1963 PLP 422 (PTD)

MANZUR QADIR, C. J.‑At the conclusion of the arguments, we pronounced the following short oral order "For reasons to be given later, we hold that the Sales Tax Act (Act III of 1951) was, has been and continues to be a valid piece of legislation, and the taxes levied under that Act are valid. This petition is dismissed with costs." We now proceed to give those reasons.

2. A demand in respect of sales tax has been made from the petitioner after the 3ist of March 1952 under the Sales Tax Act, 1951 (Act III of 1951).

3. It is contended on behalf of the petitioner that the Sales Tax Act of 1951 ceased to be a valid piece of legislation on the 3ist of March 1952 and all impositions, demands or collections of tax under that Act after that date are illegal.

4. The circumstances on which this contention is based are these. Originally taxes on the sale of goods were included in the Provincial List in the Seventh Schedule to the Govern ment of India Act, 1935, under Entry No.

48. In 1948, by the Government of India (Amendment) Act, 1948, the words " the sale of goods and on " were omitted from that Entry and a new Entry under a new number 54‑B "Taxes on the sale of goods" was inserted in the Federal Legislative List in that Schedule. The insertion of this Entry, however, was to be operative only up to the 3ist of March 1950. By the Govern ment of India (Fourth Amendment) Act, 1950, published in the Gazette of the 27th of March 1950, it was again provided that the words "the sale of goods and on" be omitted from Entry No. 48 of the Provincial List and an Entry "Taxes on the sale of goods" be inserted in the Federal List as No. 54‑B. The life of the omission and the insertion was again limited to a period of two years expiring on the 3ist of March 1952. The same process was repeated once again by the Government of India (Amendment) Act, 1952, published in the Gazette of the 25th of March 1952. This time, however, no time‑limit was placed on the life of the omission and the insertion as had been done on previous occasions.

5. The Sales Tax Act of 1951 was passed by the Con stituent Assembly of Pakistan acting as the Federal Legislature on the 20th of April 1951. The learned counsel for the petitioner contends that the power of the Federal Legislature, as it existed in 1951, did not extend to the making of perpetual law in respect of taxes on the sale of goods, since the Entry, by virtue of which it was enabled to make a law on this subject, was itself inserted for a limited duration. He argues that any law made by the Federal Legislature in pursuance of that power would automatically lapse on the, day on which the power under which it was being made way due to lapse, and in so far as the Government of India (Amendment) Act of 1952 did not provide that the life of the previously inserted Entry was being extended indefinitely, but instead made a provision for a fresh insertion to take the place of the previous Entry when it lapsed, the power of the Federal Legislature derived from the Entry inserted in 1950 did in fact lapse on the 3ist of March 1952. According to him it was necessary that the Federal Legislature should have re‑enacted the Sales Tax Act in pursuance of its perpetual power acquired in 1952 if that Act were to have perpetual legal effect after the 3ist of March 1952.

6. For this proposition he relies on a judgment of the Supreme Court reported as The Province of East Pakistan v. Muhammad Mehdi Ali Khan (P L D 1959 S C (Pak.) 387). In a passage on page 413, their Lordships have observed :‑

"The position may be, and is indeed, different where the Legislature suffers from an inherent lack of power to enact a law. Such a law is void ab initio and must be deemed never to have been enacted, and if it exists on the statute book, it has no legal sanction and is essentially of the nature of an unauthorised writing on the statute book. Even if the defect of lack of jurisdiction is removed by a subsequent conferment of the requisite legislative power, the law enacted when no such power existed will continue to be void and will create no rights or obligations unless it be re‑enacted." Their Lordships were dealing with the argument addressed to them in that case that by reason of Article 4 of the Consti tution of the Islamic Republic of Pakistan, when that Constitution came into force on the 23rd of March 1956, all laws which were inconsistent with any of the fundamental rights were effected from the statute book and were not in force immediately before the Proclamation of the 7th of October 1958 within the meaning of Article 4 (1) of the Laws (Continuance in Force) Order, 1958. While repelling this argument, their Lordships drew a distinction between laws which were void because the Legislature that made them had no power to do so, and other laws which were valid when made but which on account of the operation of fundamental rights were rendered inoperative to the extent of their repugnancy to those rights. The learned counsel for the petitioner argues that the proposition enunciated by the Supreme Court amounts in effect to saying that if a Legislature had no power to make the kind of law that it made when it made it, no subsequent conferment of power would remove the initial. defect. On this basis he asks us to conclude that the Federal Legislature in 1951 not having any power to make a perpetual law in regard to taxes on sale of goods could not have made such a law and the subsequent conferment of power to make perpetual laws, conferred on it in 1952, would not cure the defect arising out of the initial lack of power in 1951. We are of the opinion that no such conclusion can be drawn. The Federal Legislature had the power to make a law on the subject of taxes on the sale of goods at the time when i made the law in question. An objection to its continued operation on the ground that the Legislature that passed had lost that power, might, perhaps, be valid. That, however, is not the case here. The Federal Legislature and after it the Legislature that succeeded it, have continuously remained vested with that power. The fact that that power had been made available for a limited period when the law in question was passed, has no bearing on the issue before us. It is not as if the power bestowed by the relevant Entry was at power to make only such laws as were limited in time, That Entry read with those provisions of the Government of India Act, 1935, which dealt with the power to make laws bestowed unlimited power to make laws on the subject mentioned in it. Only the Act by which that Entry was inserted, provided that after two years that power would cease to be available. Before those two years were over, the same power was again made available by another Act, and this time wit,‑,out the provision that it would cease to be available at any time. It seems clear that the observa tions of their Lordships of the Supreme Court have no application to the circumstances of this case.

7. The learned counsel for the respondent has drawn our attention to the Proclamation of Emergency under section 102 of the Government of India Act which was in force at the relevant time. He contends that even if there was a lack of power in the Federal Legislature to deal with the subject in question, it would not be material during the continuance of an emergency because the Federal Legislature during that period had the power to legislate on Provincial subjects as well. He has drawn our attention also to the Taxation of Goods (Sales and Purchases) Order, 1960, wherein it is provided that no law made in exercise of the power to impose taxes on the sale of goods or taxes on sales and purchases would be called in question on certain stated grounds. It seems to us that the applicability of section 102 of the Government of India Act, and the President's Order mentioned above, to the circumstances of this case is doubtful. It is, however, not necessary to decide these points as we do not find any such lack of power as is contended for on behalf of the petitioner. A. H. Petition dismissed.