1976 (7) TMI 153 - HC - VAT and Sales Tax

Summary

Issues:
1. Constitutionality of the inclusion of tapioca in the First Schedule to the Kerala General Sales Tax Act, 1963.
2. Allegation of violation of Article 301 and Article 14 of the Constitution.
3. Suspension of proceedings due to the Presidential Order dated 27th June, 1975.
4. Challenge to the proviso to entry No. 72 under Article 14 of the Constitution.
5. Impact of taxation on intra-State sale on freedom of trade and commerce.
6. Allegation of the tax being a colorable exercise of power to prevent export of tapioca.

Analysis:
1. The judgment upholds the inclusion of tapioca in the First Schedule to the Kerala General Sales Tax Act, 1963, as constitutional. The petitioner's contention regarding the alleged violation of Article 301 and Article 14 of the Constitution is addressed. The court emphasizes the need for prima facie evidence of contravention of fundamental rights before suspending proceedings due to the Presidential Order.

2. The proviso to entry No. 72, exempting small-scale traders from tax if turnover is below a specified amount, is analyzed. The court cites precedents emphasizing the reasonableness of classification in taxation statutes. It is highlighted that a reasonable classification based on the subject and purpose of the enactment is permissible under the law.

3. The judgment delves into the impact of taxation on intra-State sale on freedom of trade and commerce. Various Supreme Court decisions are referenced to establish that not all taxes directly impede the free movement of goods. The court dismisses the argument that the tax on tapioca restricts movement within or across State boundaries.

4. The petitioner's claim of the tax being a colorable exercise of power to prevent export of tapioca is rejected. The court cites a Supreme Court decision to emphasize that the motive behind imposing a tax does not affect its validity if the authority has the power to levy the tax.

5. The judgment concludes by dismissing the original petitions, stating that no other substantial points were raised. The court rules in favor of upholding the legislation regarding the taxation of tapioca, with no order as to costs.