Sugan Chand Bhuramal and Sons and Others vs The State of Punjab and Others

S.S. Sandhawalia, J.—In this set of writ petitions (Civil Writ Nos. 1947), 2058, 2070, 2071, 2088, 2113, 2274 and 3008 of 1977), the constitutional validity of sub--section (1), (2) and (2--A) of S. 8 and sub--secs. (2) and (3) of S. 9 of the Central Sales Tax Act, 1956, has been challenged. On behalf of the petitioners, it is urged that the determination of the constitutional validity of the said provisions of the Act is necessary for the disposal of these writ petitions. On behalf of the respondents, it was submitted that the vires of the aforesaid provisions have been upheld by their Lordships of the Supreme Court. This submission, however, loses sight of the fact that the judgments relied upon by the respondents are prior to the Central Sales Tax (Amendment) Act, 1976(No. 103 of 1976), which has introduced changes in the aforesaid provisions, which are now the subject--matter of attack.

Though we are not very greatly impressed by the contentions raised on behalf of the petitioners, yet undoubtedly, at this stage they cannot either be termed frivolous or entirely without substance. It is plain that without a decision first on the vires of the aforesaid provisions, the writ petitions cannot be finally disposed of. We are hence satisfied that in these writ petitions a question as to the constitutional validity of the aforesaid provisions is involved. Reliance has rightly been placed on behalf of the petitioner on an unreported judgment of this Court in M/s. D. M. Oil and General Industries, Khanna, District Ludhiana v. Union of India, etc., Civil Writ Petition No. 1948 of 1976, decided on Feb. 2, 1977(Punj). Following the same and having regard to the provisions of Arts. 226A and 131A of the Constitution of India, we refer the following question to the Supreme Court for its decision:--

"Are sub--secs. (1), (2) and (2--A) of S. 8 and sub--secs. (2) and (3) of S. 9 of the Central Sales Tax Act, 1956, as amended by the Central Sales Tax (Amendment) Act, 1976, constitutionally invalid for the reasons specified in the writ petitions."

Further proceedings in this Court will remain stayed under Art. 131A(4) of the Constitution till the decision of their Lordships of the Supreme Court.

Learned counsel for the petitioners had, however, strenuously pressed their prayer for the stay of the recovery of tax meanwhile. Perhaps in the absence of any substantial ground on principle, this stay was sought mainly on the basis of supposed precedents of this Court. Our attention was sought to be drawn to M/s. D. M. Oil and General Industries, Khanna''s case (supra), but a perusal of the final judgment in the case makes no mention of any order regarding the stay of the recovery of tax. Without citing the judgment, learned counsel for the parties had made reference to Civil Writ Petition No. 2367 of 1977(Punj), decided on Sept. 30, 1977, for the submission that recovery of tax had been stayed therein. We have perused the said judgment. It is evident therefrom that the recovery of tax has not been stayed therein and all that has been observed is that as regards the amount of penalty alone sought to be recovered from the petitioners, the recovery proceedings shall not be initiated against the petitioners in case they furnish Bank guarantee to the satisfaction of the recovering authorities. The said judgment cannot be construed as an authority for the stay of recovery of tax which may fall due.

Whilst we are extremely sceptical whether the grant or refusal of stay which is entirely discretionary can be a matter governed by precedent, yet as noticed above, learned counsel for the parties have been unable to cite any such authority before us. On principle we are, however, clear that the present case is hardly fit for the grant of stay of the recovery of tax till such time as the Supreme Court may decide the question of law referred. It is a matter fit for judicial notice that under the newly added Art. 131A, already thousands of references involving the vires of Central Statutes all over the country have been made to the Supreme Court. One can easily visualise that it may well take years before the matter can possibly be decided finally. That, meanwhile the State should be denied the resources of taxation from such a wide ranging statute as the Central Sales Tax Act., 1956, appears to us as totally unwarranted. There is no equity in favour of the petitioners in this context and in case they succeed, they can possibly have no difficulty in securing a refund of the taxes paid to the State.

Even otherwise, a broad construction of Art. 131A of the Constitution would show that now jurisdiction to decide all questions of law relating to the constitutional validity of any Central law is vested in the Supreme Court to the exclusion of any other Court. This power or jurisdiction has in terms been withdrawn from the High Courts. By virtue of clause (5), the parties are entitled to a hearing before the Supreme Court before the question referred is decided. Further, sub--clause (a) of this provision also entitles the Supreme Court to dispose of the whole case itself. In this context also, it appears more apt that the power to grant discretionary relief should ordinarily be exercised by the Court, which is in essence seized of the matter. We may, however, not be understood to imply that this Court has no such jurisdiction because the matter was not debated before us at length. We are, therefore, of the view that the petitioners should approach their Lordships of the Supreme Court for the grant of stay of the recovery of the tax, which is hereby declined.

Order accordingly.