JUDGMENT M.C. Desai, C.J.
1. In this petition the petitioner who is a dealer in cotton yarn seeks certiorari against an order passed under the U.P. Sales Tax Act assessing it to sales tax on the turnover of sales of cotton yarn in the assessment year 1962-63. The connected petitions are also petitions for certiorari against orders passed under the Sales Tax Act assessing the petitioners, who are all dealers in cotton yarn, on the turnover: of their sales of cotton yarn in the assessment year 1958-59 or subsequent assessment years. In some of the connected petitions the petitioners also seek certiorari against orders passed by the Sales Tax Officers rejecting the petitioners' applications for rectification of the assessment orders under Section 22 of the Act, which applications were made within three years of the assessment orders, but more than one year after they were passed. All the rectification applications were dismissed by the Sales Tax Officers on the ground that there was no apparent error in the assessment orders.
2. These petitions came up for hearing before our brother Manchanda, J., who has referred them to a larger Bench because he considered that the questions raised before him call for an authoritative decision. The petitioners in all the petitions have been assessed to sales tax at the rate of 2 nP. per rupee of turnover of sales of cotton yarn made by the petitioners to consumers; the sales in all the petitions are the last sales in a series of sales.
3. Under Section 3 of the Sales Tax Act, subject to the other provisions in the Act every dealer has to pay a tax at the rate of 2 nP. per rupee on his turnover of the assessment year. This is the general provision and under it sales tax is payable on the turnover of every sale in a series of sales and at the fixed rate of 2 nP. per rupee. Section 3-A reads as follows :-
(1) Notwithstanding anything contained in Section 3, the State Government may, by notification..., declare that the turnover in respect of any...class of goods shall not be liable to tax except at such single point in the series of sales by successive dealers as the State Government may specify.
(2) If the State Government makes a declaration under Sub-section (1) it may further declare that the turnover in respect of such goods shall be liable to tax at such rate not exceeding ten naye paise per rupee as may be specified.
4. By these provisions the State Government has been given the power to except certain goods from taxation at more than one point in a series of sales ; and then such goods shall be taxed only at a particular point of sale in a series of sales. This provision is by way of an exception to the general provision contained in Section 3 under which turnover of every sale in a series of sales is taxable. When the State Government issued a notification under Sub-section (1) it is given further power to declare that the turnover at the selected point of sale of the goods shall be liable to tax at a particular rate which must not exceed 10 nP., whereas under Section 3 the tax is payable at the fixed rate of 2 nP. per rupee. The State Government is authorized in a case covered by Sub-section (1) of Section 3-A to vary the rate but not so as to exceed 10 nP. per rupee. Thus the State Government is authorized not only to select the point of sale but also to vary the rate of tax subject to the limitation that it must not exceed 10 nP. per rupee. Sub-section (2) makes it clear that it applies only when a declaration has been made by the State Government under Sub-section (1). If in respect of any goods no declaration has been made by the State Government under Sub-section (1) the turnover in respect of them remains liable under the general provision contained in Section 3 and the State Government has no power to vary the rate given in Section 3. The rate that the State Government is empowered to fix under Sub-section (2) is in respect of turnover of sale of the goods at the selected single point of sale. If no single point in the series of sales is selected by it under Sub-section (1) there is no question of its fixing a rate for taxing the turnover of the sale at a particular point.
5. Article 286(3) of the Constitution was amended in 1956 and Sub-article (3) lays down that, " any law of a State shall, in so far as it imposes, or authorizes the imposition of, a tax on sale...of goods declared by Parliament by law to be of special importance in inter-State trade or commerce, be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament may by law specify. " Parliament then enacted the Central Sales Tax Act No. 74 of 1956, which by Section 14 declared that cotton yarn was of special importance in inter-State trade or commerce and by Section 15 required that every sales tax law of a State shall, in so far as it imposes or authorizes the imposition of, a tax on the sale of declared goods, be subject to the restrictions and' conditions that it shall not exceed two per cent, of the sale price and shall not be levied at more than one stage. On account of these restrictions and conditions the U.P. Sales Tax Act was amended by addition of Section 3-AA with retrospective effect from 1st April, 1956. It lays down that, "Notwitstanding anything contained in Section 3 or 3-A, the turnover in respect of ' cotton yarn ' shall not be liable to tax except at the point of sale by a dealer to the consumer, and the rate of tax shall not exceed two naye paise per rupee. " Under Section 3-A(2) the State Government was given the right to fix the rate of tax at any amount not exceeding 10 nP. per rupee but in respect of cotton yarn it could not fix the rate at more than 2 per cent, of the sale price,; vide Section 15 of the Central Sales Tax Act. Consequently in respect of cotton yarn and other declared goods the State Government had to amend the Sales Tax Act and therefore Section 3-AA was enacted. The Legislature fixed the point of sale at the sale by a dealer to the consumer but did not fix the rate of tax at all and simply contented itself with fixing the maximum rate. Under Section 3-A (1) in respect of goods selected by the State Government it could select any single point in the series of sales but under Section 3-AA the Legislature itself fixed, in respect of cotton yarn, that the turnover in respect of it shall be taxed only at the point of sale by a dealer to the consumer. The consequence was that the power conferred by Sub-section (1) of Section 3-A could not be exercised by the State Government in respect of cotton yarn. When the Legislature itself fixed the point of sale there could not arise any question of the State Government's fixing the point of sale by a notification in the official Gazette. What was laid down by the Legislature in Section 3-AA was inconsistent with the grant of the power to the State Government under Section 3-A(1). That is why Section 3-AA opens with the words, " notwithstanding anything contained in Section 3-A ". By fixing the point of sale in respect of cotton yarn the Legislature took away the power conferred under Section 3-A(1) in respect of its turnover to the State Government. As the State Government was deprived of its power to select the single point of sale in respect of cotton yarn it was also deprived of its power of issuing a notice in the official Gazette in respect of the single point of sale. As we said earlier the notification had to be issued in respect of the single point of sale selected by the State Government at its discretion ; when the Legislature itself fixed the single point of sale by enacting Section 3-AA, there could not arise any question of the State Government's issuing notification declaring the single point of sale. The consequence of this was that the State Government did not get the power of fixing the rate of tax on the turnover of cotton yarn referred to in Sub-section (2) of Section 3-A.
6. On 1st August, 1958, the State Government issued Notification No. ST. 2934/X-902(7)-56 in the purported exercise of the power conferred by Section 3-AA, notifying that, "the turnover in respect of cotton yarn...which under the said section is liable to tax only at the point of sale by a dealer to the consumer shall with effect from 1st August, 1958, be subject to tax at the rate of two naye paise per rupee. " The petitioners in these petitions challenge the vires of this notification. Section 3-AA which is referred to in the notification as the authority for its issue does not contain any words authorizing its issue. It does not expressly leave anything to be fixed by the State Government through a notification. It does not provide for the issue of a notification at all by the State Government. It has itself selected the single point in the series of sales. It has not fixed the rate of tax but it has also not provided that the rate of tax would be fixed by the State Government through a notification. Not only does it not lay down the rate of tax but also does not lay down by whom or how the rate of tax could be fixed. If the Legislature intended that the State Government should fix the rate of tax in respect of the goods mentioned in Section 3-AA it failed to carry out the intention by enacting a' provision conferring the power upon the State Government. The conferment of such power cannot be assumed at all. Neither the conferment of the power on the State Government can be assumed from the fact that it provides that the rate of tax shall not exceed 2 nP. per rupee nor can it be assumed that the power was to be exercised by the State Government. There should have been a provision conferring the power to fix the rate of tax and designating the authority on whom the power is conferred. There is no other provision in the Sales Tax Act under which the notification could have been issued. It could not be issued under Section 3-A for the reason given above namely that it could not, and did not, declare in exercise of the power conferred by Section 3-A(1) that the turnover shall be liable to tax at the point of sale by a dealer to the consumer. The notification itself states the fact that the point of sale has been fixed in Section 3-AA itself ; the State Government does not even profess to select the point of sale and to declare it in exercise of the power conferred by Section 3-A(1). We, therefore, hold that the notification could not be issued by the State Government either under Section 3-A or under Section 3-AA.
7. On 15th November, 1961, the State Government issued another notification No. 4921/X-1035(42)-60 in the purported exercise of the power conferred by Section 3-A read with Section 3-AA laying down that the turnover in respect of cotton yarn shall not be liable to tax except at the point of sale by a dealer to the consumer and that it shall be liable to payment of tax at the rate of 2 nP. per rupee. It had become necessary to issue this notification because the earlier notification was not issued in the name of the Governor. Otherwise there is no difference between the two. For the reasons for which we have held the earlier notification to be unauthorized and without any effect we hold this notification' also to be unauthorized and without any effect.
8. Sri Raja Ram appearing on behalf of the opposite party contended that assessing the petitioners at 2 nP. per rupee on the turnover at the point of sale by the dealers to the consumers was valid under the general provisions contained in Section 3. It is true that the assessment orders in all these cases do not infringe any provision of Section 3 but the rate specified in Section 3 does not apply in the case of cotton yarn, and, therefore, the assessment orders cannot be sustained oh the ground that they were, or could be passed under Section 3. They were passed not under Section 3 but under the notifications mentioned above which themselves were issued in the supposed exercise of the powers conferred by Sections 3-A and 3-AA. Section 3 does not contemplate the issue of any notification by the State Government. Sections 3-A and 3-AA both are by way of exceptions to the general provision of Section 3 ; the turnover in respect of cotton yarn and other declared goods is governed by Section 3-AA and the turnover of some other goods is governed by Section 3-A. In either case, the provisions of Section 3 must be read with Section 3-AA or Section 3-A, and to the extent that Section 3-A or 3-AA confines the point of taxability to a specified single point of sale and provides for the rate of tax, the corresponding provisions in Section 3 must be superseded. Both Sections 3-A and 3-AA open with the words " Notwithstanding anything contained in Section 3 ", which means that anything contained in Section 3 which is inconsistent with that for which provision is made in Section 3-A or 3-AA shall yield to the latter. In a case governed by Section 3-A the liability imposed by Section 3 is to be imposed only at the point selected in the notification and only at the rate of tax fixed in the declaration, and in respect of cotton yarn and other declared goods the liability imposed by Section 3 is to be imposed only at the point of sale by a dealer to the consumer and at a rate of tax not exceeding 2 nP. per rupee. It was a lacuna in Section 3-AA inasmuch as no rate of tax was fixed and no authority was empowered to fix it but this lacuna would not make the rate mentioned in Section 3 applicable. There are no words in Section 3-AA suggesting that if no rate was fixed for the turnover in respect of the declared goods the general rate fixed in Section 3 would apply. Cotton yarn and other declared goods are excepted out of Section 3 by Section 3-AA and other goods in respect of which a notification might have been issued by the State Government under Section 3-A(1) are excepted out of it by Section 3-A.
9. Another argument advanced by Sri Raja Ram was that Section 3-AA could be treated as if it were an exception to Section 3-A(1). He contended that if the provisions contained in Section 3-AA were added as Sub-section (4) to Section 3-A, they would be treated as a proviso to Section 3-A(1) and that the provisions of Sub-section (2) would apply to them as they apply to Section 3-A(1). The Legislature has itself fixed the single point of sale in respect of cotton yarn and other declared goods by enacting Section 3-AA; it has not called upon the State Government to fix that point of sale in exercise of the power conferred by Section 3-A(1). The provision contained in Section 3-AA is quite independent of the provisions contained in Section 3-A(1). Far from Section 3-AA being an exception or proviso to Section 3-A(1) the latter applies only when the former does not apply. In respect of cotton yarn and other declared goods the single point of sale is fixed by the Legislature itself, the State Government is left with the power conferred by Section 3-A(1) in respect of only the remaining goods. There is no question of its exercising the power conferred by Section 3-A(1) in respect of cotton yarn and other declared goods. Not only was there no point in the Legislature's requiring the State Government to select the sale by the dealer to the consumer as the single point of sale in respect of cotton yarn and other declared goods but also it has not done so. Therefore, it cannot be contended that what has happened is that the State Government has been required, while exercising its power under Section 3-A(1) in respect of cotton yarn and other declared goods, to select a particular point of sale and that consequently Sub-section (2) applies to the turnover of the goods and the State Government can fix the rate of tax. The maximum rate of tax prescribed by Section 3-A(2) is different from that prescribed by Section 3-AA. If the contention of Sri Raja Ram were accepted and Section 3-A(2) were applied, it would be open to the State Government to fix a rate of tax exceeding 2 nP. per rupee. This would be in clear conflict with the provisions contained in Section 3-AA. It is evident that Section 3-A(2) cannot be applied in a case covered by Section 3-AA.
10. In the result we hold that there is no rate of tax on the turnover of cotton yarn fixed and that the petitioners in these cases could not be assessed to any tax on the turnover of cotton yarn.
11. The petitioners are still not entitled to succeed in these petitions because they had a remedy available to them by appeals from the assessment orders. They have not availed themselves of that remedy and we are not satisfied that they had any adequate reason for their refraining to do so. The Sales Tax Officers who passed the assessment orders had jurisdiction to pass them; it cannot be said that they lacked inherent jurisdiction to pass them. Some petitions are also belated because the petitioners instead of coming to this Court within reasonable time from the dates on which the assessment orders were passed wasted time by applying to the Sales Tax Officers for rectification. They cannot, after the delay of so much time, attack the validity of the assessment orders. If they desired to attack their validity they could come to this Court within reasonable time. If they spent time in applying for their rectification they can attack now only the orders passed on rectification applications. The rectification applications failed because the Sales Tax Officers did not see any manifest error in the assessment orders passed by them. We cannot say that the matter was so clear that they should have seen manifest error in the assessment orders passed by them and that consequently their decisions that there was no manifest error were themselves manifestly wrong. It has been held by the Supreme Court and also by this Court that in a taxation matter an assessee cannot be permitted to short-circuit the departmental remedy and invoke the extraordinary jurisdiction of the High Court when he has an alternative remedy by appeal to the departmental authorities. We would, therefore, in the exercise of our discretion refrain from quashing this order and the orders in the connected petitions.
12. We also find that the contentions that have been advanced on behalf of the petitioners before us were not advanced by them before the Sales Tax Officers. The petitioners ought to have pleaded before the Sales Tax Officers that there was no rate of tax fixed for the turnover of cotton yarn and that consequently they could not be assessed at all. It was for the first time in these petitions that the petitioners have raised the contention that the notifications were invalid and that no rate of tax on the turnover of cotton yarn has been fixed under any provision of the Sales Tax Act.
13. We, therefore, dismiss this petition and having regard to the circumstances we shall let the parties bear their costs themselves.