GH MOHD GANAI Vs. STATE

JUDGEMENT

(1.) THESE two batches of writ petitions involve two important but different questions of law but, since the facts are almost identical and the questions of law are inter -linked, both are being disposed of together by this common judgment. What are two questions involved in the two batches of the petitions? The first question is: Whether the State does not have the power to impose tax on certain goods, like edible oils, dry fruits etc. etc, or to impose tax at a particular rate which may be higher than the rate of tax either hitherto prevalent or different than in the neighbouring States. The second question is whether the State does not have the power to grant exemption to a class of local units so that the goods imported from outside the State become leviable to the payment of sales tax, as against the goods manufactured within the State by such exempted local units.

(2.) THE facts are very short, simple and undisputed. The petitioners in both the batches of the petitions are either dealers in Dry Fruits and some other items locally based within the Jammu & Kashmir State, or are importers from outside the State and import mostly edible oils. The Government of Jammu and Kashmir issued a notification vide SRO 124 dated 27th June 1994 whereby, in exercise of powers conferred upon it under section 4(1) of the Jammu and Kashmir General Sales Tax Act, 1962 (Act for short) it incorporated certain amendments in the notification issued vide SRO 135 dated 29 -3 -1989. Section 4 (1) of the Act is a charging section under which the State has the power to impose tax on goods. Sub -section (1) of section 4 reads as under: - 4(1) Liability to tax under this Act. (1) Subject to the provisions of this Act, every dealer, except the one dealing exclusively in goods declared tax free under section 5, shall pay for each year tax on his total turn over at a rate not exceeding twelve percent of such turn -over as may be determined by the Government and notified by the Government in the Government Gazette and such tax shall be charged on the sale of goods once only."

(3.) IN 1989 notification SRO 135 dated 29 -3 -1989 was issued in exercise of the powers conferred upon the Government under this section. It was in this notification that the Government had imposed taxes at varying rates on certain classes of goods contained in Schedules -A to D annexed with the notification. Schedule A contained a list of three items of goods chargeable to tax @ 30% Schedule B a list of 14 items of goods chargeable to tax @ 10% Schedule C 22 items of goods chargeable to tax @ 8% and schedule D35 items of goods chargeable to tax @ 4%. In these petitions, we are concerned only with the items of edible oils and dry fruits including Almonds and Kernals thereof. Whereas items of dry fruits was not originally included in any of the Schedules in notification No. 135 of 1989 the item of edible oil was included at S. No. 9 of Schedule D to this notification. It therefore, follows that whereas edible oil was brought from Schedule D (chargeable to tax @ 4%) to Schedule C* (chargeable to tax @ 8%) Dry fruits were for the first time brought into the tax net by their inclusion in Schedule C, chargeable to tax @ 8 %. It is this notification SRO 124 dated 27 -6 -1994 which has been impugned in these petitions primarily on the following grounds.