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TMI Blog1956 (9) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... ering the object of the act, the meaning attached to sale and the scheme of assessment provided for generally, there is reason for the petitioners to complain of peculiarity and arbitrariness in the principle and procedure applied to them. There is no dispute about the assessment being in conformity with what is provided for by the statute and the rules made by Government in exercise of the power conferred on it by the statute. What has to be considered therefore is whether these are unauthorised, unconstitutional or unwarranted by the facts admitted or proved. Three decisions, one of the Madras High Court in Gannon Dunkerley v. State of Madras[1954] 5 S.T.C. 216; A.I.R. 1954 Mad. 1130., another of the Nagpur High Court in Pandit Banarsi Das v. State of Madhya Pradesh[1955] 6 S.T.C. 93. and the third of the Hyderabad High in Jubilee Engineering Co. Ltd. v. Sales Tax Officer, Hyderabad[1956] 7 S.T.C. 423; A.I.R. 1956 Hyd. 79., were strongly relied upon in support of the objections to the Act and the levy of the tax. In each of these, assessments similar to these now in question under analogous enactments were quashed; but the reasons for this are not identical. In the Hyderabad ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioners are entitled to relief. A definite and express restriction on the taxation of goods for export and in the course of inter-State trade is placed by Article 286 and to that extent the operation of the State legislation is curtailed. The continuance of laws existing on the date of the Constitution is stated in Article 372 to be "subject to the provisions of the Constitution". Therefore it is now open to the petitioners to make out that what is guaranteed or enjoined by these will be infringed by giving effect to the statute. The right affected is said to be equality before the law and equal protection of the laws conferred by Article 14. In Bell's Gap Railroad Company v. Commonwealth of Pennsylvania[1890] 134 U.S. 232., Bradley, J., observed: "The provision in the 14th Amendment that no State shall deny to any person..............equal protection of the laws, was not intended to prevent a State from adjusting its system of taxation in all proper and reasonable ways.......All such regulations, and those of like character, so long as they proceed within reasonable limits and general usage, are within the discretion of the State Legislature or the people of the State in fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um percentages: (a) in the case of an electrical contract 20 per cent. (b) in the case of a structural contract 30 per cent. (c) in the case of a sanitary contract 33 1/3 per cent. (d) in the case of other contracts 30 per cent." By a notification dated 11th April, 1952, Government has fixed percentages of the total cost at which deduction is to be allowed with respect to the contracts. This is not strictly in compliance with the requirement of the rule as what has to be fixed is the proportion between cost of labour and cost of material and not the deduction allowable for labour with reference to the total value of work carried out. The rule also contemplates determination of rates from time to time and from area to area according to prevailing conditions. A uniform rate is prescribed for the whole State and for the first time in 1952 so that a doubt may reasonably arise about the Government having applied its mind to the local conditions, differences in wages and prices between one place and another and periodic fluctuations in these. This cannot be considered a defect which has prejudiced the petitioners as the maximum allowance permitted by the rules has been granted to them. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be repugnant to Article 14. Justice Brewer pointed out in Gulf of Colorado Santafe Railway Co. v. Ellis[1897] 165 U.S. 150 at p. 165. : "The mere fact of classification is not sufficient to relieve a Statute from the reach of the equality clause of the 14th Amendment and...... ........it must appear not only that a classification has been made but also that it is one based upon...........reasonable ground, some difference which bears a just and proper relation to the attempted classification and is not a mere arbitrary selection." The principle of equality may be offended on account of dissimilarity of treatment in like instances or same treatment in cases between which resemblance is lacking. Cumberland Coal Co. v. Board of Revision(1931) 284 U.S. 23. is a case of the latter kind. It was considered that the deliberate and systematic assessment for taxation of all the coal lands in a township at the same sum per acre notwithstanding differences in actual or market value due to distances from transportation facilities and other factors, violates the equal protection clause of the 14th Amendment, although none of such lands are assessed for more than their fair market value. Hug ..... X X X X Extracts X X X X X X X X Extracts X X X X
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