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TMI Blog1991 (7) TMI 341X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. It also found a place at the same time as item No. 35 in the Second Schedule to the Act. According to the petitioner it purchased refined oil in the course of inter-State trade or commerce. It also purchased refined oil manufactured within the State of Karnataka. The items stated in the Second Schedule to the Act are the subject of a single point tax at the stage of first sale. Until the introduction of the impugned provision refined oil was subjected to tax at the point of first sale. By virtue of the impugned provision the same refined oil when sold in the State is again subjected to tax at the point of last sale. This according to the petitioner brings about discrimination between similarly situated dealers. In addition the provision is a measure which affects the inter-State trade in the said goods. The petitioner contends that the impugned provision is violative of articles 14, 301 and 304(b) of the Constitution. Article 304(b) of the Constitution is attracted because the amendment Act by which the impugned provision was brought into the Act did not receive President's assent even though the said provision affects the inter-State trade. 3.. Therefore, we have to consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in the State, according to Sri Srinivasan, would normally sell the goods to a dealer who in turn would sell the same in retail. We can take judicial notice of the fact that a similar procedure is normally adopted by those who bring in goods from another State and before the imported goods reach the consumer, mostly the goods would have undergone more than one dealing in the State. This apart, the taxing provision nowhere levies tax in respect of the same transaction twice over. The sales tax is a tax on the sale or purchase. While section 5(3)(a) selects the first point of sale for the levy, the impugned provision selects the last sale for the levy. Both are independent of each other. However, the impugned provision refers to section 5(3)(a) for the purpose of identifying the subject-matter of levy under the impugned provision. The impugned provision reads as if it is an exception or supplemental to section 5(3)(a). The goods which are enumerated in the Eighth Schedule are treated as a class apart for the purpose of levy of tax under the Act at two stages and this provision, if at all, is comparable to section 5(1) of the Act wherein certain goods are subjected to tax under multi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04(b) is again rooted in the earlier contention. Because of the alleged discrimination against locally manufactured goods, it is contended that the goods brought into the State stood favoured, thus the impugned provision adversely affected the inter-State trade; therefore the impugned provision should have been assented to by the President. In view of our finding on the first ground that there is no discrimination and the alleged burden caused by the impugned provision is the result of fortuitous circumstances depending upon the number of dealings in the said goods this contention also has to fail. Sri Srinivasan, learned senior counsel, relied upon the decision of the Supreme Court in Indian Cement Ltd, v. State of Andhra Pradesh [1988] 69 STC 305; AIR 1988 SC 567. The State of Andhra Pradesh issued a notification reducing the rate of sales tax in respect of cement manufactured by the factories situated in the said State and sold to the manufacturing units situated within the said State for the purpose of manufacture of cement products. At the same time the tax leviable in respect of the sales of cement in the course of inter-State trade or commerce was also reduced. Similar notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then article 304 of the Constitution will not come into the picture at all. See the observations in Nataraja Mudaliar's case [1968] 22 STC 376 (SC) at 390; [1968] 3 SCR 829 at 843-846; AIR 1969 SC 147 at 156-158 of the report. It has to be borne in mind that there may be differentiations based on consideration of natural or business factors which are more or less in force in different localities. A State might be led to impose a higher rate of tax on a commodity either when it is not consumed at all within the State or if it is felt that the burden falling on consumers within the State, will be more than that and large benefit is derived by the revenue (sic). The imposition of rates of sales tax is influenced by various political, economic and social factors. Prevalence of differential rates of tax on sales of the same commodity cannot be regarded in isolation as determinative of the object to discriminate between one State and another. Under the Constitution originally framed, revenue from sales tax was reserved for the States." Thereafter, while considering article 304 it was observed at page 101 of STC (832 of AIR) that: "The object is to prevent discrimination against the im ..... X X X X Extracts X X X X X X X X Extracts X X X X
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