jammu, was heard and finally disposed of by a Full Bench on 22nd

July, 1974. This judgment is reported as Glacier Cold Storage and Ice Mills v. Assessing Authority, Sales Tax, Jammu LR 1974 J&K 531 (FB).

On the basis of various decisions of the Supreme Court and other High Courts in India, the Full Bench eventually upheld the constitutional validity

of Section 4(1) on the grounds : firstly, that the State does not have to tax everything in order to tax something : East India Tobacco Co. Vs. State

of Andhra Pradesh, ; secondly, that under a taxing statute the legislature has wide powers of classification and that the power of working details

regarding the subjects to be taxed and fixation of the rate of tax, which in turn depend upon the social, economical and administrative

considerations to be identified by legislature, has to be left to the Hiralal Rattanlal Vs. State of U.P. and Another etc. etc., and Orient Weaving

Mills (P) Ltd. Vs. The Union of India (UOI), ; and thirdly, that the maximum limit of the rate of tax fixed by a taxing statute may itself provide

sufficient guidelines to save it from the attack of unconstitutionality : Municipal Corporation of Delhi Vs. Birla Cotton, Spinning and Weaving Mills,

Delhi and Another, . The Full Bench, however, declared the withdrawal of exemption in so far as goods sold by halwais were concerned as

unconstitutional, as in its opinion, since halwais and bakerywallas did the same type of business and were thus similarly situated, charging sales tax

from halwais alone, would clearly expose them to hostile descrimination, infringing the right of equality guaranteed under Article 14 of the

Constitution. The Full Bench, accordingly, concluded its judgment with these observations:

For the reasons given above, we hold that while Section 4 of the Act is intra vires and constitutional, item 34 and the second proviso of the

notification passed u/s 5 of the Act, namely, No. SRO 729 dated 11th October, 1972, which run thus :

Sales made by dhabawallas, tandoorwallas, lohwallas, tea-stall holders and halwais. 2 per cent.

Provided further that in relation to dhabawallas, tandoorwallas, lohwallas, tea-stall holders and halwais, maximum turnover not liable to tax shall be

Rs. 40,000.

are discriminatory and violative of Article 14 of the Constitution of India. As these are the only offending parts of the notification which are

severable from the rest of the notification, we strike down and quash the aforesaid parts.

None of the parties challenged this judgment, but the Government withdrew the exemption in respect of goods sold by bakerywallas as well by

issuing SRO No. 121 on 8th March, 1976 and added another entry to Schedule II, being entry No. 45, which read as under :

Bakery and confectionary goods including sweetmeats costing Rs. 10 and above per kilogram. 4 per cent.

It also brought about a corresponding change in Schedule II by deleting entry No. 4 from it, under which exemption from payment of sales tax

was till then claimed by bakerywallas. Entry No. 45 was soon amended by the Government by virtue of SRO No. 162 dated 26th March, 1976

and the words ""and confectionary goods"" omitted from it. Another entry No. 94 was added to Schedule I, which read as under :

Bakery goods including sweetmeats the cost whereof is less than Rs. 10 per kilogram.

Hardly two years thereafter, another SRO being No. 80 came to be issued on 6th February, 1978, by virtue whereof, entry No. 45 was totally

deleted from Schedule I with effect from 1st April, 1977. On the same day, another SRO being No. 81 was issued by the Government exempting

those halwais and bakerywallas from payment of sales tax whose annual turnover exceeded Rs. 1,00,000 subject to the condition that they

obtained exemption certificate from the concerned authority on payment of a fee of Rs. 2,000 in two equal instalments. This SRO was made

effective from 1st April, 1977. It, however, did not survive for long and was replaced by another SRO being No. 187, issued on 31st March,

1978, which read as under :

SRO 187.-In exercise of the powers conferred by Sub-section (8) of Section 4 of the Jammu and Kashmir General Sales Tax Act, 1962 (XX of

1962) and in supersession of all the notifications issued in this behalf, the Government hereby notify that the maximum turnover that shall not be

liable to tax in respect of dealers other than the importers shall be as under, namely :-

(i) Hoteliers, restaurateurs, halwais and owners of such other places where cooked/baked articles of food, tea or coffee are served Rs.

1,00,000.00

(ii) Dealers other than those specified in Clause (i) above Rs. 50,000.

This notification shall have effect from the first day of April, 1977.

By order of the Government of Jammu & Kashmir.

On that very date, another SRO No. 194 was issued by the Government, rescinding SRO No. 81 and deleting entry No. 94 from Schedule II

to the basic SRO No. 157. This SRO too, for the sake of ready reference, is reproduced as below:

SRO 194.-In exercise of the powers conferred by Section 5 of the Jammu and Kashmir General Sales Tax Act, 1962 (XX of 1962), the

Government hereby rescind Notification SRO No. 81 dated 6th February, 1978:

Further the Government in exercise of the powers conferred by Section 5 of the said Act hereby direct that entry 94 of Schedule II of Notification

SRO No. 157 dated 15th May, 1965, shall be deemed to have been deleted with effect from 1st day of April, 1977.

By order of the Government of Jammu & Kashmir.

Through the medium of these writ petitions, the petitioners seek to challenge the constitutional validity of Section 4(1) of the Act and SRO

Nos. 121 and 187 dated 8th March, 1976 and 31st March, 1978 respectively, besides the notices issued to them to submit their accounts for

determining the extent of their liability to pay sales tax for the accounting year mentioned therein. The challenge is based upon the following grounds

:

(1) Section 4(1) of the Act is ultra vires of the Constitution, as it suffers from the vice of excessive delegation and the Full Bench decision in Sain

Dass's case LR 1974 J&K 531 needs reconsideration.

(2) The effect of the Full Bench's judgment in the aforesaid case was not only to strike down entry No. 34 of Schedule I to the basic SRO No.

157 added to it vide SRO No. 729, as well as to strike down the second proviso to SRO No. 729, but was also to revive entry No. 68 in the

same form in which it existed immediately before SRO No. 729 came into force.

(3) Entry No. 45 added to Schedule I by virtue of SRO No. 121 having been deleted vide SRO No. 80 and Entry No. 94 added to Schedule II

by SRO No. 162 also having been deleted by virtue of SRO No. 194, the exemption granted to bakerywallas stood revived, which rendered

SRO No. 187 discriminatory, on the basis of the reasons adopted by the Full Bench in Sain Dass's case 1974 LR j&k 531

(4) Even if SRO No. 187 were to be interpreted to have taken away the exemption granted to halwais by virtue of entry No. 68, still to club

halwais with hoteliers was discriminatory and therefore, violative of Article 14.

(5) In any event, SRO No. 187 being a piece of subordinate legislation, in the absence of such a power being clearly traceable to Section 4(1) of

the Act which is the charging provision, no tax could have been imposed by virtue of the said SRO No. 187 retrospectively with effect from 1st

April, 1977.

(6) No shelter could have been taken under entry No. 45 of Schedule I to tax the goods sold by halwais, as the aforesaid entry is exclusively

related to goods sold by bakerywallas.

The respondents' case, however, is that entry No. 68, as it stood amended by SRO No. 729, was never struck down by the Full Bench in

Sain Dass's case 1974 LR j&k 531, with the result, that the exemption which the halwais, lohwallas, dhabawallas, tandoorwallas and tea-stall

holders had enjoyed till the aforesaid SRO came into force, remained no longer available to them after its enforcement. Even otherwise also,

sweetmeats being prepared and sold by halwais alone, this exemption would be deemed to have been withdrawn by necessary implication as a

consequence of SRO No. 121. In any case, it was specifically withdrawn with effect from 1st April, 1977, by virtue of SRO No. 187. Section

4(1) did not suffer from any vice of excessive delegation of powers and the view taken in Sain Dass's case 1974 LR J&K 531 did not require

reconsideration. We now proceed to deal with each ground separately.

Ground No. (1).-The Full Bench, on the authority of various decisions given by the Supreme Court and other High Courts in India, had upheld

the constitutional validity of Section 4(1) in Sain Dass's case 1974 LR J&K 531 . We are in respectful agreement with this view taken by it and do

not feel persuaded at all to make a reference to a still larger Bench for its reconsideration, much less, when except raising a feeble argument,

nothing substantial has been brought to our notice by the learned counsel for the petitioners, that may raise even the slightest doubt in our mind in

regard to its correctness. This ground, accordingly, fails.

Ground No. (2).-This ground is in fact the sheet anchor of the petitioners' case. The Full Bench in Sain Dass's case 1974 LR J&K 531 had

held SRO No. 729 as violative of Article 14, as in its opinion, halwais and bakerywallas who prepared and sold identical articles of food like nans,

puris, kulchas, mathies, etc., stood similarly situated, with the result, that keeping bakerywallas exempt from payment of sales tax and taxing

halwais alone, would clearly subject the latter to hostile discrimination. The Full Bench had observed :

...It has been alleged in paragraph (8) of the petition that the petitioners and bakerywallas are exactly in the same position ; both of them

manufacture identical food commodities, like nans, puris, kulchas, mathies, etc. and, therefore, both of them fall in the same category of dealers so

far as the preparation of these articles of food is concerned. It has further been contended that if the provisions of the notification are to be

followed then it will be well nigh impossible to collect sales tax from the purchasers amounting to 2 np. in a rupee and even if the petitioners do so,

they are bound to suffer in competition because if their turnover is Rs. 40,000 or over they would have to charge more for the very same articles

than other halwais whose turnover is less than Rs. 40,000 as a result of which their business shall come to a standstill and no purchasers will be

drawn to purchase the articles of food from the petitioners. In reply to this argument the Additional Advocate-General submitted that the

petitioners catered to the luxurious and affluent customers and it was, therefore, a reasonable basis for classification whereas the bakerywallas

catered to the general masses, i. e., the hoi fiolloi. We are not inclined to agree with this argument because there are no reliable materials before us

to show as to what is the nature of customers of the halwais and bakerywallas, nor is there any report on which a probe can be made in the matter

to show what is the exact position in this regard. In other words, there is nothing to show as to which class of people buys articles of food from the

bakerywallas and which class buys from the halwais. If a probe had been ordered by the Government in the matter before issuing the notification

and if from such materials collected it would have appeared that the customers of the petitioners came from affluent class of people whereas the

customers of the bakerywallas come from the poorer and weaker sections of the society, then a rationale for the classification could have been

found. But as it is, there is no such material on the record and we find that both the bakerywallas and the halwais are doing the same and identical

type of business and they are preparing the same kind of articles of food. Unfortunately the petitioners have been treated by the Government with

draconic severity by following the policy of ruthless discrimination so far as the petitioners are concerned. There does not appear to be any

reasonable basis for classifying the petitioners in a separate category for the purpose of taxation and leaving out the bakerywallas, who are equally

placed and similarly circumstanced with the petitioners....

By making these observations, the learned Judges clearly meant that halwais were also entitled to claim exemption, so long as the same was

enjoyed-by bakerywallas. If that be so, as in fact it is, then the inevitable consequence of the aforesaid observations was the revival of entry No.

68 of Schedule II in the same form in which it existed prior to 16th October, 1972, i. e., the date on which SRO No. 729 had come into force, so

far as halwais were concerned. Consequently, they could not have been validly taxed even thereafter, so long as the vice of discrimination existed,

or in other words, so long as bakerywallas who were similarly situated with them, continued to enjoy exemption under entry No. 4 of Schedule II.

The Full Bench, accordingly, manifested its aforesaid intention by striking down entry No. 34 of Schedule I and the second proviso to SRO No.

729, as these two provisions alone specifically spoke of subjecting halwais to payment of sales tax.

We are not impressed with the argument advanced by Mr. S. Dutt that since entry No. 68 as amended by SRO No. 729, which unlike the

unamended entry No. 68 did not exempt dhabawallas, lohwallas, tandoorwallas, tea-stall holders and halwais from payment of sales tax, was not

struck down by the Full Bench, an irresistible conclusion would follow that they ceased to enjoy the exemption which they used to enjoy before

S.R.O. No. 729 came into force. This argument, in our opinion, is more attractive than substantial. As we have already pointed out, entry No. 34

and the second proviso to SRO No. 729 were found bad in so far as and only to the extent they subjected halwais to payment of sales tax. Since

entry No. 68, as amended by SRO No. 729, did not make mention of halwais, there was nothing to be struck down from it by the Full Bench.

Striking down entry No. 34 and the second proviso was the only possible way in which the Full Bench could have manifested its intention to

uphold the exemption to be enjoyed by the halwais, even after the SRO came to be issued. The Full Bench could not have itself recast or re-

enacted entry No. 68 to carry out its aforesaid intention, for, that was the exclusive domain of the Government, which alone was invested with the

powers of subordinate legislation. It is impossible to imagine that the Full Bench struck down entry No. 34 and the second proviso, because it

wanted to uphold the exemption claimed by them under entry No. 68 and also that it did not strike down the same entry as amended by SRO No.

729, because it wanted to uphold the withdrawal of the said exemption.

Furthermore, striking down entry No. 68 from SRO No. 729 would have necessarily meant reviving the old entry No. 68 in its entirety as it

existed before its amendment by the said SRO which conferred the benefit of exemption, not only upon halwais, but also upon lohwallas,

dhabawallas, tandoorwallas and tea-stall holders. The Full Bench apparently found no justification for upholding the exemption enjoyed by

dhabawallas, lohwallas, tandoorwallas and tea-stall holders. This is clearly borne out from the fact that it did not say even a word about them, nor

did it find any similarity between them and bakerywallas to attract the violation of Article 14, as it had found it in the case of halwais. Obviously,

therefore, the Full Bench could not have struck down entry No. 68 from SRO No. 729, as by doing so, it would have conferred the benefit of

exemption even upon dhabawallas, lohwallas, tandoorwallas and tea-stall holders, for which it had obviously found no justification. The ratio of the

judgment clearly indicates that the Full Bench had found justification for upholding the exemption in favour of halwais alone and in favour of none

else. It is true that in the operative part of its judgment it struck down the whole of entry No. 34 and the second proviso of SRO No. 729, but this

part of its. judgment has to be understood and interpreted in the backdrop of the facts found and the reasoning adopted by it. As held by their

Lordships in B. Shama Rao Vs. The Union Territory of Pondicherry, : ""It is trite to say that a decision is binding not because of its conclusion but in

regard to its ratio and the principle laid down therein."" Viewed thus, we are clearly of the opinion that the Full Bench in Sain Dass's case 1974 LR

J&K 531 had upheld SRO No. 729, in so far as it withdrew the exemption enjoyed till then by dhabawallas, lohwallas, tandoorwallas, tea-stall

holders, but had struck it down to the extent it withdrew a similar exemption enjoyed by halwais ; no matter that in the concluding part of its

judgment, it had struck down the whole of entry No. 34 and the second proviso from SRO No. 729.

Ground No. (3)-Section 4 of the Act, which is the charging section, to the extent it is relevant for the present discussion, is reproduced as

below :

Liability to tax under this Act.-(1) Subject to the provisions of this Act, every dealer except the one dealing exclusively in goods declared tax-

free u/s 5, shall pay for each year tax on his total turnover at a rate not exceeding twelve per cent of such turnover as may be determined by the

Government and notified by the Government in the Government Gazette and such tax shall be charged on the sale of goods once only :

Provided that the rate of tax shall not exceed 'three per cent' in respect of any goods referred to in Section 14 of the Central Sales Tax Act, 1956.

Section 5 of the Act, which empowers the Government to grant exemption in payment of sales tax, is also reproduced as below :

Exemption from taxation.-The Government may, subject to such restrictions and conditions as may be prescribed, including conditions as to

licence and licence fees, by order exempt in whole or in part from payment of tax any class of dealers or any goods or class or description of

goods.

On reading these provisions together with the two schedules appended to the basic SRO No. 157, among others, the following two

conclusions clearly emerge:

(1) Sales tax is chargeable on every article sold by a dealer, unless it has been specifically exempted by the Government from its payment, in

exercise of its powers u/s 5 of the Act.

(2) Tax shall be charged on every article not exempted u/s 5, according to the rate fixed for that particular article by the Government in exercise of

its powers u/s 4 of the Act and where no such rate has been so fixed, tax on that article shall be charged according to the rate mentioned in the

residuary entry No. 35 of Schedule I.

Once we realise these implications, we shall have to hold that after SRO No. 121 came to be issued, even bakerywallas ceased to enjoy the

exemption, which they had till then enjoyed under entry No. 4 of Schedule II. By virtue of SRO No. 121 not only bakery and confectionary goods

were specifically taxed at the rate of 4 per cent by adding entry No. 45 to Schedule I, but a corresponding amendment was also made in Schedule

II to give effect to this intention and entry No. 4 of the said schedule was omitted under which bakerywallas used to claim exemption till then. This

SRO was amended by SRO No. 162 and bakery goods, the cost whereof was less than Rs. 10 per kg. alone were exempted from payment of

sales tax, by adding to that effect entry No. 94 to Schedule II. Entry No. 45 of Schedule I was no doubt rescinded by virtue of SRO No. 80, but

the only effect which this SRO produced was that whereas bakery goods not selling at the rate of Rs. 10 per kilogram, which were being

previously taxed at the rate of 4 per cent, were made liable to be taxed at the rate of 7 per cent under the residuary entry No. 35 of Schedule I.

Things, however, did not stop here. By virtue of SRO No. 194, even entry No. 94 of Schedule II was rescinded, with the result, that bakerywallas

ceased to enjoy any exemption from payment of tax with effect from 1st April, 1977.

The absolute exemption, which the halwais had hitherto enjoyed under entry No. 68 of Schedule II, was qualified by SRO No. 187 and the

benefit of the exemption was restricted to only those halwais whose annual turnover did not exceed Rs. 1,00,000. This was an all embracing

provision, which placed dealers in two categories and granted qualified exemption to all of them from payment of sales tax. It put persons dealing

with service of articles of food, whether cooked or baked, tea or coffee, in the first category, whereas it put persons dealing with other goods in

the second category. Dealers belonging to the first category were made liable to pay sales tax only if their annual turnover exceeded Rs. 1,00,000,

whereas dealers belonging to the second category were made liable to pay the same only if their annual turnover exceeded Rs. 50,000. The

language in which this SRO is couched makes it abundantly clear that its Clause (i) applied not only to halwais, but also to bakerywallas,

dhabawallas, lohwallas, tandoorwallas and tea-stall holders, all of whom have been made liable to pay sales tax in case their annual turnover

exceeded Rs. 1,00,000. The basis found by the Full Bench in Sain Dass's case 1974 LR J&K 531 for striking down entry No. 34 of Schedule I

and the second proviso to SRO No. 729 having thus disappeared, it is idle to contend that the vice of hostile discrimination still remained attached

to SRO No. 187, the inevitable consequence whereof was to subject even bakerywallas to payment of sales tax. Consequently, this ground also

fails.

Ground No. (4).-This ground merits no consideration, because it has neither been specifically taken in the writ petitions and nor has any

foundation been otherwise laid for it by pleading necessary facts therein. It also, accordingly, fails.

Ground No. (5).-SRO No. 187 was issued on 31st March, 1978. Admittedly, it is a piece of subordinate legislation. Section 4 of the Act,

there can be no manner of doubt, does not give any power to the Government, either expressly or by necessary intendment, to impose sales tax

retrospectively. This SRO could not have been, therefore, made effective from 1st April, 1977. The law on the point has been succinctly laid down

by their Lordships in Income Tax Officer, Alleppey Vs. M.C. Ponnoose and Others, , wherein it has been held :

...The courts will not, therefore, ascribe retrospectivity to new laws affecting rights unless by express words or necessary implication it appears that

such was the intention of the legislature. The Parliament can delegate its legislative power within the recognised limits. Where any rule or regulation

is made by any person or authority to whom such powers have been delegated by the legislature it may or may not be possible to make the same

so as to give retrospective operation. It will depend on the language employed in the statutory provision which may in express terms or by

necessary implication empower the authority concerned to make a rule or regulation with retrospective effect. But where no such language is to be

found it has been held by the courts that the person or authority exercising subordinate legislative functions cannot make a rule, regulation or bye-

law which can operate with retrospective effect....

It, therefore, follows that SRO No. 187 took effect not on 1st April, 1977, but only on 31st March, 1978, i. e., the date on which it was

actually issued. This ground consequently succeeds.

Ground No. (6).-Inviting our attention to entry No. 45, added to Schedule I by virtue of SRO No. 121, Mr. S. Dutt, however, contended that

since sweetmeats were prepared by halwais alone, even they shall be deemed to have been taxed at the rate of 4 per cent along with bakerywallas

by necessary implication. The argument turns upon two questions : one, whether sweetmeats are prepared by halwais alone ; and two, whether tax

can be imposed by implication. The word ""sweetmeats"" has not been defined in the Act. As common knowledge goes, there are many articles of

food like saambosas, cream-rolls, cakes, pastry, etc., prepared by bakerywallas, which may reasonably fall within the definition of sweetmeats

even by construing them in the popular sense of the word. Granting, therefore, that sweetmeats are prepared both by bakerywallas and halwais,

even if the other interpretation that by using the word ""sweetmeats"" in entry No. 45, the Government meant to tax halwais also is a plausible

interpretation, still, in the absence of a specific mention of halwais in entry No. 45, the benefit has to go to halwais. The law is well-settled, that

where two interpretations are possible the one favourable to the assessee has to be preferred. In Alladi Venkateswarlu and Others Vs. Govt. of

Andhra Pradesh and Another, , their Lordships in almost similar circumstances had observed as under :

...We must also remember that the schedule which we have to interpret is in the English language where the term 'rice' is still found in the rendering

or description of 'pelalu' as well as that of 'muramaralu' in the English language. And, in any case, if two interpretations of a provision are possible,

we think that we ought to, in such a case, apply the principle that the interpretation which favours the assessee should be preferred.

A similar view was taken in Commissioner of Income Tax, Punjab Vs. Kulu Valley Transport Co. P. Ltd., . It therefore follows that halwais

were not made liable to pay sales tax by virtue of entry No. 45 added to Schedule No. I through SRO No. 121. Obviously, therefore, this ground

succeeds.

From the above discussion, the following conclusions clearly flow :

Halwais were absolutely exempted from payment of sales tax till 31st March, 1978. They became liable to pay it at the rate of 7 per cent under

the residuary entry No. 35 from 1st April, 1978, onwards, provided their annual turnover exceeded Rs. 1,00,000.

Dhabawallas, lohwallas, tandoorwallas and tea-stall holders, whose annual turnover did not (sic) exceed Rs. 40,000 became liable to pay sales

tax at the rate of 2 per cent from 11th October, 1972 till 31st March, 1978. From 1st April, 1978, onwards, only those dhabawallas, lohwallas,

tandoorwallas and tea-stall holders remained liable to pay it at the same rate, whose annual turnover exceeded Rs. 1,00,000.

Bakerywallas were absolutely exempted from payment of sales tax till 8th March, 1976. From this date onwards they became liable to pay it at

the rate of 4 per cent, but on those goods only, which they would sell at the rate of Rs. 10 or more per kilogram. Their liability to pay sales tax at

the rate of 4 per cent remained till 31st March, 1978. But, from 1st April, 1978, onwards, they became liable to pay it at the rate of 7 per cent,

irrespective of the price at which their goods were sold, provided their annual turnover exceeded Rs. 1,00,000.

From what has been stated heretofore, Writ Petition No. 37 of 1978 titled Mangat Ram v. State of Jammu and Kashmir is dismissed. All other

petitions are allowed, but only to the extent they challenge the notices issued to the petitioners to submit their accounts for the years preceding 1st

April, 1978 and all such notices are by a writ of certiorari quashed. The respondents are by a writ of prohibition restrained from charging any sales

tax from halwais for any period prior to 1st April, 1978. In the circumstances of the case, the parties in all these writ petitions are left to bear their

own costs.

G.M. Mir, J.

I agree.