S.S. Sandhawalia, C.J. - (1.) THE constitutional validity of the first proviso to Section 5(1) of the Punjab General Sales Tax Act, 1948, as recently amended by Punjab Act No. 11 of 1976 has been the sole subject -matter of debate in this set of twenty -one connected writ petitions.
(2.) IT is unnecessary to advert to the facts and indeed Mr. H.L. Sibal whilst presenting the main argument on behalf of the Petitioner did not make any reference thereto. Nevertheless to give the barest factual background on which the primary legal question aforesaid rest it may suffice to advert briefly to the averments in CWP No. 3368 of 1978. The Petitioner herein is a partnership concern duly registered under the Punjab General Sales Tax Act (hereinafter referred to as the Act) and engaged in the business of the purchase and sale of tubewell fittings like monoblock electric motors, starters etc. When Ailing the requisite quarterly returns under Section 10(3) of the Act, the Petitioner claimed electric motors and starters to be liable to tax at 6 per cent only as these did not fall in Schedule 'A' of the said statute. However, the assessing authority subsequently treated electric motors and starters as goods falling in Schedule 'A' to the Act and consequently assessed them at the rate of 10 per cent instead of the 6 per cent as claimed by the Petitioner. - -vide assessment order, annexure P. 1 dated the 15th of January, 1978. Aggrieved by this enhanced assessment, the Petitioner and the others have presented this set of writ petitions. To appreciate the legal contentions noticed hereafter it becomes necessary to refer albeit briefly to the legislative history of the provisions. When originally enacted in 1948 Section 5(1) of the Act read as follows: 5(1) Rate of tax. Subject to the provisions of this Act, there shall be levied on the taxable turn -over every year of a dealer a tax at such rates as the Provincial Government may by notification direct. (2) * * * * By the East Punjab General Sales Tax (Amendment) Act. 1956 (Punjab Act No. 3 of 1956), the concept of 'luxury goods' was introduced in the Act by adding a proviso to Section 5(1) of the Act. In the objects and reasons of the said Act it was pointed out that the Government being committed to a socialistic pattern of society and consequently gradual reduction in the disparity of wealth, considered it necessary that the rate of sales tax should not be uniform on all commodities. It was, therefore, decided to double the rate of sales tax on luxury goods and consequently the added proviso laid down that a tax just double the rate of tax so notified on the ordinary goods may be levied on the sale of luxury goods as specified in Schedule 'A' appended to the Act from such date as the State Government may by notification direct. Subsequently changes in the statute also followed to which reference, however, is unnecessary and suffice it to mention that prior to the impugned amendment the section read as follows: 5(1) Subject to the provisions of this Act, there shall be levied on the taxable turnover of a dealer a tax at such rates not exceeding seven paise in a rupee as the State Government may by notification direct: Provided that a tax at such rate, not exceeding ten paise in a rupee, as may be so notified may be levied on the sale of luxury goods as specified in Schedule 'A' appended to this Act from such date as the Government may by notification direct. The State Government after giving by notification not less than twenty days notice of its intention so to do may by like notification add to or delete from this Schedule and thereupon this Schedule shall be deemed to have been amended accordingly.
(3.) HOWEVER , in its practical application the classification of luxury goods posed sizable problems and the matter was carried to Court in a number of cases. To mention only a few in Amir Chand Om Parkash v. The Assessing Authority Amritsar and Anr., (1973) 31 S.T.C. 232 M.R. Sharma J., took the view that Dhoop and Agarbatti could not be regarded as luxury goods within the meaning of the proviso to Section 5(1) of the Act and therefore, could not be taxed at the enhanced rate. Again in Science House v. The Assessing Authority Ludhiana, (1973) S.T.C. 233, R.N. Mittal J., took the view that beakers, test tubes flasks, jars, etc., might be glasswares but they were not luxury goods.;