Rajalzmundry v. A· Nageswara Rao

their claim for exemption and the Mills in support of maintaining that sales tax was due and had been legitimately assessed and demanded. On behalf of the Union of India was filed an affidavit affirmed by one M. P. Pai, Joint Secretary Ministry of Works, Production & Supply. It was the Government therein stated that a department of of India named the Department of Supply came in the month of September 1939 immedi existence the commencement of World War II and ately on (Sales before the enactment of the Bengal Finance (Bengal Act VI of 1941). It was Tax) Act, 1941 the 7th January 1946 the said De averred that before the procure partment of Supply was charged with including ment of Stores Indian Bengal and that Stores Department in the United Kin~dom and of the India States of America. by Resolution No. 227/45-Pub(c) dated the 31st December 1945 the Gov the creation with ernor-General the Department effect from the existing De of Industries & Supply partment of Supply and of Industries and Civil Sup It was claimed that the powers and functions plies. Industries and Supplies were the same as those of the Department of Supply and that there was no variation in the nature of the said functions whatsoever. from all places it also directed the work of in Council announced the 7th January 1946 of Supply Mission It was added the Department of in place of the United India In The rule came up for hearing before Bose, J., who the newly created Department of took the view Industries & Supplies was charged with work of procurement of stores for Government as had the Department of Supply and· been entrusted the name certain additional works and that Industry and was again changed to Ministry of Supply. The learned Judge pointed out that although the designation of the Indian there was a change Stores Department and the Supply Department of the Government of India, section. 5(2) (a)(iii) was not ·when by an amend amended in any way until 1949 ing Act (West Bengal Act X of 1949) the exemption later on 1955 T!.. Union of lrulia v. Thi Commercial Tax Ojjicer, W tsl Bengal and ot/urs D1J1 Aclg. C. J. 2 S.C.:R. SUPREME COURT REPORTS 1081 granted under section 5(2)(a)(iii) was withdrawn. The learned Judge appears to have regarded this con tinuance of section 5(2)(a) (iii) in the Bengal Finance (Sales Tax) Act, 1941 as indicative of the fact in view of the State of West Bengal the Ministry of Industry & Supply was the same as Indian Stores Department and the Supply Department of the Gov section. The ernment of India learned Judge accordingly held the Mills were to the benefit of the exemption and were not entitled liable to pay sales respect of tax in on the 3rd January 1952, question. He accordingly, made the rule absolute. referred to in the supplies J. learned Judges taken by The Commercial Tax Officer and the State of West Bengal went up on appeal the said judgment and order of Bose, J. The appeal came up fot hearing before a Bench consisting of K. C. Das Gupta, J. and In separate but concurring judg P. N. Mookerjee, ments both the prelimi rejected the Mills and the Union of nary objection the appeal. On the India as to the maintainability of the Department of merits both of them held that Industries & Supplies was not the same as Indian Stores · Department or the Supply Department of the Government departments ceased to exist and a new department combining some of the functions of these departments and some new functions was created and that, the newly created department could not be deducted turnover under section 5(2)(a)(iii). the Appeal Court allowed the appeal In with costs, set aside the order of Bose, J. and dis the application of the Mills under Article 226. missed the Union of India have now The Mills as well as come up on appeal before us with a certificate of ness granted by the High Court. India. The old the result, therefore, taxable In view of the• decision of this Court in National Sewing Thread Co. Ltd. v. fames Chadwick & Bros. the question of maintainability of the appeal Ltd.( ), before the High Court has not been raised before us. The appeals have been fought out on the merits only. (I) [1953] S. C.R. 1028. lOSi '. \. " . SUPREME COURT REPORTS . [1955] 1955 The appeals came: up before this·. Court for hearing Th• Union ,j India on the 22nd and -_ 23rd September 1955: After going The c~ _ . through the r~cords ·.it-was • felt that the materials on Tax Off~"• w,,1 the Court to· de Bmgal. mu! ot"4rs c_ termine . tlie Das A-;;:C.-j • . \parties.-· The appeals were accordingly adjourned and directions were· - given for the filing of sup_plementary affidavits· ·,setting . out the facts relied on by the parties respectively •. -Fresh affidavits have since been filed. to enable .real •point - of · controversy ' between record were not sufficient · ) Indian to avail including textile goods It . appears from the affidavit of· · one - A. R. Iyer, of Supplies Deputy· · . Director, Directorate ' General and Disposals, under the Ministry of Works, Housing & Supply, that in 1918 a department called · the Con tracts Directorate had been - constituted · as _ a pur chasing organisation ·for the needs of the Army. : With ·stores effect from - the -lst January 1922 the · Department . .was constituted . as - a result of .the recom mendations of the Stores Purchase Committee. The to" act as a pur functions of this department were chasing and inspection agency . in. respect of -. certain for· ~ll Central commodities departments and minor Local · Governments and such themselves other authorities as might desire of the services of this · department. · Annexure III that it was not obliga the ~davi.t _of Iyer indicates tory - on the · other departments inake purchases Indian s;ores Department. Originally through • the this department . was constituted for a period of years but by Resolution No. S. 217 of the Govern ment of India, dated the 6th May 1924, · -it was placed on a permanent basis and continued to this Re -same functions. Rules 5 and 6 -attached solution -. show that purchases could - also be made ' locally. by other departments in case of emergency or for convenience. . - In 1939 when the outbreak of World War II was for- creating -a new depart- the Governor-General ment was keenly felt and the-- Home Department Council _ by a. Resolution:· of (Annexure V to Iycr's the 26th August 1939 affidavit) announced the creation from that date of a department of Supply "to deal directly with ques- to discharge the necessity _ - - . -. - -- - imminent 1955 The Union of India v. The Commercial Tax Officer, West Bengal and others Das Actg. C. J. 2S.C.R. SUPREME COURT REPORTS 1083 relating their identity, required India which were being of war". Annexure VIII Indian Stores Department and tions concerning supplies of all kinds Iyer's the prosecution the control of the Indian Stores affidavit shows Department and all other matters purchase of stores dealt with in the Department of Commerce were as a tem be dealt with in the department Supply the war. That porary measure for the duration of the Contracts is shown by Directorate did not the Office Memorandum dated the 3rd August 1940 (Annexure X, Clause 4) and Office Memorandum (Annexure XI, Clause dated the 2nd December 1941 1(a) and Clause 4). end of the year 1940 purchases used and on account of the Government of Indian Stores Department Contracts Directorate, that purchases the Department of Supply and It was were also made locally by other departments. then that on the 1st July 1941 the Bengal Legislature passed (Sales Tax) Act, 1941 which by section 5(2) (a)(iii) exempted Indian Stores Department, the Supply Department of the Government of India and any railway or water transport administration other departments of the Government of India were not so exempted. thus clear that up to to be made India by the Bengal Finance tax. Sales It it shows Iyer's affidavit) By a Press Note dated the 2nd September 1941 issued by the Government of Supply India Department (Annexure XIII a purchase branch of the Supply Department duration of the war was created with effect from 1st August 1941 and the Contracts Indian Stores Department had Directorate and the then "ceased duration of the war and a new branch was being orga nised in their place. Then came 23rd December 1941 the Government of the Department of Supply (Annexure XIV) India the previous office memorandum dated the 13th December 1940 (Annexure XII). The 14-85 s. C. lndia/59 the Office Memorandum dated separate entities" to exist as superseded issued by

195.'l Tiu Union o.( Indict v. The Comm<"r..ial T°'" Offeer, Jl'e.rt ffthl'rs Bengal and Das A~·t_i;. (.'. J. 1084 SUPREME COURT REPORTS r 1955J referred touch with it though working therein were and, I annexed is clearly mentioned in Statement therein the Central Governmellt concerned authorities under the production, manufacture and p_urchase of thereto. supplies were shown departments It other than the ones to the contrary, would remain the absence of orders independent of the department (Clause 3). Powers of local pur chase were also not disturbed in any way (Clause 4). Statement I indicates plies, e.g., medical and veterinary supplies, coal and for Railway and other civil and military auth India, etc., and Printing and Stationery ont1es the Supply Department. stores, were independent of Indian Stores Department thus clear that It and the Supply Department of the Government of the only departments which had auth India were not ority to make purchases for and on behalf of the Gov ernment of India in its various departments. that purchases of various On Shortly (iii) Controls. 107/43-Pub(c) whereby to deal with (i) Statistics and Research, the 21st April 1943 came Notification No. 2rB the Governor-Gcnr No. the 22nd ral in Council announced the creation, from April 1943, of a Department of Industries and Civil (ii) Supplies Development and thereafter the 14th May Office Memorandum No. E4(179) dated 1943 intimated issued by the Department of Supply the Governor-General in Council had decided the Department of Industries and Civil Supplies would, with effect from the 15th May 1943, take over textiles responsibility Iyer's and cotton affidavit). So this Department of Industries and Civil Supplies became another purchasing organisation of the Department the Government of India apart from of Supply. for the procurement of cotton textile (Annexure XVI to stores the 7th The Government of India Resolution dated the 31st December 1945 announced the creation, with effect January 1946, of the Department of Industries and Supplies in place of the existing De partment of Supply and the Department of Industries and Civil Supplies. By Indian this Resolution 1955 The Union of India v. The Commercial Tax Oificer, West Bengal and others Dar Aclg. C. ]. 2S.C.R. SUPREME COURT REPORTS 1085 incorporated formerly assigned It will be noticed the Government of the war had been brought under the Department of the Contracts Directorate Stores Department which during in the newly Supply Department, were that this newly created department. to it the work of the <:reated department had assigned India procurement of stores the Department of which was Industries and Civil Supply and this department these duties Supplies. In addition things, namely, was authorised also to deal with other industries, administration of Govern development of specialised depart ments, Disposals of Surplus and Civil Supplies. The nature and volume of the purchases made by newly created department became obviously different those of the two departments it from and larger that the Department replaced. of Supply which was created the prosecution of war was abolished as soon as the war was over (An nexure XVII to the affidavit of Iyer). factories not allocated It is also noteworthy The Resolution of the Government of India dated the 2nd September 1947 published in the Gazette of India (Annexure XVIII) announced, amongst other that with effect from the 29th August 1947 the Department of re-designated as Industries and Supplies would be .the Ministry of Industries and Supply. the 6th September 1947 things, the Ministry of From the summary of the annexures to the affidavit it is quite clear that of Iyer filed in these proceedings Industries and Supply was a Industries and new designation of the Department of Supplies, the Department of Industries and Supplies cannot be regarded merely as a new designation of the Department of Supply and the Department of the Resolu Industries and Civil Supplies. the "creation" of the Department of tion announced in place of the two existing Industries and Supplies This newly created departments mentioned above. department had wider powers and was a new depart ment altogether. The (Sales-Tax) Act, 1941 was given to Bengal Finance two departments by name. It was not given granted by exemption Indeed, •,\ 1086 ·. SUPREME COURT REPORTS [19551 1955 . 1 that the It is true these . two departments Th4 U•ionofl•dia ments. sales to· ilie·. Government 'of India . and the ·Supply ·Department of if they were distinct entities. · The Act, .-· - in alh itS' depart- Indian Stores· ·Department TM c:· the Govetnment of Tax o.ou:':'"W,,, . India were not corporate bodies but. they evidently Bengal and •thtrs - were . sufficiently well defined organisations to be in some of the· Press Notes to as. "entities" Das Jct&· C.J \ . referred and Resolutions mentioned above and even· in affidavits filed .. in· these. proceedings. Further, Bengal Finance (Sales Tax) Act, 1941 . by section· 5 two departments (2)(a)(iii) certainly dealt with these in a manner, conferred ' on status, as it were, of well defined and distinct entities the purposes of that Act, namely for least for making sales to them exempt from the tax .. If it were the object of the Bengal Legislature to give exemp tion to all sales to all departments of the Government of India it would ·have been quite easy · for it to frame (iv) sub-clause had been to be regarded as covering sales to departments were ·all departments of the Government of India then India not wholly, belonged to ·need not have been separately mentioned in _ the way it · has been in sub-clause (iii). As - already stated, there were, at the date when the Act was passed, the Government of various other departments of India which were concerned with purchase of stores but quite dearly section was not those departments. Therefore, the section cannot two . particular departments ·possibly be read as a reference to the Government of India generally. the real object of section · to give exemption not to the parti 5(2)(a)(iii) was ·cu1ar departments but to the sales of such goods as, . at the date of the Act, used to -be made to those de, those goods made therefore, sales · of partments ·and, to any department of the Government of India which came to be charged with the duty of purchasing those (iii) in a general way as framed. Further,· if sales · to to the Railways which at that t)le exemption conferred by the Government of sub-clause It has · been urged the reference ·to time mostly, to the sales to extend intended ·- + 1955 The Union of lndi• v. The CommtrciaJ Ta, Ojf1ur, w,.i &ngal and olhm Da< A<tg. C.J. 2S.C.R. SUPREME COURT REPORTS 1087 to those involves to those to them at for the court reasoning. This to the benefit of to all sales made it. We are unable for the prosecution of the sales were only of addition of the section which ordinarily language med by it to the section should also come within the purview of section and be entitled the exemp tion conferred by to accept this line of interpretation will unduly the scope and ambit of the exemption by limit narrow those goods as, at the date of ing it to sales of only two departments the Act, used to be two depart and sales of other goods even ment',, however necessary war, would not get the benefit of the exemption. Such intention of the legislature could not possibly be framing· as fxpressed by the the section. According the exemption two deparunents, is given the kind of no matter whether goods which used to be sold the date of the Act or of other kinds of goods. The suggested qualifying interpretation is not per the press notes missible and the resolutions of the Government of India sum there were other indicate marised above clearly purchasing departments which were independent of Indian Stores Department or the Supply Depart ment of the Government of India and that the auth ority of other departments of making local purchases interfered with by t~e creation of these · two was not departments. Therefore that, same or similar at the date of the passing of the Act, two depart kinds of goods used to be ments as well as in view of the language of the cannot be contended, section, that to extend intended similar kinds those other departments also. is not necessary for us to pronounce any opinion as to the validity or soundness of the extreme position the learned Advocate-General of West Bengal up by namely _that as is given by a statute to sales made to two departments eo nomine it will not extend for our present designated by a new name. to other departments but surely the exemption was same or it may well have been the same department to do. Further, to sales made the exemption It is enough It 1955 Tht Union of India v. The Commtrcial Tax Olficer, We.\'t Bengal and others Das Artg. C.J. 1088 SUPREME COURT REPORTS [1955} language the scope of those of the two departments, the Department of subsequently the Ministry of Industries and Supply was not Industries purpose and Supplies which was re-designated ·as same as the Indian Stores Department or the Supply Department of the Government of India under a diff the work en erent name. The scope and volume of Industries and Supplies trusted to the Department of was much wider and larger than that with· which the two departments which it replaced had been charged. Unlike its purchases to goods necessary for the prq_secu were not confined tion of the war. To extend the benefit of the statu tory exemption to the sales made to the newly created department of Industries and Supplies, of goods not required for war purposes but, say, for meeting inter the present case, will neces national obligations as in sarily widen the exemption and impose greater loss of revenue on the State of West Bengal than what the Act by its to do. In view of the ever expanding activities of the modern welfare State in different fields including that of trade departments are and commerce, the performance of well defined often entrusted with activities and are authorised to deal with the outside world and to enter into contracts of sale and purchase the same way as an ordi and other nary person or company may do. Such Government therefore, may well be regarded as dis departments, tinct units or quasi for which they are created. At particular purposes the Bengal Finance (Sales Tax) Act, 1941 by any rate, providing for turnover cer named departments as distinct tainly entities. This exemption is the creation of the statute and must be construed strictly and cannot be ex tended the section was not amended until 1949 does not at all indicate that intended to ex to any but the depart tend the benefit of the section In our ments specifically mentioned the Appeal opinion the conclusion arrived at by to other departments. The fact taxable departments the Bengal Legislature the deduction of the Government legal entities, at the sales to the in the section. transactions to sales intends treated 2 S.C.R. SUPREME COURT REPORTS 1089 Court, namely sale in question dismissed with costs. is payable on the is correct and these appeals must be sales tax in the in these S1NHA J.-I regret the appellant (Messrs Shrcc Ganesh ed brethren tion involved sales by 1954 appellant India transactions <,a]es 1941 (Bengal Act VI of 1941), inafter as " The Act". (the Government of tax under to have determination of appeals, namely, . whether Jute Mills Ltd.) to differ from my the only ques in Civil Appeal No. 10 of the Union of to payment of (Sales Tax) Act, referred to here India at the liable the Bengal Finance to be in Civil Appeal No. 9 of 1954, in question) were time of Tht~Union of India \'. 'f ht Commtrcial Tax Ojfuu, Wt>I Bl!ngal ari.rl othtrJ Do• Actg. C.J. The farn leading up to these appeals may shortly be stated as follows : The Government of India Ministry of Industry and Supply (which for of brevity may be called "The Government" entered into a contract on the 1st September 1948 with Messrs Jute Mills Ltd., which may be desig Shree Gane<,h supply of hessian at cer nated "The Mills", description appearing filed on behalf of the Mills. Exhibit A to the affidavit With reference contract contains the following stipulation :- for the rates and of certain the question of "The prices shown above are exclusive of India will the Govern the conditions of contract specified if it is ultimately Bengal Sales Tax. The Government of arrange direct payment of sales ment of Wt'>t Bengal in respect of this contract". sales tax is payable that "This contract will be govern It is also provided c:.d by in Form to date". This contract WSB. 133 "A Huq, Deputy was entered into for and on behalf of the Gover Director of Supplies, In pursuance of the aforesaid nor-General of India". the Mills rnpplied hessian goods to the Gov contract ernment of India of a certain valuation on which the the main contest :~ommercial Tax Officer of Bengal, ing respondent, made a demand of Rs. 9,401-10-6 .sales tax from the Mills. The Mills demurred amended up '>igned by 1955 The U11io11 of India v The CfJmmercial Tax O.fficer, H'est IJengal and others Sinha]. 1090 SUPREME COURT REPORTS [1955] to pay the contesting the Mills moved in appeal under respondents 1 and 2 to sales in questjon payment and contended were exempt from payment of the sales tax demand ed in view of the provisions of section 5(2)(a)(iii) of the Act. Eventually the High Court of Calcutta for an appropriate writ under article 226 of respondents. the Constitution against The matter was heard by a Single Judge of that Court who by his judgment dated the 6th December 1951 held that the Mills were not liable the notice of demand tax demanded and cancelled and directed forbear from the demand. Respondents 1 and 2 went enforcing the Letters Patent. The appeal was heard by a Division Bench which came contrary conclusion. The major portion of the ment of the Letters Patent Bench was devoted discussion of the question whether judgment of the writ matter was amenable Letters Patent. That question has not been pressed therefore no more in during that was canvassed controversy. The only question before us was the applicability of section 5(2) (a) (iii) the benefit of the Act which contains in each of which case. The exemption is in these terms :- learned Single is being sought by the arguments and Judge appellate the exemption, the appellants jurisdiction "Sales Supply Di'partment of any railway or water transport administration". Stores Department, the Government of India, and Indian It has been contended on behalf of the sale of hessian by the Mills ment of India is within On the other hand, Sales Tax Department of Bengal the aforesaid exemption clause. development of the Department in question. the appellants the Govern in the Ministry of Industry and Supply terms of the exemption quoted above. it is contended on behalf of \Vest in question were not covered by It is therefore neces the formation and into some detail of the Government of the sales to go The supplementary affidavit filed on behalf of Government and sworn to by Shri A. R. Iyer, Deputy of Supplies & Director of Directorate General 1955 The Uni.on of India v. Thi Commercial Tax Officer, Wtst Bengal and others Sinha J. 2S.C.R. SUPREME COURT REPORTS 1091 required following the public facts. The such major Indian India for Government January 1922 as a result of and functions of to act as a purchasing and Disposals, discloses Indian Stores Department was constituted with effect from the 1st the recommenda the Stores Purchase Committee which had tions of constituted by the Government of India to exa mine the whole question of the constitution of an ex to carry out on a large scale purchase of pert agency supplies services, as recom mended by the Industrial Commission, with purchase · of the object of encouraging articles made in requirements. The the Department, inter alia, inspection agency, and in an advisory capacity in all matters connected with the purchase of stores fqr the public services, on behalf of all Central Departments of the Government and of the minor local Governme11ts and also on be local Governments, Company half of worked Railways, Corporations, Port Trusts, Munici palities and quasi public bodies and Indian States as might desire the Department's assistance. The activities of the Department consisted in the purchase and inspection variety of goods and articles including "textile goods", that the purchase of hessian which is the particular commodity involved included in the activities of the Department. The Department had been constituted in the first instance for a period of two years. But by a Resolution of the Govern the 6th May 1924 ment of India dated it was placed on a permanent basis. same functions as before. It made purchases not only for the needs of the civilian departments of the Gov ernment of India but also of all the requirements of the Army. Hessian which had been purchased from the Mills in this case was one of the products which the Government of India used purchase only Indian Stores Department whenever through needed for Government purposes. A Department called the "Contracts Directorate" had been constituted 1918 as a purchasing organization for the needs of the Indian Army. But It continued to discharge to avail themselves of this case, would be in India of a constitution of 1955 The (/nifJn qf India v; TM Commtrcial 1·ax O.fficer, WtJl IJ~ngal and r1lhtn Sinha J. 1092 SUPREME COURT REPORTS [1955] to meet amongst and textiles required by ·position was the needs of Jute products the demands of the the services of procurement of them. By imminent the Contracts Directorate and the Stores Department in 1922 the Army authorities alsr> began to utilize the Indian Stores De partment categories of several a Resolution of stores Home Department dated the · 26th August 1939, appa rently second Indian world war, Stores Department were in· 1940. amalgamated with the Department of Supply so that in 1941, when the Depart Act was passed, ment of Supply as reorganized on the 3rd August 1940 included its activities functions the Government. purchase of stores for This branch of its activity was administered by located at New Directorate General, Supply Branch, including hessian Delhi. had to be purchased only by placing. indents by department concerned with the Directorate General this Department absorb of Supply, New Delhi. Thus the purchasing sec ed for the duration of tions of Contracts Directorate which were placed under com pletely empowered for war purposes or procure all to be supplies otherwise. All indents or procured demands on the Directorate General concerned. With from the 1st August 1941 the Contracts Directo effect Indian Stores Department ceased to exist rate and in the Supply Department and be as separate entities in the said Depart came one purchasing organization ment. This organisation arranged supply of all .classes of stores for purposes of Government, such as leather goods, etc. Thus hessian which came textiles, the head of "textiles" which was being pur chased Indian Stores in the first instance only by to be purchased by the Supply Department Department when Indian Stores Department the control of the Supply Department. came under By a notification dated the 21st April· 1943 issued by the Home Department, the Government of India Industries another Department the war Store's Department and supplies, whether authorities self-contained organizations called India had continued to place requmng Indian 1955 The L'11ion of lndi,o ''· T ht Commercial Tax Offim, Wr.<i Bmgnl and othrn Si11ha]. 2 S.C.R. SUPREME COURT REPORTS 1093 to be (other textiles continued take over and cotton responsibility the Department of of cotton Industries and Supplies activity. But with effect then were being dealt with by industries, supplies this Department was first created, Civil Supplies Department was created. This Depart- statistics and ment was primarily concerned with and development of research foodstuffs). controls it had no \Vhen purchasing the Government directed that the new 15th May 1943 department should textile procurement stores which Indian Stores Department which later came under the Supply Department as aforesaid. Purchase of jute and woollen textiles responsibi lity of the Supply Department. By a Resolution of the Government of India dated the 31st December 1945 place of the existing Departments of Supply and of Industries and Civil Supplies was created with effect that date from the 7th Department of Industries and Supplies became the procurement of stores from all places ponsible for in India the Department of Supply had been doing previously its amalgama tion with the new Department. The powers and func tions of the Department of Industries and Supplies the matter of procurement of stores continued as before. The Department continued to procure and the same kinds of articles as the Depart purchase only the coming ment of Supply had been doing before Industries and into existence of the Department of Supplies the Department of the creation of Industries and Supplies did not make any difference relating to purchase of stores. There in its functions was no addition to or subtraction in the matter of purchase of stores. in the same manner as

#1946. From from its activities January functions of the Government of reference to the procurement of From what has been stated above, it is clear that India the purchasing textiles with special including hessian with which we are immediately con Indian Stores Depart cerned were discharged by the ment from 1st functions were . Supply m 1940. taken over by the Department of January 1922. Those 1955 Tht Union Qf India v. The Cornrntrcial Tax Officer, J.Vest Btngal and others Sinha J. 1094 SUPREME COURT REPORTS [1955] 1947 the Ministry of itself merged m the Department of result of the emergence of The Department of Supply Department of Industries and Supplies with effect from the 7th January 1941\. By a notification of the Industries 2nd September the Ministry of In and Supplies was redesignate<l as dustry and Supply with effect from the 29th August India as an 1947 as a Independent State. Thus Industry and Supply is a lineal descendant of the Indian Stores Department, of course, with an added volume of work functions, but the original activity of purchase the same in bulk and in character. of stores remaining Indian Stores It has already been noticed function, concerned with Department was amongst others, of purchasing stores of a large variety of articles and goods on behalf of all Central Depart ments of the Government of India and Local Gov Port ernments, Railway Companies, Corporations, Trusts, Municipalities and other quasi public bodies, if they availed of the services of as also Indian Stores infant in the in stature and volume Department has grown sapling course of the last about 25 years. The same has grown sole purchasing agency of India the Government of for a large variety of goods and other Governments ·has contiilued. The nomenclature and commodities has undergone successive changes, but function the Central and of purchasing agency on behalf of as aforesaid other Governments and public bodies the purchase the same. Furthermore, of hessian, which is the subject-matter of the demand in question has continued in the same organization, though under a different name. Indian States department. Thus into a shady tree but its function as remained they existed at the year 1941 the provisions of a statute It is well settled state of to the reference have to be construed with affairs as time the statute was In passed. Supply Department of the Government of India which Indian Stores Department. the main According to above, and commodities activities of purchase of to the affidavit referred there was in existence incorporated 1955 The ( .. /nion of /ndit; v. T ht Commercial Tax Officer, lf'"est Bengal and others Si,,hn ]. 2S.C.R. SUPREME COURT REPORTS 1095 forage, referred later was re-designated stated above, the exemption the reason why local bodies, etc., except that is to say, not exceeding Rs. 100 is based chiefly on the consideration specified commodities, stores, etc. required by the Government of India and other Gov for · purchases of ernments, small values, each case and of certain foodstuffs, lethal !n para. 7 of the affidavit (at p. 18 of the supplementary the Supply Depart paper book) were carried on by ment. That is Government of India was worded as it stands in sec the Supply De tion 5(2)(a)(iii). As partment existed as a separate department up to 6th January 1946. With effect from the 7th January the Department of Industries & Supplies existence which Ministry of Industry & Supply. The judgment under appeal exemption clause in question does not in terms refer to the newly created department which now goes by the Industry & Supply. But name of this di:partment industry, is not concerned with the main purchasing activities India. The exemption was granted in respect of Government of India and that function continues to be assigned the Supply Department which has now become a wing of the newly created department therefore arises whether the Government of the benefit of the exe.mption. The India could claim High Court the nega tive ha,s gone upon mere nomenclature. It has em phasize1l the name and overlooked the sub1;tance of the matter. the Government. The question in so far as it deals with the purchasing activity of the Government of those circumstances the Ministry of that question in answering change After all, what is a Department of a Government ? It is is not a mere name, whatever else it may be. It not a person, either natural or artificial. A Depart ment of Government function. The Government has so many functious or a group of functions in charge of a particular Department which may be made up of a number of clerks organized in a group, whose Is supervised by a hierarchy of officials with a particular functions and each of is placed 1935 '!ht Union of India v. T ht Commercial Ta.-r Offutr, ~Vest Brngal and others Sinha]. 1096 SUPREME COURT REPORTS [1955] The therefore consist of a single the apex. A depart function out the many functions of the Government, or it may in charge of a single Indian Stores Department in the Supply Depart India and later merged larger Department of the Ministry of Industry its separate existence it did until 1939 or could have become part of a the 3rd August it did after the 7th January 1946, or the 29th August its activities could be split up under different the nature of the com in my opinion, in either direction should function, namely, of pur India and other Governments con It is a matter of substance the head of the department at ment may .comprise several functions placed departmental head. which came to be incorporated ment of the Government of & Supply, could have continued larger department as 1940, or 1947 ; and conversely, into a number of heads classified according modities change not matter so long as the chasing articles and Government of tinued and not of form. sub-departments to be purchased. But, in the nomenclature required by commodities the same. to be raised tertium quid between tbe High Court has not said so The Department concerned cannot be' equated with a natural person. Nor can it be of a legal person. I am not aware of any principle of justify placing a depart jurisprudence which would ment of Government on the pedestal of a legal person. two positions. There is no in so many Though the department either as a legal words, it has treated person or as something in between a legal person and a natural person. That, in my opinion, is not sound for treating a logic. Nor department of Government either as a legal person or as a natural person. terms of s. In my view, the show that it was an exemption granted to 5(2) (a) (iii) India a particular function of described by a certain name. And one might the great poet Shakespeare inclined to exclaim with "What is in a name !" It is but a description of main purchasing activity of the Government of India, set out shows. as the history of the department above the Government of legal basis there any 1955 The C.:nion of India '" The Commercial Tax Officer, West Bengal and others Sinha .J. 2S.C.R. SUPREME COURT REPORTS 1097 the language in order to give effect the language of a statute has to be con Sometimes strued in a modified the real intentions of the legislature where, as in present case, is only of a descriptive nature and not a definitive one. An instance of this )· In is furnished by the case of Miller v. Salomons( 1 that case the question arose whether a person of Jewish persuasion who was to Parliament as a Member of the House of Commons was entitled taking the prescribed oath. The form to sit without the oath as given by 6 Geo. 3, c. 53, mentioned It was argued on the name of "King George" only. the oath was confined to behalf of that member that name. But it .the name of a sovereign who bore was held by the Court that it was a mere description intention of the statute was to include all sovereigns who came after King George III. The relevant portion of the observations of the Court are in these terms : returned to be the both thereafter, the obligation to administer that Sovereign, because the 6 Geo. 3, c. 53, mentions to him. It is clear that the taken always "The second question arising on the construction of the Act is, whether, as the form of the oath given the name of King it ceased George only, it was reign of I think this argu applicable to no other ment cannot prevail. legislature the enactment is general-that it shall be taken with out limit of time-and the oath the existing monarch, but mentions 'the successors' ; and as it could not be in those words during the reign of a Sovereign not of the name of George, it follows is merely used by that the name George the existing Sovereign ; and the way of designating oath must be altered from in the name to time of the Sovereign, iq the manner it was when actually administered in this case, the obvi ous meaning of the enactment is an instance in which the language of the legislature must be modified, to avoid absurdity and incon sistency with its manifest intentions". to carry into effect. This is not confined in order in order (]) [1852] 7 Exch~quer 475: 155 E.R. 1036, 1068. 1955 The Union of India v. Tht Commercial Tax Offiar, VVtJt Bengal and others Sinh11}. 1098 SUPREME COURT REPORTS [1955] India the effect the Provinces of as stated on behalf of receiving subsidies and The High Court referred that the exemption was granted should be the burden of the community. Those observations, the observation of Lord Halsbury in the case of Commissioners of Inland Revenue v. Forrest(!) that exemptions strictly construed because taxation taxation will fall on other otherwise members of my opinion, have no relevance facts and cir to the the present controversy, because we cumstances of the Gov the department dealing with ernment of purchase of certain commodities and articles with to quantity. As already pointed out, out reference Indian Stores Department was concerned with for public services on behalf of all purchase of stores Central Departments of Government and local Gov the Government of Bengal as ernments, etc., and then constituted was one of India subventions which have been in their budget~. As a matter to make up the deficit of fact, the Bengal Govern ment the concesswn was granted to enable the Province of Bengal business communities within terms with others outside to compete on favourable Bengal liberal Government. Hence throwing construction of the exemption a greater burden on other citizens. On the other in the Province of Bengal the sales hand, 2s it used to the bmi the greater ness community doing business within that Province. though the It -was present case involved for · determination Rs. 10,000, amounts because in this case affected much to several crores. the business com munity in the Province of Bengal having had the Govern advantage of fairness should have allowed ment of Bengal the purchasing agency of the Government of India that benefit was in the benefit of the exemption until stated at the Bar that taxes amounting arising larger the Province amounted in the matter of supplying transactions of sale, the larger to be, is no question of I should have the question sales within the needs of the benefit in order therefore resulting thought in all (I) (1890] 15 A.C. 334. 1955 The Union o,( bu!ia \' The Commercial Ta., Officer, We-11 Ben,~al and othen Sin:.a J. 2 S.C.R. SUPREME COURT REPORTS 1099 In through incorporated the purchasing agency of terms withdrawn some time in the beginning of 1949. The matter can be looked at from another point of view also. We are concerned here with the sale of hcssian. As ,pointed out in the affidavit filed on be India, the purchase of half of the Government hessian has all along been the concern of the Supply Department, now the Ministry of lndustry & Supply. Sab tax is a tax on sale of goods and tax on hessians falls :within the contemplation of the law granting the sales were the exemption effecteJ the Gov ernment of India. The beneficiary certainly was not an amorphous body like a department but the Gov it is the Government of eniment of India, because hdia which could be a unit for purposes of the Act. this connection our attention was invited to the last clause of the words transport administra "and any tion". The argument was if the Government of India as such was just quoted. But this' was no necessity railway or a that a argument overlooks administration need not necessarily there were, be a department of Government because are, rai~way systems or water transport systems which are owned and administered by cor porate bodies other the Government of India. Sales even to those public or semi-public bodies were terms of the exemption. Those words within limitation but words therefore are which widen in so far as railways and water transport administrations not owned and carried on by the Government of India. Railway or water the beneficiary, the scope of the exemption the exemption covered by same may be available the words not words transport to be there was nothing Another reason which may be adduced m answer to prevent to the contention that the exemption was the Legislature the Government granted of India Indian Stores Department and its later substitutes had to make purchases not only for local govern the Government of the exemption ments and other public bodies. Hence from stating in respect of all purchases by is that India but also for 15-85 S. C. India/59. 1955 Tht Union ef India v. T Ju Commtrdal Ta:it Officer, Wesl Btngal and olhtrs Sinha ]. 1100 SUPREME COURJ' REPORTS [1955! that if the commodities, the exemption through through discharged in the was not an exemption in of India only but also lic bodies which could avail of purchase through that department. Another argument was urged terms in which it occurs in section 5(2) (a) (iii) the Government favour of to other Governments and pub themselves of the facilitv · to meet the appel lant's case that really the exemption was meant for the its function of purchase of Government of India stores Indian Stores Department and Supply Department. It was argued the Govern to grant lature meant ment of India, to do would have been to the Government of that sales tax. But it has not been India were exempt from that all the contention of the appellant Government of India are within the the ex terms of emption. Only purchasing department 9f the Government of India were so exempt. In para. 7 of the affidavit referred to above it has been stated on behalf of the Govern the different departments were entitled ment that make local purchases of small values, to say, not exceeding Rs. 100 and of certain specified com modities purchasing activity of the departments aforesaid of the Government of in my opinion, there is no validity like foodstuffs which were in this argument either. India. Hence, the easiest not within transacted through .that is to say to be related then such an interpretation would It was also suggested during the argument that if the exemption were to only such com modities and articles as were within the purview of the Stores Department and later of the Supply De partment, involve addition of qualifying words the section which is not ordinarily within the function of the courts. But, in my opinion, infirmity the departments mentioned the exemption clause quoted above with a person,-an argument which has already been dealt with. · 'In my opinion, conclusion that those are mere words of description and are not words with defined connotation, because this argument also suffers that it equates is no escape 1955 The UniMi of l•dia v. Tiu CatRmucia Tax Ojfiar, Wis B•ngal and othtTJ Sinha J 1955 D1ctmher 20. 2S.C.R. SUPREME COURT REPORTS 1101 is no escape neither the Act nor the rules framed thereunder define If the nomenclature only matt those departments. ·ered, the conclusion that whatever articles and commodities were pur chased by the Indian Stores Department or its later substitutes, of whatever magnitude and value, would be within question. But tention of the framers of the Act. They knew what those de the activities of the Government partments were and granted only in respect of those functions of the Government, as already indicated. the mischief of the exemption clause in my opinion, was not the the exemption was through that, For the aforesaid reasons I would allow these ap the orders of the Letters Patent Bench the orders passed by the Single Judge of peals, set aside and restore the Calcutta High Court, with costs throughout. BY THE COURT. in accordance with the Judgment of the majority the appeals are dismissed with costs. P. L. LAKHANPAL v. THE STATE OF JAMMU AND KASHMIR. ls. R. DAS, ACTING C.J., BHAGWATI, }AGANNADHA DAS, B. P. SINHA and }AFER IMAM JJ.] Constitution of .India, Arts. 13, 21, 22 and 35(c)-/ammu and Kashmir Preventive Detention Act, 2011 (Act VI of 2011), s. 3(1) (a )(i) and s. 8(1) Proviscr-Constitution (Application to /am mu and Kashmi,.) 01·der, 1954-Detention order under the provisions of ss. 3 (J)(a)(i) and 8(1) Proviso of the Act-Whether violates fundamental .-ights guaranteed under Arts. 21 and 22 of the Constitution-Non supply of grounds of detention to Detenu-Whether violates his funda mental right-Addition of clause (c) to Art. 35 of the Constitution Effect of. The petitioner was detained in Kothibagh sub-jail in Srinagar by the order of Jammu and Kashmir Government under the provi sions of s. 3(1)(a) (i) of the Jammu and Kashmir Preventive Deten- tion Act, 2011. ·