Supreme Court of India
State Of M.P. And Others vs Makers Development Service Pvt. Ltd., ... on 18 August, 1993
Equivalent citations: AIR1994SC125, 1994SUPP(3)SCC90, AIR 1994 SUPREME COURT 125, 1993 AIR SCW 3762, 1994 (3) SCC(SUPP) 90, 1994 SCC (SUPP) 3 90
Bench: B.P. Jeevan Reddy, S.P. Bharucha
JUDGMENT
1. These two appeals arc preferred against what may be described as rather unusual Orders of Madhya Pradesh High Court. The facts which we shall presently narrate speak for themselves.
2. The Madhya Pradesh legislature enacted Madhya Pradesh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam (Madhya Pradesh Entry Tax Act) in the year 1976. It provides for levy of lax on entry of goods into a local area for consumption, use or sale therein. The Act is relatable to Entry 52 of List II of the VII Schedule to the Constitution of India. Under the Act, a notification was issued by the Government, on 28th June, 1990 prescribing the rates of tax on two items including lime-stone. The levy on lime-stone was at the rate of 10%. on the taxable quantum. The validity of the notification was challenged by the respondent herein by way of writ petition in (he Madhya Pradesh High Court. It was filed on 31-11-1991 and came up for admission on 6-2-1992. On the same day, and without sending a notice to the respondents in the writ petition, the Division Bench comprising the learned Chief Justice and Justice ssuing struck down the notification, following the decision of this Court in India Cements (1990) 1 SCC 12 : AlR 1990 SC 85 at the stage of admission1 itself. The Division Bench referred to Entries 23 and 49 of List II and held that the Act or the notification is not relatable to and is not with in the purview of either of the said entries, There is no reference in the judgment to Entry 52 at all. The judgment is exclusively based upon India Cements which is not a decision relating to entry tax. It deals with the levy of cess on minerals by the State Government, which minerals were subject to payment of royalty under the provisions of Mines and Minerals (Regulation and Development) Act, 1957. The learned Counsel for the appellant says that, the principle of India Cements has absolutely no relevance to the controversy in the writ petition. The respondent's Counsel however submits that the principle of India Cements does apply herein and submits further that the Act in question is not relatable to Entry 52, but to certain other entries.
3. We are not inclined to go into the merits of the ease in view of the fact that we are remanding the matter back to the High Court, in view of the wholly unsatisfactory manner in which the writ petition has been disposed of. The Division Bench not only disposed of the writ petition before it, even before issuing notice to and calling upon the Stale Government to file its counter, it also disposed of all other matters which were said to be pending in that Court on the said point and which were directed to come up for final hearing lour weeks later. The following directions in the judgment may be quoted with advantage:
Such provisions of the State Act can, therefore, which are under attack either in this case or any other such case on this point, may at once be disposed of and such Sections of the M.P. State Act, No. 52/76 are struck down as ultra virus. There is no need for any ad interim relief because the petition is allowed here and now and the consequential results of the striking down of such provisions in the M.P. State Act shall inevitably follow such a declaration of the ultra virus nature of the same.
Let this Order be brought to the notice of the Bench before which the batch of such cases is to be put up for final hearing on 4-3-1991, if this Bench is not available on that date so that only for this reason if not anything else, while they are Supposed to be finally heard, the principle's governing the Order regard rig their Ultra virus nature is we have done in this case may after this Order has been brought to the notice of the learned Judges hearing those cases, be disposed of in the terms of this Order, unless there is an) matter which can be said to be made a case distinct from merely challenging the virus of such provisions, but involving the points de hors the question of virus.
(Emphasis added)
4. A perusal of the extract shows that not only the notification was struck down, but even the "provisions of Madhya Pradesh State Act No. 52/76" were also struck down without specifying the provisions struck down. It is stated that later when another writ petition (Miscellaneous Petition No. 405/91) filed by Associated Cements Companies came up before the same Bench, it struck down following its judgment in the earlier writ petition not only the notification but the entire Act as such. The Act was held to be ultra virus the legislative competence of the State legislature under any of the entries in List II in the VII Schedule to the Constitution of India. A writ of mandamus was also issued restraining the State and its authorities from taking any steps in pursuance of the Act or the notification. However, on an application being filed by the State, the Bench modified the said Order and confined it to the notification alone. In other words the portion striking down the Act as ultra virus was deleted.
5. Since we are of the opinion that the grounds upon which and the manner in which the writ petitions have been allowed is wholly unsatisfactory-and also because the-Division Bench does not in fact appears to have applied itself to the merits of the matters before it, we have no option but to set aside the judgments under appeal and remit the writ petitions to the High Court for disposal on merits in accordance with law.
6. The learned Counsel for the appellant complains that basing on the said judgment, the High Court has granted absolute stay of Collection of Entry Tax in a large number of writ petitions. It is made clear herewith that it shall be open to the State to apply for reviewing 6r modifying those Orders in view of the Orders now made by us.
7. Having regard to the facts and circumstances of this case, we are constrained to observe that it would be in the fitness of things that these matters be heard by a Division Bench other than the one which made the Orders under appeal.
8. The appeals are accordingly allowed. The impugned Orders are set aside. No costs.