This article is written by Janani Parvathy J. It analyses in detail, the facts, questions of law, arguments of parties and the judgement by the court in the case of Devi Das Gopal Krishnan vs. State of Punjab (1967). The article further analyses the validity of purchase taxes imposed by the State.

This article has been published by Shashwat Kaushik.

Introduction 

Devi Das Gopal Krishnan and Ors vs. State of Punjab (1967), is a landmark civil law case relating to sales and purchase taxes. Set in the 1960’s, the case holds importance for approving the validity of purchase taxes. Traditionally, goods and services were taxed at multiple stages i.e., from the raw material until the final product stage. The Punjab government, in 1958, amended the Punjab General Sales Tax Act, 1948, introducing a purchase tax on the sale of goods and services. The validity of the purchase tax on iron, cotton, and oil seeds were questioned before the Supreme Court in this case. 

Entry 54 of the State list empowers the State to impose taxes on the purchase and sale of goods. The right to tax imposition of States is restricted by Article 286. Article 286 restricts the State from imposing taxes on inter-state trade of goods and services and mandates President’s approval of taxation of essential goods and services. The Punjab General Sales Tax Act, 1948 follows the Madras Sales Tax Act,1939 as one of the oldest state tax legislations in India. Inspired by the Punjab government, several other states began imposing purchase taxes on goods and services soon.

Details of the case

Case name: Devi Das Gopal Krishnan and Ors. vs. State of Punjab and Ors.

Equivalent Citation: 1967 AIR 1895, 1967 SCR (3) 557, AIR 1967 SUPREME COURT 1895

Court: Supreme Court of India

Appellant: Devi Das Gopal Krishnan and Ors.

Respondent: State of Punjab and Ors.

Judgement Date: 10 April, 1967

Facts of the case

• There were three appellants in the present case, each having approached the court through Petitions 526, 527, and 529 of 1964, respectively. All the appellants are owners of an oil mill at Moga, Punjab where oil is extracted from the seeds and the residue is sold as oil cakes. In addition to the already leviable sales tax, the Punjab Sales Tax (Amending Act), 1958, imposed a purchase tax of 2% on oil. The appellants refused to pay the purchase tax levied on oil seeds. Subsequently, the Excise and Taxation Officer, Ferozepur, threatened to initiate legal proceedings. The appellants responded to this by approaching the Punjab High Court through a writ petition, questioning the validity of the amendment. The division bench of the High Court dismissed the appeals by the oil sellers. 
• In this case, Civil Appeals, No. 39 to 43 of 1965 were filed by owners of a rolling steel business in Gobindgarh. The appellants purchased steel ingots and steel scraps and converted them into rolled steel. The Amendment Act imposed a 2% purchase tax on steel scrap and steel ingots. The appellants challenged this before the High Court, seeking a restrainment on the imposition of the tax. Likewise, the judgement in the case of oil, the division bench of the High Court approved the imposition of the tax.
• Further, Appeals No. 81 and 540 of 1965 were made before the High Court. The appellants of this petition were trustees of Birla Education Trust and the owners of a textile mill in Bhiwani. The appellants purchased cotton from several dealers for manufacturing clothes. Subsequently, on 11th March 1962 the District Taxation Officer, Hissar requested the appellants to pay purchase taxes. As a response, the trustees filed a writ petition before the High Court. The High Court ruled in conformity to the previous decisions by it in this case. 
• The appellants of the above three cases appealed to the Supreme Court challenging the purchase tax levied on oil seeds, iron, and cotton respectively. The Supreme Court clubbed these appeals, as they had the same issues. Specifically, they challenged Section 5 of the Punjab Sales Tax Act of 1948 and its subsequent amendment. Section 5 of the Punjab Sales Tax Act had empowered the government to impose purchase taxes on goods, further the amendment had restricted the tax limit to 2 %. The High Court of Punjab had already held earlier that Section 5 was void. 

Issues raised in the case

• Whether Section 5 of the Punjab Sales Tax Act, 1948 was void?
• Whether the amendment could give life to the Section, in case it is void? 

Arguments of the parties

Appellants

• Mr. M.C Setalvad represented the owners of the oil mill. The Supreme Court highlighted the arguments of Mr. M.C. Setalvad as they felt that it summarised the arguments of the other appeals as well adequately. 
• The counsel argued that Section 5 of East Punjab General Sales Tax Act, 1948 was found void because it excessively empowered the provincial government to make laws with respect to taxation of goods . The counsel pointed out that since Section 5 was the charging legislation i.e., the Section which levied the tax, and was declared void by High Court, therefore, the complete Act was null. The counsel further argued that any subsequent amendment through Act 19 of 1952 to a void legislation shall also be void.
• Further, the counsel argued that ‘purchase’ taxes introduced by 1958 Act was unconstitutional. They argued that it was contrary to the taxable unit i.e., ‘sale’ as defined under Entry 52 of 7th Schedule (State list) and was similar to an ‘excise’ duty imposed under the veil of purchase tax. Therefore, the counsel argued that the taxes imposed by the Act did not really resemble a purchase tax and therefore was invalid. 
• Further, the counsel also highlighted the discriminatory nature of taxes levied. They pointed out that while purchase tax were imposed on manufacturers, dealers were exempted from it
• The counsel then argued that the amended Section 2(ff) violated Sections 14 and 15 of the Central Sales Tax Act, 1956 which prohibited taxation at multiple stages of production but, in the present case, taxes were imposed at production and sale stages. Additionally, the counsel argued that the oil mill owners did not produce/manufacture oil seeds but only made oil.

Respondent

• The counsel for the respondent relied on the Corporation of Calcutta vs. Liberty Cinema (1964). The counsel relied on the Liberty Cinema case to point out that the state could impose taxes if necessary for the performance of their statutory duty. The counsel argued that similar to the Liberty Cinema case, even in the present case, the state was empowered to impose taxes.
• The counsel for the state argued that under Article 162 of the Constitution, the executive had power over all matters under the jurisdiction of the state Legislature and that taxation was among them. The counsel argued that the state legislature had the power to raise money for the performance of its statutory duty. They relied on the Doctrine of Constitutional and Statutory needs to point out that the executive body of the state was empowered to fix and impose taxes. Therefore, the counsel reasoned that on reasonable necessity, the state was entitled to impose additional taxes even in the present case.
• The counsel further cited several precedents to substantiate their case. The counsel cited State of Madras vs. Gannon Dunkerly & Co., (Madras) Ltd (1958), to highlight that the State was statutorily empowered to fix taxes. 
• Further, the respondents argued that the state possessed power to fix the tax rates also. They argued that although prima facie the Legislature has not delegated the power to fix tax rates to the State, but that the same could be inferred through constitutional provisions.

Laws involved in Devi Das Gopal Krishnan vs. State of Punjab (1967)

Provisions of Punjab General Sales Tax Act

• Section 5 of Punjab General Sales Tax Act, 1948

This Section empowers the State to decide the rate of taxes imposed on goods and services. According to the original Section, no bar on the rate of taxes that could be imposed existed. Therefore, the Section was held void for granting excessive power to the legislature by the Punjab High Court previously. 

• Section 5 of the Amendment Act, 1952 

This Section amended Section 5 of the 1948 Act. It imposed a limit on the taxes that could be imposed by the State. A limit of 2% taxes on sale and purchase of goods and services was imposed by this amendment.

• Section 4 and 6 of the Punjab General Sales Tax Act,1948 

Section 4 of the Punjab Sales Tax Act details the responsibility of the dealers and retailers to pay sales tax. The Section mandates that tax is payable within thirty days when the turnover of the dealer exceeds the taxable amount. Further, the Section specifies the taxable quantum of turnover for different business dealers, including ‘other dealers’ under which the appellants in this case might fall under. Section 6 of the Punjab General Sales Tax 1948 enlists goods exempted from taxes. The section specifies that goods under Schedule B cannot be taxed, and if the state intended they must provide a prior notice of a minimum 20 days. 

Provisions of the Indian Constitution

• Article 14 of the Constitution 

Article 14 explains the ‘right to equality’. The Article contains two parts. The first part lays down that equality before the law should be practised. It specifies that the State cannot discriminate against citizens based on caste, religion or any other parameters and that all citizens must be treated alike before the law. The second part specifies that all citizens, irrespective of class, race, caste or other differences, must follow and are governed by the same law. Subsequently, by some precedents, the scope of Article 14 was increased. Article 14 protects citizens from arbitrary, biased and harmful decisions of the State. Further, the principle of positive discrimination was laid down and approved as a necessary exception under this Article. In the present case, the counsel for petitioners  had argued that Article 14 was being violated by the taxes imposed through the Act as it was selectively applicable. However, the Supreme Court rejected this argument.

• Article 162 of the Constitution  

Article 162 specifies the scope of executive power of the State. The Article specifies that executive power of the State government is limited to the jurisdiction as specified by the Constitution or by the State legislature. The executive power of the State is limited to the items on the State list as specified in the Seventh Schedule. Article 162 was important in understanding the demarcation of the powers between the Centre and the State. The Supreme Court analysed Article 162 to check the validity of imposition of purchase taxes.

• Article 286 of the Constitution

This Article deals with the restrictions on tax impositions by the State. Clause one prevents the State from imposing taxes on goods exported, imported and on goods outside the jurisdiction of the State. However, through Article 286(2), the State legislature can make principles regarding the type of goods specified under clause one. Further, clause three also empowers the State to impose taxes on inter-trade goods provided the tax is of importance to the state. Article 286 plays a significant role in understanding the powers and jurisdiction of the state with respect to taxation matters.

Judgement in Devi Das Gopal Krishnan vs. State of Punjab (1967)

The Supreme Court analysed the validity of Section 5 of the Punjab Sales Tax Act, and its amendment. The court analysed the doctrine of statutory necessity, the principle of delegation and analysed whether the executive body of the state had powers to fix taxes. The Supreme Court dismissed the appeal and held in favour of the state, empowering them to impose taxes. The court observed that the state could impose reasonable taxes for its maintenance.

Rationale behind the judgement 

• Before the actual judgement of this case, the court highlighted the background of Section 5 of the Punjab Sales Tax Act. The Supreme Court analysed Section 5 of the Punjab Sales Tax Act,1948 and its amendment (Act 19 of 1958). Section 5 of the Punjab Sales Tax Act, 1948 empowered the State to impose sales and purchase taxes on goods of any dealer. Subsequently, the Second Amendment of 1958 of Section 5, allowed imposing taxes of maximum 2%. 
• The Punjab High Court held that the initial Section 5 of the Punjab Sales Tax Act was void. However, the court also observed that the amendment to the Section gave it new life. The questions before the court were regarding the validity of Section 5 and the significance of its amendment. 
• The Supreme Court observed that although the law on this subject was already well settled, some clarifications were still needed. The court analysed the case of Corporation of Calcutta vs. Liberty Cinema (1964). In this case, the taxes imposed over a cinema house and the delegation of tax collection to another statutory authority were disputed. The court held in the Liberty Cinema case that municipalities and state governments were entitled to impose additional taxes provided monetary assistance was needed by the state to perform its statutory duty.
• The Supreme Court observed that if the Liberty Cinema case was considered a precedent which laid down that tax collection could be delegated from the state to another statutory body, then it implied that the statutory authority also possessed the power to fix taxes. However, the court held to the contrary that when statutory purposes were mentioned in a provision, it does not automatically entitle the statutory authority to fix and levy taxes but, it instead varied based on the terms of the provision. 

Validity of Section 5 of Punjab Sales Tax Act,1948

• Further, the court analysed the next argument of the respondents. The respondents claimed that for the smooth functioning of its constitutional duties, the state was entitled to impose taxes. The Supreme Court rejected this argument.
• The Supreme Court observed that the judgement in the Corporation of Calcutta vs. Liberty Cinema was limited to the provisions of the Calcutta Municipal Act and cannot be extended to the Punjab Sales Act. Further, the court observed that the Sales Tax Act does not specify that the state is empowered to fix tax rates. 
• Further, the Court held that State of Madras vs. Gannon Dunkerley and Co (1958)  also disproved the respondents’ argument. The Supreme Court differentiated the Gannon Dunkerley case, stating it was irrelevant to the present case as it did not revolve around the fixation of tax rates. Additionally, the Court referred to Vasantlal Maganbhai sanjanwala vs. The State of Bombay (1960) and Union of India vs. Messrs. Bhana Mal Gulzari Mal (1959).
• Further, the court observed that while Section 5 of the Punjab Sales Act, 1948 granted extraordinary taxation powers to the state, no separate provision allowing delegation of power existed. Therefore, the court dismissed the argument of the state that the taxation power could be delegated. Further, no statutory provision existed, conferring the rights of tax fixation to the state. Therefore, the court observed that in the absence of a particular statute or guideline, Section 5 of the Punjab Sales Tax Act, 1948 was void. 

Charging Section

• Further, the court sought to answer the second argument of the appellants. The appellant argued that Sections 4, 5 and 6 of the Punjab Central Sales Tax Act,1948 were interrelated and that if Section 5 was void, then Sections 4 and 6 were also void. Further, they contended that if the charging Section itself was void then the whole Act was also void. The court analysed Sections 4 and 6 to determine an answer. 
• The court observed that Section 4 of the Punjab General Sales Tax Act,1948 was a charging Section, Section 5 authorised fixation of taxes and Section 6 exempted some goods from taxes. Section 6 specified that goods listed under Schedule B were exempted from taxes. The question of whether Section 4 would become void if Section 5 was declared void, the court observed, would depend on two sub-questions. First, was whether Section 5 was a charging Section and second, if Section 4 was alone the charging Section and was under Section 5, whether Section 4 was now void. 
• The court analysed Kesoram Industries and Cotton Mills Ltd. vs. Commissioner of Wealth-tax, (Central), Calcutta (1965). In Kesoram Industries case, Section 3 of the Income Tax was analysed and it was observed that Section 3 of the Income Tax Act,1961 was a charging Section and the Finance Acts were references for fixations of the taxes.
• The Supreme Court observed several similarities between the Income Tax Act and the Punjab Sales Tax Act. The court observed that both the Acts properly differentiate quantification and changeability of taxes. The only difference between these Acts was that while the Punjab Sales Tax Act specifically provided for the fixation of taxes under Section 5, the Income Tax does not do so. 
• Further, the court observed that the Income Tax Act existed independent of the Finance Act and that non-quantification of tax does not erase the liability to pay. Further, the court pointed out Section 67B, which states that until a new Act was passed, the provisions of the Finance Act would be applicable. Subsequently, the court analysed another case, B. Shama Rao vs. The Union Territory of Pondicherry (1967), which analysed the validity of some Sections of the Madras General Sales Tax Act, 1989. The Supreme Court observed that the present case was different from the Madras General Sales Tax Act 1959. In the Shama Rao case, the Sections in question were found void because they were irrelevant without the charging Section.
• The Supreme Court found that, unlike the Madras General Sales Tax Act case, in the present case, the charging section was unaltered and only the Section related to fixation of taxes was altered. Therefore, the court held that Section 4 will not become void because Section 5 was held void. 

Amendment to the Section 5

• The next question before the court was whether an amendment to Section 5 would also be void because the Section was non est (i.e., void from the beginning). The amendment to Section 5 introduced the phrase ‘not exceeding 2%’. The court observed that the amendment only added a maximum limit to taxes imposed, but did not discuss anything about the authority who can fix the tax. Further, the Court observed that the amendment did not clearly specify an authority for tax fixation, but since it related to sales tax, the government could be given the discretion. 
• The court further observed that the Government could not be granted power to arbitrarily decide rates. However, it reasoned that a tax of 1-2% was insignificant and therefore, the Court held that such an amendment was valid. 

Section 2(ff) 

• The next contention of the counsel was that Section 2(ff), inserted through an amendment was void. Section 2(ff) defines ‘purchase’ as the buying of goods, specified under Schedule C for a valuable consideration. The appellants argued that the definition of purchase was more comprehensive than the definition of sale under this Act and therefore, the legislature cannot legislate upon both sale and purchase of goods. The Court analysed the definition of a sale as given by State of Madras vs.Gannon Dunkerley & Co. (Madras) Ltd, Sales-tax Officer vs. Budh Prakash (1964) and George Oakes vs. State of Madras (1961). 
• Along with the inferences from the above-mentioned cases, the Supreme Court interpreted ‘purchase’ and ‘sale’. Purchase was defined as an acquisition of goods for a consideration, not under a mortgage or debt. Sale, the Court observed, was a transfer of property for some consideration. 
• Further, the Court observed that ‘sale’ and ‘purchase’ were two sides of the same coin, they both contained the same elements. The Court further observed that the purchase was only a different aspect of the sale and that the transaction was the same. The Court focused on two terms, it found different, ‘acquisition’ and ‘sale’. After analysis of the Section 2(ff), the Court concluded that ‘acquisition’ or purchase under it, only meant ‘transfer’ or sale. 
• While interpreting the next term ‘price’, the Court analysed Section 2(ff), Section 2(h) and the Sales Tax Act. The Court then concluded that price broadly referred to monetary consideration. Therefore, since the court found no irregularity in the definition under Section 2(ff), the Court held that the Section was not void. 

Violation of Article 14

• The next argument was that Section 2(ff) of the Punjab General Sales Tax violated equality under Article 14. The appellants had argued that the same goods, if purchased by a manufacturer were to be taxed, and not taxed if purchased by someone else. The Supreme Court rejected this argument and observed that there was a difference between the goods brought by the manufacturer and the goods brought by other dealers. The Court pointed out that manufacturers buy raw materials, which need to be taxed separately. Therefore, the Court observed that a reasonable distinction existed in different taxation.

Purchase Tax, not an Excise duty

• The next argument of the appellants was that the definition under Section 2(ff) only refers to the purchase of goods for the manufacture of goods and services. Therefore, the appellants argued that the tax was an excise duty which went beyond the jurisdiction of the State. To answer this issue, the Court had to analyse whether the tax was imposed over the sale or purchase of the goods. The Court observed that an excise duty must be imposed on the manufacture of goods, as it was held in, Shinde Brothers vs. The Deputy Commissioner (1966). 
• Further, the Court observed that the purpose for which the taxes were imposed was relevant only for the fixing of the taxes, and nothing more. Therefore, the court held that the tax was a purchase levy and not an excise duty. 

Multiple taxes 

• The counsel for the appellants argued that the 2% tax imposed by the state government violated Section 15 of the Central Sales Tax Act, 1956. Section 15 of the Central Sales Tax Act, 1956 imposes a restriction on the state not to impose taxes at several levels. However, the court rejected this argument by stating that goods sold and goods purchased were different, and therefore they were two distinct taxes and were valid individually. 
• The next argument of the appellants was that the tax was imposed only on goods that are manufactured. The appellants had argued that taxes were to be imposed on only oil seeds and not oil, as oil seeds were used to produce oils. The court observed that the Act differentiated between processing and manufacturing. The appellants had relied on the case of Union of India vs. Delhi Cloth & General Mills (1962). However, the court rejected the arguments of the appellant and ruled to the contrary. Therefore, the court held that the taxes on oils were valid. 

Civil Appeals No. 39 to 43 

• The next argument of the appellants was that the conversion of steel into iron does not amount to the manufacturing of goods. However, the court observed that steel undergoes several changes on its conversion to iron and therefore, the process amounted to manufacturing.

Section 15 of the Central Sales Tax Act, 1958

• The court then analysed the amendment to Section 15 of the Central Sales Tax Act. The court observed that Section 15 before the amendment, only described the stage at which the tax was imposed, and the Section after the amendment, only limited the stages at which it could be levied. The court next analysed M/s Modi Spinning & Weaving Mills Co. Ltd. vs. Commissioner of Income-tax, Punjab & Anr (1964) where the purpose of Article 286(3) was analysed and it was held that Article 286 modified the charging sections of the Central Sales Tax Act in accordance with the law of the Parliament. Before the amendment in October 1958, the Central Sales Tax Act, the tax could be only imposed on goods manufactured within the state and after, the Amendment Act 31 to the Central Sales Taxes Act, 1958, the taxation power of the State was restricted to being chargeable only on one stage. The Court observed that the Punjab General Sales Tax Act,1948 was  influenced by the Central Sales Tax Act, and amended the taxation procedure. Before, under the Punjab Act, taxes used to be imposed only on goods purchased for manufacturing within the State but after the amendment, taxes can be imposed at the sale stage. The court therefore observed that the amendment to Section 5 of the Punjab General Sales Tax Act,1948 was in line with Section 15 of the Central Sales Tax Act,1958 and courtconcluded that the amendment was not unconstitutional. 

Deciding on the additional arguments

• The counsel for the appellants had raised a few additional contentions. First, was that the state, by the imposition of 2% taxes, exceeded the jurisdiction granted under the Seventh Schedule of the Constitution. The second contention was that tax was levied on cotton on multiple stages. The third contention was that the state irrationally, and arbitrarily imposed taxes on oil-seeds, resins, and cotton. The Supreme Court disregarded all three contentions and stated that they were either already dealt with or were irrelevant. Hence, the Court dismissed the appeals and held that the amendment and the imposition of 2% taxes were valid. 

Relevant judgements referred in Devi Das Gopal Krishnan vs. State of Punjab (1967)

The Supreme Court analysed several precedents in this case. 

State of Madras vs. Gannon Dunkerley & Co., Ltd (1959) 

• The Gannon Dunkerly case analysed the validity of Section 6(2) of the Madras Sales Act, 1939. Section 6(1) of the Madras Sales Act specifies that tax cannot be imposed on goods under the Schedule of the Madras Sales Act, 1939. Further, Section 6(2) allowed the state to amend the Schedule through a notification. Section 6(2) of the Act was challenged because it gave overriding power to the state tax goods by amending the Schedule.The Madras High Court observed that the transfer of powers of tax collection and taxable persons to a statutory authority was constitutionally valid. 
• The Supreme Court observed that the Gannon Dunkerly case was irrelevant to the present case, as it does not address the delegation of fixation of taxes. Further, the Court found it unnecessary to analyse the Gannon case in detail because the law was already established by the Liberty Cinema case. 

Vasantlal Maganbhai sanjawala vs.The State of Bombay (1960). 

• The Court was analysing the validity of Section 6(2) of the Bombay Tenancy and Agricultural Lands Act, 1948, which empowered the State to decide the rent payable by tenants. The Court held the Section was an exercise of the State’s legislative power. This case analysed the ambit of excessive legislation.
• The Supreme Court in the present case was also analysing the question of whether the State could impose additional taxes. The Supreme analysed the Vasantlal case because it related to the issue of the present case. 

Union of India vs.Messrs. Bhana Mal Gulzari Mal (1962). 

• In this case, excessive delegation on steel goods was questioned. The Court found the delegation of powers valid as it was only an extension of Sections 3 and 4 of the State Act. The question analysed in this case was whether the State was empowered to fix the maximum price of steel and it was answered in the affirmative. 
• The issue in the present case was also whether unlimited taxation power could be given to the State Legislature. The issue was whether a limit to the taxes that could be imposed was in question. The Court answered the above question affirmatively.

Kesoram Industries and Cotton Mills Ltd. vs.Commissioner of Wealth-tax, (Central), Calcutta (1965)

• The Court in the Kesoram Industries case, was analysing the charging Section with respect to Income Tax. The court held in that case that the charging Section for Income tax was Section 3 of the Indian Income Tax Act, 1933. The Appellants in that case argued that liability to pay never occurred before quantifying it. However, the argument was dismissed. 
• The Supreme Court correlated the Income Tax Act and the present Punjab Sales Tax Act and observed that non-quantification of the tax will not destroy the liability to pay.

Analysis of Devi Das Gopal Krishnan vs. State of Punjab (1967) 

In this case, the validity of the 2% purchase taxes imposed by the Punjab government was challenged. The court upheld the statutory power of the state to impose taxes through legislation. This case has some important aspects. They are:

• Successive-stage taxation: A major issue in this case was whether taxes could be levied at the production and sale stage. The Court answered in the affirmative and held that both purchase and sales tax could be imposed on a product. The court observed that the nature of the product at the raw-material stage and the finished goods at the sale stage were distinct and therefore, successive stage taxation was held valid. 
• Delegation of taxation power: Another question that came up in this case was whether the power of taxation could be delegated to another statutory authority by the state or centre. The court held in the affirmative that delegation of power of taxation could be made to another statutory body like the municipality, but the same had to be mentioned by the state in the statute. If not mentioned, then the power could be assumed to be designated to the state.
• Amendment to a Section declared void: A pivotal question before the court was whether a Section already declared void could be amended. The court held in the affirmative. It observed that, in this case, the amendment was only fixing a limit for the purchase tax, and therefore was inconsequential. The same would also differ on a case-to-case basis. 
• Doctrine of Severability: The doctrine of Severability states that when a particular Section of the statute becomes void, the whole Act does not become void. Applying the same logic, the court in the present case observed that if Section 5 of the 1948 Act was declared void, it does not mean that the entire Act was void or its subsequent amendment was also void.

This judgement may not be applicable in the present time, because of the introduction of the GST (Goods and Services Tax) system. GST revolutionised the system of taxes, it brought an end to successive and multiple taxes and replaced several existing taxes with one destination-based tax called  ‘GST’. However, the judgement shall continue to guide decisions on the statutory power of the executive to fix and collect taxes. 

Conclusion

In conclusion, the Devi Das case is extremely significant in understanding the validity of purchase taxes imposed by the State. This case analyses the extent of State jurisdiction in imposing taxes. Specifically, the Section 5 of the Punjab Sales Tax Act is under question. Further, this case also analyses the impact of amendment to a void legislation. The case provides several insights into the jurisdiction and powers of the State government. It also laid down that taxes could be imposed by the State if necessary for proper functioning and maintenance of the State.

Frequently Asked Questions (FAQs)

Who can impose taxes?

The Article 265 of the Constitution specified that only an ‘authority of law’ i.e, the State or Central legislature can impose taxes. Further, any other statutory authority to whom the legislature has delegated such responsibility can impose taxes. 

What is GST?

GST or Goods and Services Tax was introduced in 2017, through the 101’st amendment. It is a destination-based tax, completely payable by the final consumer. It is imposed by the Centre and States. 

References

• https://gst.kar.nic.in/latestupdates/historyNEW.pdf 
• https://apct.gov.in/apportal/AllActs/APGST/Acts/05Levy.html