EAST INDIA SANDAL OIL DISTILLERIES LTD Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) The constitutionality of section 8 of the Central Sales Tax, (LXXIV of 1956) (hereinafter to be called the Act for the sake of convenience) is challenged in these petitions.

(2.) Most of the petitioners carry on business in jaggery and export it to several States in the country, the others being dealers either in groundnut-oil, rice or niger seeds. While submitting returns, they claimed exemption in respect of the part of the turnover covering sales of inter-State character on the plea that the tax had already be n paid on the first sales. The exemption was disallowed on the ground that tax was leviable as the sales were subject to tax under section 8 of the Central Sales Tax Act. Impugning the order of the assessing authorities, the aggrieved assessees have put in these petitions.

(3.) The principal contention pressed upon us is that section 8 of the Central Act, which enables the Revenue to tax transactions in respect of which single point tax alone was leviable under the State law, is unconstitutional in that it is violative of the equal protection of laws embodied in Article 14 of the Constitution. It is maintained that, by reason of section 8, while dealers in several kinds of goods in some of the States are exempt from sales tax, dealers in the same commodities in this State are liable to pay tax on their inter-State sale , not with standinh the fact that tax is leviable on these goods in this State only at a single point and in fact tax was collected in the State on the first sales. Consequently dealers of one State are given preference over those of another and this amounts to a discrimination which is not permissible under Article 14 of the Constitution. The assessees of other States carrying on business in the same commodities enjoy an advantage over those of the State of Andhra Pradesh and this constitutes denial of the equal protection of laws to assessees of this State similarly situated, continues the counsel for the petitioners. For an appreciation of these points, it is useful to extract the relevant provisions of the Central Act and the Andhra Pradesh General Sales Tax Act (hereinafter to be called the State Act).