The Supreme Court in Sardar Soma Singh & Ors. v. The State of PEPSU and Union of India [1954 SCR 955] evaluated the constitutional validity of the Patiala and East Punjab States Union General Sales Tax Ordinance, 2006 (No. XXXIII of 2006) in light of Article 286(3) of the Indian Constitution. The petitioners, dealers in essential commodities such as coarse and medium cloth, challenged the levy of sales tax on these goods, arguing that they were protected from such taxation under Article 286(3) and the Essential Goods (Declaration and Regulation of Tax on Sale or Purchase) Act, 1952 (Act LII of 1952). The Supreme Court, however, held that Article 286(3) refers only to post-Constitution laws and does not invalidate pre-Constitution laws like the impugned Ordinance. Accordingly, the Court upheld the continued operation of the Ordinance under Article 372 of the Constitution. This judgment reinforced the principle that existing laws prior to the Constitution are not subject to the procedural requirements imposed on post-Constitution legislation under Article 286(3). The decision clarified the scope of Article 286(3), particularly distinguishing between the applicability of laws made before and after the Constitution’s enactment, thereby affirming the tax liability of the petitioners under the Ordinance.

Keywords: Article 286(3), Sales Tax Ordinance, Constitutional Validity, Pre-Constitution Law, Essential Commodities, PEPSU, Article 372.

B) CASE DETAILS

i) Judgement Cause Title
Sardar Soma Singh and Others v. The State of PEPSU and Union of India

ii) Case Number
Petition No. 325 of 1953

iii) Judgement Date
March 11, 1954

iv) Court
Supreme Court of India

v) Quorum
Mehr Chand Mahajan, C.J., Mukherjea, S.R. Das, Vivian Bose, and Ghulam Hasan, JJ.

vi) Author
Justice S.R. Das

vii) Citation
1954 SCR 955

viii) Legal Provisions Involved

• Article 286(3), Constitution of India

• Article 372, Constitution of India

• Patiala and East Punjab States Union General Sales Tax Ordinance, 2006 (No. XXXIII of 2006)

• Essential Goods (Declaration and Regulation of Tax on Sale or Purchase) Act, 1952 (Act LII of 1952)

ix) Judgments Overruled by the Case (if any)
None

x) Case is Related to Which Law Subjects
Constitutional Law, Taxation Law, Administrative Law

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The judgment arose in the backdrop of the constitutional transition post-1947 and the integration of princely states into the Indian Union. The Patiala and East Punjab States Union (PEPSU) was formed from several princely states and had promulgated its own sales tax ordinance—Ordinance XXXIII of 2006 (PEPSU calendar)—before the adoption of the Constitution of India. The petitioners, being dealers in textiles, were taxed under this Ordinance even after the Constitution came into force. The controversy stemmed from the subsequent declaration by the Parliament under the Essential Goods Act, 1952, wherein certain textile goods were declared essential for the life of the community. Article 286(3) of the Constitution mandated that no state law imposing tax on such essential goods would be valid unless it had received the President’s assent. The petitioners challenged the Ordinance on the grounds that it had become unconstitutional post-1950 due to non-compliance with Article 286(3). This dispute required the Supreme Court to interpret the temporal and substantive scope of Article 286(3) and to balance federal power with tax regulation by erstwhile princely unions.

D) FACTS OF THE CASE

The petitioners were engaged in the trade of coarse cloth and medium cloth, goods which were later included in the Schedule of the Essential Goods (Declaration and Regulation of Tax on Sale or Purchase) Act, 1952, specifically under Item 8. This Act, under Section 3, required any State law imposing tax on declared essential goods to be reserved for the President’s consideration and to receive his assent. The Patiala and East Punjab States Union (PEPSU) had promulgated the General Sales Tax Ordinance, 2006 (No. XXXIII of 2006) on November 6, 1949, before the Constitution commenced. The petitioners contended that, after the Constitution’s enactment on January 26, 1950, the Ordinance had become unconstitutional and void under Article 286(3). They alleged that the sales tax levied on their goods was ultra vires and amounted to the violation of their fundamental rights under Article 19(1)(g). The respondents countered that the Ordinance remained valid under Article 372, which allowed for the continuation of pre-Constitution laws, and argued that Article 286(3) applied only to post-Constitution legislative enactments. This factual conflict necessitated the Court’s ruling on the interplay between existing laws, constitutional provisions, and post-constitutional parliamentary declarations.

E) LEGAL ISSUES RAISED

i) Whether the Patiala and East Punjab States Union General Sales Tax Ordinance, 2006, became void or unenforceable upon the commencement of the Constitution of India.

ii) Whether the said Ordinance violated Article 286(3) of the Constitution due to non-compliance with the requirement of Presidential assent for taxing essential goods.

iii) Whether Section 3 of the Essential Goods (Declaration and Regulation of Tax on Sale or Purchase) Act, 1952, nullified the sales tax imposed by the said Ordinance.

F) PETITIONER/APPELLANT’S ARGUMENTS

i) The counsels for the petitioners submitted that the Ordinance XXXIII of 2006 had lost its validity upon the enforcement of the Constitution of India. They argued that Article 286(3) clearly prohibited the imposition of tax on goods that Parliament had declared essential for the life of the community unless the concerned law had received the President’s assent. Since the Essential Goods Act, 1952, categorized coarse and medium cloth under Item 8 of the Schedule and the PEPSU Ordinance had not been reserved for Presidential consideration, the tax levied under it was constitutionally invalid.

The counsel also invoked Article 13(1) of the Constitution, which invalidates any pre-constitutional law that is inconsistent with fundamental rights or constitutional mandates. They maintained that continued taxation of essential goods violated the freedom to carry on trade under Article 19(1)(g) and that the impugned taxation law must be struck down as unconstitutional. The petitioners placed reliance on the interpretation of Article 286 in Ebrahim Vazir Mavat v. The State of Bombay [1954 SCR 933] where the Court analyzed the scope of Article 286 in restricting taxation powers.

G) RESPONDENT’S ARGUMENTS

i) The counsels for the respondents submitted that the Ordinance was a pre-Constitution legislation and was therefore protected under Article 372, which continued all existing laws unless expressly repealed or modified. They argued that Article 286(3), by its own wording, applied only to laws made by a State Legislature after the Constitution came into force. The PEPSU Ordinance did not fall within this category, and thus, the requirement of Presidential assent did not apply.

They further contended that Section 3 of the 1952 Act also applied only to laws enacted after the commencement of the Act, thereby excluding the Ordinance. The respondents highlighted that constitutional continuity under Article 372 allowed for uninterrupted enforcement of valid laws enacted before the Constitution, unless such laws directly contravened a specific constitutional prohibition. They argued that the Ordinance was not inconsistent with Article 286(3) or Article 13(1), and no procedural infirmity affected its validity post-Constitution.

H) RELATED LEGAL PROVISIONS

i) Article 286(3), Constitution of India
Restricts the imposition of sales tax by States on essential goods unless reserved for and assented to by the President.

ii) Article 372, Constitution of India
Continues the operation of laws existing before the commencement of the Constitution unless inconsistent or repealed.

iii) Essential Goods (Declaration and Regulation of Tax on Sale or Purchase) Act, 1952
Declares certain commodities essential and regulates taxation on them post-1952.

iv) Article 19(1)(g), Constitution of India
Grants citizens the right to practice any profession or to carry on any occupation, trade, or business.

v) Article 13(1), Constitution of India
Invalidates pre-Constitution laws to the extent they contravene fundamental rights.

I) JUDGEMENT

a. RATIO DECIDENDI
The Supreme Court held that Article 286(3) applied only to post-Constitution laws made by State Legislatures. It did not cover laws like the PEPSU Sales Tax Ordinance, which was enacted before the Constitution. The Court clarified that existing laws continued to operate under Article 372 and were not subjected retroactively to the procedural constraints introduced by the Constitution unless they directly contradicted a fundamental right or express provision.

b. OBITER DICTA 
Justice Das, delivering the judgment, observed that the expression “law made by the Legislature of a State” in Article 286(3) implies a legislature created by the Constitution and not one under a princely union. Hence, retrospective application of constitutional constraints to pre-Constitution laws was untenable.

c. GUIDELINES 

• Article 286(3) does not invalidate pre-Constitution tax laws.

• The test for invalidity of such laws lies in explicit contradiction with fundamental rights or constitutional mandates.

• Presidential assent under Article 286(3) applies only to laws passed after January 26, 1950.

• Section 3 of the Essential Goods Act, 1952, does not apply retrospectively.

J) REFERENCES

a. Important Cases Referred

i) Ebrahim Vazir Mavat v. State of Bombay, [1954 SCR 933], Supreme Court of India
ii) Sardar Soma Singh & Ors. v. The State of PEPSU and Union of India, [1954 SCR 955], Supreme Court of India

b. Important Statutes Referred

i) Constitution of India, Articles 286(3), 372, 13(1), and 19(1)(g)
ii) Essential Goods (Declaration and Regulation of Tax on Sale or Purchase) Act, 1952
iii) Patiala and East Punjab States Union General Sales Tax Ordinance, 2006 (No. XXXIII of 2006)