First-sale tax on manufactured goods is sales tax, not excise, and falls within provincial legislative competence.

A tax levied on the first sale of goods by a manufacturer or producer under the Madras General Sales Tax Act, 1939 was held to be a sales tax, not a duty of excise, even though it attached at the first sale. The Court followed its earlier view that the two levies are distinct and declined to depart from that position. The levy therefore remained within provincial legislative competence and outside the central excise field, so the challenge to its validity failed.

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Issues: Whether the tax imposed on the first sale of goods by a manufacturer or producer under the Madras General Sales Tax Act, 1939, was within provincial legislative competence or was, in substance, a duty of excise within the exclusive competence of the Central Legislature.

Analysis: The subject was treated as governed by the earlier decision on the same issue. The Court found no reason to depart from that view and held that a tax on sales by a manufacturer or producer is not a duty of excise merely because it is levied at the first sale. The tax remained a tax on the sale of goods within the provincial field, and the earlier determination that the two forms of levy were distinct was followed.

Conclusion: The impugned levy, so far as first sales were concerned, was valid and within provincial competence; the challenge failed.

Ratio Decidendi: A tax on the first sale of goods by a manufacturer or producer is a sales tax and not a duty of excise, and therefore falls within the provincial taxing entry rather than the central excise entry.

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