V.S. KOTWAL, J.

( 1 ) CHALLENGE to the vires of section 13aa of the Bombay Sales Tax Act, 1959 as introduced by maharashtra Act No. 28 of 1982 essentially based on the main plank of legislative competency as also in the context of article 301 of the Constitution of India is the centre of controversy generated in all these three petitions, which in turn revolves around the construction of the said provision in the context of other provisions of the Bombay Sales Tax Act (hereinafter referred to as the "said Act") as also item No. 92-B of the Union List and item No. 54 of the State List in the seventh Schedule to the Constitution as prescribed under article 246 thereof.

( 2 ) SINCE identical contentions are raised in all the petitions as also same grounds were canvassed at the hearing and the controversy falls and can be resolved entirely on the common pattern, it is obviously justified and appropriate to dispose of all these three petitions by the common judgment. Writ Petitions Nos. 2114 of 1983 and 2644 of 1984 were filed on the original side of this Court while other petition was filed on the appellate side. By appropriate order the said two petitions from the original side have been transferred for hearing to this Court and that is how all the three petitions ar clubbed and are heard together.

( 3 ) SINCE the factual aspect is not very much under controversy whereas the main attack relates to the various provisions of the said Act, it would become unnecessary to have a detailed reference to all features on facts and as such only a few landmarks can well be indicated.

( 4 ) WRIT Petition No. 2114 of 1983 is filed by the Wipro Products Limited, a company incorporated under the Companies Act having its registered office at Bombay. The said company manufacturers and deals in vanaspati, refined oil and soaps. They have their factory at Amalner in Jalgaon district in the State of Maharashtra. The company, however, has established their marketing depots not only in the State of Maharashtra but also outside and in particular in madhya Pradesh, Karnataka and Andhra Pradesh. The company is required to purchase vegetable non-essential oil (VNE oil) from the State Trading Corporation of India as also from other indigenous local sources. This oil essentially and pre-dominantly constitutes the raw material used in the manufacture of vanaspati oil. The company under the requisite order under the Essential Commodities Act such as Vegetable Oil Products Control Order has been purchasing such imported oil from the depot of the State Trading Corporation, since it is the canalising agent appointed under the provisions of the Import and Export Control Act and also under the Import Control Order for the import of vegetable non-essential oil. The company thereby used the said VNE oil so purchased for the manufacture of vanaspati at their plant located at Amalner in Jalgaon district and in the next phase the company used to despatch vanaspati to their marketing depot in various States.

( 5 ) THE said company is a dealer and trader in the field and is subject to payment of sales tax under the. The company has been paying sales tax at the time of purchase of the said oil as prescribed under the. However, since the oil is used up in the manufacture of vanaspati and other items and since the manufactured goods are despatched outside the State under the provisions of section 13aa of the as introduced by section 2 of the Maharashtra Ordinance no. 8 of 1980 in the year 1982, the company was obliged to pay an additional purchase tax at the rate of 2 paise in a rupee, i. e. , 2 per cent, on the purchase of goods so used in the manufacture. This was in addition to the purchase tax at the rate of 3 per cent initially and thereafter increased to 4 per cent. The petitioner-company thus challenged the validity of the said order directing them to pay additional purchase tax of 2 per cent on the goods already purchase and used in the manufacture of other goods, which are being despatched outside the State and which challenge is essentially based on the vires of section 13aa of the said Act. The order in question is issued by the second respondent-Sales Tax Officer at Jalgaon and that is how he has been impleaded as second respondent.

( 6 ) IN Writ Petition No. 3042 of 1984 filed by the Maharashtra Vegetable Products Limited, a company incorporated under the Companies Act, having their registered office at Dhule are the first petitioner while the second petitioner is the shareholder and director of the said company. The said company manufactures and deals in assorted items like vanaspati, refined oil and soaps. They have their factory located at Dhule in the State of Maharashtra and they have their marketing depots at Indore in Madhya Pradesh and the commission agents in other States. The second respondent whose order is being impugned is the Sales Tax Officer having jurisdiction over the area of Dhule city. The company is registered under section 22 of the said Act and holds a certificate of registration in addition to which it also holds a recognition certificate under section 25 of the said Act.

( 7 ) THIS company also purchases VNE oil and vanaspati is manufactured out of the said oil, which constitutes about 80 per cent of raw material. They also purchase VNE oil from the State trading Corporation of India, who are the canalising agents for import of the said oil and thus are major suppliers of the said oil to all manufacturers of vanaspati. The bulk of their requirement is being purchased from the corporation and they are registered as dealer under the act whereas remainder of requirement is purchased from the other dealers, who are also registered under the said Act. Vanaspati which is manufactured out of the said oil in their factory at Dhule is partly sold within the State of Maharashtra while remaining quantities are sold outside the State through the petitioners depot at Indore or through the commission agents at different places outside Bombay. On the same pattern as in the other petition, a grievance is made that they have been required to pay sales tax at the time of purchase of the said raw material earlier at 3 per cent and thereafter at 4 per cent and after introduction of section 13aa they are obliged to pay additional tax of 2 per cent on the purchase of the said raw material, which was done at the initial stage and that is how they are ultimately required to pay the purchase tax in all at the rate of 6 per cent. The Sales tax or purchase tax at 6 per cent is directed by the second respondent. The challenge is on the same pattern about the validity of this order depending on the validity of the provisions of section 13aa of the said Act.

( 8 ) WRIT Petition No. 2644 of 1984 filed on the original side, but tagged along with other petition on the appellate side, is filed by Hindustan Lever Limited incorporated under the provisions of the Companies Act, having registered office at Bombay. The said company manufacturers, markets and deals in vanaspati, soaps, chemicals and agro-chemicals. They have their factories for that purpose located at various places and the factory located at Sewree in Bombay is claimed to be the largest amongst all other factories. The second respondent is the officer of sales tax operating within Bombay city limits. This company also has to purchase VNE oil from within the State of Maharashtra as also from places outside the State for the manufacture of vanaspati. This commodity of oil includes vegetable oil, which does not have any aroma and it includes edible oil like groundnut oil, cotton seed oil as also some items of inedible oil and also solvent extracted oil. These varieties of VNE oil are used by the company in the manufacture of vanaspati and soaps and such oil constitutes the major part of raw material used in the said process of manufacture. These articles, viz. , vanaspati and soaps, are also manufactured in their factory located at Haji Bander, Sewree in the State of Maharashtra. Since they have wide net of distribution of their product all over India they have appointed about 40 clearing and forwarding agents in the country. The company despatches the goods so manufactured from its factory to the clearing and forwarding agents and upon receipt of orders from the redistribution stockists located in different places in the country, despatches the goods from appropriate clearing agents to the concerned redistribution stockists. Thus after the manufacture of goods in the said factory at Sewree, Bombay, possible sale is estimated as likely to take place within the State of maharashtra and retaining that quantity the balance is despatched outside the State of maharashtra for sale. They were also required to pay sales tax at the time of purchase of the said raw material initially at 3 per cent and thereafter at 4 per cent and by virtue of the amended provisions of section 13aa of the said Act they were directed by the second respondent to pay an additional purchase tax at 2 per cent over the raw material, which was purchased at the initial state before it was used in the manufacture of finished goods. The challenge is to the validity of that order essentially based on the validity of section 13aa.

( 9 ) THUS the challenge in all the three petitions is identical revolving around the provisions of section 13aa of the said Act with the ancillary relief of refund of various amounts, which they were required to pay as additional purchase tax or sales tax on the said raw material as directed by the concerned Sales Tax Officers.

( 10 ) AS indicated at the threshold, the predominant plank of the challenge to the said provisions relates to the question of legislative competency and for that purpose Shri Ashok Desai, the learned counsel, who appears for some of the petitioners and Shri Kothari, the learned counsel for others, mainly contended that the mechanics of this additional tax is so apparent inasmuch as the raw material which is already purchased has been subjected to the purchase tax which was already paid and it is thereafter that the said raw material is utilised in the manufacture of finished goods like vanaspati and soaps and in the third phase these are despatched outside the state of Maharashtra by the company either through their own depot or through their clearing agents. Consequently, therefore, there are three different stages; one being initial purchase on which tax is already paid, second is its user and consumption in manufacture of several goods and the third is the despatch or the consignment of the said finished product outside the State of maharashtra. The learned counsel, therefore, submits quite vigorously that the basis for charging additional purchase tax on the initial purchase of raw material is really impermissible and in reality what is charged is the consignment tax because it is only after the manufacture of finished goods utilising the said raw material that the said finished goods are despatched and consigned outside the State of Maharashtra. If that is the real import and that is the real taxable event then it would be exclusively within the jurisdiction and competence of the Parliament under List I under the Seventh Schedule to the Constitutional falling under entry No. 92-B whereas it would be obviously beyond the competence of the State Legislature and an attempt to make it fall under entry No. 54 in the State List is obviously a fallacy and almost a camouflage to anyhow invest the jurisdiction in the authority as also competence in the State Legislature. In other words, it is contended that since it squarely gets a label as consignment tax or a tax on despatch or consignment it would fall under entry No. 92-B of the Union List and thus it would not fall under entry No. 54 of the State List wit the resultant consequence that enactment of this provision of section 13aa under which this additional purchase tax is sought to be levied is beyond the legislative competence. The other plank of challenge is in the context of articles 301, 304 and article 14 of the Constitution.

( 11 ) THE learned Advocate-General, who appears on behalf of the respondents, in all the three petitions countered all these contentions, equally vigorously. According to him, there is an apparent fallacy in this argument advanced on behalf of the petitioners since the reality is sought to be distorted at this stage to anyhow bring the item within the purview of entry No. 92-B of the union List. According to him, the fallacy basically lies on an assumption that it is a tax on despatch or consignment tax. On the contrary it is really the purchase tax on the raw material itself which was purchased earlier. A certain concession is given at that time with a stipulation that if used in the manufacture of finished goods those normally expected to be sold within the state of Maharashtra so that the Government can get some more revenue and if this condition is breached by despatching the goods outside the State for the purpose of sale then the concession which was given at the initial stage stands withdrawn and this purchase tax is placed on the same par with the other taxes and thereby to get into conformity an additional tax of 2 per cent is levied though it must relate back to the purchase of raw material itself and therefore, cannot be styled as despatch or consignment tax. According to the learned Advocate-General, therefore, it would squarely fall under entry No. 54 of the State List and thereby it would be in complete harmony with the legislative competence. There is also no vice of any discrimination or offending any provision of the Constitution. He has also disputed the challenge levelled by the other side in the context of article 301 of the Constitution.

( 12 ) IT would be apparent that the controversy, therefore, ultimately reduces itself to a narrow field concerning the question about true nature of this tax, which is being charged after the raw material is used in the manufacture and at the time of despatch of the finished goods outside the state of Maharashtra, and in that context on a parallel track the controversy also would touch the question as to whether this levy falls in entry No. 54 of the State List or entry No. 92-B of the union List. As observed by narrating factual aspect in all these petitions the under-current is that practically identical raw material viz. , VNE oil, is purchased by the respective companies at which time certain purchase tax is paid. This is admittedly the raw material used in the manufacture of other finished goods like vanaspati and soaps. Further admitted feature is that this raw material is actually used in the manufacture of the said goods and thereafter in the third phase those goods are sent or despatched out of the State of Maharashtra for the purpose of sale either to their counterpart or to their agents. Consequently, therefore, the premise that this oil is essentially the bulk of raw material, used in the manufacture of other goods and after its user the finished goods are despatched outside the State of Maharashtra is undisputed and it is equally undisputed that at the time of initial purchase of raw material the purchase tax is paid, which does not go beyond 4 per cent at all, while the additional tax charged is 2 per cent in the event of happening of the competency as indicated earlier. The merits of the rival contentions, therefore, can be assessed on the anvil of these admitted features and facts.

( 13 ) TO appreciate the thrust of the controversy it would not be inappropriate to consider some of the provisions of the as also relevant entries in the two Lists of the Seventh Schedule to the constitution.

( 14 ) THE Bombay Sales Tax Act, 1959 is enacted to consolidate and amend the law relating to levy of tax on the sale or purchase of certain goods in the State of Bombay. Section 2 contains some definitions. Section 24 deals with authorisation, turnover and sales of registered dealer of the goods, which are either exported or despatched outside the State or are sold to authorised dealer or exporter, and the dealer can then apply for authorisation to the Commissioner and the commissioner in turn issue him an authorisation. An authorised dealer covers the case of registered dealer who holds an authorisation. The declared goods which are sold are as defined in the Central Sales Tax Act. A "dealer" means any person who whether for commission, remuneration or otherwise carries on business of buying and selling goods in the State and includes the Central Government, or any State Government, which carries on such business, and also any society, club or other association of persons which buys goods from or sells goods to its members. This definition contains an exception qua an agriculturist who sells exclusively agricultural produce grown by him and also contains an explanation categorising several bodies such as Bombay Port Trust, Municipal Corporation, etc. , to dispose of goods as unclaimed or confiscated, etc. , who shall also be deemed to be a dealer to certain extent of such disposal. The "goods" includes every kind of movable product not being newspaper or actionable claim or money or stocks, shares or securities and includes growing crops, grass and trees, etc. The "manufacture" means producing, making, extracting, altering, ornamenting, finishing or otherwise processing, treating or adapting any goods any goods, but does not include such manufactures or manufacturing processes as may be prescribed. "purchase price" means the amount of valuable consideration paid or payable by a person for any purchase made including any sum charged for anything done by the seller in respect of the goods. "recognised dealer" means a dealer who holds a recognition. The "recognition" in turn means a recognition granted under section 25 which deals with the issuance of a recognition in such form by the commissioner issued to the dealer relating to the value of all taxable goods manufactured by a registered dealer for sale exceeding a particular amount and the Commissioner being satisfied in respect of such goods required by the dealer for use within the State in the manufacture of taxable goods for sale by him or in the packing of goods so manufactured. The "sale" means a sale of goods made within the State, for cash or deferred payment or other valuable consideration containing certain explanation. The "taxable goods" means goods other than those on the sale or purchase of which no tax is payable under section 5 and section 5 in turn deals with sales and purchases of certain goods free from all taxes qua the items in Schedule A.

( 15 ) SECTION 3 deals with incidence of tax giving various features of taxation, while section 4 deals with the liability of dealer registered under the for payment of tax. Section 6 deals with the tax payable by dealer who is liable to pay tax under this Act leviable in accordance with the provisions of this Act. Section 7 deals with the single point levy of sales tax on declared goods specified in Schedule B while section 8 deals with similar items regarding Schedule C. Section 8a deals with the power to specify points of sale at which goods may be taxed.

( 16 ) SOME of the succeeding provisions ar quite relevant. Thus section 11 relates to tax payable at reduced rates on certain sales and prescribes that where a dealer liable to pay tax under this act sells any taxable goods to an authorised dealer who certifies in the prescribed declaration form that the goods will be despatched in the same form in which they were purchased without doing anything to them which might result in manufacture or will be used for packing of the goods which will be so despatched within six months from the date of purchase to his own place of business outside the State for sale or for use for packing of the goods so manufactured or for use in the manufacture of goods for sale. This is governed by sub-clause (a) of clause (1 ). Clause (2) deals with the sale to a commission agent holding the permit, who certifies in the prescribed declaration form that he is registered under the Central Sales Tax Act and that the goods are purchased by hi as commission agent for his principal who is, as per sub-clause (b) (ii) a dealer whose place of business is outside the State and is registered and that the goods will be sold or will be used in the manufacture of goods for sale outside the State for the principal or will be used for packing of the goods so manufactured, while sub-clause (iii) deals with the registered dealer having place of business also outside the State and that the goods will be sold or will be used in the manufacture of goods for sale outside the State by such principal. Sub-clause (c)stipulates despatch of goods outside the State within six months and sub-clause (d) stipulates a declaration in the prescribed form.

( 17 ) SECTION 12 prescribed that there would be no deduction from the turnover except on declaration suggesting that there would be no deduction from the turnover of sales, sales of goods to an authorised dealer, or a recognised dealer or to a commission agent holding a permit, unless the authorised dealer certifies in the prescribed declaration that the goods are purchased for resale in the course of inter-State trade or commerce or in the course of export out of the territory of India and that such goods will be so resold by himself or by another authorised dealer to whom he resells the goods within nine months from the date of purchase. Clause (b) deals with the recognised dealer certifying in the prescribed declaration form that the goods purchased by him are covered by Part II of Schedule C and that the goods are purchased by him for use by him within the State in the manufacture of taxable goods, for sale, which will in fact be so used and sold by him or in the packing of goods so manufactured. Clause (c) deals with the commission agent certifying in the prescribed declaration form that the goods are purchased on behalf of the principal, who is an authorised dealer and that the goods will be sold by the principal in the course of inter-State trade or commerce or will be used by him for packing of the goods meant for resale in the course of inter-State trade or commerce or would be sold or resold within nine months, etc. , Clause (d) is also on the same pattern, when the commission agent has to certify in the prescribed declaration form that the goods are purchased on behalf of the principal, who is a recognised dealer, that the goods are covered by Part II of Schedule C and that the principal will use the goods within the State in the manufacture of taxable goods for sale which will in fact be so used and sold by him or in the packing of the goods so manufactured. Clause (e) deals with the commission agent certifying in the prescribed declaration form on the similar pattern that the goods are purchased by him from the principal for complying with the agreement or order of sale, etc. Section 12a deals with a category where there shall be no deduction from the turnover or certain sales except on a certificate suggesting that there shall not be deducted from the turnover or sale, resale of goods purchased by the dealer from a registered dealer unless the dealer claiming deduction produces a bill or cash memorandum containing a certificate.

( 18 ) SECTION 13 and 13a then play a relevant part in the wake of controversy. Section 13 deals with the purchase tax payable on certain purchases of goods from unregistered dealer and prescribes that where a dealer who will be liable to pay tax purchases any goods specified in schedule B or C from a person or a Government who or which is not a registered dealer, then unless the goods so purchased are resold by the dealer, there shall be levied a purchase tax on the turnover of such purchases at the rate set out against each of such goods in the Schedules.

( 19 ) SECTION 13a was inserted by Maharashtra Act 32 of 1981 prescribing purchase tax payable on purchase of goods in Schedule C in certain cases and indicates that where a recognised dealer purchases the goods on a declaration under clause (b) of section 12 or as the case may be, a commission agent holding the permit purchases goods on behalf of principal, who is a recognised dealer on a declaration under clause (d) of section 12, then there shall be levied in the hands of the recognised dealer or commission agent a purchase tax on the turnover of such purchases at the rate of four paise in a rupee.

( 20 ) THEN enters in the arena the controversial provision of section 13aa, which was introduced by Maharashtra Act 28 of 1982, which was by section 2 of the Maharashtra Ordinance No. 8 of 1982. The said Ordinance was thus replaced by the said Maharashtra Act 28 of 1982 with effect from 1st July, 1982. Since the substantial thrust of the controversy revolves round this provision, it has become necessary to reproduce that provision verbatim, which reads as : "13aa. Purchase tax payable on goods in Schedule C, Part I, when manufactured goods are transferred to outside branches.- Where a dealer, who is liable to pay tax under this Act, purchases any goods specified in Part I of Schedule C, directly or through commission agent, from a person who is or is not a registered dealer and uses such goods in the manufacture of taxable goods and despatches the goods, so manufactured, to his own place of business or to his agents place of business situated outside the State within India, then such dealer shall be liable to pay, in addition to the sales tax paid or payable, or as the case may be, the purchase tax levied or leviable under the other provisions of this Act in respect of purchases of such goods, a purchase tax at the rate of two paise in the rupee on the purchase price of the goods so used in the manufacture, and accordingly the dealer shall include purchase price of such goods in his turnover of purchases in his return under section 32, which he is to furnish next thereafter. "

( 21 ) THE last of the relevant provisions is contained in section 14 relating to liability to purchase tax for contravention of terms of declaration. It is split up into two sub-clauses, which themselves have their further split up in different clauses. Under sub-clause (1) which prescribes that where any dealer or commission agent has purchased any taxable goods either before or after the notified day under a certificate or declaration under section 8a, 11 or 12 and the conditions, recitals and undertakings of such certificate or declaration are not complied with then such dealer shall be liable to pay purchase tax on the purchase price of such goods and the purchase tax shall be levied at the rate set out against each of such goods in column 4 of schedules B and C, and accordingly he shall include the purchase price thereof in his turnover of purchases in his return. It carves out a proviso suggesting that where a recognised dealer, who has purchased the goods mentioned in Part II of Schedule C directly or through commission agent under a declaration given by him under section 12 and uses them in the manufacture of taxable goods and contrary to recitals of such declaration despatches the goods so manufactured to his own place of business or to his agents place of business situated outside the State within india where he or his agent is registered, then the rate of purchase tax shall be 6 paise in the rupee as against the rate mentioned in column 4 of Schedule C. The further proviso prescribes that where the purchase tax is payable by the dealer under this sub-section by reason of the fact that he has failed to comply with the conditions or undertakings of a declaration issued under section 11 or 12, then the amount equal to the tax paid or payable under section 11 or as the case may be, the purchase tax levied or leviable under section 13a shall be set-off against the purchase tax so payable over the goods. Sub-clause (2) deals with the commission agent on the same pattern prescribing that in respect of transaction by commission agent made under a declaration under section 11 or 12 and if he purchases the goods at one rate and passes them on to his principal at an increased rate or fails to obtain from his principal the declaration under section 11 or 12 then he shall be liable to pay purchase tax on the purchase price of the goods so purchased which will be levied at the rate set out against each of the said goods in Schedule B and C, and he shall include that amount in his return for the turnover. The proviso makes it clear that where such purchases are made by furnishing declaration under section 11 or 12 then amount equal to the tax paid under section 11 or 13a shall be set-off against the purchase tax.

( 22 ) IN the other category, the prescribes the different shades though we are more concerned with Schedule C which is under sections 8, 13 and 14 dealing with the goods other than declared goods, the sale or purchase of which is subject to sales tax or purchase tax and the rates of tax. It is divided into two parts. Part I contains various items of articles from Nos. 1 to 35 while Part II contains other articles from items Nos. 1 to 102. The pattern unmistakably shows and which is not disputed on behalf of the petitioners that Part I essentially deals with raw material while Part ii deals withe other material. Item No. 35 of Part I deals with vegetable non-essential oil other than hydrogenated vegetable oil and those to which entry No. 67 of Part II of the Schedule applies. It is also not seriously disputed that vegetable non-essential oil in question would squarely fall as raw material in this item No. 35 and in Part I of Schedule C. It may be observed at this juncture itself that column 3 of the said Schedule in both the parts deals with rate of sales tax while column 4 deals with purchase tax and it is significant to note that Part I in both the columns the rate ranges between 2 paise in a rupee to 4 paise in a rupee, meaning thereby that it does not go beyond 4 paise at all. This is in contrast with the corresponding rates in columns 3 and 4 in Part II of Schedule C, which range between 6 per cent to 15 per cent. This will have some relevance in the context of the controversy.

( 23 ) ON the parallel track it is necessary to examine the two lists of the Seventh Schedule of the constitution and this is essentially under article 246, dealing under the heading as the subject-matter of laws made by the Parliament and State Legislature suggesting that Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the seventh Schedule while the Legislature of any State has exclusive power to make laws for such state or any part thereof with respect to any matters enumerated in List II, while sub-clause (2)deals with Concurrent List being List III which empowers both Parliament as also the legislature relating to entries therein with which, however, we are not concerned in this proceeding. List I is the Union List investing competence only on the Parliament. Before the amendment the relevant entry pertained to entry No. 97 though, however, after the amendment the relevant entry is numbered as 92-B which was inserted by the 46th Amendment by Act of 1982 as per section 5 which reads as :

"taxes on the consignment of goods (where the consignment is to the person making it or to any other person), where such consignment takes place in the course of inter-State trade or commerce. " in the State List II, the relevant item is entry No. 54, which reads as : "taxes on the sale or purchase of goods other than newspapers, subject to the provisions of entry 92-A of List I. "

( 24 ) THIS makes the circuit complete to examine the validity of section 13aa of the said Act and to find out whether this additional tax falls within the purview of entry No. 92-B of the Union list or entry No. 54 of the State List and thereby decide the main question about the legislative competency.

( 25 ) THE main thrust of the petitioners claim is predominantly founded on the premise that this tax, which is in addition to the one which is already levied at the time of the purchase, has nothing to do with the event of purchase at the initial stage, but the said taxing event occurs only by reason of contingencies as prescribed under section 13aa such as same goods which are obviously in the shape of raw material are used in the manufacture of certain goods which are taxable and those manufactured goods are despatched outside the State. As against that, the main dominant plank of the argument on behalf of the respondents is that this is the purchase tax levied on the goods purchased by the dealer and specified in Part I of Schedule C and that the taxing event is the purchase of the goods by the dealer. The analysis of the provisions of section 13aa logically spell out the split up parts, viz. , that these goods which are purchased are specified in Part I of Schedule C meaning thereby that those are the goods which are catalogued in that part of the Schedule and which are essentially used are raw material; that these goods which are so purchased are used in the manufacture of goods which themselves are taxable and lastly those manufactured goods are despatched outside the State. Thus three different phases have to come into existence, the first being the initial purchase of such raw material, the second is user or consumption of those goods in the manufacture of taxable goods and in the last phase the manufactured goods are required to be despatched outside the State. This is expressly provided for in the said section itself as is apparent from the phraseology used therein, and more in particular the user of words "such goods" in the context of the purchase which makes the situation further clear, making the even relatable to the purchase of these goods itself. It is only after the purchase of these goods that the further contingencies are capable of being brought into existence and getting tangible form inasmuch as it is only after the purchase of such raw material which are the goods mentioned in Part I of Schedule C, that the question of their user in the manufacturing process can crop up, and it is only after the goods are so manufactured out of the raw material that the further question and the last stage of their despatch outside the State will arise. If such goods so purchased remain in the same form within the State then the further contingency as also the question of levying additional tax would not arise. Further once the processing of manufacture and despatch becomes complete it brings along with it a corresponding liability which makes it obligatory for levying of additional tax, which can be legitimately called as purchase tax. The most important feature which is eloquently missed in the whole argument advanced on behalf of the petitioners is to the effect that this situation of liability of paying additional tax is not inserted or superimposed at any later stage but is very much in existence at the inception of the transaction of the purchase itself. It however, does not come on the surface as it remains very much in the latent form. So long as other contingencies like manufacture and despatch outside the State are not effected that liability continues to remain within the shell and in the latent form itself. However, the moment the raw material is utilised in the manufacture of goods which themselves are taxable and those goods are despatched outside the State the liability which had thus remained under the cover springs on the surface in a patent form so that along with it obligation for levying additional purchase tax comes into existence. Therefore, in reality the event of obligation very much comes into existence at the time of purchase itself though its effective implementation takes place on the happening of this further event. This would, therefore, mean that the obligation or liability though in existence is postponed for its execution till these contingencies come into play, which, however, does not mean that this obligation is imposed for the first time much later after the purchase. This in turn would strongly indicate that it is very much boldly enunciated and proclaimed to every one who enters into the transaction of sale or purchase of such goods that he will have to pay a particular amount of tax and that will continue to remain in force so long as the goods are not converted into any manufactured goods and despatched outside the State and under the same declaration the purchaser is also informed that the said limited liability will exhaust itself transforming into an additional liability of paying further tax the moment it is established that the said raw material is used in the manufacture of certain finished goods which themselves are taxable and those goods are despatched outside the State. Therefore, the condition is formulated at the inception though its happening is contingent on those events. This cannot be confused to mean that this is imposed for the first time after happening of those events. The imposition is very much there but its effective execution becomes permissible only after the happening of the said contingencies. In the same vein the argument contains a fallacy which is canvassed on behalf of the petitioners that, therefore this is not a purchase tax or tax on purchase of goods but this is merely a tax on the despatch of goods after their user and therefore it can legitimately get a label of user tax or consignment tax as according to the learned counsel, the process of despatch and consignment is synonymous. As already discussed the very premise of this entire argument is not only vulnerable but is non-existent because it proceeds on an assumption that this tax has nothing to do with the purchase of goods and is levied on the despatch of the goods wholly divorced or unconnected with the initial transaction of purchase.

( 26 ) THE situation would further make it clear that the purchase tax is required to be paid in addition to the sales tax paid or payable or the purchase tax levied or leviable in respect of the same goods which have been so purchased before the conditions mentioned in section 13aa are specified. The goods therefore, remain the same and the event is referable to the inception of transaction of purchase or sale itself. It would, therefore, be manifest that the event which attracts the purchase tax under section 13aa remains very much the same event, viz. , the sale or purchase of the goods which are specified in Part I of Schedule C which are essentially the raw material provided those goods are thereafter used for the manufacture of other goods, which are taxable and provided further that only manufactured goods are despatched outside the State. The reality of the situation is so glaring that the tax is not either on newly manufactured goods not on the despatch of those goods outside the State. As rightly contended by the learned advocate-General the said two conditions about the manufacture and despatch only activate the levy of purchase tax which is required to be so levied under the provisions of section 13aa, but which is being done so on the same event on which the sales tax is levied, viz. , the sale of those goods at the inception.

( 27 ) TO expand the dimensions of this situation it would be clear on plain reading of that provision that in the context of other provisions under the that a sort of concession in given at the time of purchase qua the quantum of tax payable on the goods so purchased which fall under Part I of Schedule C. That tax is claimed to be 4 per cent, i. e. , 4 paise in the rupee which earlier was 3 per cent. The concept of concession becomes clear when read in the context of tax on other items falling in Part II of Schedule C. Thus at the time of the transaction of sale or purchase it is stipulated and understood between the seller and buyer that while sales tax is payable by the seller and recoverable from the purchaser at the rate of 4 per cent, the purchaser or buyer would be under the obligation to pay additional tax of 2 per cent more if he was to use those goods for the manufacture of other goods which are taxable and takes the manufactured goods outside the State. This is the clear mandate of the law which is very much in existence at the initial transaction of sale or purchase itself and it is so clearly understood between the seller and buyer under which though the tax at concessional rate is paid the obligation to pay the additional tax on the happening of certain events is undertaken by the purchaser. These two conditions, therefore, activate the tax, which is already levied under section 13aa at the time of the purchase and the said levy is thus at the time of the purchase itself. At the cost of repetition it can well be highlighted that it is only dormant and is attracted only if the buyers were to use those taxable goods for the manufacture of other goods and were to despatch the newly manufactured goods outside the State, clearly meaning thereby that the tax is not attracted by the said newly manufactured goods or even by the event of despatch of those newly goods outside the State. It is very much attracted by the original goods, though the said two conditions trigger and actually activate the levy of purchase tax, which is attracted by the original goods only and therefore, the taxing event is only one, viz. , in respect of the purchase of goods. As indicated the phraseology in section 13aa and in particular the user of words "such goods" in the arrangement of further terminology therein makes it further clear that those goods obviously refer to the goods which were initially purchased and sold and, therefore, the tax is not on any other goods or any other event. The goods remain the same and the event also remains the same and both of those are tagged to the initial transaction of sale and purchase. The two contingencies are merely the conditions which merely activate the imposition of levy which has been postponed so far and which is contingent upon the event as mentioned in section 13aa. In effect it would mean that though the fulfilment of conditions activate still the levy is on the event of purchase itself.

( 28 ) THERE is yet another tinge to this question. On a perusal of Part I of Schedule C in the context as also in contrast with Part II of Schedule C, it would be manifestly clear that the rate of purchase tax as payable on these items mentioned in Part I which are essentially raw material and which includes VNE oil is obviously concessional. The rate of sales tax as given in that table is at 4 per cent and that is the maximum that is leviable for any of the items in Part I of Schedule c. In contrast thereto the rates mentioned in Part II of Schedule C vary between 6 per cent to 15 per cent. This would thus mean that the rate of 4 per cent on the sale or purchase of goods as mentioned in Part I of Schedule C which covers VNE oil under entry No. 35 can never exceed 4 per cent whereas it can vary from 6 per cent to 15 per cent in respect of the goods as mentioned in table of Part II of Schedule C. This rate on the goods as mentioned in Part I of Schedule C which are essentially raw material was leviable at 3 per cent under entry No. 6a of Schedule D of Part I prior to 1st July, 1981, which has been increased to 4 per cent as entry No. 35 of Part I of Schedule C with effect from 1st July, 1981. The goods as mentioned in Part I are essentially and mainly the raw material, which are ultimately used in the manufacture of other products of goods which are themselves taxable or used in the packing of the goods so manufactured. It is probably on this count that the legislature thought it fit to prescribe low rates of sales tax and purchase tax on the raw material attributable to the goods in Part I of Schedule C because it was further intended to make it a concessional rate which concession appears to have been founded on the assumption and expectation that the manufactured goods are to be sold within the State so as to invite further tax on sale and this expectation has been transformed into a condition in that behalf, and also to obviate the necessity of claiming set-off under rule 41-A of the Rules to the extent of the tax exceeding 4 per cent. It is, therefore, rightly submitted by the learned advocate-General that the rates referred to earlier applicable to the rules in Part I of Schedule C are obviously concessional in comparison to the rates prescribed under Part II of the said schedule. Implicit therein is a condition precedent that to avail of this concession the goods are required to be sold within the State after those are used in the manufacture of other taxable goods. This logically justified the stipulation or prescription that the moment there is a breach of the condition the concession is liable to be withdrawn. Therefore, it would mean that if in spite of this stipulation and getting advantage of this concession of low rate at the time of purchase, the purchaser after utilising the said raw material manufactures certain goods which are taxable and instead of selling those manufactured goods within the State despatches the said goods outside the State then the corresponding obligation or the liability must necessarily follow in forfeiting the said concession and bringing it on par with the other taxation and that is how the additional tax is sought to be levied, though on the same goods and on the same event of sale and purchase. As discussed earlier the rate charged at the inception is obviously comparatively low one and thus a concessional one, which concession depends on the performance of the stipulation, which was perhaps on the premise that if the goods are utilised within the State there would be additional revenue in the form of sales tax on the sale of such newly manufactured goods within the State which additional revenue would be lost if the goods are despatched outside and secondly it is also with a justified feeling that the people within the State would get the advantage and benefit of such manufactured goods.

( 29 ) THE learned Advocate-General has justifiably relied on yet another feature and which is also elaborately indicated in the return filed on behalf of the respondents by the Assistant commissioner of Sales Tax. It becomes clear that the manufacturer is entitled to purchase the goods, which are covered in Part II of Schedule C by paying the tax at 4 per cent on the strength of recognition which is reflected in form No. 15 though subject to the conditions that in respect of finished goods, the sale would be effected within the State, whereas such manufacturer can also purchase at the same rate the goods covered under Part I of Schedule C, like VNE oil even without issuing any declaration. Thus it is rightly indicated that the rates of payment of tax under part II of Schedule C against form No. 15 on the strength of recognition certificate of the recognised dealer would thereby be the same as in respect of the goods under Part I of Schedule c. Thus the rates can be said to be on par on both the transactions. In the case of former the said rate is prescribed under section 11 which is already indicated and in the case of latter the rate is prescribed in Part I of Schedule C itself. There is also no question of any discrimination and as such the transferring of raw material by themselves and transferring of manufactured goods cannot be compared since it has been classified in two categories like raw material goods and manufactured goods separately which obviously is reasonable classification. One of the condition attached to form No. 15 is that the goods so purchased are meant for use in the manufacture of taxable goods for sale within the State of Maharashtra. If any of the conditions is not fulfilled by the purchaser on the strength of the declaration form No. 15 then he is liable to pay purchase tax under section 14 of theand the said purchase tax becomes payable at full rate under that provision. Therefore, the goods so purchased against the declaration in form No. 15 cannot be transferred to his own place outside the State of Maharashtra for manufacture or otherwise. In the same manner the goods so purchased and manufactured in the Maharashtra state cannot be transferred to the place outside the State. If, however, the manufactured goods purchased against the said form No. 15 are transferred outside the State of Maharashtra then the purchase tax equivalent to 6 per cent is payable under section 14 and in particular under the proviso to that section after 1st July, 1982. This provision would further strongly point out the position of liability in three different cases remaining the same, viz. , (i) manufacturer who purchases the goods covered in Part II of Schedule C and uses them in the manufacture within the State of Maharashtra and transfers the manufactured goods to his own place outside the State, (ii) manufacturer who purchases the goods under form No. 15, uses them in the manufacture and then transfers the manufactured goods to his own place outside the State of Maharashtra and (iii)the manufacturer who purchases the goods covered in Part I of Schedule C which essentially is raw material and includes VNE oil, uses them in the manufacture and then transfers the manufactured goods to his own place outside the State of Maharashtra. It would thus be apparent that on the basis of rate of tax levied the first two will invite the liability of 6 per cent while the third though initially at 4 per cent would be enhanced to 6 per cent by the addition on account of despatch of those manufactured goods. Therefore, it would be manifest that the liability in respect of all these three varieties of goods would remain the same and section 13aa therefore, in fact eliminates the disparity between the different manufacturers, meaning thereby that in its absence the manufacturer under the third variety would have been required to pay the tax at 4 per cent while those in the first two varieties would have been required to pay 6 per cent though the facts and circumstances are practically identical in all the said three cases. It is worth noting in this behalf and it is manifestly clear that additional rate of purchase tax is so calculated not in an arbitrary manner but in a very rational manner so that even after its addition the rate does not go beyond 6 per cent, whereas as indicated earlier the rates in respect of goods mentioned in Part II of Schedule C range between 6 per cent to 15 per cent. In other words, in respect of the said three varieties which have been illustrated earlier even after addition of 2 per cent in the purchase tax in the third variety on account of provision of section 13aa ultimate rate taxable in all the three cases becomes 6 per cent meaning thereby that the rate in this third variety does not go over and above the rate in other cases. To expand the illustration it would appear that the rate of sales tax in cases of purchase against form No. 15 and on purchase of VNE oil is practically the same being 4 per cent. Parallel to that it would equally appear that the liability of manufacturer who despatches the manufactured goods to his own place outside the State of maharashtra is also the same, i. e. , 6 per cent where the goods are manufactured out of form No. 15 purchases or relating to the goods in Part I of Schedule C or even otherwise. It is, therefore, rightly submitted that the provisions of section 13aa on the contrary very much rationally tend to wipe out any discrimination or disparity and liability of all such manufacturers who manufacture goods and despatch the goods outside the State are put on par at the rate of 6 per cent.

( 30 ) IT is also clear that the purchase tax leviable under section 13aa is on the purchase value of vne oil used in the manufacture and transfer to the branches and not on the value of the manufactured goods so transferred to the branches. Therefore, it is rightly submitted by the learned Advocate-General that the classification of goods for the purpose of levy and tax is made with a view to give concession to the manufacturers according to the object of the said provisions. It is also clearly indicated by the various provisions that if the manufacturer buys within the State, manufactures within the State and also sells within the State then the revenue obtainable is 4 per cent plus something more than 4 per cent while the manufactured goods are sold outside the State after the branch transfer then by addition of 2 per cent under section 13aa the tax is enhanced from 4 per cent to 6 per cent, while in the the last category if the raw material itself is despatched outside the goods are manufactured outside the State and thus sold outside the State then it would be 4 per cent but if it is sold within the State even after having manufactured outside the State the tax would be 4 per cent plus more than 4 per cent. It would be apparent therefore, that in cases covered by section 13aa the Government would really get less revenue in comparison to other cases. As stated initially the maximum rate charged is 4 per cent and addition of 2 per cent makes the maximum of 6 per cent which really is on par with the other cases. As already discussed the provisions of section 11 and section 14 of theplay an important part, which has been rightly relied upon by the learned Advocate-General which provisions need not be reproduced over again and those aspects touching these two provisions in the context of additional tax which is already considered hereinabove thus need not be rediscussed over again though emphasis on these two provisions, viz. , section 11 and 14, cannot be underestimated.

( 31 ) THIS discussion therefore, in the context of various provisions and rival contentions clearly exposes the fallacy in the arguments advanced on behalf of the petitioners while construing the provisions under the and especially the provisions contained in section 13aa and the very foundation of the entire superstructure of that argument about additional tax is not the purchase tax on the initial purchase of goods but is a tax on user which is being styled as despatch tax or consignment tax is wholly non-existent as against which in contrast the reality makes it quite clear that the said purchase tax levied under section 13aa is on the goods already purchased by the dealer which goods as are specified in Part I of Schedule C while taxing event is the purchase of goods by the dealer and is payable in respect of the same goods upon the same event whereas the effect of the said two conditions only activate the levy of the purchase tax, which makes it further clear that the tax is not attracted by newly manufactured goods or by the event of its despatch but it is attracted by the same event in respect of purchase of such goods and as such as already discussed the said two conditions merely activate the levy which has been postponed so far and becomes effective upon the event as mentioned under section 13aa but the levy remains on the same event of purchase itself.

( 32 ) THIS conclusion which really is apparent on the plain reading of the provisions gets reinforced by some of the ratios of the judicial pronouncements. Both sides placed reliance on various decisions though it would be worthwhile to refer to only a few one which are most relevant in the context of the controversy.

( 33 ) THIS aspect has been fully discussed by the Kerala High Court in Malabar Fruit Products company v. Sales Tax Officer, Palai reported in [1972] 30 STC 537. There also it was the initial transaction in which otherwise in the circumstances no tax was payable under section 5 of the kerala General Sales Tax Act but the said Act did tax the said sale or purchase when the goods so purchased were consumed for manufacture and disposed of in the manner other than by way of sale in the State. Section 5a of the Kerala General Sales Tax Act, 1963 was under scrutiny. The petitioners therein were the assessees who have been assessed to tax on the purchase turnover under section 5a. In fact almost identical contentions as sought to be raised on behalf of the petitioners in the present proceeding were specifically raised in the said case and have been clearly negatived. Section 5a is the same Act which was inserted by Act 14 of 1970 as a measure for checking the evasion of sales tax. The said provision is under the heading as "levy of purchase tax" and prescribes that every dealer who in the course of his business purchases from a registered dealer or from any other person any goods, sale or purchase of which is liable to be taxed under that Act, in the circumstances in which no tax is payable under section 5 and thereafter it prescribes, which lays down further prescription that such person consumes such goods in the manufacture of other goods for sale or otherwise or dispose of such goods other than by way of sale in the State or despatches them outside the State in which case he has to pay the tax on the taxable turnover relating to such purchase at the rate mentioned in section 5. These very submissions were elaborately considered and negatived which can be more effectively projected, instead of discussing, by reproducing some of the relevant observations therein, which read as :

". . . . . . . . . . . if the goods are sent for any other purpose outside the State whether for consignment sale or consumption, section 5a is attracted. . . . . . . The scheme apparently appears to be that if the goods are not available as such goods for being taxed in the State at some other subsequent point, the dealer is liable to be taxed on his purchase turnover though but for such a situation he would not be liable to be taxed on such purchase turnover. . . . . . The object of section 5a appears to be to tax the goods which would normally have been taxed at some point in the State subsequent to their purchase by the dealer if they are not available for such taxation. "

The judgment then proceeds to observe as :". . . . . . . . In the scheme of the section purchase by the dealer who is taxed under that section becomes taxable in his hands only if the goods are consumed or disposed of in any manner other than by way of sale or despatch outside. . . . . . . These are all subsequent events and, therefore, the time at which the tax is imposed is postponed to the happening of subsequent events, but by the very fact of purchase the dealer becomes liable to pay tax on the purchase. It depends upon the subsequent contingencies and the tax becomes payable when the event mentioned in the section happens. The main attack against the validity of section is based upon the legislative competence of the State to tax the purchases on the happening of such future contingencies. The contention is that the Legislature of the State was not competent to impose a tax which does not arise on the occasion of sale but is made to depend upon the subsequent consumption or use or dealing with the goods and therefore renders it a tax other than a sales tax, possibly a tax on consumption or use, the imposition of which is beyond the competence of the State Legislature. "

( 34 ) ENTRY No. 54 in the State List of the Seventh Schedule to the Constitution thus figures prominently in view of this condition of legislative competence. The condition that the action for taxation is not the purchase by the dealer which event is ultimately sought to be taxed but subsequent dealing by him with the goods which may be long after the purchase itself which is a contingency which may or may not occur has been considered in the context of the controversy. It was also contended on behalf of the petitioners that the tax liability is not the one which arises on the action of purchase but arises on the subsequent action when the goods are used or consumed or otherwise dealt with and, therefore, the same would be appropriately called as "use" tax or "consumption" tax and not the sales tax. This very argument was expressly negatived when it was observed as :

"it is true that the sales tax is a tax imposed on the occasion of the sale of goods. But it has no reference to the point of time at which the sale or purchase takes place. It refers to the connection with the event of purchase or sale and not the point of time at which such purchase or sale takes place. . . . . it would not be possible to tax any goods at the last purchase point in the State, for the last purchase point in regard to any goods could be determined only when the goods are sold later and not when the goods are purchased. On the same reasoning as urged by counsel, one should say in such a case that since the goods are taxed only when the goods are sold outside the state or are despatched for such sale outside the State and so the last purchases are taxed not on the occasion on the purchases and, consequently, it is beyond the competence of the legislature. That certainly cannot be. . . . . . "

( 35 ) SOME of the observations of the Federal Court in the C. P. Motor Spirit Act, 1938, I re [1938] 1 STC 1; AIR 1939 FC 1 [LQ//1938/1 ;] ">AIR 1939 FC 1 [LQ//1938/1 ;] [LQ//1938/1 ;] and in the case of Madras Province v. Boddu Paidanna [1942] 1 STC 104; AIR 1942 FC 33 [] are extracted. The learned Judge of the Kerala High Court while making observations which are reproduced earlier relied on a few observations made by the Federal court, such as :

"the words on the occasion of the sale have reference to the character of the transaction and not to the point of time at which the duty becomes leviable, and they have no bearing on the question as to when such a tax could be imposed. "

In the ultimate analysis the challenge on the ground of absence of legislative competence and thus same not falling under entry No. 54 of the State List was negatived when it was expressly held that it is certainly not the consumption or despatch tax but it remains very much as the tax on the initial purchase which is brought on the forefront only on account of the happening of this event.

( 36 ) THIS decision of the Kerala High Court in Malabar Fruit Products [1972] 30 STC 537 which was by the learned single Judge, was endorsed and affirmed by the Division Bench of the same high Court in appeal in Yusuf Shabeer v. State of Kerala reported in [1973] 32 STC 359 [LQ/KerHC/1973/156] and we would presently point out that this very view was affirmed by the Supreme Court in subsequent decisions. In view of this, therefore, really speaking there hardly remains any scope for debate. The Division Bench of the Kerala High Court dealt with all features canvassed before it on the same lines which were agitated before the learned single Judge and which are on the same pattern as in the instant case. A reference was made to several other decisions of different High courts. After reproducing the provisions of section 5a of the said Kerala General Sales Tax Act, various contentions raised on behalf of the petitioners therein were considered. One of the contentions was as assumed that the section is clear enough and could be treated as charging section, it imposes the tax not on the sale or purchase of goods but, on its use and consumption and, therefore, the said State Legislature has no competence to impose tax on the sue or consumption of goods and so the section is ineffective. One of the contentions was to the effect that the object sought to be achieved by introduction of section 5a has not been accomplished because the section is vague was negatived in view of the observations of the Supreme Court in ganesh Prasad Dixit v. Commissioner of Sales Tax reported in [1969] 24 STC 343. [LQ/SC/1969/34] Reference to some of the observations of the other decisions was also made wherein it was argued that the state Legislature could not levy a use tax which was essentially different from purchase tax which contention was negatived while observing that the said assumption was not well-founded because the taxable event under those provisions is purchase of goods and not use or enjoyment of what is purchase. In the ultimate analysis while negativing that contention it was observed as :

"the contention that the tax imposed by section 5a is a tax not on the purchase but on the use or consumption is equally unacceptable. . . . . . From the wording of that section there can be no doubt that what is taxed is the purchase and not the use or consumption. . . . . . ."

( 37 ) SECTION 7-A of the Madras General Sales Tax Act, 1959 which was introduced by the Tamil nadu General Sales Tax (Amendment) Act, 1970 was couched more or less on the same phraseology as that of section 5a of the Kerala General Sales Tax. In M. K. Kandaswami v. State of Tamil Nadu reported in [1971] 28 STC 227 [LQ/MadHC/1971/195] the Madras High Court, however, upheld the challenge to the validity of the said provision of section 7- A. It was observed that the purpose of section 7- A which was to check the evasion of tax, could not be achieved because the phraseology has fallen short; that it could have detailed the circumstances in which the tax liability would arise but instead the circumstances have been related by the said provision to sales or purchases which are liable to tax, but for some reason no tax is payable and the High court felt that it was in contradictory terms. As regards the other commodity, viz. , butter, the purchase tax was levied on the purchase of butter on the ground that butter was consumed in the manufacture of ghee while similar tax has also been levied on the purchase turnover of ghee involved in consignment sales with the other sales. The said High Court held that such purchase tax could not be levied under section 7- A mainly because the butter was taxable to multi-point tax and is levied at the purchase point or sale. On this and other observation the challenge was upheld.

( 38 ) THE State of Tamil Nadu carried this decision in appeal in Supreme Court in State of Tamil nadu v. M. K. Kandaswami [1975] 36 STC 191 [LQ/SC/1975/219] ; AIR 1975 SC 1871 [LQ/SC/1975/219] when the State completely succeeded and the observations and conclusions of the Madras High Court were upset. In the course of judgment after reproducing requirement and ingredient of section 7- A when the said provision was analysed and split up into different clauses it was held that section 7- A can be invoked if the said ingredients are cumulatively satisfied. As indicated earlier the provisions of section 7- A are practically on the same pattern as the provisions of the Kerala Act and serves as an analogy to the provisions of the Bombay Sales Tax Act in question. Therein also the purchaser is the dealer. He has to purchase in the course of business either from registered dealer or from any person and the goods purchased are liable to be taxed and thereafter the dealer either consumes the goods in the manufacture of other goods or despatches such goods manufactured outside the State. The Supreme Court also did not accept the observations of the Madras High court that there was any contradiction in terms between the expression that the "goods, sale or purchase of which is liable to tax under the" and the phrase "purchase". The Supreme Court at different places of judgment observed as :

"the scheme of the involves three inter-related but distinct concepts which can conveniently be described as taxable person, taxable goods and taxable event. All the three must be satisfied before a person can be saddled with the liability under the. Nevertheless, the distinction between them, if overlooked, may lead to serious error in the construction and application of the. . . . . . . . . . . . The goods is defined in section 2 (j) of the. . . . . . . . . . . . . . taxable person is a dealer as defined is section 2 (g ). taxable event is the sale or purchase of goods effected during the accounting period. . . . . . . . The words the sale or purchase of which is liable to tax under the qualify the term goods and exclude by necessary implication goods, the sale or purchase of which is totally exempted. . . . . . . . . . . . The goods so exempted - not being taxable goods - cannot be charged under section 7- A. "

The Supreme Court further while construing section 7- A observed as :"it may be remembered that section 7- A is a charging as well as remedial provision. Its main object is to plug leakage and prevent evasion of tax. In interpreting such a provision, a construction which would defeat its purpose and, in effect, obliterate it from the statute book, should be eschewed. If more than one construction is possible, that which preserves its workability and efficacy is to be preferred to the one which would render it otiose or sterile. The view taken by the High Court is repugnant to this cardinal canon of interpretation. "

( 39 ) THE Supreme Court then referred to Ganesh Prasad Dixit v. Commissioner of Sales Tax [1969] 24 STC 343 [LQ/SC/1969/34] ; AIR 1969 SC 1276 [LQ/SC/1969/34] where section 7 of the Madhya Pradesh General Sales tax Act was under scrutiny and certain observations from that are extracted. However, what is of more relevance is that the Supreme Court in this case in terms considered the ratio in Malabar fruit Products case as decided by the Kerala High Court [1972] 30 STC 537 in the context of challenge to the validity of section 5a of the Kerala General Sales Tax Act mainly on the ground of legislative competency and the judgment makes it abundantly clear that not only the observations but the entire ratio and conclusions reached by the Kerala High Court have been endorsed and affirmed and we may, to recapitulate, indicate that as discussed earlier the said provision under section 5a offers comparable analogy to the provision of section 13aa of the bombay Sales Tax Act and what is of more importance is that almost identical arguments were advanced as has been done on this forum on behalf of the petitioners with reference to the legislative competence. Entry No. 54 of the State List and the nature of tax which was sought to be labelled as consumption or consignment tax and not the tax on purchase and all these contentions were expressly negatived by the Kerala High Court and by endorsing the said ratio it becomes clear that the Supreme Court has also negatived the said contentions which would be very relevant to assess the contentions raised on behalf of the petitioners on this forum also. On the same parity of reasoning, therefore, our conclusions are reinforced. The Supreme court after reproducing section 5a of the Kerala General Sales Tax Act and after specifically referring to the said decision in Malabar Fruit Products Companys case [1972] 30 STC 537 (Ker) and also the contentions raised on behalf of the petitioners therein and equally the observations of the kerala High Court in negativing those contentions, then referred to the appeal against that decision observing as :

"the judgment of the learned single Judge was affirmed in appeal by a Division Bench of the same High Court in Yusuf Shabeer v. State of Kerala [1973] 32 STC 359 (Ker) [LQ/KerHC/1973/156] and dissented from the view taken by the Madras High Court in the judgment now under appeal. "

The Supreme Court thereafter endorsed the said view as :"in our opinion, the Kerala High Court has correctly construed section 5a which is in pari materia with the impugned section 7-A of Madras General Sales Tax Act. The goods, sale or purchase of which is liable to tax under this Act in section 7-A (1), means that taxable goods, that is, kind of goods, the sale of which by a particular person or dealer may not be taxable in the hands of a seller but the purchase of goods by a dealer in the course of his business may subsequently become taxable. We have pointed out and it needs to be emphasised again that section 7- A itself is a charging section which creates a liability against the dealer on his purchase turnover with regard to the goods, the sale or purchase of which though generally liable to be taxed under the have not, due to the circumstances of particular sales, suffered tax under section 3, 4 or 5 and which after purchase, have been dealt by him in any of the modes indicated in section 7- A. "

In that view, the said appeal was allowed and the decision of the Madras High Court was set aside.

( 40 ) IT thus becomes manifest that the two decisions of the Kerala High Court in the same matter in Malabar Fruit Products Company [1972] 30 STC 537 and Yusuf Shabeers case [1973] 32 stc 359 [LQ/KerHC/1973/156] deal with all these points that are also now being canvassed on behalf of the petitioners and those are negatived more or less on the same reasons which we have assigned and which have been canvassed by the learned Advocate-General, whereas contrary contentions which are sought to be raised on behalf of the petitioners by Shri Ashok Desai, the learned counsel, have been expressly negatived therein also. Those observations, conclusions and ratio have been fully endorsed by the Supreme Court in M. K. Kandaswamis case [1975] 36 STC 191 [LQ/SC/1975/219] ; AIR 1975 SC 1871 [LQ/SC/1975/219] whereas contrary view as indicated by the Madras High Court in the same case was negatived. It would thus follow that the Supreme Court has really concluded the matter in that field which is very much against the petitioners and those lend considerable support to the conclusions reached and the reasons assigned by us.

( 41 ) INITIALLY at some stage much reliance was sought to be placed by Shri Ashok Desai, the learned counsel, on the decision of the Punjab and Haryana High Court in Bata India Limited v. State of Haryana [1983] 54 STC 226. [LQ/PunjHC/1983/315] Section 9 (1) (b) of the Haryana General Sales Tax Act as amended by the Haryana General Sales Tax (Amendment and Validation) Act, 1983 was the subject-matter of the controversy. It pertains to the liability to pay purchase tax when a dealer purchases goods other than mentioned in Schedule D and uses it in the manufacture of any other goods and despatches the manufactured goods outside the State in any manner otherwise than by way of sale in the course of inter-State trade or commerce, then in a circumstance in which no tax is payable under that provision of the there shall be levied a tax on the purchase of such goods at such rate as may be notified under section 15. The challenge to the validity of the said provision is more or less on the same grounds about the lack of legislative competence. That contention was ultimately upheld and the said provision was struck down. It was held that mere despatch of goods outside the State otherwise than by way of sale as the sale as meaning as consignment of goods in the course of inter-State trade or commerce and, therefore, would fall in entry No. 92-B of the Union List of the Seventh Schedule to the Constitution. Consequently, therefore, it was further held that the levy of sale or purchase tax on such a despatch or consignment would be within the exclusive legislative competence of Parliament to the total exclusion of the State Legislature. Consequently further it would not fall within entry No. 54 of the State List and therefore, ousting the jurisdiction of the State Legislature. It was further held that in such a situation it is really the consignment tax and not the purchase tax. The court in the course of judgment observed that the real taxing event is despatch of manufactured goods to a place outside the State and there is no distinction between the concept of despatch of goods and consignment of goods and, therefore, once there is such despatch of goods it is synonymous to consignment, it becomes really a consignment tax and, therefore, would fall under entry No. 92-B of the Union List exclusively vesting in Parliament. It was further observed that it is the consignment of goods to which attracts a liability of purchase tax and in pristine essence is the taxable event under section 9 (1) (b) of the said Act and, therefore, it is plain that shorn off of surplusage, the purports to tax even the consignment of goods to the person making it in the course of inter-State trade or commerce. It was again emphasised that if the purchase tax is levied compositely on the manufacture plus mere despatch of goods then taxable event would still remain the despatch of the goods. It is on the basis of this conclusion that the said provision was struck down essentially on the basis of lack of legislative competence of the State legislature.

( 42 ) WITH respect this judgment does not deal with several aspects of controversy which were canvassed before us on behalf of the respondents by the learned Advocate-General and which in our opinion logically flow from various provisions of the. With respect the same fallacy giving wrong label to the transaction of levying tax as consignment tax has crept in which unfortunately has resulted in erroneous conclusion. Since this is in direct conflict with the decision of the Supreme Court in M. K. Kandaswamis case [1975] 36 STC 191 [LQ/SC/1975/219] ; AIR 1975 SC 1871 [LQ/SC/1975/219] which upheld the ratio of the Kerala High Court in Malabar Fruit Products Companys case [1972] 30 STC 537, the endeavour to distinguish the ratio of these two cases in this judgment of the Haryana High Court is with respect rather difficult to appreciate. We are thus in respectful disagreement with this ratio and the reasons therefor need not be restated.

( 43 ) HOWEVER, the matter does not rest there since this decision has been expressly overruled by the Full Bench of the same High Court in Des Raj Pushap Kumar Gulati v. State of Punjab [1985] 58 STC 393 (P [LQ/PunjHC/1985/86] and H), though it must be said in fairness to the learned counsel for the petitioners that he himself had cited this decision though no doubt he endeavoured, which was perhaps the only option left for him under the circumstances, to distinguish the said ratio and to impress that the ratio by the Division Bench in Bata Indias case [1983] 58 STC 226 (P and H) is more acceptable. The learned Advocate-General obviously placed much reliance on this decision. On a careful reading of the said decision with respect we find ourselves in full agreement with the same. The observations, conclusions and ratio which in our opinion is most consistent and harmonious deserves to be fully accepted and that is precisely in full consonance with out view which we have already expressed independent thereof.

( 44 ) THE validity of section 4-B of the Punjab General Sales Tax Act, 1948 was under challenge and along with it section 9 of the Haryana General Sales Tax Act also was challenged. These two provisions are practically in pari materia containing similar ingredients. The provisions of section 9 of the Haryana Act refer to the liability to pay purchase tax where a dealer purchases goods in the State, uses them in the manufacture within the State of certain goods and disposes of the manufactured goods in any manner otherwise than by way of sale, there would be an additional levy of tax on the purchase of such goods at the rates notified. Section 4-B of the punjab Act is more or less on the same pattern. It prescribes that a dealer, who is liable to pay tax under that Act purchases any goods other than those mentioned in Schedule B from any source and thereafter uses them within the State in the manufacture of goods either as mentioned in schedule B or otherwise and sells the goods so manufactured outside the State in any manner by way of sale or uses such goods for a purpose other than resale within the State or sells them outside the State otherwise than by way of sale in the course of inter-State trade or commerce and if no tax is payable on the purchase of such goods under any provision of the, then he would be liable to pay a tax on the purchase of such goods at such rate not exceeding the rates specified in section 5 (1 ). The commodity contained raw cotton which was ginned and crushed and oil-seeds were crushed into oil and manufactured oilcakes which were sent outside the State while in some cases it was pig-iron which was purchased and used in the manufacture of agricultural implements and other steel articles and those were sold out of the State. Practically identical contentions were raised, which are being canvassed in this proceeding and which have been expressly negatived by the said Full Bench though some of those were accepted by the division Bench in Bata Indias case [1983] 54 STC 226 (P [LQ/PunjHC/1983/315] and H), which was expressly overruled by the Full Bench.

( 45 ) THE Full Bench took survey of several ratios available in that field including the ratio in malabar Fruit Products [1972] 30 STC 537 (Ker) and M. K. Kandaswami [1975] 36 STC 191 (SC); AIR 1975 SC 1871 [LQ/SC/1975/219] . Reference to some of the observations in Kandaswamis case [1975] 36 STC 191 (SC); AIR 1975 SC 1871 [LQ/SC/1975/219] was made as also to those in Ganesh Prasad Dixit v. Commissioner of Sales Tax [1969] 24 STC 343 (SC), which were referred to in Kandaswamis case [1975] 36 STC 191 (SC); AIR 1975 SC 1871 [LQ/SC/1975/219] , were also reproduced. The assessees therein were registered as dealers and they had purchased building materials in the course of their business, that building materials are taxable under the and the appellants consumed the said material otherwise than in the manufacture of goods for sale and for profit-motive. It is on that basis that it was held by the Supreme Court that on the plain words of section 7 the purchase price is taxable. The ratio in Kandaswamis case [1975] 36 STC 191 (SC); AIR 1975 SC 1871 [LQ/SC/1975/219] was fully considered in that decision. It was also emphasised that the Supreme Court expressly upheld that ratio of the Kerala High Court in Malabar Fruit products case [1972] 30 STC 537. The said Kerala High Court judgment in Malabar Fruit Products [1972] 30 STC 537 was also considered in details as also the decision in Hindustan Milkfood Manufacturers Ltd. v. State of Andhra Pradesh [1982] 51 STC 1 (AP) [LQ/TelHC/1982/50] , was considered in that context. It was then observed that section 9 therein was not only a charging provision but also a remedial one in character. The observation in that context in Kandaswamis case [1975] 36 STC 191 (SC); AIR 1975 SC 1871 [LQ/SC/1975/219] was also relied upon. In the ultimate analysis the Full Bench concluded as :

"the provision of section 9 (1) of the Haryana Act was, therefore, required to be viewed through the international prism of the kind commended by the Supreme Court and not the one of strict construction adopted in Batas case [1983] 54 STC 226 (P [LQ/PunjHC/1983/315] and H) by this court. The judicial consensus in regard to identical provision of the taxing statutes of other States was that the tax in question is a purchase tax; that the taxing event is the purchase of the given goods and not their despatch outside the State, which view finds affirmation in the high authority of Kandaswamis case [1975] 36 STC 191 (SC ). . . . . . . . . . . . "

The Full Bench in terms held that the taxing event was purchase of the raw material which was consumed in the manufacture of goods, which were despatched outside the State otherwise than by way of sale in the course of inter-State trade or commerce and the Division Bench in Bata indias case [1983] 54 STC 226 (P [LQ/PunjHC/1983/315] and H) erred in presuming that the taxing event is the despatch of goods out of Haryana State in a manner otherwise than by way of sale in the course of inter-State trade or commerce. It was further observed and held that once the taxing event was identified to be the act of purchase or sale or tax was held to be a purchase tax or sales tax, as the case might be, then it becomes manifest that the State Legislature was admittedly competent to legislate about the said tax. It was ultimately observed as :"when thus viewed, the impugned provision of section 9 (1) of the Haryana Act admittedly related to a topic of taxation which was covered by entry 54 of List II of the Seventh Schedule to the Constitution of India, and therefore, the Haryana and Punjab States Legislatures were within their legislative right to enact the given provisions. In view of the conclusion reached by us that section 9 (1) envisages imposition of purchase tax and not a tax on despatch of goods or consignment of goods outside the State otherwise than in the course of inter-State trade or commerce, it is not necessary to examine the entry No. 92-B and the reasons that led to its addition. . . . . . . . . "

The court then concluded as :"in view of the aforesaid conclusion, we hold that the Division Benchs decision in Bata Indias case [1983] 54 STC 226 (P [LQ/PunjHC/1983/315] and H) does not lay down the correct law and we, therefore, overrule the same, with the result that the provision of section 9 (1) is hereby held to be intra vires as also the provision of section 4-B of the Punjab Act. . . . . . . . . . . . . . "

( 46 ) THE Full Bench then considered the alternate situation and felt that even if two views were possible (i) that it was a tax on despatch of goods and (ii) that the incidence of tax was on purchase of goods which are being despatched out of the State, then in that situation also the construction which helps in making effective the remedial measures against the mischief that it sought to curb has to be adopted and otherwise also when two constructions are possible, one that saves the statute from being declared ultra vires has to be adopted. These observations were, however, only by way of alternate plank because the judgment makes it very clear that the said bench was firm in its opinion that it does not fall within entry No. 92-B but exclusively falls within entry No. 54 within the legislative competence of the State Legislature and that it was only the purchase tax and not the consignment tax. It is only in the alternate field that those incidental observations are made that even there also the validity of the said provision was required to be upheld. We may incidentally observe that we are firm in our opinion that the same being purchase tax and has not even the semblance of consignment tax, it does not even remotely fall in the Union List in entry No. 92-B but exclusively falls in entry No. 54 of the State List. This Full Bench decision of the Punjab and Haryana High Court, therefore, with which we are in respectful agreement, reinforces our conclusion in every respect.

( 47 ) IN Hindustan Milkfood Manufacturers Ltd. v. State of Andhra Pradesh [1982] 51 STC 1 (AP) [LQ/TelHC/1982/50] to which reference is made in the Full Bench judgment of the Punjab and Haryana High court, similar construction was based on the relevant provision which is in conformity with the view we are taking. Therein section 6a of the Andhra Pradesh General Sales Tax Act was under debate, which prescribes that every dealer who purchases goods from the registered dealer in the circumstances in which no tax is payable or purchases goods from a person other than registered dealer and thereafter he consumes such goods in the manufacture of other goods for sale or otherwise or disposes of such goods in any manner otherwise than sale in the State or despatches the goods to a place outside the State would be required to pay tax on the turnover related to the said purchase. Almost an identical contention was raised that the said provision is in substance a levy on the act of user or consumption and hence cannot be reasonably construed as a tax on sale or purchase and, therefore, it was beyond the legislative competence. The commodity purchased there is milk which was converted into preparation like Horlicks and the converted commodity is sold. The Andhra Pradesh High Court considered various ratios in that behalf some of which we have already referred and expressly negatived the said contention on behalf of the petitioners when it was expressly observed that it is clear that the said commodity like milk purchased and later used or utilised for the manufacture of a commodity which though later is made exigible to tax will nevertheless be liable to tax as an imposition of tax is on the event of purchase. It was also indicated as to how and when its character is charged by virtue of its being processed in the manufacture of some other commodity is of no consequence and ultimately it was held as :

"hence section 6a of the is intra vires as every act of purchase attracts the tax. "

( 48 ) THE other decision available in the field is in Andhra Sugars Ltd. v. State of Andhra Pradesh [1968] 21 STC 212 (SC); AIR 1968 SC 599 [LQ/SC/1967/292] which is also relied upon in that behalf. Section 21 of the Andhra Pradesh Sugarcane (Regulation of Supply and Purchase) Act of 1961 was under debate and challenge to its vires was also levelled on behalf of the petitioners. The relevant part of the said provision prescribes that the Government may by notification levy a tax at such rate not exceeding Rs. 5 per metric tonne as may be prescribed on the purchase of cane required for use, consumption or sale in a factory. Different points were raised including the one as to whether it amounts to a sale when the agriculturists offer the sugarcane to the factory. However, one such question also pertained to as to whether it amounts to use tax. In the course of judgment, the Supreme Court observed in that context as :

"assumption of counsel that section 21 levies a use tax is not well-founded. The taxable event under section 21 is the purchase of goods and not the use or enjoyment of what is purchased. . . . . . . . . . The tax under section 21 is essentially a tax on purchase of goods. The taxable event is the purchase of cane for use, consumption or sale in a factory and not the entry of cane into a factory. . . . . . . . . . . "

The argument that the purchase tax must be levied on goods generally and there can be no purchase tax with reference to their subsequent use, consumption or sale was expressly negatived. Shri Ashok Desai, the learned counsel, no doubt tried to distinguish, which distinction was essentially based on the phraseology of section 21 as according to him, it is prescribed under that provision that the purchase of cane is required for use, consumption or sale in a factory though it is actually not used at that time itself and it is only the requirement for which purchases are made. The learned Advocate-General cannot be said to be unjustified when he submits that this distinction is unrealistic when the core of the matter remains the same and, therefore, the label of "use tax" that was sought to be given to such transaction was negatived and in any event it was accepted as purchase tax. In our opinion, this ratio also to some extent lends substantial support to the proposition canvassed by the learned Advocate-General and which we are inclined to accept as already discussed.

( 49 ) IT is not necessary to multiply the ratios since the major landmarks in that field have been referred to an discussed in the context of the controversy. The thrust of all those ratios indicating a consistent view which has been taken in that behalf supports the view that we are inclined to take in this matter. In many of thes referred to earlier the phraseology can furnish a goods analogy and comparison while in some cases though the phraseology is not identical but foundation is common, whereas in some cases a distinction is sought to be made that the goods are initially not liable to be taxed has been clarified by the Supreme Court, which is already discussed. There is thus a common undercurrent in all those ratios harmoniously highlighting the foundation that in such eventuality the tax really gets proper label as purchase tax and it would be a fallacy of style it as "use or consignment tax".

( 50 ) SHRI Kothari, the learned counsel appearing on behalf of the petitioners in one petition, tried to distinguish the ratio of the Full Bench of the Punjab and Haryana High Court in Des Raj pushaps case [1985] 58 STC 393. [LQ/PunjHC/1985/86] In effect he contended that no proper enquiry was made in the said decision primarily as to whether the impugned tax was truly in the nature of consignment tax leviable under entry 92-B of the Union List and if in that enquiry the court had come to the conclusion in favour of the said entry 92-B, then the conclusion that it fell in entry No. 54 would not have reached. It was also contended that the said decision did not apply to the rules of pith and substance in examining the nature of impugned tax and the argument was expanded further that if it wad doubtful whether the legislation falls under particular entry in List I or List II then the true nature of the legislation should have been examined. A difference was sought to be spelt out in the relevant provisions under the various Acts of different States which are the subject-matter in different decisions referred to above to support the contention that those decisions therefore, do not afford any analogy in reaching the conclusion as done by the Full bench. It was further contended that unlike other Acts the provision in the instant case is not remedial and on that count at least its validity should be struck down. In our opinion all those points are fully covered under the discussion we have already made at the earlier point of time and in fact most of his contentions are effectively answered in various decisions which are cited earlier, and even the said Full Bench decision answers all these points through the findings recorded which include that the tax in question is the purchase tax and therefore would squarely and exclusively fall in entry No. 54 of the State List and as the counterpart, since it is not the consignment tax it follows that it could not fall in entry No. 92-B of the Union List. An endeavour to make a distinction in the decision of the Full Bench in Des Raj Pushaps case [1985] 58 STC 393 [LQ/PunjHC/1985/86] by the Punjab and Haryana High Court is wholly unsustainable, being almost illusory and consequently the counterpart to impress upon the court to accept the ratio in Bata indias case [1983] 54 STC 226 (P [LQ/PunjHC/1983/315] and H) which was overruled by the Full Bench also must fail. It is not necessary to burden the record by restating the reasons over again.

( 51 ) SHRI Ashok Desai, the learned counsel appearing in some of the petitions, made a reference to the Statement of Objects and Reasons while enacting the Ordinance and ultimately enacting the statute by adding the provision of section 13aa in the. It is well-accepted that the statement of Objects and Reasons falls in a restricted field and for a limited purpose and that too only at a particular point of time. However, there is some reference in the return filed on behalf of the respondent to this aspect. Shri Desai, therefore, contended having regard to the said statement of Objects and Reasons that in the first instance there is no concession qua the items mentioned in Part I of Schedule C and secondly it is indicated that the proposed amendment was necessary with a view to avoid the unintended loss. Reference was also made by Shri Desai, the learned counsel, to the occurrence of Part II of Schedule C predominantly in the said statement. Observations to the effect that certain concessions are provided to the manufacturers in the State though it is noticed that such concessions in actual operation result in unintended loss of revenue and with a view to avoid such loss certain amendments are necessary only to serve almost as a preamble in general terms. Direct consideration is however, reflected further while dealing with the proposed amendment by section 2 for inserting section 13aa. It is then indicated that irrespective of tax rates for various commodities the manufacturers are permitted to purchase their inputs at concessional rate at 4 per cent on the presentation of a declaration and most of the industrial raw materials are placed in Part I of Schedule C and have a tax at only 4 per cent, which is also a concessional rate for the purchase of inputs for the manufacturers. Then it refers to the proviso to section 14 (1) allowing the additional tax of 1 per cent on the inputs that go into branch transfer, but is restricted to Part II of Schedule C. It is therefore, further observed that since such manufacturers who transfer most of the goods by branch transfer, use all the facilities of infrastructure provided by the state. It was therefore, felt that it is no more necessary to give them concession in respect of the inputs falling in Part II of Schedule C and accordingly it was proposed to levy 2 per cent purchase tax even on the inputs covered by Part I of Schedule C in addition to sales or purchase tax paid or payable, as the case may be. Even a cursory reading of this Statement of Objects and Reasons would make it manifest that it contains a rational nexus with the object to be achieved in proposing the amendment and it also clearly indicates the nature of concessional rates available to the items in Part I of Schedule C when it is indicated that the said concession is many times misused and that is why it impliedly indicates that when there is a breach of conditions then the concessional rate gets an additional tax added to it, thereby the concession getting withdrawn, though what is of more importance is, which is clear from the earlier discussion, that even the composite rate of tax does not go beyond 6 per cent and thus gets on par with other items. Reference to the items contained in Part II of Schedule C as reflected in that Statement are to be read in proper context, which would clearly bring on the surface the vulnerability of the petitioners contention that the said statement refers only to the concession allotted to the goods in Part II of Schedule C, but does not refer to any concession in respect of Part I of that Schedule. Four per cent being the concessional rate on items in Part I and the necessity to have the additional tax of two per cent in that respect is boldly reflected in that statement. Consequently, therefore, the said statement on the contrary serves a pointer in favour of the validity of the said Act and the view that we have taken in the matter.

( 52 ) CAREFUL assessment of this main plank of contentions raised on behalf of the petitioners entails into the most obvious conclusion that it has absolutely no substance, which gets substantial support from various provisions of the as also different ratios as discussed earlier, making it manifestly clear that the levy of tax as prescribed under section 13aa falls squarely and exclusively in entry No. 54 of the State List and is not even remotely attracted by entry No. 92-B of the Union List. Thus the challenge on the ground of legislative competence fails.

( 53 ) THIS opens the next line of attack which is essentially based on article 301 of the constitution. In substance the foundation of argument is that the sales tax sought to be levied under section 13aa is in breach or violation of article 301 of the Constitution, because it impedes free trade flow. Article 301 is placed in Part XIII under the heading "trade, commerce and intercourse within the territory of India" and it prescribes that subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free. Article 304 which also falls in the same Part may have some relevance in the context of nature of restrictions on trade, commerce and intercourse amongst the States and clause (b) stipulates that the Legislature of a State may by law impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest. As stated the main bone of contention is that by imposing such additional tax as proposed under section 13aa, the concept of freedom of trade, commerce and intercourse throughout the territory of India is destroyed and, therefore, it offends this provision and it is further indicated that if these are treated as restrictions then those cannot be said to be reasonable restrictions within the meaning of article 304, sub-clause (b ). This is obviously countered by the learned advocate-General on behalf of the respondents firmly suggesting that this provision has no application whatsoever, much less there arises any question of offending this provision. Inter alia, it was submitted by the learned Advocate-General that the goods which are taxed under section 13aa are consumed in the State itself in the process of producing another commodity and consequently the goods taxed do not leave the State as also the raw material purchased and consumed in the manufacture of other goods. It is further submitted that in any event the raw materials which are purchased at initial stage in the State change their shape and form in the state itself when they are used and consumed within the State in the manufacture of another commodity. It was firmly submitted that article 301 operates only when there is "direct", immediate and substantial hindrance to free trade". According to the learned Advocate-General amongst these three features none exists in the instant case since there is no hindrance at all in the matter of free trade much less the same can be said to be direct, immediate or substantial. It is also submitted with enough justification that the flow of trade does not necessarily depend upon the flow of tax but depends upon various factors. It was further vigorously contended that as a normal view the tax on sale of goods does not impede free flow of trade at all and, therefore, so goes the argument, that the very basic foundation of the argument advanced on behalf of the petitioners in that behalf contains a fallacy. The learned Advocate-General also contended with equal justification that in each case in the face of such a normal rule, there must be allegation which is to be substantiated by evidence and material to show as to how free flow of trade has been affected by this additional rate of tax and in the instant case this is blissfully missing in all these petitions.

( 54 ) BOTH sides placed reliance on certain decisions in this field and the learned advocate-General has also brought to our notice several ratios which tend to support the propositions, which he has enunciated and which we have indicated while narrating his line of argument in the context of the controversy. Reference to only a few out of these decisions would suffice the purpose making it unnecessary to refer to all other decisions.

( 55 ) IN Atiabari Tea Co. Ltd. v. State of Assam AIR 1961 SC 232 [LQ/SC/1960/173] the observations of the supreme Court in majority view furnish substantial guidelines in construing the true import of article 301, which guidelines have been accepted in all the subsequent decisions and the relevant portion can be reproduced as :

". . . . . . . . . . In construing article 301, we must, therefore, have regard to the general scheme of our constitution as well as the particular provisions in regard to taxing laws. The construction of article 301 should not be determined on a purely academic or doctrinaire considerations; in construing the said article we must adopt a realistic approach. . . . . It is as Federal Constitution which we are interpreting,. . . . . . Besides, it is not irrelevant to remember that the article imposes a constitutional limitation on the power of the Parliament and the State Legislatures to levy taxes, and generally, but for such limitation, the power of taxation would be presumed to be for public good and would not be subject to judicial review or scrutiny. Thus considered we think it would be reasonable and proper to hold that the restrictions, freedom from which is guaranteed by article 301, would be such restrictions as directly and immediately restrict or impede the free flow or movement of trade. The taxes may and do amount to restrictions; but it is only such taxes as directly and immediately restrict trade that would fall within the purview of article 301. The argument that all taxes should be governed by article 301 whether or not their impact on trade is immediate or mediate, direct or remote, adopts an extreme approach which cannot be upheld. . . . . . . We are, therefore, satisfied that in determining the limits of the width and amplitude of the freedom guaranteed by article 301 a rational and workable test to apply would be : does the impugned restriction operate directly or immediately on trade or its movement . . . . . . . . . . "

( 56 ) IN Automobile Transport Limited v. State of Rajasthan AIR 1962 SC 1406 [LQ/SC/1962/152] the Supreme court was considering the relevant provisions of the Rajasthan Motor Vehicles Taxation Act and in particular section 4 which relates to the imposition tax. A challenge to its validity was levelled also on the basis of article 301 which was negatived under the majority view. The observations in Atiabaris case AIR 1961 SC 232 [LQ/SC/1960/173] were accepted and it was observed during the course of judgment as :

"the taxes under this Act are compensatory taxes which do not hinder the trade, commerce or intercourse assured by article 301. . . . . . Regulatory measure or measures imposing compensatory taxes for the use of trading facilities do not come within the purview of the restrictions contemplated by article 301. . . . . . The concept of freedom of trade, commerce and intercourse postulated by article 301 must be understood in the context of an orderly society as a part of the constitution which envisages a distribution of powers between the States and Union and if so understood the concept must recognise the need and the legitimacy of some degree of regulatory control, whether by the Union or State. This is irrespective of the restrictions imposed by other articles in Part XIII of the Constitution. . . . . . For the tax to become a prohibited tax it has to be a direct tax the effect of which is to hinder the movement part of trade. . . . . . "

In the ultimate analysis it was concluded that the said Act does not violate the provisions of article 301 and the taxes imposed do not hinder the freedom of trade, commerce and intercourse and, therefore, those taxes were legal.

( 57 ) IN Andhra Sugars Ltd. v. State of Andhra Pradesh [1968] 21 STC 212 (SC); AIR 1968 SC 599 [LQ/SC/1967/292] to which we have already made reference earlier in other context also deals with this aspect. Section 21 of the Andhra Pradesh Sugarcane (Regulation of Supply and Purchase) Act was under scrutiny. The challenge on the ground of legislative competence which was negatived has also been discussed earlier. The challenge on the basis of article 301 was also repelled. We have already indicated the ingredients of the said section 21 in the earlier discussion and the said provision relates to levy of tax not exceeding five rupees per metric tonne on the purchase of cane required for use, consumption or sale in a factory. In that context the Supreme Court observed as :

"the tax levied under section 21 does not discriminate against any imported cane. Under section 21, the same rate of tax is levied on purchases of all cane required for use, consumption, etc. , in a factory. There is thus no discrimination. . . . . . Non-discriminatory tax does not offend article 301 unless it directly impedes free movement or transport of goods. Normally, a tax on sale of goods does not directly impede the free movement or transport of goods. Section 21 is no exception. It does not impede free movement or transport of goods and is not violative of article 301. . . . . . . . "

( 58 ) IN State of Madras v. N. K. Nataraja Mudaliar [1968] 22 STC 376 (SC); AIR 1969 SC 147 [LQ/SC/1968/116] the provisions of section 8 (2) and (5) of the Central Sales Tax Act were considered in the context of challenge to their validity on the basis of article 301. That challenge was repelled since the said Act was merely an enactment for the purpose of imposing tax, which was to be collected and retained by the State and there was no discrimination between one State and another because of varying rates of taxes prevailing in different States. In that context the Supreme Court observed as :

"the flow of trade does not necessarily depend upon the rates of sales tax : it depends upon a variety of factors such as source of supply place of consumption, existence of trade channels, etc. . . The free flow of trade cannot necessarily be deemed to have been obstructed merely because in a particular State the rate of tax is higher than the rates prevailing in other States. . . . . . "

( 59 ) MUCH reliance was placed on behalf of the petitioners on the ratio in Kalyani Stores v. State of Orissa AIR 1966 SC 1686 [LQ/SC/1965/229] . However, on bare reading of the facts therein it would become apparent that it does not furnish any ratio which could be applicable to the facts of the instant case. Section 27 of the Bihar and Orissa Excise Act was under consideration and the petitioners therein had challenged the imposition of duty of excise on foreign liquor imported into the State initially levelled at Rs. 40 per L. P. gallon, which was enhanced to Rs. 70 under that provision. It is this enhancement of duty which was predominantly challenged on the ground that since the foreign liquor was not manufactured in the State and no duty of excise as such could be levied on the locally manufactured liquor, a countervailing duty could not be charged on foreign liquor brought from outside the State. Though initially the challenge was against the entire amount of duty still it ultimately was restricted only to the enhanced amount. A concept of countervailing duty in entry No. 51, List II of the Seventh Schedule to the Constitution was examined when it was indicated that such duty could only be levied if similar goods are actually produced or manufactured in the State on which excise duty could be levied. Articles 301 and 304 were considered in a composite manner also to find out whether the restrictions could be said to be reasonable. It was essentially on the count that no foreign liquor was manufactured or produced in the State that it was held that the power to legislate was not available. It would be thus clear that the observations and the ultimate ratio about infringement of articles 301 and 304 of the constitution are entirely on the basis of the facts therein when entry No. 51 along with the concept of countervailing duty was considered and the material feature was that admittedly no foreign liquor was produced or manufactured within the State. In our opinion, this decision therefore, cannot be a criterion for applying the same to the facts of the instant case to hold on the same lines.

( 60 ) THE Supreme Court had yet another occasion to consider this aspect in State of Kerala v. A. B. Abdul Kadir AIR 1970 SC 1912 [LQ/SC/1969/240] . The notification issued under the Kerala Luxury Tax on tobacco (Validation) Act was the subject-matter of the challenge essentially levelled on the basis of articles 301 and 304 in addition to other counts. The Supreme Court took survey of various decisions available in that field, most of which we have already referred to, and also considered the impact of the ratio in Kalyani Stores case AIR 1966 SC 1686 [LQ/SC/1965/229] . There were some rules earlier and the complexion was changed subsequently after Cochin State was integrated in travancore and became Part B State and the Central Excises and Salt Act was extended to it. There were some notifications in-between and ultimately this notification was passed, which was ultimately replaced by the Ordinance and section 3 of the said Act imposes the liability on the person vending or stocking tobacco, to pay the luxury tax in the form of fee for licence. The observations from various decisions, most of which we have already considered including atiabari Tea Co. s case AIR 1961 SC 232 [LQ/SC/1960/173] were extracted. The Supreme Court also held after discussion that the ratio in Kalyani Stores case AIR 1966 SC 1686 [LQ/SC/1965/229] could not be invoked on the facts of that case. The Supreme Court further laid a proposition that unless there is a finding on material that is available on record that there has been infringement of the guarantee under article 301 the further question as to whether it is saved under article 304 (b) would not arise. In substance the Supreme Court observed as :

"imposition of a duty or tax in every case would not be tantamount per se to an infringement of article 301. Only such restrictions or impediments which directly or immediately impede free flow of trade, commerce and intercourse fall within the prohibition imposed by article 301. A tax may in certain cases directly and immediately restrict or hamper the flow of trade, but every imposition of tax does not do so. Every case must be judged on its own facts and its own setting of time and circumstance. . . . . . Unless the court first comes to the finding on the available material whether or not there is an infringement of the guarantee under article 301 the further question as to whether the statute is saved under article 304 (b) does not arise and the principle laid down by the Supreme Court in kalyani Stores case AIR 1966 SC 1686 [LQ/SC/1965/229] cannot be invoked. . . . . . "

( 61 ) ELABORATING the observations of the Supreme Court in Kalyani Stores case AIR 1966 SC 1686 [LQ/SC/1965/229] and examining those in the context of the facts therein, the Supreme Court observed as :

". . . . . . . . . As no liquor was manufactured within the State, the protection under article 304 was not available. The decision was based on the assumption that notification enhancing the duty on foreign liquor infringed the guarantee under article 301 and may be saved if it fell within the exceptions contained in article 304 of the Constitution. The court did not intend to lay down the proposition that imposition of a duty or tax in every case would be tantamount per se to an infringement of article 301. . . . . . "

No doubt in the said case the matter was remitted back to the High Court since the Supreme court felt that the High Court had not considered whether on the material available there was any infringement of article 301, but the High Court had proceeded on the assumption that it did so and considered whether it is saved by the exemption under article 304 (b ). However, the supreme Court clearly observed as :"as we have already pointed out it is well-established by numerous authorities of this court that only such restrictions or impediments which directly or immediately impede the free flow of trade, commerce and intercourse fall within the prohibition imposed by article 301. A tax may be certain cases directly or immediately restrict or hamper the flow of trade, but every imposition of tax does not do so. . . . . . "

( 62 ) SOME endeavour was made to rely on couple of decisions on behalf of the petitioners. However, in our opinion, those would not have any bearing to resolve the controversy in this field. Thus for instance in R. C. Jall Parsi v. Union of India AIR 1962 SC 1281 [LQ/SC/1962/92] a different question was considered on an entirely different set up as to whether a particular tax ceased to be in essence an excise duty and the rational connection between the duty and the person on whom it is imposed cease to exist. The duty of excise was imposed under an Ordinance on coal and coke, which was despatched by train by collieries or coke plants and which was to be collected by the railway administration by means of surcharge on freight and the said duty of excise was made recoverable either from the consignor or consignee as the case may be. The question whether coal cess was a fee and not a tax or duty was considered. In Firm A. T. B. Mehtab Majid and Co. v. State of Madras [1963] 14 STC 355 (SC); AIR 1963 SC 928 [LQ/SC/1962/391] validity of rule 16 of the madras General Sales Tax (Turnover and Assessment) Rules was under controversy. The main contention was that the tanned hides or skins imported from outside the State and sold within the state are subjected to higher rate of tax than the tax imposed on hides or skins tanned or sold within the State when it was also contended that the said sales tax had the effect of discriminating between the goods of one State and the goods of another State thereby affecting free flow of trade and thus offending article 301 of the Constitution. It was also contended that the sales tax on the imported hides of skins tanned outside the State was on their sale price while the tax on hides and skins tanned within the State was really on the sale price of those hides and skins when they are purchased in raw condition, which is substantially less and further the hides and skins imported from outside after purchase in their raw condition and then tanned inside the state are also subjected to higher taxation than those purchased in raw condition in the State. Such discrimination, so was argued, in taxation also offended article 304 as also it offended article 301 because it affected free flow of trade. For obvious reasons it was so decided on the facts of that case, which does not serve and analogy to the facts of the instant case. As observed by the Supreme Court in Abdul Kadirs case AIR 1970 SC 1912 [LQ/SC/1969/240] that the imposition of duty or tax in every case would not be tantamount per se to an infringement of article 301 and every case must be judged on its own facts and in its own setting of time and circumstances.

( 63 ) ON the basis of the facts that the available in the instant case, in our opinion, no question legitimately arises about the said taxation offending article 301 without carving any exception under article 304 (b ). As we have already indicated the goods taxed do not leave the State in the shape of raw material, which change their form in the State itself and that there is no question of any direct, immediate or substantial hindrance to a free flow of trade. It is fairly well-demonstrated on behalf of the respondents, which aspect has been discussed in details earlier, and which also prominently finds place in the return, that initial concession was given which stands withdrawn on the breach of certain conditions, which breach really activate the imposition of such additional tax which very much remained in dormant form at the inception of initial purchase itself and furthermore even after adding this tax it does not go beyond any irrational limit but on the contrary it is placed on par with other duty. Such a tax on sale of goods even as per normal rule does not impede free flow of trade as contemplated by article 301. Moreover, absolutely no material has been placed on behalf of the petitioners even to ostensibly justify their contentions and to show as to how such free flow of trade has been affected by the additional rate of tax. In our opinion, any further discussion on that count also is wholly unsustainable.

( 64 ) TO complete the circuit an affidavit has been filed by the Assistant Commissioner of Sales tax, Bombay, on 16th June, 1988 only for a limited purpose that the procedure prescribed under article 304 (b) of the Constitution has been complied with by the State Government under which it was necessary to obtain the prior sanction in the State Legislature to the introduction of the said Bill which was so introduced in August, 1982 under which the provisions of section 13aa were sought to be inserted. The affidavit says that prior to the introduction of the said Bill the state Government applied for the requisite sanction and that necessary sanction was received on august 21, 1982 pursuant to which intimation regarding this fact was forwarded to the Secretary to the Maharashtra Legislative Assembly on August 30, 1982. This is reflected in a letter of the same date addressed by the then Honourable Minister for Finance to the Secretary to the maharashtra Legislative Assembly incorporating the said facts. A copy of the said letter is annexed to that affidavit. The said letter clearly mentions that it was proposed to introduce the said Bill in the Assembly and copy of the Bill with the Statement of Objects and Reasons and the governors recommendation under article 207 (1) of the Constitution for consideration of the Bill by the Assembly was attached. It was also indicated that as required under the proviso to article 304, sub-clause (b) of the Constitution, the President of India has accorded his previous sanction to the introduction of the above Bill in the State Legislature. This aspect is not controverted or disputed on behalf of the petitioners and this, therefore, puts a stamp of finality on the procedural part about the validity of the said amended provision. Not only that but it also takes care of compliance of the provisions of article 304, sub-clause (b) of the Constitution, which are to be read in the context of the challenge based on article 301 of the Constitution. This, therefore, is an additional factor to negative the petitioners contention in that field. Consequently, the challenge on the basis of article 301 also fails.

( 65 ) IN the third category an endeavour was made on behalf of the petitioners to level a challenge on the basis of article 14 of the Constitution. In effect it was contended that section 13aa makes a classification between a dealer, who uses the purchased goods within the State and transfers the manufactured goods outside; a dealer either sends the purchased goods outside the State or uses the purchased goods within the State and levy of additional purchase tax on the first category of persons. It was further suggested that the classification would be between the dealer who uses the purchased goods for manufacture in the State of Maharashtra and transfers the manufactured goods outside and the other dealers who transfer the purchased goods outside the State for manufacture in another State. It was on this basis further contended that such a classification discriminates against those who manufacture goods in the State of Maharashtra and it bears no nexus to the object of the, which intends to raise revenue by levying a tax on the sale or purchase of goods in the State of Maharashtra. It is on the basis of these composite contentions that it was canvassed that the impugned section is therefore, discriminatory and violates article 14 of the Constitution. This aspect really speaking had been elaborately dealt with though in the other context while considering the contention on the main ground about the legislative competence as also about the provisions of article 301 with which it is to some extent associated and therefore, it need not be rediscussed over again in detail. We have already elaborated that the rate of sales tax regarding the items in Part I of the Schedule C is 4 per cent at the maximum in contrast to Part II of that Schedule, which range from 6 per cent to 15 per cent. This was obviously a concessional low rate of purchase tax on the raw material presumably because it related to the raw material that was to be utilised in the manufacture of finished goods and on an assumption as also expectation that if the manufactured goods are sold within the State it would invite further tax on an equally additional expectation that those goods will be available to the people in the State. During the earlier discussion we have pointed out that the rate under Part II of Schedule C against from No. 15 would be the same as in respect of goods in Part I and thus the rates can be said to be on par on both the transactions, since in one case it would be under the section itself while in another it is prescribed in Part I. Therefore, there is no question of any discrimination. It is also rightly submitted by the learned Advocate-General and as discussed earlier, the transferring of raw material by themselves and transferring of manufactured goods cannot be compared since it has been classified in two categories separately like raw material and manufactured goods, which is obviously a reasonable classification. We have also demonstrated as to how the position of liability in the three different cases would remain the same relating to the manufacturer who purchases goods in Part II, those purchase in Part I and others who purchase under form No. 15 and in fact the ultimate liability of tax leviable would be 6 per cent thereby on par with each other and consequently this provision really eliminates disparity between different manufacturers. The provision thus examined properly, therefore, would on the contrary strongly indicate that it tends to wipe out any discrimination or disparity. We have also negatived the challenge based on article 301 holding that it does not hamper or impede free trade, commerce and intercourse, which finding to some extent cover this aspect also. On the facts and circumstances of this case there is hardly any question of there being any classification between different dealers having no nexus with the object of the and the provisions being discriminatory and therefore, violative of article 14 of the Constitution.

( 66 ) WE may incidentally mention that in the case of Andhra Sugars v. State of Andhra Pradesh [1968] 21 STC 212 (SC); AIR 1968 SC 599 [LQ/SC/1967/292] where section 21 of the Andhra Pradesh Sugarcane (Regulation of Supply and Purchase) Act was under consideration and where a challenge on the ground that it was consignment tax as also offending article 301 was negatived, the further attack was made to challenge the same contending that it offended article 14. It was inter alia contended that he said provision levies low rate of tax on the purchase of cane of khandsari unit and there was also discrimination in favour of producer of jaggery. A distinction was also sought to be made in the process of manufacture of sugar by means of vacuum pan process and open pan process. This challenge was also repelled. The differential treatment to the factories each utilising different process was reasonable having a rational relation to the object and taxation and there was a marked difference between the three classes of users of cane and their capacity to pay the tax and, therefore, the legislature could reasonably treat the three classes of users differently for the purpose of levy. The further argument that the power under that provision to exempt new factory and the factories which have substantially expanded was discriminatory and violative of article 14 was also repelled. The said exemption was found to be based on legitimate legislative policy. In Hindustan Milkfood Manufacturers Ltd. v. State of Andhra Pradesh [1982] 51 STC 1 (AP) [LQ/TelHC/1982/50] it was already discussed in the other context. A challenge to section 6a of the Andhra Pradesh General Sales Tax Act was levelled on several counts, however, which was repelled and to which we have already made a reference. It offended article 14 which was also one of the grounds of challenge suggesting that it makes an invidious discrimination between the purchase made from registered dealers and the persons other than the registered dealers, having no rational nexus with the object, and also on the ground of differential treatment in the matter of incidence of tax. While repelling the contention it was indicated that such a classification if any is rational and the attraction of tax on any of the three conditions is equally distinct. It was further observed that subject to certain limitations and adhering to fundamental principles of doctrine of economy, the courts admit a larger play of legislative discrimination in the matter of classification in regard to tax legislation so that the legislature may select the persons, properties, transactions and objects and different method and even different rate of tax if the legislature does it reasonably. It was also indicated that the courts would not strike down the as denying equal protection of law merely because other objects could have been taxed by the legislature and the statute is not therefore, open to attack on the ground that it taxes some persons and objects and not others. It was indicated that it is only when within the range of its selection the law operates unequally and if that operation cannot be justified on the basis of any valid classification then it would be violative of article 14.

( 67 ) IT is not necessary to burden the record by considering this contention any further, since in our opinion for the reasons already assigned and in view of elaborate discussion already made there is no question whatsoever of the provision of section 13aa even remotely offending the provision of article 14 of the Constitution. This plank of contention is also therefore, devoid of any substance.

( 68 ) IN view of this discussion it inevitably follows that the challenge to the vires and validity of the provisions of section 13aa of the as introduced in the Bombay Sales Tax Act on any count is thoroughly misplaced and wholly illusory.

( 69 ) ON the basis of this premise there is hardly any controversy that on facts the cases of all the three petitioners squarely fall within the purview of that provision. In fact this aspect is not disputed, which is manifest from the factual structure about the case of each petitioner, which is indicated at the threshold. All the petitioners are dealers within the meaning of the, they are assessed to pay tax under this Act, they make purchases of goods specified in Part I of Schedule c in the mode as suggested in that provision, use such goods in the manufacture of taxable goods and despatch the goods so manufactured outside the State. All these features on fact co-exist. If that be so then it follows that under the provisions of section 13aa they are liable to pay additional tax of 2 per cent on the purchase price of goods so used in the manufacture. Thus the prescription under section 13aa, existence of facts as required under that provision and inevitable liability too pay the additional tax are all the relevant features co-existing and consequently the challenge to the levy of such tax and the relief for claiming refund of this tax, which is already levied also must fail.

( 70 ) IN this view of the matter all the petitions would obviously fail.

( 71 ) RULE in all the three petitions is discharged. There would, however, be no order as to costs in either.

( 72 ) AT this stage the petitioners pray for leave to appeal to the Supreme Court. Since we have decided the question on the basis of the law laid down by the Supreme Court we do not think that this is a fit case for grant of any such leave. Hence leave refused.