N G PURUSHOTTAM Vs. GOVERNMENT OF KARNATAKA

JUDGEMENT

(1.) THE petitioner seeks a declaration that entry 5 (e) (ii) of the Fourth Schedule to the Karnataka Sales Tax Act, 1957 ("the KST Act", for short) as amended by Karnataka Act of 23 of 1983 as unconstitutional, as offending articles 14, 286 and 304 (a) of the Constitution of India; consequently, the levy of tax under entry 5 (e) (ii) of the said Fourth Schedule, on coconuts is sought to be quashed.

(2.) THE petitioner is a wholesale dealer in coconut. Coconut is a "declared goods", declared to be of special importance in inter-State trade or commerce, under section 14 of the Central Sales Tax Act, 1956 ("the CST Act", for short ). Section 15 of the CST Act imposes certain restrictions and conditions in regard to tax on sale or purchase of declared goods within a State. By Karnataka Act 23 of 1983, tax is levied on sale, as well as purchase of coconuts in the State of Karnataka, which according to the petitioner is constitutionally impermissible. It is asserted that, under the KST Act, tax was leviable on the fresh purchase in the State. In respect of coconuts purchased locally within the State, tax was being levied at the earliest point of purchase; now after the amendment, in respect of purchases made by inter-State sales, tax is not levied, but tax is levied at the point of first sale; this levy, is not only discriminatory, but also offends article 304 (a) of the Constitution.

(3.) MR . Gandhi contended that under entry 54, List II of the Constitution, tax can be levied either on the sale or on the purchase, of any particular goods, but not on both sale and purchase; in the instant case, the State Legislature has selected on both points of sale and purchase of the levy, which is not permissible. The legislature should have confined the levy, either to the levy stated in entry 5 (e) (i) or to entry 5 (e) (ii), but levy on both aspects of a transaction is not contemplated by the legislative entry. In respect of coconuts brought into the State of Karnataka by inter-State trade, tax is already levied under section 15 of the CST Act; such coconuts already bear the tax burden; imposition of one more tax again, while these coconuts are sold in the State, at the first point of sale, enhances the burden on the goods; this primarily attracts the bar imposed by article 304 (a ).