Ram Bux Chaturbhuj and Anr vs State Of Rajasthan and Ors

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Writ Petition (civil) 10-11 of 1959

Decision Date: 14 March 1961

Coram: S.K. DAS, J.L. KAPUR, M. HIDAYATULLAH, J.C. SHAH, T.L.V. AIYYAR

In this case the Supreme Court examined two writ petitions filed under Article thirty‑two of the Constitution that were directed against orders issued by the Assistant Sales Tax Officer at Jodhpur requiring the petitioners to produce their accounts for the years 1955‑56, 1956‑57 and 1957‑58 so that assessment could be made under section ten of the Rajasthan Sales Tax Act, 1954 (Act XXIX of 1954). The bench consisted of S K Das, J L Kapur, M Hidayatullah, J C Shah and T L V Aiyyar and the judgment was delivered by Justice Kapur. The petitioners were Ram Bux Chaturbhuj and another, while the respondents were the State of Rajasthan and others; the writ petitions were numbered ten‑eleven of 1959. The petitioner in writ petition number ten‑59, Ram Bux Chaturbhuj, a seller of pan (betel leaves) together with other pan sellers, had earlier approached the Rajasthan High Court challenging the notice that had been served on him, but the High Court dismissed that challenge. He obtained a certificate permitting an appeal to this Court and also secured special leave to appeal, but subsequently withdrew that appeal and instead filed the present writ petition, identified as writ petition number ten‑59. By contrast, the petitioner in writ petition number eleven‑59 asserted that he had never filed any such earlier petition. The Court observed that it was unnecessary to decide the effect of the High Court’s judgment because, in its view, both writ petitions were without merit. The principal contention of the petitioners was that betel leaves are vegetables and therefore should be exempt from taxation under the Act. Section four of the Act provides that no tax shall be payable on the sale of any exempted goods where the conditions specified in column three of the Schedule are satisfied, and further empowers the State Government, by notification in the Official Gazette, to exempt any goods, class of goods, person or class of persons on such conditions and upon payment of a prescribed fee. Section ten of the Act deals with assessment, and Schedule two lists the articles on which sales tax is not payable. Item two of that Schedule reads: “Fresh fruits, sugar‑cane, vegetables, onions and garlic, prepared from any one or vegetables and flower seeds, more of such articles and bulbous plants, excluding …”. The petitioners argued that because the Schedule uses the term ‘vegetables’ in its popular sense, betel leaves should fall within that exemption. The Court noted that the word ‘vegetables’ is not defined in the Act and referred to a recent decision in writ petition number four of 1958, reported as Ramavatar Budhaiprasad v. The Assistant Sales Tax Officer, Akola and Another, where the Court held that the term ‘vegetables’ does not include pan (betel leaves). Consequently, the Court concluded that betel leaves are taxable under the provisions of the Act. The petitioners also contended that a notification dated 1 April 1958, which purported to exempt betel leaves on condition that the dealer held a valid certificate and paid an annual fee of ten rupees, amounted to an indirect levy of tax without statutory authority and violated Articles fourteen and nineteen‑one‑g of the Constitution. This contention is equally without force because section

In this case, the Court observed that the schedule item which listed onions, garlic and similar articles together with fresh fruits, sugar‑cane and vegetables showed that the term “vegetables” was intended in its ordinary meaning, that is, the vegetables cultivated in a kitchen garden for ordinary table consumption. The Court further noted that the word “vegetables” had not been given any specific definition in the statute. The Court then referred to the decision in W.P. No. 4 of 1958, reported as Ramavatar Budhaiprasad v. The Assistant Sales Tax Officer, Akola and Another 1961 (12) STC 286, which had been decided on the same day. That decision held that the term “vegetables” did not encompass pan, that is, betel leaves. Accordingly, the Court concluded that betel leaves fell outside the definition of “vegetables” and were therefore subject to tax under the provisions of the Act.

The respondents had submitted that the notification dated 1 April 1958, which exempted betel leaves from sales tax provided that the dealer possessed a valid certificate and paid an annual fee of ten rupees, amounted to an indirect way of imposing tax and therefore violated Articles 14 and 19(1)(g) of the Constitution. The Court rejected this contention. It observed that Section 4(2) of the Act expressly permitted conditional exemptions on payment of a fee as specified in the notification. Because betel leaves were not covered by the word “vegetables,” the exemption could only be granted by the conditional mechanism provided in the statute. The Court found no discrimination between similarly situated persons, since the exemption applied only to those who satisfied the conditions laid down in the notification. Consequently, there was no breach of the principle of equality under Article 14. Moreover, the fee was a valid statutory charge and did not infringe the freedom of trade guaranteed by Article 19(1)(g). On these grounds, the Court dismissed the petitions, ordered the parties to bear costs, and levied a hearing fee.