State sales tax on silk fabrics remained valid after removal from declared goods and despite inclusion in the excise schedule.

Silk fabrics, once removed from section 14 of the Central Sales Tax Act, 1956, ceased to attract the section 15 restriction on State sales tax. Continued inclusion of silk fabrics in the Additional Duties of Excise (Goods of Special Importance) Act, 1957 did not curtail Delhi's competence to levy local sales tax under its own law, because that scheme affected distribution of proceeds rather than taxing power. The article distinguishes Attesee on that basis and explains that the local sales tax notifications on silk fabrics were upheld despite the additional excise schedule.

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Issues: Whether the impugned notifications levying local sales tax on silk fabrics in Delhi were invalid because silk fabrics continued to figure in the Additional Duties of Excise (Goods of Special Importance) Act, 1957, and whether the rate of local sales tax was confined to the restriction applicable to declared goods under the Central Sales Tax Act, 1956.

Analysis: Silk fabrics had originally been included in section 14 of the Central Sales Tax Act, 1956, attracting the restriction in section 15, but were later removed from that list. Once removed, the statutory cap under section 15 no longer controlled the local sales tax leviable by the State. The mere continuance of silk fabrics in the schedule to the Additional Duties of Excise (Goods of Special Importance) Act, 1957 did not take away the legislative competence of the Delhi authority to impose local sales tax under the Delhi Sales Tax Act, 1975. The additional excise duty scheme only operated to affect the State's share of the distributable proceeds, and not to prohibit the State from levying a tax otherwise within its competence. The decision in Attesee did not assist the petitioners, because it did not hold that the State lacked power to tax goods appearing in the additional excise schedule; it only recognised the inter-connected scheme and the fiscal consequences under that enactment.

Conclusion: The challenge to the notifications failed. The levy of local sales tax on silk fabrics at 3 paise, 12 paise, and 4 paise in the rupee was upheld.

Final Conclusion: The writ petitions were dismissed, and the notifications imposing sales tax on silk fabrics for the relevant periods were sustained.

Ratio Decidendi: Removal of goods from section 14 of the Central Sales Tax Act, 1956 lifts the section 15 restriction on State sales tax, and continued inclusion of those goods in the Additional Duties of Excise (Goods of Special Importance) Act, 1957 does not curtail the State's legislative competence to levy local sales tax under its own law.

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