JUDGMENT D.R. DHANUKA, J. :---The 1st petitioner herein has set up a manufacturing unit at MIDC, Mahad an underdeveloped area of the State of Maharashtra in district Raigad manufacturing pesticides covered under Entry 31 of Schedule C-II appended to the Bombay Sales Tax Act, 1959. The 1st petitioner has several branches within the State as well as outside the State. The 1st petitioner holds registration certificates under Bombay Sales Tax Act, 1959 as well as Central Sales Tax Act, 1955. The 2nd petitioner is the director of the 1st petitioner company and is a citizen of India. The above referred unit of the 1st petitioner is an eligible unit duly covered under 1983 Package Scheme of incentives introduced by the Government of Maharashtra. The 1st petitioner has complied with all the conditions of eligibility prescribed by the said Scheme. By virtue of the provisions contained in the said scheme as well as Entry 136 of relevant exemption notification issued by the Government of Maharashtra under section 41 of Bombay Sales Tax Act, 1959, the petitioner No. 1 is entitled to (i) exemption from payment of purchase tax/sales tax payable under the Bombay Sales Tax, 1959 on purchase of raw-materials; (ii) sales tax payable under the said Act on sales of finished goods and (iii) Central sales tax payable under the Central Sales Tax Act, 1956 on sale of finished goods effected in course of inter-State trade and commerce upto a ceiling limit of Rs. 1,00,16,675/- during the period 27th March, 1989 to 26th March, 1996. With a view to ensuring that the eligible unit does not avail of the tax exemption in excess of the stipulated ceiling limit, the notional sales tax liability of the unit is required to be assessed every year so as to debit the unit against its total entitlement of tax exemption as aforesaid. The rights and obligations of the eligible unit in respect of tax exemption are governed by the notification issued by the Government of Maharashtra under section 41 of the Bombay Sales Tax Act, 1959. The said notification is of legislative character. The rights and obligations of the eligible unit in respect of tax exemption are governed by the notification issued by the Government of Maharashtra under section 41 of the Bombay Sales Tax Act, 1959. The said notification is of legislative character. The said 1983 Scheme inter alia treats branch transfer or stock of goods or transfer of goods on consignment basis, though not in pursuance of an agreement of sale or connected with transaction of sale as "deemed sales" for purpose of computation of benefit of tax exemption availed of by the eligible unit. The petitioners are very much aggrieved by the impugned provisions contained in Clause 2.11 of 1983 Scheme. 2. By this writ petition filed under Article 226 of Constitution of India, the petitioners have impugned portions of Clause 2.11 of the "Package Scheme of Incentives 1983" propounded by Government of Maharashtra offering sales tax exemption to the entrepreneurs setting up industrial units in under-developed or backward areas of the State to the extent of ceiling specified therein, in so far as the said scheme treats "branch transfers" goods manufactured by petitioner No. 1 to its own depots or branches within the State or outside the State or mere consignment of goods, without there being any transaction of sale, as "deemed sales" for purpose of computation of sales tax exemption availed of by petitioner No. 1 as more particularly set out therein. 3. The petitioner No. 1 has set up an industrial unit in the backward area/underdeveloped area at a place known as Mahad in Raigad District. The above referred industrial unit of petitioner No. 1 is an eligible unit entitled inter alia to sales tax exemption for the period specified in certificate of eligibility dated 17th March, 1989 issued by the Development Corporation of Konkan Ltd. and entitlement certificate dated 27th March, 1989 issued by the Dy. Commissioner of Sales Tax, Maharashtra State, Bombay to the extent of Rs. 1,00,16,675/- subject to the conditions specified in entry 136 of the Schedule appended to Government Notification No. STA-1059(iii)G-I dated 28th December, 1959 as amended. The said unit is duly covered under the 1983 Package Scheme propounded by Government of Maharashtra. The extent of sales tax exemption available to petitioner No. 1 in sum of Rs. 1,00,16,675/- subject to the conditions specified in entry 136 of the Schedule appended to Government Notification No. STA-1059(iii)G-I dated 28th December, 1959 as amended. The said unit is duly covered under the 1983 Package Scheme propounded by Government of Maharashtra. The extent of sales tax exemption available to petitioner No. 1 in sum of Rs. 1,00,16,675/- is fixed on the basis of 100% of the Gross Value of fixed capital investment in respect of the eligible unit covered under the Scheme. No Tax liability can be created without authority of law. No tax exemption can be granted except to the extent and in the manner set out in the tax legislation. It is thus far too obvious that the extent of sales tax exemption available to petitioner No. 1 is governed by exemption notification issued by the Government of Maharashtra in exercise of its power of delegated legislation under section 41(1)(a) of Bombay Sales Tax Act, 1959, i.e. Entry 136 of the Schedule appended to the exemption notification and not by Government circulars or Schemes as such. Nevertheless, for purpose of understanding the background of relevant provisions of law concerning the extent of tax exemption available to the eligible unit and the computation of benefits enjoyed or availed of by the unit, it is necessary to refer to at least two Clauses of 1983 Package Scheme here and now. "5. Sales Tax Incentive Under Part-I : 5.1(A) Exemption: By way of sales tax incentive as an exemption the eligible unit will be entitled to exemption from payment of :--- (i) Purchase Tax/Sales Tax payable under the Bombay Sales Tax Act, 1959, on the purchasers of Raw Materials; (ii) Sales Tax payable under the Bombay Sales Tax Act, 1959, on the sales of finished products of the eligible unit; and (iii) Central Sales Tax payable under the Central Sales Tax Act, 1956; on the sales of finished products of the eligible unit effected in the course of inter-State trade or commerce. (Note : Section 8(5) of Central Sales Tax Act, 1956 inter alia empowers the State Government to grant exemption (i.e. from liability to pay Central Sales Tax) to a dealer having his place of business in the State in respect of the sales by him, in the course of inter-state trade or commerce etc. (Note : Section 8(5) of Central Sales Tax Act, 1956 inter alia empowers the State Government to grant exemption (i.e. from liability to pay Central Sales Tax) to a dealer having his place of business in the State in respect of the sales by him, in the course of inter-state trade or commerce etc. as more particularly set out herein)." Clause 2.11 of the Scheme defines "Notional Sales Tax liability" as under : "2.11 Notional sales tax liability : Notional Sales Tax Liability means --- (a) Sales Tax/General Sales Tax/Purchase Tax that would have been payable on the purchase of Raw Materials and Sales Tax/General Sales Tax payable on the sales of finished products of the eligible unit under the Local Sales Tax Law but for an exemption, computed at the maximum rates specified under the Local Sales Tax Law as applicable from time to time. For the purpose of the above clause, sales made on consignment basis within the State of Maharashtra or branch transfers within the State of Maharashtra shall also be deemed to be Sales made within the State eligible to tax. And (b) Tax payable under the Central Sales Tax Act, 1956, on the sales of finished products of the eligible unit made in the course of inter State trade or commerce computed at the rate of tax applicable to such sales as if these were made against certificate in Form C on the basis that the sales are eligible to tax under the said Act. For the purposes of the above clause branch transfers/transfers on consignment basis outside the State of Maharashtra shall be deemed to be Sale in the course of inter-State trade or commerce. (The underlined portions of Clause 2.11 of the Scheme are impugned portions of the clauses under the Scheme). 4. The petitioners have impugned the above referred portions of the said scheme inter alia on the following grounds : (a) The State legislature has no legislative competence to levy tax on sales or purchase of goods unless the transaction amounts to sale or purchase of goods within the framework of Entry 54 List II Seventh Schedule to the Constitution of India read with the wider definition of the expression sale or purchase of goods under sub-clause (29-A) of Article 336 of Constitution of India inserted therein by the Constitution Forty Sixth Amendment Act, 1982. Mere transfer of stocks from one branch or another within the State or outside the State can never constitute sale. The State Legislature has neither legislative nor executive competence to treat the "branch transfer" of goods as "deemed sales". Even the magic power of the legislature to create fictions by enacting "deeming" provisions cannot transgress the width of legislative power. The State Legislature has no power to treat consignment of goods" as deemed sales or levy consignment tax thereon. Similarly the State has no power to levy any tax on the transaction of sale in course of inter-State trade or commerce. (b) The power of the State Executive is co-extensive with power of the State legislature. No fiction can be resorted to or provided in a Government circular, resolution or scheme which transgresses directly or indirectly the legislative jurisdiction of the State legislature. The State executive cannot do what the State legislature is prohibited from enacting. (c) The petitioner No. 1 is entitled to exemption from payment of sales tax, purchase tax, Central Sales Tax, within the period specified in certificate of entitlement, subject to the ceiling set out therein as set out in Entry 136 forming part of statutory notification issued by the State Government under section 41(1)(a) of the Bombay Sales Tax Act, 1959 and the above referred entitlement of petitioner No. 1 cannot be curtailed by computing the tax exemption availed of by the petitioner No. 1 on the assumption that the branch transfers or consignment of goods within the State or outside the State are deemed sales and are to be treated as if exigible to sales tax/purchase tax even though these transactions do not and cannot amount to sales and are not taxable under Bombay Sales Tax Act, 1959. The petitioners have contended that the quantum of tax incentives availed of by petitioner No. 1 must be computed only by taking into consideration transactions which amount to actual sales and which would have been taxable but for the 1st petitioners entitlement to exemption from payment of tax under a valid notification issued under section 41(1) of the Act, the said notification being of a legislative character. (d) The impugned portion of 1983 Package Scheme is thus beyond the jurisdiction of the State Government and is inconsistent with the constitutional scheme and the provisions of the Constitution as well as the provisions of Bombay Sales Tax Act, 1959 and the notification of exemption issued by the State Government under section 41(1) of the Act. (e) The impugned portion of 1983 Scheme is totally arbitrary and irrational. The impugned portion of the scheme is violative of Article 14 of Constitution of India. (f) The impugned portion of 1983 Scheme amounts to a fraud on the Constitution. (g) The basic clause of the Scheme as well as exemption notification is to grant sales tax exemption upto monetary limit of Rs. 1,00,16,675/- as specified in certificate of entitlement issued by the Commissioner of Sales Tax. The notional sale tax liability of the eligible unit to be computed by the assessing authorities every year for purpose of ascertaining the extent of benefit of tax exemption availed of by the unit cannot be more than actual sales tax liability of the eligible unit which would have been incurred by the unit in absence of tax exemption as aforesaid. The deeming provisions made in the 1983 package scheme (which are impugned in this petition) are clearly severable and are not inextricably mixed up with the entire scheme of grant of incentives in such a manner so as to make the doctrine of severability inapplicable in the situation. (h) The impugned assessment orders are liable to be set aside and modified so as to exclude the branch transfers or consignment of goods from the computation of turnover of sales for purpose of computation of notional sales tax liability of petitioner No. 1. 5. The State of Maharashtra does not dispute the correctness of basic submission made on behalf of the petitioner to the effect that the State has no jurisdiction to levy sales tax or purchase tax on branch transfers or on consignment of goods within the State or outside the State. The respondents contend that the respondents have merely provided a measure for ascertainment of notional sales tax liability so as to compute the tax exemption availed of by the eligible unit. The respondents have contended that such measure need not coincide with actual tax liability under the Act and the notification but for the exemption. The respondents contend that the respondents have merely provided a measure for ascertainment of notional sales tax liability so as to compute the tax exemption availed of by the eligible unit. The respondents have contended that such measure need not coincide with actual tax liability under the Act and the notification but for the exemption. The respondents have contended that if the impugned provisions of 1983 Scheme are viewed in this perspective, it would be found that the impugned provisions of the Scheme are valid and cannot be faulted with. The respondents have contended that it is upto the State to grant such concessions or incentives to the eligible unit as the State authorities deem fit. The respondents have further contended that the Scheme of 1983 represents an indivisible contract between the eligible unit and the State and the impugned portion of the Scheme are not severable. The respondents have contended that the petitioners were fully aware of the mode and manner in which the availment of tax benefits would be computed by the authorities from inception and the petitioners should not be now allowed to challenge the impugned portion of the Scheme. The respondents have generally denied the correctness of submissions made on behalf of the petitioners. The respondents have also invited the attention of the Court to the newly incorporated section 41-B of the Act, newly incorporated in the Bombay Sales Tax Act, 1959 by Maharashtra Act, XXIX of 1994. Section 41(1) of the Bombay Sales Tax Act, 1959 reads as under :--- "41. (1) Subject to such conditions as it may impose, the State Government may, if it is necessary so to do in the public interest, by notification in the Official Gazette, exempt any specified class of sales or purchases from payment of the whole or any part of any tax payable under the provisions of this Act and such exemption shall take effect from the date of the publication of notification in the Official Gazette or such other date as may be mentioned therein." (Note: Section 41 was renumbered as sub-section (1) of that section by Maharashtra Act 21 of 1962, section 17). Section 41-B has been newly inserted in Bombay Sales Tax Act, 1959 by Amending Act known as Act No. XXIX of 1994. Section 41-B has been newly inserted in Bombay Sales Tax Act, 1959 by Amending Act known as Act No. XXIX of 1994. The said section has come into effect from 1st May, 1994 subject to the said section being operated upon only on and after the necessary rules are framed providing for "calculation of cumulative quantum of benefits under the package scheme of incentives". The said section reads as under : "41-B (1) In order to determine whether the cumulative quantum of benefits received by any dealer to whom a Certificate of Entitlement has been granted by the Commissioner under Entry 136 of the Schedule to the Notification issued under section 41, has at any time after 1st January, 1980, exceeded the relevant monetary ceiling under any Package Scheme of Incentives for any period whether before or after the date of commencement of the Maharashtra Tax Laws (Levy and Amendment) Act, 1994, (hereinafter, in this section, referred to as "the commencement date"), the Commissioner shall calculate the cumulative quantum of benefits in the manner prescribed in respect of all the relevant periods and the Package Scheme of Incentives. (2) If it is found that the cumulative quantum of benefits so calculated in respect of any Eligible Unit has exceeded the relevant monetary ceiling where such ceiling is provided in the Package Scheme of Incentives, then the Commissioner, shall, require the dealer by order in writing to pay the tax, interest or penalty in respect of each relevant period and shall for the purpose of recovery of such tax, interest or penalty, serve on the dealer a notice; Provided that, an order under this section shall be passed without giving the dealer a reasonable opportunity of being heard. (3) The notice so issued, shall be deemed to be a notice issued under sub-section (4) of section 38 and the relevant provisions of this Act shall apply to such notice as they apply to a notice issued under sub-section (4) of section 38." No rules are yet framed. In our opinion, the said section has no bearing on determination of issues involved in this petition. 6. Having highlighted the nature of controversy required to be adjudicated upon in this petition, we shall first summarise the facts and relevant provisions of law. We shall then refer to the relevant case law cited at Bar. In our opinion, the said section has no bearing on determination of issues involved in this petition. 6. Having highlighted the nature of controversy required to be adjudicated upon in this petition, we shall first summarise the facts and relevant provisions of law. We shall then refer to the relevant case law cited at Bar. In the end, we shall formulate our conclusions and the reasons in support thereof. Summary of material facts 7(a). In order to achieve dispersal of industries outside Bombay - Thane - Pune belt and to attract the entrepreneurs to the underdeveloped and developing areas of the State, the respondent No. 1 has propounded a scheme offering incentives to the new and other units covered thereunder known as the Package Scheme of Incentives. It is common knowledge that but for the offer of these incentives including guarantees of sales tax holiday for prescribed number of years, the entrepreneurs might not undertake the project to set up the unit in these areas for economic reasons. The State Government propounds these schemes for encouraging the entrepreneurs for advancing economic development of the country. It is also common knowledge that sales tax exemption cannot be ensured to a dealer except under an exemption notification issued under the relevant provision of the relevant sales tax legislation. The first of such scheme was introduced in the year 1964. The said scheme was amended from time to time till the year 1979. On 5th January, 1980, the Government of Maharashtra propounded the revised package scheme of incentives. The said revised scheme was amended by the State Government from time to time inter alia by Government Resolution No. IDL-1082/(4077)-IND-8 dated 4th May, 1983. The modified package scheme of incentives was continued to be in force from time to time. The said scheme obligated the concerned entrepreneurs to undertake various effective steps before the concerned unit could be entitled to benefit of incentives offered under the Scheme. The said Scheme contemplated issue of an eligibility certificate by the implementing agency named therein as well as the issue of the entitlement certificate by the prescribed authority so as to certify the entitlement of the concerned unit to the sales tax exemption during the period set out therein subject to the ceiling of the amount mentioned therein. The said Scheme contemplated issue of an eligibility certificate by the implementing agency named therein as well as the issue of the entitlement certificate by the prescribed authority so as to certify the entitlement of the concerned unit to the sales tax exemption during the period set out therein subject to the ceiling of the amount mentioned therein. The said scheme provided for grant of sales tax exemption to the eligible unit as set out under Clause 5.1(A) thereof. The eligible unit was given an option to opt for grant of sales tax exemption or the grant of "sales tax deferral". Clause 5.2 of the said Scheme provided that the quantum of the sales tax incentive contemplated under the scheme either as an exemption or as deferral under para. 5.1 will be as per the scales and subject to ceilings as provided in the table forming part of the said scheme. Clause 2 of the said Scheme provided for definitions of various words and expressions used in the said scheme. Clause 2.9 of the Scheme provided that "Local Sales Tax Law" would mean the Bombay Sales Tax Act, 1959 as modified from time to time and the rules made thereunder as modified from time to time. 7(b). The said scheme contemplated that the maximum entitlement of sales tax incentives by way of sales tax exemption shall be specified in the eligibility certificate for sales tax incentive under Part I of the above referred scheme and the figure of such maximum entitlement shall be worked out in light of the provisions contained in the said scheme i.e. on the basis of "fixed capital investment" in the project set up etc. The said scheme contemplated that the certificate of eligibility as well as the certificate of entitlement shall also specify the period during which the eligible unit can avail of the above referred exemption from sales tax subject to availment of "sales tax exemption" not exceeding the maximum entitlement of sales tax exemption specified in the certificate of entitlement. The said scheme contemplated that the certificate of eligibility as well as the certificate of entitlement shall also specify the period during which the eligible unit can avail of the above referred exemption from sales tax subject to availment of "sales tax exemption" not exceeding the maximum entitlement of sales tax exemption specified in the certificate of entitlement. The said Scheme as implemented during the course of years contemplated sales tax assessment of the eligible unit every year for purpose of computation of "notional sales tax liability" so as to entitle the respondent No. 1 to debit the assessee with the amount of notional sales tax liability computed by the prescribed authority as a result of the assessments made against his entitlement to sales tax exemption as aforesaid. 7(c). By Clause 2.11 of the said scheme, the expression "notional sales tax liability" was defined. The said definition is already extracted in the earlier part of the judgment and need not be extracted again. 7(d). On 17th March, 1989, the Development Corporation of Konkan Limited issued an eligibility certificate for sales tax incentive under Part I of the 1983 Scheme in favour of the petitioner No. 1 stating therein that the petitioner No. 1 was entitled to sales tax incentive by way of exemption during the period 27th March, 1989 to 26th March, 1996 in the amount not exceeding Rs. 65,22,313/-. It was also stated in the said certificate that the petitioner No. 1 held necessary registration certificate under the Bombay Sales Tax Act, 1959 bearing Registration No. N-29-A-625 dated 23-11-1987 and also registration under Central Sales Tax Act, 1956 bearing No. MAH/One-M-3684 dated 23-7-1987. The amount of maximum entitlement of sales tax incentive by way of exemption was enhanced by the prescribed authority to Rs. 1,00,16,675/- by an addendum issued by the Deputy Commissioner of Sales Tax dated 2nd November, 1991. On 27th March, 1989, the Deputy Commissioner of Sales Tax issued the necessary certificate of entitlement in favour of petitioner No. 1 in terms aforesaid. In the said certificate of entitlement, it was stated by the prescribed authority that the said certificate was valid for the period 27th March, 1989 to 26th March, 1996. On 27th March, 1989, the Deputy Commissioner of Sales Tax issued the necessary certificate of entitlement in favour of petitioner No. 1 in terms aforesaid. In the said certificate of entitlement, it was stated by the prescribed authority that the said certificate was valid for the period 27th March, 1989 to 26th March, 1996. By the said certificate it was provided that the petitioner No. 1 was entitled to claim exemption under Entry 136 of the Schedule appended to Government Notification Finance Department, No. STA-1059(iii) G-1, dated 28th December, 1959 as more particularly set out therein. By the said certificate, it was directed that the petitioner No. 1 shall be entitled to exemption in respect of payment of tax on sale and purchase effected during the period of validity of the said certificate subject to the petitioner No. 1 incorporating a declaration in the sales bill of cash memorandum issued by petitioner No. 1 in the format set out therein which is as under : "This sale is exempt from tax under the provisions of Entry No. 136 of the Schedule appended to the Government Notification Finance Department, No. STA-1059(iii)G-1, dated 28-12-1959, at the buyer purchasing these goods and any subsequent buyer purchasing these goods shall- i) Not be entitled to claim drawback, set-off or refund under any provisions of the Act of the Rules framed thereunder, in respect of the purchases of these goods. ii) Not give any Certificate in Form 31 or 31-A the B.S.T. Rules, 1959 to any subsequent purchaser of these goods. By the said certificate of entitlement it was further provided that the petitioner No. 1 shall be entitled to goods free from whole of tax on his furnishing to the Registered dealer a declaration in form BC bearing the seal and signature of the Sales Tax Officer, having jurisdiction over his place of business, declaring inter alia that the goods are required for use in the manufacture of goods at the said industrial unit for sales within the State or in the course of inter-State trade or commerce or in the course of export out of the territory of India or in the packing of goods so manufactured. 7(e). Since the petitioner No. 1 unit was entitled to total sales tax exemption for the duration of the above referred certificate subject to reaching of the prescribed ceiling limit of Rs. 7(e). Since the petitioner No. 1 unit was entitled to total sales tax exemption for the duration of the above referred certificate subject to reaching of the prescribed ceiling limit of Rs. 1,00,16,675/-, annual assessments were required to be made by the prescribed sales tax authority so as to compute the "notional sales tax liability" of the eligible unit within the framework of the 1983 scheme and the Bombay Sales Tax Act, 1959 and the exemption notification issued under section 41(1) of the Act so as to debit the amount so computed against the maximum entitlement of the sales tax exemption to which the petitioner No. 1 was and is entitled under the above referred eligibility certificate issued by Development Corporation of Konkan Limited as well as entitlement certificate issued by the Deputy Commissioner of Sales Tax, Maharashtra State, Bombay. It is obvious that the petitioner is not entitled to sales tax exemption once the aggregate of the lawful debits made to the eligible unit on basis of annual assessments made in respect of "notional sales tax liability" reach the figure of prescribed ceiling and the said debits cannot be inflated by the State by resorting to device of creating fictions in the Scheme which are not permissible in the law. 7(f). For the period 27th March, 1989 to 31st March, 1989, the notional sales tax liability of the petitioner No. 1 was calculated by the assessing authority at Rs. 47,736/-. For the period 1st April, 1989 till 31st March, 1990, the notional sales tax liability of petitioner No. 1 was calculated at Rs. 42,28,578/-. For the period 1st April, 1990 till 31st March, 1991, the notional sales tax liability of the petitioner No. 1 was calculated at Rs. 52,39,655/-. Copies of impugned assessment orders pertaining to petitioner No. 1 computing the notional sales tax liability as aforesaid are annexures D and E to the writ petition. In the assessment order Exhibit E to the petition, it is inter alia observed as under :--- "The dealers have sales depots out of Maharashtra State for sales of their own products (Pesticides). The manufacturing unit is at Mahad and office at Thane. The goods manufactured are brought to Thane godown and then despatched out of Maharashtra State from Thane. This is done due to transport facility at Thane. The godown at Thane is a Central warehouse for products at Mahad. The manufacturing unit is at Mahad and office at Thane. The goods manufactured are brought to Thane godown and then despatched out of Maharashtra State from Thane. This is done due to transport facility at Thane. The godown at Thane is a Central warehouse for products at Mahad. The goods are despatched to sales depots out of Maharashtra State as per tentative requirements of these depots. However, if any depot is surplus of stock the goods are called lock, and again, despatched to the depots as per the requirement. As the dealers to do not deal in the products of others and the sales depots out of Maharashtra State are exclusively for the sales of their own products, despatched from this office, the claim of Branch transfers is accepted after reducing the amount of stock returned from the sales depots." Thus the assessing authority has calculated notional sale tax liability on branch transfers, to branches outside Maharashtra, as more particularly set out in the petition. The petitioners would have never incurred any sales tax liability on branch transfers of stocks within the State of Maharashtra or outside the State under the State Sales tax law or Central Sales Tax Act or under the Local Sales tax law or in respect of mere consignment of goods. 7(g). The assessing authority did not grant any set off to petitioner No. 1 on presumptive basis as permissible to regular dealers liable to pay sales tax under the Act in terms of Rules 42-C, 41-D and 44-D of the rules framed by the State Government under the Bombay Sales Tax Act, 1959. We would like to observe here and now that we do not propose to adjudicate on question No. (iv) and (v) formulated in para. 3 of this writ petition in view of different benches of Maharashtra Sales Tax Tribunal having taken a different view on the subject and the alternate remedy of making an application for reference being available to the petitioners. We shall concentrate and adjudicate only in respect of controversy pertaining to constitutional and legal validity of the impugned State action of treating branch transfers and consignment of goods as deemed sales for purpose of computation of Notional Sales Tax Liability as aforesaid. We shall concentrate and adjudicate only in respect of controversy pertaining to constitutional and legal validity of the impugned State action of treating branch transfers and consignment of goods as deemed sales for purpose of computation of Notional Sales Tax Liability as aforesaid. Prima facie no such set off can be claimed by the eligible unit by virtue of the provisions contained in Entry 136 of the Schedule to the relevant exemption notification. In our opinion, notional sales tax liability cannot be larger than actual sales tax liability subject to the exemption from tax being restricted in terms of exemption notification issued under section 41(1) of the Act. Relevant provision of Sales Tax Law and the Constitution of India. 8(A). Section 2(12-B) of Bombay Sales Tax Act, 1959 defines the expression "Eligibility Certificate" as "a certificate granted by SICOM or the relevant Regional Development Corporation under the Package Scheme or Incentives designed by the State Government for promoting industrialization of the backward areas of the State". Section 2(12-C) of the Act defines "Eligible Unit" as the Industrial unit in respect of which an Eligibility Certificate is issued. Section 2(12-C) of the Act defines "Eligible Unit" as the Industrial unit in respect of which an Eligibility Certificate is issued. Section 2(28) of the Act defines the expression "sale" as under : "Sale" means a sale of goods made within the State for cash or deferred payment or other valuable consideration, and includes any supply by a society or club or an association to its members on payment of a price or of fees or subscription, but does not include a mortgage, hypothecation, charge or pledge, and the words "sell", "buy" and "purchase" with all their grammatical variations, and cognate expressions, shall be construed accordingly; Explanation.---For the purpose of this clause,--- (a) a sale within the State includes a sale determined to be inside the State in accordance with the principles formulated in sub-section (2) of section 4 of the Central Sales Tax Act, 1956; (b) (i) every disposal of goods referred to in the Explanation to Clause (11); (ii) the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service is made or given on or after the 2nd day of February, 1983, for cash deferred payment or other valuable consideration; (iv) the transfer, otherwise than in pursuance of a contract, or property in any goods for cash, deferred payment or other valuable consideration; (v) the supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration; shall be deemed to be a sale;" Section 2(29) of the Act defines the expression sale price. Section 2(32) of the Act defines the expression tax as sales tax, turnover tax, purchase tax, or additional tax as the case may be payable under the Act. Section 2(35) of the Act defines the expression turnover of purchases. Section 2(36) of the Act defines the expression "turnover of sales". Section 3 of the Act is a charging section in respect of liability of a dealer to pay tax under the Act on his turn over of sales and on his turn over of purchases. Section 41(1) of the Act is of special relevance for the purpose of this petition. Section 3 of the Act is a charging section in respect of liability of a dealer to pay tax under the Act on his turn over of sales and on his turn over of purchases. Section 41(1) of the Act is of special relevance for the purpose of this petition. The said section reads as under : "41.(1) Subject to such condition as it may impose, the State Government may, if it is necessary so to do in the public interest, by notification in the Official Gazette, exempt any specified class of sales or purchases from payment of the whole or any part of any tax payable under the provisions of this Act and such exemption shall take effect from the date of the publication of the notification in the Official Gazette or such other date as may be mentioned therein." Power of the State Government to issue notification under section 41 of the Act exempting any specified clause of sales or purchase from the payment of the whole or any part of any tax payable under any Act is legislative in character. The subject matter of tax exemption is thus governed only by the Act or the exemption notification issued under section 41(1) of the Act and cannot be whittled down or regulated by an executive fiat or the Government circular or Scheme or Government Resolution. On 28th December, 1959, the Government of Maharashtra issued its notification No. STA-1059(iii)G-1 in exercise of powers conferred on it under section 41(1) of the Act. Entry No. 136 of the schedule appended to the said notification is directly relevant for the purpose of deciding this petition. Column Nos. 4, 5 and 6 of Entry 136 will be shown immediately after Columns Nos. 1, 2 and 3 thereof. Entry No. 136 of the schedule appended to the said notification is directly relevant for the purpose of deciding this petition. Column Nos. 4, 5 and 6 of Entry 136 will be shown immediately after Columns Nos. 1, 2 and 3 thereof. Serial Classes of Sales or Purchases Exemptionwhether No. of whole or part Entry of tax No. 1 2 3 136.(1)(a) Sale, by a registered dealer, being an industrial unit set up in the developing regions of the State of Maharashtra and certified by the State Industrial and Investment Corporation of Maharashtra Limited or as the case may be the relevant Regional Development Corporation as an eligible unit under the 1979 Scheme or the 1983 Scheme falling under the Package Scheme of incentives and to whom a certificate of entitlement has been granted by the Commissioner for the purposes of this entry, of goods manufactured in the said unit, made during the period covered by the certificate of entitlement. Whole of Tax (b) Sales of any goods being raw materials as explained in Explanation-II given below by a registered dealer to a registered dealer being an eligible industrial unit referred to in Clause (a) during the period covered by the Certificate of Entitlement. Whole of Tax (c) Purchase of any goods being raw materials as explained in Explanation-II given below, by a Registered dealer, being an eligible industrial unit referred to in Clause (a), from an unregistered dealer, during the period covered by the certificate of entitlement. Whole of Tax 2.(a) Sale, by a registered dealer, being an Industrial Unit set up in the developing regions of the State of Maharashtra and certificated by the State Industrial and Investment Corporation of Maharashtra Limited or as the case may be, the relevant Regional Development Corporation as an eligible unit under the 1988 Scheme falling under the Package Scheme if incentives and to whom a certificate of entilement has been granted by the Commissioner for the purpose of this entry, of goods manufactured in the said unit and of scrap goods, made during the period covered by the certificate of entitlement. Whole of tax (b) Sales of any goods being raw material as explained in Explanation II given below by a registered dealer to a registered dealer being an eligible industrial unit referred to in Clause (a) during the period covered by the certificate of entitlement. Whole of tax (b) Sales of any goods being raw material as explained in Explanation II given below by a registered dealer to a registered dealer being an eligible industrial unit referred to in Clause (a) during the period covered by the certificate of entitlement. Whole of tax (c) Purchase of any goods being raw materials as explained in Explanation II given below, being an eligible industrial unit referred to in Clause (a), from an un-registered dealer, during the period covered by the certificate Whole of tax of entitlement. Conditions G.N.F.D. No. w.e.f. and date 4 5 6 If the selling dealer incorporates the GNFD.No.STA-1080 21/RES 8, w.e.f. following declaration in addition to dated the 5th July, 1980 and 5-7-1980 the certificate under section 12-A Government Notification of the Bombay Sales Tax Act, 1959, Department No. STA-1081/232/ in the Sales bill or cash memo RES-8, dated 25th June, 1981, randum issued by him in respect and Government Notification Finance of the sale, namely : Department No. STA 1088/173/ This sale is exempt from tax under Taxation -2 dated 3rd October, the provision of Entry No. 136 in the 1988, dated 5th October, 1988 Schedule appended to Government and GNFD STA. 1089/92/Taxation Notification, Finance Department dated 9-2-1990. No. STA-1059(iii)G-1, dated the 28th December, 1959 and the buyer, including any subsequent buyer purchasing these goods (irrespective of whether the buyer or any of the subsequent buyers holds a Trade Mark or a patent in respect of the goods so purchased or holds a patent in respect of the method or process of manufacturing the goods purchased.) (i) Shall not be entitled to claim drawback, set off or refund under any provisions of the Bombay Sales Tax Act, 1959, or the rules framed thereunder, in respect of purchaser of these goods, and (ii) shall not give any certificate in form 31 under the Bombay Sales Tax Rules, 1959 to any subsequent purchaser of these goods. 2. If the selling dealer fulfils the conditions specified in the Appendix hereto. 1. 2. If the selling dealer fulfils the conditions specified in the Appendix hereto. 1. If the purchasing dealer furnished to the 5-7-1980 selling dealer a declaration in form to date BC bearing the seal and signature of the Sales Tax Officer or the Assistant Commissioner of Sales Tax as the case may be, having jurisdiction over the place of business of the purchaser, declaring inter alia that the goods are required for use in the manufacture of goods at the said unit for sale within the State or in the course of inter-State trade or commerce or in the course of export out of the territory of India (or for transfer outside the State) or in packing of goods so manufactured and that the purchase is made during the period covered by the certificate of entitlement. 2. The declaration furnished by the purchasing dealer shall be in printed form and shall be serially numbered in the chronological order of issue and the dealer shall keep mechanically duplicated copies or carbon copies of such certificates duly signed and dated and if required by the Sales Tax Officer or the Assistant Commissioner of Sales Tax as the case may be in whose jurisdiction the unit is situated, produce before him such copies. 3. If the purchasing dealer fulfils the conditions 5-7-1980 specified in the Appendix hereto to date (1) If the goods are used by the purchasing dealer in the manufacturing of goods of the said industrial unit for sale within the State or in the course of inter-State trade or commerce or in the course of export out of the territory of India (or transfer outside the State) or in packing of goods so manufactured. (2) If the purchasing dealer fulfils the conditions specified in the Appendix hereto. (2) If the purchasing dealer fulfils the conditions specified in the Appendix hereto. (1) If the selling dealer incorporates the following 5-7-1980 declarations in addition to the certificate under to date section 12-A of the Bombay Sales Tax Act, 1959, in the sales bill or cash memorandum issued by him in respect of the sale namely :--- This sale is exempt from tax under the provisions of Entry No. 136 in the schedule appended to Government Notification, Finance Department No. STA-1059(iii)G-1, dated the 28th December, 1959 and the buyer including any subsequent buyer purchasing these goods (irrespective of whether the buyer or any of the subsequent buyer holds Trade mark or a patent in respect of the goods so purchased or holds a patent in respect of the method or process of manufacturing the goods purchased. (i) shall not be entitled to claim drawback, set-off or refund under any provisions of the Bombay Sales Tax Act, 1959, or the rules framed thereunder, in respect of the purchase of these goods, and (ii) shall not give any certificate in form 31 under the Bombay Sales Tax Rules, 1959 to any subsequent purchaser of these goods". (2) If the selling dealer fulfils the conditions specified in the Appendix hereto. (1) If the purchasing dealer furnishes to the selling dealer a declaration in Form BC bearing the seal and signature of the Sales Tax Officer or the Assistant Officer or the Assistant Commissioner of Sales Tax as the case may be, having jurisdiction over the place of business of the purchaser, declaring, inter alia, that the goods are required for use in the manufacture of goods at the said unit for sale within the State or in the course of inter-State trade or commerce or in the course of export out of the territory of India (or for transfer outside the State) or in packing of goods so manufactured and that the purchase is made during the period covered by the certificate or entitlement. (2) The declaration furnished by the purchasing dealer shall be in printed form and shall be serially numbered in the chronological order of issue and the dealer shall keep mechanically duplicated copies or carbon copies of such certificates duly signed and dated and if required by the Sales Tax Officer or the Assistant Commissioner of Sales Tax as the case may be in whose jurisdiction the unit is situated, produce before him such copies. (3) If the purchasing dealer fulfils the conditions specified in the Appendix hereto. 1. If the goods are used by the purchasing dealer in the manufacture of goods at the said industrial unit for sale within the State or in the course of inter-State trade or commerce or in the course of export out of the territory of India (or for transfer outside the State) or in packing of goods so manufactured. 2. If the purchasing dealer fulfils the conditions specified in the Appendix hereto. Explanation I. For the purpose of this entry "developing regions" means the regions mentioned and classified as such in Government Resolution, Industries, Energy and Labour Department, outlining the 1979 Scheme, the 1983 Scheme or the 1988 Scheme as, the case may be. Explanation II. "Raw materials" include Components, intermediate goods, substances, consumables, stores and packing materials which are utilised in the process of manufacture and packing of finished products by the eligible industrial unit referred to in sub-entries (1) or (2), as the case may be. Explanation III. For the purpose of sub-entry (2) of this entry, the word "manufacture" or its cognate expression used in this entry would cover processes specified in Clauses (i),(vii), (xviii) and (xviii-A) of Rule 3 of the Bombay Sales Tax Rules, 1959. Appendix A. Where the dealer conducting the industrial unit for which the certificate of entitlement has been granted (which unit is hereafter in this Appendix referred to as the said industrial unit") has additional place or places of business either within the jurisdiction of the same Sales Tax Officer/ Assistant Commissioner of Sales Tax or within the jurisdiction of different Sales Tax Officer/Assistant Commissioner of Sales Tax the dealer shall furnish a separate return in respect of said industrial unit and shall not be entitled to the permission to furnish consolidated return as far as the said industrial unit is concerned. B. Separate book of accounts shall be maintained in respect of the said industrial unit. C. No Authorisation, Recognition or Permit shall be obtained in respect of the said industrial unit where the dealer has no additional place of business, and where the dealer has additional place or places of business and has obtained Authorisation, Recognition or as the case may be, a Permit, he shall not use the Authorisation, Recognition or as the case may be, the Permit for making purchases for the purpose of the business carried on by the said industrial unit. d. Where the dealer has affected any purchases free of tax on furnishing a declaration in form BC referred to in Column (4) of Clause (b) each of sub-entries (1) and (2) above, he shall not be entitled to claim any drawback, set off or refund in respect of such purchases under a ny provisions of the Bombay Sales Tax Act, 1959 or the Rules framed thereunder." By the above referred notification read with Entry 136 thereof as amended from time to time, it was clearly provided that sales and purchases by the registered dealers covered under the said entry were totally exempted from whole of the tax subject to the conditions specified in Column 3 thereof. The said Entry 136 was re-cast and the revised Entry 136 is operative with effect from 1st April, 1993. The changes made are of no material consequence for our purpose. 8(B). Entry 54 in the State List i.e. List II appended to the Seventh Schedule of the Constitution of India reads as under : "54. Taxes on the sale or purchase of goods other than newspapers, subject to the provisions of Entry 92-A of List I." By the Constitution (Sixth Amendment) Act, 1956, a new Entry No. 92-A was inserted in the union list so as to empower the Union Legislature to levy taxes on the sale or purchase of goods other than newspapers where such sales or purchases took place in the course of inter-State trade or commerce. By the said Constitution Amendment Act, the present Entry No. 54 in the State List was substituted and the legislative power of the State was confined to levy "taxes on the sale or purchase of goods other than newspapers, subject to the provisions of Entry 92-A of List I. By the same Amendment Act, a new sub-clause (g) was inserted in Clause 1 of Article 269 of the Constitution recognising and/or conferring the power on the Central legislature to levy and collect tax on the sale or purchase of goods other than newspapers where such a sale or purchase took place in the course of inter-State trade or commerce. Such taxes could be assigned by the Central Government to the States in accordance with Clause (2) of Article 269. It is not necessary to refer to sub-Article (3) of Article 269 which was newly inserted in the Constitution by the said Amending Act for the purpose of considering this petition. Article 286 of the Constitution as amended provided that no law of a State shall impose or authorise the imposition of a tax on the sale or purchase of goods where such sale or purchase took place outside the State or in the course of the import of the goods outside the State or in the course of import of the goods into or export of the goods out of the territory of India. 8(C). The Central Sales Tax Act, 1956 (Act No. 74 of 1956) was enacted by Parliament. The said Act came into force on 21st December, 1956. The said Act also provided for definition of the expression "sale" by section 2(g) of the Act. Section 6-A of the Act provided that no dealer shall be liable to pay tax under the Central Sales Tax Act merely because transfer of goods from one State to another unless such transfer had taken place as a result of sale. Section 8 of the said Act prescribed rate of tax on sales in the course of inter-State trade or commerce. Section 8 of the said Act prescribed rate of tax on sales in the course of inter-State trade or commerce. Section 8(5) of the Act empowered the State Government to issue a notification in public interest so as to provide that no tax under the Central Act shall be payable by any dealer having his place of business in the State in respect of the sales by him in the course of inter-State trade or commerce from any such place of business of any such goods or class of goods as may be specified in the notification or that such sales shall be subjected to lower rate of tax. 8(D). On 2nd February, 1983, the Constitution (Forty Sixth Amendment) Act, 1982 received the assent of the President of India. By the said Act sub-clause (b) was inserted in Article 269 of the Constitution of India so as to empower the union Parliament to levy tax on consignment of goods (where the consignment was to the person making it or to any other person) where such consignment took place in the course of inter-State trade or commerce. By the said Constitution Amendment Act, sub-clause (29-A) was inserted in Article 336 of the Constitution. By the said article, enlarged definition of the expression "tax on the sale or purchase of goods" was provided. By the said Constitution Amendment Act, sub-clause (29-A) was inserted in Article 336 of the Constitution. By the said article, enlarged definition of the expression "tax on the sale or purchase of goods" was provided. The said definition reads as under : (29-A) "tax on the sale or purchase of goods" includes--- (a) a tax on the transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration; (b) a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract; (c) a tax on the delivery of goods on hire-purchase or any system of payment by instalments; (d) a tax on the transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration; (e) a tax on the supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration; (f) a tax on the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being good or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service is for cash, deferred payment or other valuable consideration. and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made." In our opinion, these are the only provisions of law which have some bearing on the problems under consideration of this Court. Relevant Case-law 7. We shall now refer to the authorities cited at the Bar by Shri N.B. Seervai, the learned Counsel for the petitioners. 8. In (The State of Maharashtra v. Gannon Dunkerley Co. (Madras) Ltd.)1, A.I.R. 1958 S.C. 560, the Supreme Court construed entry 48 in List II forming part of Schedule VII to the Government of India Act, 1935 reading as under :-- "Taxes on the sale of goods". 8. In (The State of Maharashtra v. Gannon Dunkerley Co. (Madras) Ltd.)1, A.I.R. 1958 S.C. 560, the Supreme Court construed entry 48 in List II forming part of Schedule VII to the Government of India Act, 1935 reading as under :-- "Taxes on the sale of goods". While construing the said entry, the Court held that the expression "sale of goods" used in the said entry was liable to be construed in the sense in which the said expression was understood in English and English Law. While referring to Chalmer's well known treatise on the Sale of Goods, the Apex Court held that the essence of sale was the transfer of the property in a thing from one person to another for a price. The Supreme Court held that in order to constitute a sale, it was necessary that there should be transfer of title to the goods by one person to another for the monetary consideration. In para 26 of the judgment, T.L. Venkatarama Aiyar, J., speaking for the Court observed that the power to enact a law with respect to tax on sale of goods under Entry 48 must, under it be intra vires, must be one relating in fact to sale of goods, and accordingly, the Provincial Legislature could not in the purported exercise of its power to tax sales, tax transactions which were not sales by merely enacting that they shall be deemed to be sales. It is thus not open to the State Legislature to enact a law or levy tax on deemed sales if the transaction does not amount to sale in fact as understood under the Sale of Goods Act. In other words, the concept of sale as provided in the Indian Sale of Goods Act, 1930 was treated as incorporated in Entry 48 of List 2, Schedule 7 to the Government of India Act, 1935. This decision is of considerable relevance for the purpose of understanding the constitutional history having bearing on the subject and for understanding the background which led to the enactment of the Constitution (Forty Sixth Amendment) Act, 1982 and insertion of sub-clause (29-A) in Article 366 of the Constitution. This decision is of considerable relevance for the purpose of understanding the constitutional history having bearing on the subject and for understanding the background which led to the enactment of the Constitution (Forty Sixth Amendment) Act, 1982 and insertion of sub-clause (29-A) in Article 366 of the Constitution. We are, firmly of the opinion that even the extended definition of the expression 'tax on sale or purchase of goods' does not assist the respondents in this case so as to treat mere branch transfers or transfer of stocks from one branch to another as sale of goods. As far as consignment of tax is concerned, we need say nothing in this judgment save and except referring to the obvious fact that Entry 54 in List II, 7th Schedule to the Constitution in terms provides that the power conferred under the said entry was subject to the provisions of Entry 92-A, List I and the subject matter of consignment tax is directly the subject matter of specific union entry contained in Entry 92-B of List I. 9. In (M/s. Gannon Dunkerley and Co. and others v. State of Rajasthan and others)2, (1993)1 S.C.C. 364 , the Supreme Court interpreted various provisions of the Constitution (46th Amendment) Act, 1982. In para 31 of the said judgment, S.C. Agrawal, J., speaking for the Bench of five Judges of the Supreme Court observed that the legislative power of the States under Entry 54 of the State List was subject to two limitations - one flowing from the entry itself which made the said power "subject to the provisions of Entry 92-A of List I" and the other flowing from the prohibition contained in Article 286. Parliament alone has the power to make a law in respect of taxes on sale or purchase of goods where such sale or purchase takes place in the course of inter-State trade or commerce. The State legislature has no power to levy tax in respect of transactions of sale or purchase which takes place in the course of inter-State trade or commerce. No tax can be levied by the State Legislature in respect of sales or purchase of goods which take place outside the State. Reference may be made, if necessary, also to sub-clause 29-A of Article 366 and Article 269(G) as well as Article 269(h) of the Constitution. 10. No tax can be levied by the State Legislature in respect of sales or purchase of goods which take place outside the State. Reference may be made, if necessary, also to sub-clause 29-A of Article 366 and Article 269(G) as well as Article 269(h) of the Constitution. 10. In (Century Club, Cubbon Part, Bangalore-11 and others v. The State of Mysore and another)3, A.I.R. 1967 Mysore 25, it was held by the Division Bench of the Mysore High Court that the State Legislature had no power to create a fiction while enacting a legislation under Entry 54 of List II which had the effect of transgressing the constitutional limitations. In other words, the legislature cannot do indirectly what it cannot do directly. Thus, the legislature has no jurisdiction to provide for levy of tax on transactions which are not in reality sales or purchases. The High Court of Madras took the same view in the case of (The State of Tamil Nadu v. A. Rafeeq Ahmed Co.)4, in (1983)52 Sales Tax Cases 281. The High Court of Andhra Pradesh took the same view in the case of (Tholasi Venkatamunuswamy Chetty Sons and others v. The Commercial Tax Officer, Chittor and another)5, reported in (1974)33 Sales Tax Cases 497.