KESAVAN Vs. STATE OF KERALA

JUDGEMENT

(1.) THIS group of sixteen petitions are under Art. 226, and challenges the constitutionality of the General Sales Tax (Amendment) Act, No. XIV of 1959 whereby sales of toddy have been charged with the tax, and three amendments been made in the General Sales Tax Act, No. XT of 1125. Firstly a new clause [j-3] has been added to S. 2 of Act No. XI of 1125 and runs as follows: [j-3] "'toddy' means the fermented or unfermented juice drawn from coconut, pal myra, date or any other kind of palm tree, but shall not include juice drawn into receptacles freshly coated internally with lime or otherwise treated so as to prevent any fermentation".

(2.) THE next is in S. 4 where the words 'other than toddy, arrack' been substituted, and the section now reads as follows: "the provisions of this Act shall not apply to the sale of electrical energy and any goods other than toddy, arrack and foreign liquor on which duty is or may be levied under the Travancore-Cochin prohibition Act, 1950, or the Madras Prohibition Act, 1937, as in force in the malabar District referred to in sub-section 2 of S. 5 of the States reorganisation Act,1956 or the Travancore or Cochin Opium Act or the Opium Act, 1878, [central Act I of 1878"

(3.) THE third objection to the constitutionality of the legislation is that it offends Art. 207, for the Bill was not recommended by the governor. If one were to summarise these constitutional objections one would be reduced to one complaint of the petitioners' right and freedom to carry their trade being interfered with, because of the absence of the President's earlier sanction, the Governor's recommendation and reasonable restrictions in the interest of the general public. It is further clear that, should the State's power to tax be found not controllable by clause [6] of Art. 19 in the sense that its exercise need not be justified as being in reasonable restriction of the freedom, a further point would still require adjudication. That question is how far the exercise of such a right to tax must be justified as reasonably restricting the freedom to trade, commerce and intercourse through the territory of India under Art. 301. In other words the point for decision is whether the guarantee of no tax being leviable except by the authority of law under Art. 265 require any enactment concerning taxation of trade to be with the President's earlier assent and in reasonable restriction of the right and the freedom to carry the trade. In addition to the aforesaid points two other objections were urged before us. THEy are that: [1] THE state having granted the petitioners the licences is estopped from levying any fresh tax by subsequent amendment and substantially redu-cedncing the benefits under the earlier licences; [2] Toddy being agricultural or hortieultural produce, the prices for the sales of such a commodity would be agricultural income and excluded from the turnover as defined by S. 3 of Act No. XI of 1125.