K.M. Mohamed Abdul Khader vs The State of Madras and Another

Ramachandra Iyer, J.—The above appeal, the petitions and the tax case are filed by several dealers in hides and skins and they raise a

common question regarding the validity of Rule 16 of the Turnover and Assessment Rules promulgated by the Government in G.O. No. 2733

(Rev.) dated 3rd September, 1955, by virtue of its power u/s 19 of the Madras General Sales Tax Act, 1939 (which shall hereafter be referred to

as the Act). Recently, we had occasion to consider in W.A. No. 15 of 1958 Since reported as Sreenivas and Co. v. Deputy Commercial Tax

Officer, Moore Market Division [1960] 11 S.T.C. 68 and W.P. No. 400 of 1957 Since reported as Abdul Subhan & Co. v. The State of

Madras and Anr. [1960] 11 S.T.C. 173 the validity of the rule in connection with the objections as to its (1) not having been reserved for the

assent of the President under Article 286(3) of the Constitution and (2) contravening Article 304 of the Constitution, being discriminatory in its

operation with respect to goods produced in this State as against those coming from other States. We held that the two grounds of objections

were untenable and that the rule was valid.

A third line of attack is now made on the rule on the ground that it has not been made after conforming to the requirements prescribed by

Section 19 of the Act. We have set out in detail in our judgment in W.A. No. 15 of 1958 Since reported as Sreenivas and Co. v. Deputy

Commercial Tax Officer, Moore Market Division [1960] 11 S.T.C. 68 and W.P. No. 400 of 1957 Since reported as Abdul Subhan & Co. v.

The State of Madras and Anr. [1960] 11 S.T.C. 173 the circumstances under which the new rule had to be substituted for the previous one,

which, by reason of a defect in draftsmanship, did not reach the sales or purchases effected by a large class of dealers in hides and skins. The

impugned rule formed part of a number of amendments notified in 1955. The State Government which is invested with the power to make rules u/s

19 of the Act, effected the amendments and substitutions to the Turnover and Assessment Rules, 1939. The rules were duly placed on the table of

the Legislative Assembly, as required by Section 3(4) of the Act. After obtaining the approval of the Assembly, they were finally published in the

Fort St. George Gazette on 7th September, 1955. Section 19(4) of the Act, which was in force on the date when the rules were framed (that

provision having been repealed since then by Act I of 1957), provided that there should be a publication of the rules earlier for a period of not less

than four weeks, presumably for eliciting public opinion. But, unfortunately, there was an omission to publish the rules at the earlier stage, in

accordance with the provisions of Section 19(4). For the assessees, it is contended that the non-compliance with the provisions of Section 19(4)

which is mandatory, would be fatal to the validity of the rules.

To appreciate the contentions raised in the present case, it is necessary to set out the relevant provisions of the Act, as it stood on the date when

the rules were promulgated.

Section 2(f) ""''Prescribed'' means prescribed by rules under this Act.

Section 3. ""Subject to the provisions of this Act,

(a) every dealer shall pay each year a tax on his total turnover for such year.

(b) the tax shall be calculated at the rate of three pies for every rupee of such turnover.

* * *

(4) For the purpose of this section and the other provisions of this Act, turnover shall be determined in accordance with such rules as may be

prescribed :

Provided that no such rules shall come into force unless they are approved by a resolution of the Legislative Assembly.

u/s 5 of the Act, certain exemptions and remissions were granted. In regard to certain transactions there was a total exemption from sales tax. In

regard to. certain others, there was a partial exemption by fixing a single point in the series of sales, for attracting tax liability. Sale of hides and

skins comes under the exemption granted by Section 5(vi).

Section 5(vi) ""The sale of hides and skins, whether tanned or untanned, shall be liable to tax u/s 3, Sub-section (1), only at such single point in

the series of sales by successive dealers as may be prescribed.

Section 19 confers the power to make rules.

Section 19(1) ""The State Government may make rules to carry out the purposes of this Act.

(2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for-

(a) all matters expressly required or allowed by this Act to be prescribed.

Section 19(2) (b) to (1) specify certain subjects on which the rules could be made.

Section 19(4) ""The power to make rules conferred by this section shall be subject to the conditions of the rules being made after previous

publication for a period of not less than four weeks,

Section 19(5) ""All rules made under this section shall be published in the Fort St. George Gazette and upon such publication shall have effect as

if enacted in this Act.

As stated before, the revised Turnover and Assessment Rules notified in G.O. No. 2733 (Rev.) dated 3rd September, 1955, were not

published u/s 19(4), but there was only a final publication of the rules u/s 19(5) on 7th September, 1955, after the approval by the Legislative

Assembly. The question for consideration is whether non-compliance of the provisions of Section 19(4) would invalidate the rule. This question

came up for consideration before Rajagopala Ayyangar, J., in a batch of petitions filed under Article 226 of the Constitution, W.P. Nos. 14 etc. of

1958 Since reported as V. Baluswami Naidu and Sons v. The State of Madras [1960] 11 S.T.C. 231 The learned Judge was of the opinion that

non-compliance with the provisions of Section 19(4) of the Act would be fatal to the validity of the rules and accordingly declared the new Rule 16

invalid.

It cannot be disputed that the provisions of Section 19(4) are not merely directory; previous publication being made a condition for the

exercise of the power to make the rules, they would be mandatory. The learned Advocate-General, who supported the validity of the rule,

contended that the provisions of Section 19(4) would govern only the rules made under the authority granted by Section 19 and not those made

under the other provisions of the Act. It was pointed out that while the terms of Section 19(5), which related to the final publication of the rules,

would comprehend all rules whether made u/s 19 or under other provisions of the the Act, those of Section 19(4) would relate only to the former

category. A rule for the purpose of determining the turnover like Rule 16, being one coming u/s 3(4), the procedure to be followed would be one

indicated in the proviso thereto, subject to the final publication u/s 19(5) and no question of publication u/s 19(4) would arise.

Section 3 is a charging provision; under it the charge is imposed on the turnover for each year, such turnover being left to be determined by the

rules that may be prescribed. If the provisions of Section 3 are to be interpreted in the light of the statutory definition of the word ""prescribed"", it

would follow that the turnover would have to be determined under the rules made under the Act, that is, u/s 19.

It was, however, contended on behalf of the State that the interpretation of the term ""prescribed"" in Section 2(f) could not apply to the term in

Section 3(4), as that Section itself empowers the making of rules to determine the turnover and that the authority of Section 19 for the purpose

would be otiose. We cannot, however, agree with the contention. Section 3(4), on its terms only provides for the subject-matter on which the rules

have to be made, namely, the determination of the turnover. There is nothing in Section 3 to designate the authority to make the rules. The authority

to whom the duty of framing the rules is entrusted is specified only by Section 19. That apart, Section 19 expressly provides for the making of rules

not only in regard to the subjects mentioned therein [see Section 19(2), Clauses (b) to (1)] but also those allowed or required by the Act to be

prescribed [see Section 19(2) (a)]. A turnover rule u/s 3(4) would be one allowed or required by the Act to be prescribed and would come within

the powers granted by Section 19. But it was contended that there being a specific provision for the rule u/s 3(4), the provision u/s 19(2) (a)

should be held to be one made ex abundanti cautela and that, notwithstanding that provision, a rule framed under an authority given under the other

provisions of the Act should be held not to derive its support u/s 19.

It is a general rule of construction that every provision or word employed by a statute was intended to have effect or be of some use and a

tautology or superfluity of language should not be imputed to the Legislature except without necessity. Prima facie a statute is not supposed to use

words unnecessarily. In Hill v. William Hill (Park Lane) Ltd. [1949] A.C. 530, Viscount Simon observed at page 546 :

It is to be observed that though a Parliamentary enactment (like Parliamentary eloquence) is capable of saying the same thing twice over without

adding anything to what has already been said once, this repetition in an Act of Parliament is not to be assumed. When a Legislature enacts a

particular phrase in a statute the presumption is that it is saying something which has not been said immediately before. The rule that a meaning

should if possible be given to every word in the statute implies that unless there is good reason to the contrary the words said something which has

not been said immediately before.

These observations would apply with greater force when there is an express provision like the one in Section 19(1) (a) of the Act. The

provisions of Section 3(4) enact that the determination of the turnover on which the tax is to be levied was to be under the rules to be framed. It

prescribes the subject-matter of the rules. Though in one sense it may be said to confer the power to make the rules as well, the authority to do so

is conferred only by Section 19. Therefore, a rule u/s 3(4) would be one made u/s 19 as well. This was the view taken by this Court in

Rangaswami Chettiar and Co. v. Government of Madras [1957] 8 S.T.C. 222 to which one of us was a party. At page 232, Rajagopala

Ayyangar, J. observed :-

The net result of these provisions, therefore, is that in regard to the rules u/s 3(2) regarding the determination of turnover the procedure prescribed

both by the proviso to that Sub-section as well as that pointed out in Section 19(4) have to be followed. In making this observation we have in

mind the procedure prescribed by Section 19(4) which is attracted to the rules made u/s 3(2) by reason of the inclusion in Section 19(2)(a) of ''all

matters expressly required or allowed by this Act to be prescribed.

In Sreeramulu Chetty v. State of Andhra [1958] 9 S.T.C. 215, a Full Bench of the Andhra High Court held that Sub-sections (4) and (5) of

Section 3 merely provided for the determination of the turnover and assessment, levy and collection of taxes, in accordance with such rules as

might be made under the Act, but that they did not specify the authority empowered to make rules, prescribing the matters referred to therein and

the authority empowered to make rules under Sub-sections (4) and (5) was the authority referred to in Section 19, namely, the State Government.

It was sought to be contended that that view would lead to a conflict of procedure, as that prescribed under the Act for the rules u/s 3(4) was

different from that prescribed u/s 19. It was pointed out that Section 3(4) contemplated and directed coming into force of the rules after being

approved by a resolution of the Legislative Assembly. The words of the section, according to the learned Advocate-General, would postulate that

the rules had been completely made before they were so placed on the table of the House of Legislature, whereas u/s 19(5) all rules made u/s 19

would have effect on the publication in the Gazette and that, therefore, the two procedures cannot be cumulative. We are unable to see how there

could be any conflict in the procedure prescribed by Section 3(4) and Section 19. What Section 19(4) contemplates is the publication of draft

rules, giving an opportunity to the interested parties to show cause against them. After that stage has passed, a rule, if made, u/s 3(4) could be

placed before the Legislature and after its approval published u/s 19(5) in the Fort St. George Gazette. It is contended that this is not authorised by

the terms of Section 3(4) which contemplates the placing before the Legislature of a rule complete in all other respects. Even assuming that the

proviso to Section 3(4) contemplated a duly framed rule and not a mere draft rule, we are of opinion the rule could first be published u/s 19(5) and

thereafter placed before the Legislative Assembly. The rule though made a part of the Act after the publication will come into force only on its

being approved by the Assembly. It would, therefore, follow that Section 19(4) would apply to the rules framed by the Government for the

determination of turnover u/s 3(4). We agree with the observations of Rajagopala Ayyangar, J., in his judgment in W.P. Nos. 14 etc. of 1958

Since reported as V. Baluswami Naidu and Sons v. The State of Madras [1960] 11 S.T.C. 231 that ""the prescription u/s 3, which is what rules 15

and 16 of the (Turnover and Assessment) Rules are, must comply with the double condition, namely, conformation to the provisions of Section

19(4) and receiving the approval of the Legislative Assembly.

We have proceeded on the assumption that Rule 16 is a mere turnover and assessment rule u/s 3(4); but it is not so. The rule prescribes not

merely the mode of determination of the turnover, but fixes the point at which the sales or purchases could be taxed. That would mean that is a rule

u/s 5(vi) as well. Mr. M.K. Nambiyar, the learned counsel for the assessees, contended that in essence Rule 16 is a charging provision and not a

mere rule for the ascertainment of turnover. The learned counsel is supported in his contention by a number of decisions of this Court. It is,

however, unnecessary to consider these aspects of the question, as we are of opinion that, even if Rule 16 is taken as coming solely u/s 3(4), it

would still be a rule made u/s 19, that the provisions of Section 19(4) would apply to it and that, for a valid exercise of the rule-making power,

there should be a publication thereunder.

It was next contended on behalf of the State that, whatever might be the defect in the promulgation of the rules, the provisions of Section 9 of

the Madras General Sales Tax etc. Amendment Act (1 of 1957) would render them valid. Section 9 which purports to validate the assessment and

levy of tax and licence fees for 1955-56 runs :-

Tax may be assessed or collected and licence fees levied or collected for the year 1955-56 notwithstanding the retrospective operation of the

amendments to the Madras General Sales Tax Rules, 1939 and the Madras General Sales Tax (Turnover and Assessment) Rules, 1939 and all

assessments made, taxes collected and licence fees levied for the year 1955-56 shall be deemed to have been made, collected, or levied, as the

case may be, as if those rules as amended were in force at all relevant times.

(Proviso omitted.)

The argument that was urged on behalf of the State was that, although the object with which Section 9 was enacted was to validate the

assessment etc. of 1955-56, the language employed by the Legislature would be wide enough to validate the rules for all time and that its operation

could not be limited to the assessment for the year 1955-56 alone.

Before considering the contention, it is necessary to refer briefly to the context in which that section was enacted. The revised Turnover and

Assessment Rules, published in the Fort St. George Gazette on 7th September, 1955, were made to take effect from the beginning of the current

financial year, that is, from 1st April, 1955, thus giving them a retrospective operation. Doubts were evidently felt in regard to the validity of such a

retrospective provision. Section 9 was enacted for removing all doubts in regard to that matter. In Guruviah Naidu v. State of Madras [1958] 9

S.T.C. 145, a Division Bench of this Court held that, by reason of Section 9 of Act I of 1957, the rules were validly enacted to enable an

assessment to be made on dealers for the year 1955-56.

But the contention of the learned Advocate-General was that Section 9 would have a more extended operation than that for which it was

intended. Reliance was placed on the words of the section that the rules should ""be deemed to have been made as if those rules, as amended, were

in force at all relevant times "". The use of the words ""at all relevant times"" is relied on as indicating that the provisions of the section were to have a

wider operation than for the year 1955-56. Reference was made in this connection to the decision in E.H. Battat v. The King [1951] A.C. 519. In

that case a person was convicted of an offence against Singapore Finance Regulations. The Finance Regulations were expressed to have been

made under the authority of the Military Administration Proclamation of 1945 made by the Supreme Allied Commander, South East Asia. The

proclamation was validated and continued in force by Section 5 of the Indemnity and Validating Ordinance of 1946 enacted by the Governor,

which provided that all laws, proclamations, orders, rules, regulations and legislative Acts whatsoever made or issued during the war period by or

with the assent of any British or Allied military authority shall be deemed to have been validly made from the date of promulgation. The Privy

Council, without deciding whether the Military Administration Proclamation of 1945 was valid or not in origin, held that the provision in Section 5

of the Ordinance of 1946 gave validity to that which might otherwise have been illegal and that, therefore, the criminal proceedings against the

appellant had been properly initiated. Dealing with the contention that Section 5 of the Ordinance validated only those promulgations which were

invalid and not those which were valid, the Privy Council observed at page 530 :-

The draftsman here is clearly envisaging the possibility of existing proclamations de facto in force being invalid in law and is intending to give them

the force of law. The fact that he enumerates certain specified defects which might otherwise have rendered such instruments invalid does not, their

Lordships think, limit the generality of the earlier words, which are sufficient to validate all the enumerated instruments provided they have in fact

been made or issued in the period in question by or with the assent of the appropriate British or Allied military authority.

The whole purpose of this Ordinance, unlike the Order in Council, is to give validity to that which might otherwise have been illegal and to afford

protection to those whose acts might otherwise have made them liable to process of law. Such being its purpose it requires, if need be, to be given

a liberal interpretation so as to achieve that which its language shows to have been made its object.

In the case before the Privy Council, though the object with which the validating Ordinance was passed was limited, the words of the

Ordinance were sufficient generally to include all the enumerated instruments. But, in the present case, there are no such general words in Section 9

which would warrant the extension of validation effected by the section to assessments other than for the year 1955-56. The words ""at all relevant

times"" are used with respect to the assessment of the year 1955-56 and they cannot be taken as conferring validity on the rules beyond the period

for which the section expressly provides. The decision of the Privy Council in Battat v. The King [1951] A.C. 519 was considered in detail by

Rajagopala Ayyangar, J., in W.P. Nos. 14 etc. of 1958 Since reported as V. Baluswami Naidu and Sons v. The State of Madras [1960] 11

S.T.C. 231, who held that Section 9 of Act I of 1957 would not have larger effect than validating the assessment for the year 1955-56. We agree

with the learned Judge in his conclusion.

The learned Advocate-General next invoked support for the validity of the rule from Section 7 of the Madras General Clauses Act. It was

urged that any defect in the publication of the rule would be cured by the final publication u/s 19(5) of the Act, which admittedly had been made in

regard to the impugned rule. Section 7 of the Madras General Clauses Act enacts :-

Where, by an Act to which this Chapter applies, a power to make rules is expressed to be given, subject to the conditions of the rules being made

after previous publication, the following provisions shall apply, namely.-

(a) the authority having the power to make the rules shall, before making them, publish a draft of the proposed rules;

(b) the publication shall be made in such manner as that authority deems to be sufficient, or, if the condition with respect to previous publication so

requires, in such manner as the Central Government or, as the case may be, the Provincial Government prescribes;

(c) there shall be published with the draft a notice specifying a date at or after, which the draft will be taken into consideration;

(d) the authority having power to make the rules and, where the rules are to be made with the sanction, approval or concurrence of another

authority, that authority also, shall consider any objection or suggestion which may be received by the authority having power to make the rules

from any person with respect to the draft, before the date so specified;

(e) the publication in the Official Gazette of a rule purporting to have been made in exercise of a power to make rules after previous publication,

shall be conclusive proof that the rule has been duly made.

It has therefore to be seen whether the provisions of Section 7(e) would validate non-compliance with the mandatory provisions as to

publication like the one contained in Section 19(4) of the Act. For the application of Section 7(e) of the Madras General Clauses Act the following

conditions have to be satisfied:-(1) The enactment granting a power to make rules should be one of those coming under Chapter IV of that Act.

(2) The power to make rules should be expressed to be conferred subject to their previous publication. (3) The rules should be purported to have

been made in exercise of the powers granted. (4) There should be a final publication in the Official Gazette. If the above conditions are satisfied,

the final publication in the Official Gazette of the rules is to be taken as conclusive proof that the rules have been duly made. There is no

controversy that the 1st and 4th requirements have been satisfied in that the Madras General Sales Tax Act is one coming under Chapter IV of the

General Clauses Act and that there has been a final publication of the rules u/s 19(5) of the Act.

It would be convenient, before considering the rival contentions in regard to the 2nd requirement, to consider whether the 3rd requirement has

been satisfied. G.O. No. 2733(Rev.) dated 3rd September, 1955, states that the rules were made ""in exercise of the powers conferred by

Sections 3 and 5 of the Madras General Sales Tax Act, 1939 and of all other powers ""which enable the Government to make amendments to the

Madras General Sales Tax (Turnover and Assessment) Rules. Section 19 has not been specifically mentioned in the notification. The preamble to

the notification stated "" of all other powers hereunto enabling."" Those words are wide enough to include the power to frame rules granted u/s 19.

That apart, as in our opinion, it is Section 19 that confers the power on the Government to make the rules, it should be held that they acted under

that provision as well. It follows, therefore, that in making the impugned rules the Government purported to act in the exercise of their power under

the Sales Tax Act. In the Shorter Oxford English Dictionary the word ""purport ""is denned"" (1) in the substantive form: as import, effect, sense,

outward bearing or that which is intended to be done or effected by something, object, purpose, intention; (2) as a verb : to have as its purport, to

convey to the mind, to mean, to imply, to profess or claim by its tenor.

There can be no doubt, therefore, that in making the rules the Government did purport to act under the powers given to it under the Act. What

there remains to be seen is whether the second of the four requirements stated above have been satisfied.

Mr. M.K. Nambiyar, learned counsel for the assessees, contended that (1) Section 7 of the Madras General Clauses Act would not, in terms,

apply to the rules made u/s 19 of the Act and (2) even if Section 7 were held to apply, Section 7(e), would relate only to those infractions of the

rule which were set out in Sections 7(a) to (d) and not to the mandatory provisions like the one u/s 19(4). Taking up the first portion of this

contention, the learned counsel submitted that a statute delegating the power of making rules to a subordinate authority might be divided into three

groups: (1) those which prescribe that the rules should come into effect on publication, an instance in point being Section 38(3) of Madras Act 9 of

1949 (Aliyasanthana Act) which states that all the rules made under that section shall be published in the Gazette and on such publication shall have

the effect as if enacted in the Act, (2) those that prescribe that the rule should be published, with no other limitation, an instance of that kind being

Section 18(4) of Act 20 of 1933 (the Madras Commercial Crops Markets Act, 1933) which stated that the power to make rules under the

section was subject to the condition of the rules being made after the previous publication and (3) those which prescribed that there should be a

pre-publication of the rules for a particular period, an instance being found in Sections 128 and 130 of the Madras Public Health Act (Act III of

1939).

The learned counsel contended that Section 7 of the General Clauses Act would apply only to categories 1 and 2 set out above and not to

those rules coming under the 3rd category in respect of which there exists a statutory mandate fixing a minimum period of pre-publication. We are,

however, unable to find any warrant for any such distinction on the terms of Section 7 of the Madras General Clauses Act. Section 7 applies to all

cases of an enactment coming within Chapter IV where a power to make rules is expressed as subject to the condition of the rule being made after

previous publication. The words are of general import and will include not only a case of rules which have to be promulgated after previous

publication, but also those which have to be promulgated after the minimum period of previous publication. The alternative line of argument was

that, even assuming that the rules to be framed under the Act would be governed by the provisions of Section 7 of the Madras General Clauses

Act, Section 7(e) of the latter enactment would cure only those infractions that would come under Clauses (a) to (d) of that section, but not the

non-compliance with an independent and mandatory provision, like the one in Section 19(4) of the Act. The provision of Section 19(4) relates to

the publication of the draft rules at the first stage. Section 7(c) of the General Clauses Act specifically provides for the case of such publication and

therefore, Section 19(4) would be covered by the publication directed by that section. In a case where there is no prescription of a minimum

period of notice by a statute, the concerned rule-making authority will have to fix a reasonable date for taking the draft rules into consideration. But

where a statute fixes a minimum period of notice, the notice under Clause (c) of Section 7 will fix the date in conformity with the statutory

prescription. Therefore, Section 7(c) would include both the cases, namely, where a statute fixes no minimum period of notice and one which does.

Therefore, if there is no publication of a notice u/s 19(4) of the Act, it would be an infraction of Section 7(c) of the General Clauses Act and

Section 7(e) would apply to it. In Rangaswami Chettiar & Co. v. Government of Madras [1957] 8 S.T.C. 322 it was pointed out that Section 7(e)

was designed to put an end to all controversy as regards the formalities prescribed by the preceding sub-section The question was considered in

the judgment of the Andhra High Court in Sreeramulu Chetty v. State of Andhra [1958] 9 S.T.C. 215. In that case there was no publication u/s

19(4) of the amendment to Rule 13 of the Turnover and Assessment Rules under the Act. The Full Bench observed that the condition relating to

the previous publication not having been complied with, the power conferred on the Government to make or amend rules could not be deemed to

have been exercised. The matter was further elucidated by the Division Bench, after receiving the opinion of the Full Bench. Subba Rao, C.J. (as

he then was), observed that, in order to apply the provisions of Section 7(e), the rule should have been made purporting to be in the exercise of a

power and that the word ""purporting"" indicated that the rule would get sanctity, though not made in the actual exercise of the power but under a

bona fide belief that it was made in the exercise of that power. The learned Chief Justice further observed :-

But what is necessary is that the rule should be made under a purported or actual exercise of power which is defined in the sub-section. The power

is defined as one to make rules after publication. The power is a conditional one. Unless that condition, namely, pre-publication in the prescribed

manner has been complied with, there cannot be an exercise of that power, whether actual or purported. Till the condition is satisfied, the power

does not exist and, therefore, a rule cannot be made in exercise of that non-existent power. To state differently the power to make rules u/s 19 of

the Act can be exercised only after the condition of publication is fulfilled and if a rule is made purporting to be in exercise of that power, it is

conclusive under the rule. We, therefore, hold that, if there was no publication in the manner prescribed by Section 19(4) of the Act, there was no

power in the Government to make the rule and, therefore, the validity of a rule made in exercise of that non-existent power could be questioned.

The question of purported exercise of power will arise only where it has not actually been properly exercised. With great respect to the learned

Chief Justice, we are of opinion that the question is not so much as to whether there has been a non-compliance with the provision of Section

19(4), but whether it is permissible for the court to investigate whether a rule has been duly made having regard to the provisions of Section 7(e) of

the General Clauses Act. Section 19(4) is no doubt mandatory in form, though generally provisions relative to the time for publication, manner and

details etc. would be directory. But Section 7(e) states that the final publication in the Official Gazette would be conclusive proof of the rules having

been duly made. The term ""conclusive proof ""is defined in Section 4 of the Evidence Act thus:-

When one fact is declared by this Act to be conclusive proof of another, the Court shall, on proof of the one fact regard the other as proved and

shall not allow evidence to be given for the purpose of disproving it.

Therefore, on the terms of Section 7(e), it would not be competent for the court to embark on an enquiry as to whether there has been proper

compliance with the rules. In Craies on Statute Law, 5th Edition, at page 273, in considering the validity of subordinate legislation, the learned

author observes :-

The courts therefore (1) will require due proof that the rules have been made and promulgated in accordance with the statutory authority, unless

the statute directs them to be judicially noticed; (2) in the absence of express statutory provision in the contrary, may inquire whether the rule-

making power has been exercised in accordance with the provisions of the statute by which it is created, either with respect to the procedure

adopted, the form or substance of the regulation, or the sanction, if any, attached to the regulation.

In our opinion, Section 7(e) provides a statutory direction to accept the final publication u/s 19(5) as conclusive proof. It is no doubt true that

Section 19(4) was one enacted in the interests of the public to enable a person who will be affected by tax rule to put forward his case before the

rule-making authority before the final promulgation. At the same time, there is an equally weighty consideration that the defects in the promulgation

of the rules, like want of pre-publication etc., should not be held to invalidate them (probably years afterwards) so as to render illegal all

assessments which might have been made under the rules. Section 7(e) was, as pointed out in Rangaswami Chettiar & Co. v. State of Madras

[1957] 8 S.T.C. 222 intended to achieve that purpose. In his judgment in W.P. Nos. 14 etc. of 1958 Since reported as V. Baluswami Naidu and

Sons v. The State of Madras [1960] 11 S.T.C. 231, Rajagopala Ayyangar, J., held that Section 7(e) would not apply"" where the Government

admitted that they proceeded on the basis that for a rule to be made u/s 3(4) of the Act the only formality to be complied with was to have the

resolution approved by the Legislative Assembly and that they did not consider it essential to conform to the requirements of Section 19(4). ""That

concession, which was made in that case, is not made in the case before us. But even so, we are of opinion, that the operation of Section 7(e)

would be irrespective of any later concession by the Government. An extreme illustration was put before us in the course of arguments. It was

contended that if the Government had stated in the notification itself what they admitted now [i.e. of not having the publication u/s 19(4)

deliberately] it would be a travesty of Section 7(e) to say that the rule was duly framed. We cannot see how that illustration would help the

assessee; that would be a plain case where the Government could not be said to have ""purported"" to act under the Act. Where there is no such

defect in the notification, we are of opinion that an admission of the Government that there was no publication u/s 19(4) would not entitle a court to

go behind Section 7(e) and accept such an admission as proof. We are of opinion that, notwithstanding the fact that there has been failure of the

Government to comply with the conditions of Section 19(4) in promulgating the impugned rule, it would not be open to a court to go into that

question, having regard to the provisions of Section 7(e) of the General Clauses Act.

Two other contentions urged on behalf of the State will have next to be referred to. The first was that, whatever might be our decision on the

validity of Rule 16, Section 9 of Act I of 1957 would validate at least the assessment for the year 1955-56. This contention is obviously

unassailable.

The next contention was that, as Clause 9 of G.O. No. 2733 stated ""For Rule 16, the following rule shall be substituted, namely, 16(1) etc."" If

the new rules promulgated under the G.O. were held invalid, the old one should be held to be in existence and the assessment on the various

assessees should be held to be proper. In our opinion, that contention is correct. Mr. M. K. Nambiyar contended that, as the issue of notice and

assessments were made after promulgation of the Rules in 1955, it should be held that they were made only under the new rules and therefore

invalid and that it would not be open to the Department to fall back upon the original rules. If the impugned Rule 16, which only replaces the old

Rule 16, is held to be invalid, it would only mean that the substitute would be invalid; the original will remain. In our opinion, the assessment or

notice issued could be justified on the basis of the old rules, even if the new rules were held to be invalid. It is not disputed that the petitioners

would be liable to be assessed under the old rules and the new rules are substantially identical with those of the old rules. We are, therefore, of

opinion that the new rules are valid.

W.A. No. 40 of 1958 related to the provisional assessment for the year 1956-57. The appellant did not take objection to the rule on the

ground of want of publication before Rajagopala Ayyangar, J. But, in view of the fact that the appellant has taken a ground of objection regarding

the non-compliance of Section 19(4) in the memorandum of grounds and as the appeal was heard along with other petitions, we have allowed him

to raise the objection. T. C. No. 135 of 1959 relates to the assessment for the year 1956-57. Both the appeal and the tax case have got to be

dismissed, in view of our finding that the validity of the rule could not be impugned by reason of Section 7(e) of the Madras General Clauses Act.

W.P. Nos. 400 of 1957 and 282 of 1957 relate to the assessment for the year 1955-56. Independent of the question of the validity of the rules by

reason of Section 7(e) of the Madras General Clauses Act, the assessment in these cases would be validated by Section 9 of Act I of 1957. Rules

nisi would be discharged. The result is that W.A. No. 40 of 1958, W.P. Nos. 400 and 282 of 1957 fail and are dismissed.

The respondents will pay the costs of this application in W.A. No. 40 of 1958. The respondent will be entitled to his costs in W.P. No. 400 of

1957. Counsel''s fee Rs. 250 in each case. No order as to costs in W.P. No. 282 of 1957.

T.C. No. 135 of 1959 will be disposed of separately.