TMI Blog1969 (7) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... l No. 517 of 1969, Civil Appeal No. 518 of 1969, Civil Appeal No. 519 of 1969, Civil Appeal No. 520 of 1969, Civil Appeal No. 521 of 1969, Civil Appeal No. 522 of 1969, Civil Appeal No. 523 of 1969, Civil Appeal No. 524 of 1969, Civil Appeal No. 525 of 1969, Civil Appeal No. 526 of 1969, Civil Appeal No. 527 of 1969, Civil Appeal No. 528 of 1969, Civil Appeal No. 529 of 1969, Civil Appeal No. 530 of 1969, Civil Appeal No. 531 of 1969, Civil Appeal No. 532 of 1969, Civil Appeal No. 533 of 1969, Civil Appeal No. 534 of 1969, Civil Appeal No. 535 of 1969, Civil Appeal No. 536 of 1969, Civil Appeal No. 537 of 1969, Civil Appeal No. 538 of 1969, Civil Appeal No. 539 of 1969, Civil Appeal No. 540 of 1969, Civil Appeal No. 541 of 1969, Civil Appeal No. 542 of 1969, Civil Appeal No. 543 of 1969, Civil Appeal No. 544 of 1969, Civil Appeal No. 545 of 1969, Civil Appeal No. 546 of 1969, Civil Appeal No. 547 of 1969, Civil Appeal No. 548 of 1969, Civil Appeal No. 549 of 1969, Civil Appeal No. 550 of 1969, Civil Appeal No. 551 of 1969, Civil Appeal No. 552 of 1969, Civil Appeal No. 553 of 1969, Civil Appeal No. 554 of 1969, Civil Appeal No. 555 of 1969, Civil Appeal No. 556 of 1969, Civil Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 59), on "cane jaggery" is invalid. The High Court rejected all the contentions. Counsel for the appellants have in these appeals urged the first two grounds and have in addition submitted that in levying tax on turnover from sale of "cane jaggery" legislative power has been colourably exercised. The argument that there was excessive delegation to the executive of the legislative power was abandoned before the court, because the State of Madras has enacted Act 2 of 1968 authorising levy of tax on sale of jaggery by amending Schedule III to Madras Act 1 of 1959. Turnover from sale of jaggery-cane or palm-was subject to tax under section 3(1) of the Madras Act 9 of 1939 at three pies per rupee. By G.O. 651 dated February 28, 1955, and G.O. 2780 dated September 7, 1955, all sales of "palm jaggery" effected through co-operative societies and the Palm Gur Federation were exempted from tax. By another G.O. No. 1605 dated April 19, 1956, all transactions of sale in "palm jaggery" were exempted from sales tax with effect from April 1, 1956. Transactions of sale in "cane jaggery" therefore continued to remain liable to tax whereas sales of "palm jaggery" enjoyed the benefit of exemptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 1958 "sugar" as defined in item No. 8 of the First Schedule to the Central Excises and Salt Act, 1944, was declared a commodity essential to the life of the community and tax could thereafter be levied on "sugar" at the rate of 2 per cent. only. But in view of the definition contained in the Central Excises and Salt Act, 1944, there was some doubt whether the expression "sugar" included guy. The State of Madras being apparently of the opinion that "plam jaggery" and "cane jaggery" were subject to the provisions of the Additional Excise Act 58 of 1957, issued on April 15, 1958, G.O. No. 1457 exempting all sales of "cane jaggery" from tax with effect from April 1, 1958. Transactions of sale of "palm jaggery" were therefore exempt partially from sales tax from February 28, 1955, and wholly from April 1, 1956, and transactions of sale of "cane jaggery" were exempt from tax from April 1, 1958. The State Legislature enacted the Madras General Sales Tax Act, 1959 (1 of 1959), with effect from April 1, 1959. By section 3 every dealer whose total turnover was not less than Rs. 10,000 became liable to pay tax for each year at the rate of 2 per cent. of his taxable turnover. By section 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere without any rational nexus with the object sought to be served by the Madras General Sales Tax Act, 1959, differently treated and on that account the notification issued under section 59, sub- section (1), which modifies the Third Schedule is ultra vires. It may be recalled that the notification under section 59(1) which was issued in exercise of executive authority has received legislative sanction by Madras Act 2 of 1968. Amendment in the Third Schedule now flows from the exercise of legislative authority and not executive authority. Since section 8 read with the Third Schedule as amended by Madras Act 2 of 1968 exempts only "sugar" from liability to tax, sales of jaggery, cane and palm, now fall within the charging section. But the Government of Madras have in exercise of power under section 17 of Act 1 of 1959 exempted transactions of sale of "palm jaggery" from tax. It is true that between April 1, 1958, and October 31, 1967, transactions of sale of "cane jaggery" and "palm jaggery" were exempt from liability to pay sales tax under the Madras General Sales Tax Acts of 1939 and 1959, but it cannot be inferred therefrom that the Legislature treated "palm jaggery" and "ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and adopt different modes of assessment. A taxing statute may contravene article 14 of the Constitution if it seeks to impose on the same class of property, persons, transactions or occupations similarly situate, incidence of taxation, which leads to obvious inequality." It was also said by the court that: "It is for the Legislature to determine the objects on which tax shall be levied, and the rates thereof. The courts will not strike down an Act as denying the equal protection of laws merely because other objects could have been, but are not, taxed by the Legislature." We are accordingly of the view that "cane jaggery" and "palm jaggery" are not commodities of the same class, and in any event in imposing liability to tax on transactions of sale of "cane jaggery" and exempting "palm jaggery", no unlawful discrimination denying the guarantee of equal protection was practised. No serious argument was advanced in support of the plea that the freedom of trade and commerce guaranteed by Part XIII of the Constitution is infringed by the imposition of tax on "cane jaggery". Freedom of trade, commerce and intercourse guaranteed by article 301 of the Constitution is protected against ..... X X X X Extracts X X X X X X X X Extracts X X X X
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