B.L. Hansaria, C.J.
1. The petitioner is a dealer in wholesale season rial goods like pulses, oil seeds, etc. which are declared commodities within the meaning of Section 14 of the Central Sales Tax Act (for short 'the Act'). He purchases these goods from the local market and effects sale of the goods, in course of inter-State trade. The goods purchased by the petitioner are taxed under the Orissa Sales Tax Act at the purchase point and the petitioner has paid taxes on the same. He has also to be taxed under the Act. Once the tax under the Act is paid, he gets refund of the taxes paid in Orissa under the Orissa Safes-Tax. Act. For the assessment years starting from 1974-75, the petitioner has been assessed to central safes tax. in those years, he was entitled to refund, but despite approaches being made the refunds have not been made, for the assessment years 1978-79, 1979-80- and 1981-82, the pefrtio- ner has been assessed to tax under the Act. Once the tax demanded is paid, he will be entftfed to refund of the fax paid under the Oissa Sales Tax Act, but the petitioner apprehends that his refund applications would not be attended to, and he has, therefore, approached this Court so get the demand notices under the Act set aside. It may be stated here that during, the relevant periods of assessment, the goods in question were taxable at the rate of 4% under both the taxing statutes.
2. To take cafe of the double taxation involved and to avoid approaches for refunds following double payment of tax, a notification was issued by the State Government in the Finance Department on 8th Decem- ber, 1966 bearing No 43637-CTA-20O/66-F. in exercise of power conferred by Sub-section (5) of Section 8 of the Act being satisfied that it was necessary to- do so in the public interest directing that on fulfilment of the conditions mentioned in the notification in respect of declared goods sold in course of inter-State trade or, commerce, no tax under the Act should be payable by any dealer in respect of the sale by him of such goods where tax has been levied or collected on the sale or purchase of such declared goods under the Orissa Sales Tax Act, 1947. If this notification would have continued in force, the petitioner would not have been required to pay tax under the Act. It, however, so happened that this notification was declared as Invalid by a Bench decision of this Court in . Orissa Hides Trading Co, v. Sales Tax Officer, (1975) 35 STC 232. The same view was reiterated in K. Narayana Kumaadan Sons &. Co. v. Sales Tax Officer, (1975) 36 STC 374, and Subudhi Krishna Murty &, Sons. v. Sales Tax Officer, (1975) 36 STC 419.
3. After the above decisions were rendered, the aforesaid notification was rescinded by a Government notification dated 5th July, 1976 reading as below :
'S.R.O. No. 676/74_ln exercise of the powers conferred by Sub-section (5) of Section 8 of the Central Sales Tax Act, 1956 (74 of 1956), the State Government do hereby rescind their notification No. 43637 CTA-26/66, dated the 8th December, 1966 with effect from the first day of April, 1973.'
4. Subsequently, however, a Full Bench of this Court held in Kamal Kumar Agarwal v. Sales Tax Officer, (1980) 46 STC 384, that the notification dated 8th December, 1966 was intra vires and enfotceable. The Full 3ench further held that the judgments rendered in the aforesaid three cases were not correct in so far as they held the notification to be bad They were, therefore, overrulled.
5. Relying on the aforesaid vicissitude in the fortune of the notification dated 8th December, 1966, it is forcefully contended by Shri Agarwalla that the said notification must be taken to have sprung back to life after the Full Bench decision in Kamal Kumar's case. It is urged by the learned counsel that the rescission of the notification dated 8th December, 1966 by the S R. O. dated 5th July, 1976 having not been deemed necessary in the public interest, the same has no effect inasmuch as the power of rescission conferred by Section 22 of the Orissa General Clauses Act, 1973 has to be exercised in like manner and subject to the like sanctions and conditions which control' the power to issue the notification. As thy notification of the December, 1976 was issued on the State Government being satisfied that the same was necessary in the public interest and as the rescinding notification is silent about the need of public interest, Shri Agarwalla submits that the rescission has no force in the eye of law.
6. In this connection, we have been referred to Baldev Raj Chadha v. Union of India, : (1980)IILLJ459SC , which has stated that where an order is in challenge and its validity depends on its being supported by public interest, the State must disclose the material so that the Court may be satisfied that the order is not bad for want of any material which to a reasonable man reasonably instructed in law is sufficient to sustain the ground of public interest. Reference is also made to Sun Paper Mills Ltd. v. Union of India, (1991) 80 STC 1, wherein withdrawal of certain concession without stating that the same was being done on the demand of public policy was held to be a bald withdrawal and as such not sustainable inasmuch as granting of concession was ordered on the satisfaction that public policy demanded the same
7. As against the aforesaid submission of Shri Agarwalla, it is contended by Shri Patnaik for the Department that omission about mention of the need of public interest in rescinding the notification of 8-12-1966 cannot be taken as conclusive inasmuch as a perusal of the concerned file of the Finance Department would leave no manner of doubt that the said notification had been withdrawn because of the three pre-1976 renderings of this Court noted above. The learned counsel, therefore, urges that the rescission has to be regarded as a reasonable act, and as such, we should not find fault with the same. Strong reliance has been placed in this connection on certain observations made by the Apex Court in Indian Express Newspapers (Bombay Pvt Ltd v. Union of India, . In particular, the learned counsel refers to the observation made in para 77 of the judgment to the following effect ;
'In cases where the power vested in the Government is a power which has got to be exercised in the public interest.........the Court may require the Government to exernse that power in a reasonable way in accordance with the spirit of the Constitution.'
As to the meaning of the expression 'reasonable way', we are referred to para 78 of the judgment in which observations made by Lord Greene M. R. in Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation, (1948) 1 KB 223, were noted. This is what the noble Lord-stated in this connection :
'It is true the discretion must be exercised reasonably Now what does that mean Lawyers familiar with the phraseology commonly used in relation to exercise of statutory discretion often use the word 'unreasonable' in a rather comprehensive sense. It has frequently been used and is frequently 'used as a general description of the things that must not be done. For instance, a person entrusted with a discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said to be acting 'unreasonably. Similarly, there may be something so absurd that no sensible person could ever drawn that it lay within the powers of the authority. Warrington L, J. in Short v. Poole Corporation, (1926) 1 Ch 66 gave the example of the red-haired teacher dismissed because she had red hair. That is unreasonable in one sense. In another sense it is taking into consideration extraneous matters. It is so unreasonable that it might almost be described being done in bad faith, and in fact, all these things run into one another.
8. Relying on the aforesaid view, it is urged by Shri Patnaik that as the notification dated 5th July, 1976 had been issued to bring into effect the view expressed by this Court in three Division Benches relating to ultra vires character of the notification dated 8th December, 1966, the effort of the Government cannot be said to be unreasonable or anything having been done in bad faith or arbitrarily it is, therefore, submitted that for the mere fact that the rescinding notification did not mention about necessity of public interest in issuing the same, we may not declare that notification as void.
9. We have then been referred by the learned counsel to paras 103 to 1 6 of the aforesaid judgment in which it was discussed as to when a subseq tent law/rule would supersede the earlier statutory provision, After referring to several decisions, it was concluded in para. 106 that much would not depend merely upon use of the words like 'substitution' or 'supersession'__it would rather depend upon the totality of circumstances and the context in which they are used. To this, we shall add that the intention of the maker shall also be relevant.
10 We have closely read the the aforesaid paras and we find that the case at hand does not fit in with any of the cases dealt with in these paras.
11. We have given our considered thought to the point involved. Here is a case where the rescinding notification was issued in 1976 not because the Government thought that it was in public interest to withdraw the 1966 notification, but because this Court had declared the later notifi- cation as invalid. Now, if that notification was really not invalid, as was opined by the Full Bench in 1980, there is no doubt in our mind that the 1966 notification would not have been rescinded by the Government. This position clearly transpires from File No. CTB. 124/76 made available to us by Shri Patnaik for our perusal. In fact, Shri Patnaik is fair enough in admitting this position. If that be so, the question is 'should we now not treat the 1976 notification as ineffective and the 1966 notification as still enforceable Though the 1966 notification was declared dead by the three Division Bench renderings and the Government even published obituary, we are inclined to take the view that the Full Bench decision put back life in the dead notification and effaced the Obituary. Cases of persons declared dead, coming to life are not unknown. If the totality of the circumstances is kept in mind, as was opined in the Indian Express Newspapers' case, and the context in which, and the intention with which, the rescinding notification was issued are put in the forefront, we have no hesitation in holding that the exercise undertaken in 1976 to rescind the notification of 1966 has to be regarded as futile and sterile in the changed circumstances. The public interest having demanded issuance of the notification dated 8th December, 1966 and the rescinding of that notification being not impelled by the call of public interest, we are of the view that the public interest which led to the issuance of the notification dated 8th December, 1966 should prevail once again. The very plank of the issuance of the rescinding notification having been removed by the decision of the Full Bench, that notification cannot remain alive. Though ft is correct that the act of issuing the I966 notification was not unreasonable or arbitrary or impelled by bad faith, this by itself does not resolve the controversy. What is apparent is that the rescission was forced upon the Government, and the force having ceased, we do not think why the forced action should hold the field.
12. There is, however, another aspect of the matter. The same is that if the Government would have thought after the Full Bench decision became available that the benefit made available in public interest by the 1966 notification should continue to be enjoyed by the concerned persons, it could have withdrawn the rescinding notification of 1976. This was, How- ever, not done. Does it indicate any change of view of the Government regarding the need of continuance of the 1966 notification in public interest We have no material before us to come to this conclusion. Indeed, this is not even the stand of Shri Patnaik. All that has is contended in this context is that the withdrawal was not arbitrary or unreasonable which facet of the argument has been dealt above The worst that could be said, in so far as this . spect of the petitioner's case is concerned, is that non-withdrawal of the 1976 notification after the Full Bench decision indicated that, according to the Government, the public interest did not require revival of the 1966 notification. Though the materials on record and the stand taken by the learned counsel for the Department do not call for such an inference, we have nonetheless mentioned about this as this is the extreme stand that could be taken by the Department in this regard But then, as two views are reasonably possible on this count, we are Of the opinion that the one which favours an assessee has to be accepted. This is the well-settled principle of law for which no citation has been felt necessary.
13. Shri Agarwalla has also pressed into service the well known constitutional law 'doctrine of eclipse' and submits that the rescinding notification and the Full Bench decision having the effect of removing the shadow, the rescinded notification beamed full light thereafter. In this connection, reference made to the Constitution Bench judgment rendered in Bhikaji Narain v. State of Madhya Pradesh, : [1955]2SCR589 . That decision dealt with the question of enforceability of a pre-constitutional law. As that law imposed restriction on the exercise of 'the rights guaran- teed by Article 19(1)(g) which was not regarded reasonable under Clause (6), the same became void under Art. 13(1) of the Constitution to the extent of inconsistency. Subsequently, after Clause (6) was amended by the Consitution (First Amendment) Act, 1951 the impugned Act ceased to be inconsistent with i he fundamental rights guaranteed by Art 19 (1)(g). In this con- text, the following observation was made, which is relied upon by Shri Agarwalla :
'The true position is that the impugned law became, as it were, eclipsed for the time being by the fundamental rights. The effect of the Constitution (First Amendment) Act, 1951 was to remove the shadow and to make the impugned Act free from all blemish or infirmity'.
14. A reference to the discussion of this subject in the 'Constitutional Law of India ' by Shri H. M Seervai shows that while a law on a topic not within the competence of a legislature is a nullity, a law on a topic within its competence but violating the constitutional prohibition is only unenforceable. An important consequence of this distinction is that a law void for lack of competence being absolutely null and void, a subsequent cession of that legislative topic to the legislature would not revive the law which is stillborn and the law would have to be re-enacted. But a law within the legislative competence which violates constitutional limitations is unenforceable by reason of those limitations, but once the limitations are removed, the law becomes effective. According to the learned author, such a law, whether pre-Constitution or post-Constitution, is not wholly void if it violates the fundamental rights; it is merely eclipsed by the fundamental rights and remains, as it were, in a moribund condition as long as the shadow of fundamental rights falls upon it. When that shadow is removed, the law begins to operate proprio vigore from the date of such removal unless it is retrospective. (See pages 245-249 of Vol. I, 3rd Edn).
15. As to the applicability of the doctrine of eclipse to the case at hand, we would say that the issuance of the 1966 notification was not held to be bey and the competence of the State Government in afore- said Division Bench decisions of the Court. The fault found was that the notification issued in exercise of the power Under Section 8(5) of the Central Sales Tax Act ran counter to Section 15 (b) of the that Act and was therefore invalid The Full Bench, however, took the view that the notification intended to operate on a field different from the one covered by Section 15(b) of the Central Sales Tax Act. So, the doctrine of eclipse would help the petitioner to this extent that the shadow cast by the Division Bench deci- sions got removed by the Full Bench decision. But then, the issuance of the 197S rescinding notification had the effect of rendering the 136S notification non est in the eye of law with effect from 1-4-1973. The present is thus a case not only of the 1966 notification having been shadowed, but of that notification being obliterated by the 1976 notification. So, we do not think if the doctrine of eclipse can assist be petitioner.
16. We would now like to .refer an ingenuous argument advanced by Shri Agarwalla that the Government was not competent to issue the notification dated 5th July, 1976. The learned counsel submits that the notification of 8-l2-19o6 having been first declared ultra vires in 1974 by this Cour.. in Orissa Hides Training Company's case (supra), nothing was left to be rescinded. It is, therefore, urged that the rescinding notifica- tion has no force of law in any case. We have not felt persuaded to accept this submission. No doubt the 1966 notification was killed by the three Division Bench decisions; but then, formal declaration of its death at the hand of the maker cannot be said to be an ineffective step. The rescinding notification, as per our earlier statement, has to be read in the nature of an obituary. We would not, therefore, hold that the Government had no competence to issue the notification dated 5-7-1 76.
17. Keeping, however, in view what we have stated above regarding the totality of the circumstances and the context in which, and the intention with which, the rescinding notification was issued, we would hold that after the decision of the Full Bench, that notification lost its effectiveness and striking force with the result that the notification of 1966 became once more enforceable. May we say that in the Full Bench decision it was stated in paragraph 6 that the notification of 1966,which was referred as the impugned notification, was intra vires and enforceable. It may be that because of this the Government did not issue any further order revi- ving the 1966 notification.
18. Before closing, we would like to refer to an argument advanced by Shri Patnaik relating to the delay in approaching this Court. The learned counsel submits in this connection that the assessment orders even passed in 1982 came to be assailed in this petition which was filed in 1986. As to this, the contention of Shri Agarwalla is that the challenge in this application is also to the assessment order relating to 1981-82, which was passed on 29-3-1985, copy of which was received much later by the petitioner. It is also urged that as a very important question relating to the validity and continuity in existence of the 1965 notification is involved in this petition and as the petitioner has good, case on merits, the application may not be dismissed on the ground of delay. In this connection, reference has been made to Lohia Machines Ltd. v. Union of India, : [1985]152ITR308(SC) in which delay of 19 years in assailing a rule was not regarded as sufficient' to close the door of the Court. Having found merit in the contention of the petitioner, we have not felt inclined to dismiss the petition on the ground of laches.
19. In the result, the petition is allowed by stating that the notification dated 8th December, 1966 bearing No. 43637-CTA-200/66-F, is still enforceable, because of which the demands raised against the petitioner for the assessment years in question cannot be realised, which shall there- fore, be treated as non esr. In the facts and circumstances, we leave the parties to bear their own costs.
D.M. Patnaik, J.
20. I agree.