- (1.) The appellant, a Limited Company was a registered dealer under the central Sales Tax Act, 1956 (in brief the "act). It was a manufacturer as well as a dealer in liquor. It was selling liquor to dealers in pondicherry, Karakkal and Goa. For the year 1962-63, its total turnover of sales to places outside the State of Kerala, the State in which the appellant's registered office is situate, was for Rs. 8,28,859.40 P. Out of this the value of the liquor sold to Goa after 21/01/1963 was Rs. 22,622.50 P. and the value of the liquor sold to Pondicherry including Karakkal after 16/08/1962 was Rs. , 1,15,516.95 P. Pondicherry became Union territory with effect from 16/08/1962 as a result of the Constitution (Fourteenth Amendment) Act, 1962 and Goa became Union territory with effect from 20/01/1961 as a result of Constitution (Twelfth Amendment) act, 1962. The Act was brought into force in Goa with effect from 21/01/1963 and in Pondicherry from 1/06/1963.
(2.) S. 8 of the Act prescribes rates of tax on inter-State trade. The rate of tax on the sale of goods of the description mentioned in Ss. (3) of that S. to a registered dealer was I per cent of the turnover during the relevant year. Ss. (2) of that S. as it stood during the relevant period provided that the rate of tax for sale of goods other than the declared goods and those which did not fall under Ss. (1) was seven per cent or the rate applicable to such sale of goods under the State's Sales tax law whichever was higher. During the 'relevant year, the rate of tax under the State law on the sale of liquor was 40 per cent of the turnover. Sub-section 3 (b) of that S. provides : "The goods referred to in clause (b) of Ss. (1) (b) are goods of the class or Classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for resale by him or subject to any rules made by the central government in this behalf, for use by him in the manufacture or processing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power. "sub-section (4) provides that the provisions of Ss. (1) relating to lower rate shall not apply unless the dealer selling the goods furnishes a declaration in the prescribed form that is the 'c' form in the prescribed manner. Sub-section (5) says : "Notwithstanding anything contained in this section, the State government may, if it is satisfied that it is necessary so to do in the public interest, by notification in the Official Gazette, direct that in respect of such goods or classes of goods as may be mentioned in the notification and subject to such conditions as it may think fit to impose, no tax under this Act shall be payable by any dealer having his place of business in the State in respect of the sale by him from any such place of business of any such goods in the course of inter-State trade or commerce or that the tax on such sales shall be calculated at such lower rates than those specified in Ss. (1) or Ss. (2) as may be mentioned in the notification. "
(3.) In the exercise of the powers conferred by S. 8 (5) of the Act, the State government of Kerala issued a notification on 17/12/1962 fixing the tax on sales from that State to dealers in Goa at I per cent of the turnover subject to the condition that the seller should produce before theassessing authority within three months from the end of the assessment year, a declaration duly signed by the purchaser in the form appended to the notification. A similar notification was issued on 23/02/1963 in respect of the sales to dealers in Pondicherry.;