(1)
STATE OF MADHYA PRADESH AND OTHERS Vs.
LAFARGE DEALERS ASSOCIATION AND OTHERS .....Respondent
Sections, Acts, Rules, and Article Mentioned:
Sections: 78, 79, 80, 85, and 86: Madhya Pradesh Reorganisation Act, 2000
Madhya Pradesh Commercial Tax Act, 1994
Section 12: Madhya Pradesh General Sales Tax Act, 1958
Section 8(5): Central Sales Tax Act, 1956
Article 286 (before amendment on 16-09-16): Constitution of India
Subject:
Taxation, specifically Sales Tax, in the context of the reorganization of the erstwhile unified State of Madhya Pradesh into the reorganized State of Madhya Pradesh and the new State of Chhattisgarh in 2000.
Headnotes:
Facts:
The case involves the bifurcation of the unified State of Madhya Pradesh into the reorganized State of Madhya Pradesh and the new State of Chhattisgarh under the Madhya Pradesh Reorganisation Act, 2000. The issue revolves around the applicability of sales tax exemptions or deferments to industrial units after the reorganization when engaging in inter-state transactions.
Issues:
The central issue pertains to whether industrial units, previously granted sales tax exemptions in the unified State of Madhya Pradesh, would continue to enjoy such benefits when conducting inter-state transactions between the reorganized State of Madhya Pradesh and the new State of Chhattisgarh.
Held:
The second part of Section 78 of the Madhya Pradesh Reorganisation Act introduces a deeming fiction, indicating that the laws of the unified State of Madhya Pradesh would continue to apply to the areas forming part of the new State of Chhattisgarh and the reorganized State of Madhya Pradesh. However, this deeming fiction does not imply that the territories, post-reorganization, would remain part of the other state. It serves the limited purpose of enforcing laws as they existed in the unified State of Madhya Pradesh to the new State of Chhattisgarh.
Section 79 provides for the adaptation or modification of earlier laws in the unified State of Madhya Pradesh by the governments of the reorganized State of Madhya Pradesh and the new State of Chhattisgarh. The court emphasizes the need for interpretation in a manner facilitating the application of laws to the successor states, even if not modified within the stipulated period. Section 85 of the Reorganisation Act gives primacy to its provisions over any other law, subject to the legal and constitutional effects envisaged by the Constitution.
As per Article 286 of the Constitution (before amendment on 16th September 2016), states are not competent to enact legislation related to the taxation of inter-state sales. The expression "inter-state" trade has a specific legal connotation, referring to the movement of goods from one state to another. The judgment asserts that the creation of two separate states does not alter the legal and constitutional impact regarding the inter-state character of transactions.
Referring to an analogous case involving the Bihar Reorganisation Act, the court underscores that the legal fiction created by such acts ensures the continuity of laws in the new state without implying that the new state lacked political or constitutional existence. The judgment overrules previous observations, emphasizing the need to give full legal effect to the creation of a new political state.
Referred Cases:
B.S. Goraya v. U.T. of Chandigarh, (2007) 6 SCC 397
Commissioner of Commercial Taxes, Ranchi and Another v. Swarn Rekha Cokes and Coals Pvt. Ltd. and Others, (2004) 6 SCC 689
M.P.V. Sundararamier & Co. v. State of Andhra Pradesh and Another, AIR 1958 SC 468
Ranjan Sinha and Another v. Ajay Kumar Vishwakarma and Others, (2017) 14 SCC 774
Sri Peera Mohammad Mahamood Saheb v. The State of Andhra Pradesh, 1960 (11) STC 456
JUDGMENT
Sanjiv Khanna, J. - Leave granted in all the special leave petitions.
2. This judgment would dispose of the afore-captioned appeals which relate to the legal effect of bifurcation of the State of Madhya Pradesh into the successor State of Madhya Pradesh and the State of Chhattisgarh by the Madhya Pradesh Reorganisation Act, 2000 ("Reorganisation Act", for short) on exemption or benefit of deferment of sales tax granted under the Madhya Pradesh Commercial Tax Act, 1994 read with the applicable rules. The question to be answered is whether the industrial unit in the reorganised State of Madhya Pradesh and under the new State of Chhattisgarh would continue to avail the benefit of such exemption or deferment even after the bifurcation in both the states, irrespective of the location of the industrial unit which would be in one of the two states.
3. Civil Appeal Nos. 460, 461, 7073 of 2005 and 2343 of 2007 arise from the judgments of the Division Bench of the Madhya Pradesh High Court, Jabalpur Bench, upholding judgment of the learned Single Judge dismissing the Writ Petition by the manufacturer/dealer of cement inter-alia recording that on enforcement of the Reorganisation Act, two separate states viz., the State of Madhya Pradesh and the State of Chhattisgarh had come into existence as postulated by the Constitution of India and hence, benefit of the exemption or deferment of sales tax would be restricted and confined to the boundaries/limits of the state in which the unit was located and would not operate beyond the limits of the state boundary. It was observed that any trade and movement of goods between the two states henceforth would be inter-state trade and not intra-state trade and the provisions of the Reorganisation Act had not removed and eclipsed this legal position but had a limited effect to treat the laws in operation in the State of Madhya Pradesh as equally applicable to the State of Chhattisgarh.
4. The other set of appeals arising from Special Leave Petition (Civil) Nos. 10520 of 2013, 1334, 10165, 23297 of 2014, 6729 and 16550 of 2016 have been preferred by the State of Madhya Pradesh and the State of Chhattisgarh impugning decisions of the High Court of Madhya Pradesh, which have in view of the pronouncement of this Court in Commissioner of Commercial Taxes, Ranchi and Another v. Swarn Rekha Cokes and Coals Pvt. Ltd. and Others, (2004) 6 SCC 689 taken a contrary view and held that notwithstanding the creation of the two states, exemption or deferment of tax notifications issued before the bifurcation would continue to apply in the new state and that for the purpose of sales tax, the two states were deemed to be one because of the legal fiction envisaged vide Sections 78 and 79 of the Reorganisation Act.
5. At this stage, it would be appropriate to mention that a Division Bench of this Court (Ashok Bhan and V.S. Sirpurkar, JJ.) vide order dated 12th September, 2007 had observed that certain facts and provisions of law which were not taken note of in Swarn Rekhas case (supra), had come to light and therefore they had thought it appropriate to refer the appeals to a larger Bench for consideration.
6. Before we deal with the rival contentions, it would be appropriate to notice and take on record the undisputed position. State of Madhya Pradesh in exercise of powers conferred under Section 12 of the Madhya Pradesh General Sales Tax Act, 1958 and Section 8(5) of the Central Sales Tax Act, 1956 (for convenience we would refer to the two enactments as the "Sales Tax Act" for short), with a view to attract investors and increase industrial output in the State, had vide notification dated 19th February, 1991 formulated a policy for grant of sales tax exemption to industrial units having fixed assets above Rs. 100 crores. Quantum of exemption from tax was to be equal to the capital investment in the fixed assets and the duration or period was 11 years from the date of commencement of commercial production or the date on which quantum of exempted tax reached the limit equivalent to the value of capital investment in the fixed assets. It is an undisputed position that private parties/assessee to the present appeals being entitled to the benefit/exemption were issued a certificate of eligibility for exemption from tax by the Directorate of Industries in the unified State of Madhya Pradesh.
7. The industrial units belonging to the private parties/assessee situated in the unified State of Madhya Pradesh after the bifurcation in terms of the Reorganisation Act would necessarily fall in the area/boundary forming a part either of the reorganised State of Madhya Pradesh or the new State of Chhattisgarh. As noticed above, the precise issue before us is whether these industrial units, which were granted exemption and were after the bifurcation located in the reorganised State of Madhya Pradesh or the new State of Chhattisgarh, would continue to enjoy the benefit of exemption/deferment of tax in the other state while conducting inter-state transaction(s) from the state they are located to the new State of Chhattisgarh or the reorganised State of Madhya Pradesh, as the case may be.
8. Before we dwell into the respective contentions and elaborate our reasons, it would be appropriate to reproduce relevant provisions of the Reorganisation Act, viz. Sections 2(e), (f), (j) and (k), Sections 3, 4 and 5 and Sections 78, 79, 80, 85 and 86(1) which are as under:
"Section 2 (e), (f), (j) and (k) of the Reorganisation Act
Part I
PRELIMINARY
2. Definitions.-- In this Act, unless the context otherwise requires,--
xx xx xx
(e) "existing State of Madhya Pradesh" means the State of Madhya Pradesh as existing immediately before the appointed day;
(f) "law" includes any enactment, ordinance, regulation, order, bye-law, rule, scheme, notification or other instrument having, immediately before the appointed day, the force of law in the whole or in any part of the existing State of Madhya Pradesh;
xx xx xx
(j) "successor State", in relation to the existing State of Madhya Pradesh, means the State of Madhya Pradesh or Chhattisgarh;
(k) "transferred territory" means the territory which on the appointed day is transferred from the existing State of Madhya Pradesh to the State of Chhattisgarh;
Sections 3, 4 and 5 of the Reorganisation Act
Part II
REORGANISATION OF THE STATE OF MADHYA PRADESH
3. Formation of Chhattisgarh State.-- On and from the appointed day, there shall be formed a new State to be known as the State of Chhattisgarh comprising the following territories of the existing State of Madhya Pradesh, namely:--
Bastar, Bilaspur, Dantewada, Dhamtari, Durg, Janjgir- Champa, Jashpur, Kanker, Kawardha, Korba, Koriya, Mahasamund, Raigarh, Raipur, Rajnandgaon and Surguja districts, and thereupon the said territories shall cease to form part of the existing State of Madhya Pradesh.
4. State of Madhya Pradesh and territorial divisions thereof.-- On and from the appointed day, the State of Madhya Pradesh shall comprise the territories of the existing State of Madhya Pradesh other than those specified in section 3.
5. Amendment of the First Schedule to the Constitution.-- On and from the appointed day, in the First Schedule to the Constitution, under the heading "I. THE STATES",--
(a) in the paragraph relating to the territories of the State of Madhya Pradesh, after the words, brackets and figures, "the Rajasthan and Madhya Pradesh (Transfer of Territories) Act, 1959 (47 of 1959)", the following shall be added, namely: --
"but excluding the territories specified in section 3 of the Madhya Pradesh Reorganisation Act, 2000";
(b) after entry 25, the following entry shall be inserted, namely: --
"26. Chhattisgarh: The territories specified in section 3 of the Madhya Pradesh Reorganisation Act, 2000."
Sections 78, 79, 80, 85 & 86 of the Reorganisation Act
PART X
LEGAL AND MISCALLANEOUS PROVISIONS
78. Territorial extent of laws.-- The provisions of Part II of this Act shall not be deemed to have effected any change in the territories to which any law in force immediately before the appointed day extends or applies, and territorial references in any such law to the State of Madhya Pradesh shall, until otherwise provided by a competent Legislature or other competent authority be construed as meaning the territories within the existing State of Madhya Pradesh before the appointed day.
79. Power to adapt laws.-- For the purpose of facilitating the application in relation to the State of Madhya Pradesh or Chhattisgarh of any law made before the appointed day, the appropriate Government may, before the expiration of two years from that day, by order, make such adaptations and modifications of the law, whether by way of repeal or amendment, as may be necessary or expedient, and thereupon every such law shall have effect subject to the adaptations and modifications so made until altered, repealed or amended by a competent legislature or other competent authority.
Explanation.-- In this D.D
09/07/2019
Facts: The case involves the bifurcation of the unified State of Madhya Pradesh into the reorganized State of Madhya Pradesh and the new State of Chhattisgarh under the Madhya Pradesh Reorganisation Act, 2000. The issue revolves around the applicability of sales tax exemptions or deferments to industrial units after the reorganization when engaging in inter-state transactions.Issues: The central i...
(2)
RAMAN SINGH Vs.
THE DISTRICT INSPECTOR OF SCHOOLS, JALAUN AT ORAI & ORS .....Respondent D.D
08/07/2019
Facts:Raman Singh appointed as an ad-hoc Lecturer in English on 11 August 1993.Appointment against a short-term vacancy due to the incumbent's leave.Regularly appointed lecturer's death on 1 October 1993 led to the appellant's continued service.Management sought to absorb him into the substantive vacancy, but DIOS approval allegedly not received.Writ petition filed in April 1996 see...
(3)
RANDHIR SINGH Vs.
UNION OF INDIA AND OTHERS .....Respondent D.D
08/07/2019
Facts:Appellant, Randhir Singh, enrolled in the 43 Armed Brigade in 1996.Allegation: Inappropriately touching a colleague's spouse on 11th August 2007.Summary Court Martial (SCM) held on 22nd May 2008, leading to appellant's dismissal.Issues:Legitimacy of convening an SCM almost a year after the alleged incident.Proportionality of the dismissal as punishment.Held: The Court held that the...
(4)
STEEL AUTHORITY OF INDIA LIMITED AND ANOTHER Vs.
JAGGU AND OTHERS ETC .....Respondent D.D
05/07/2019
Facts:A tripartite memorandum of settlement was signed, outlining the payment terms for contract labor engaged by the Steel Authority of India Ltd. (SAIL).Prohibition notification dated March 17, 1993, allowed contract labor engaged before the notification to continue working until April 1996.No fresh agreement was executed during the period from March 17, 1993, to April 1996.Contract labor sought...
(5)
CENTRAL BUREAU OF INVESTIGATION AND ANOTHER Vs.
MOHD. PARVEZ ABDUL KAYUUM ETC .....Respondent D.D
05/07/2019
Facts: The case involved criminal appeals and a writ petition arising from Special Leave Petitions. The Central Bureau of Investigation (CBI) was the appellant, and the respondents faced charges under different sections of the IPC, Arms Act, and Prevention of Terrorism Act, 2002. The appeals were heard by a Division Bench comprising Arun Mishra and Vineet Saran, JJ.Issues: The misuse of the Forum ...
(6)
CHRISTOPHER RAJ Vs.
K. VIJAYAKUMAR .....Respondent D.D
05/07/2019
Facts:Christopher Raj borrowed Rs.30,000 from K. Vijayakumar on 12.08.2001 and issued a post-dated cheque.The cheque bounced due to insufficient funds, leading to a complaint by Vijayakumar.Trial court acquitted Christopher Raj, stating the cheque wasn't presented within the valid period.High Court reversed the acquittal, convicting Christopher Raj and imposing a fine.Issues:Christopher Raj d...
(7)
NAVAL KISHORE MISHRA Vs.
STATE OF U.P. AND OTHERS .....Respondent D.D
05/07/2019
Facts: The accused-respondents faced trial in Sessions trial No. 80 of 2014 for offenses under Sections 452, 302/34 of the Indian Penal Code. They were acquitted by the trial court on December 19, 2016. The State sought leave to appeal, but it was declined. The victim, Naval Kishore Mishra, filed an appeal, which was dismissed on November 23, 2017, based on the reasoning that leave had not been gr...
(8)
THE DIRECTOR, STEEL AUTHORITY OF INDIA LIMITED Vs.
ISPAT KHANDAN JANTA MAZDOOR UNION .....Respondent D.D
05/07/2019
Facts:Tripartite agreement among the appellant, contractors, and contract labor in captive mines.Payment of wages in compliance with the 1948 Act.Prohibition notification issued on March 17, 1993, under Section 10(1) of the Contract Labour Act.Extension of the existing agreement without execution of a fresh agreement during the interregnum period.Contract labor continued under the same terms until...
(9)
NIRAVKUMAR DILIPBHAI MAKWANA Vs.
GUJARAT PUBLIC SERVICE COMMISSION AND OTHERS .....Respondent D.D
04/07/2019
Facts:GPSC issued an advertisement for ACF and RFO positions with specified reservations for various categories.Appellant applied in the SEBC category, cleared the examination, and was listed in the select list.Dispute arose over the interpretation of circulars and the inclusion of reserved category candidates in the general category merit list.Issues:Whether age relaxation for reserved categories...