Fiscal classification by turnover upheld where notice clause did not delay a separate rate-enhancing tax notification.

A notice clause tied to amendment of a tax schedule was held not to control the effective date of a separate notification enhancing the tax rate, so three months' notice was not required before the higher rate became operative. The levy was also upheld against constitutional challenge because classification of dealers by business extent and turnover satisfied the test of reasonable fiscal classification: it rested on an intelligible differentia with a rational nexus to the statute's taxing object. Differential treatment based on turnover was treated as administratively workable and not discriminatory. The challenge to the notification and the levy therefore failed.

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Issues: (i) Whether the notification levying tax at double the notified rate required three months' notice before it could become operative; (ii) Whether the impugned levy violated Articles 14 and 19(1)(g) of the Constitution on the ground of discriminatory classification.

Issue (i): Whether the notification levying tax at double the notified rate required three months' notice before it could become operative.

Analysis: The proviso drew a distinction between the levy of double tax on luxury goods and the separate power to amend Schedule 'A' by notification. The notice requirement of three months was held to relate only to the amendment of the Schedule and not to the commencement of the enhanced rate. The words used in the proviso were construed as not prescribing any time limit for issuing the notification increasing the rate of tax.

Conclusion: The notification was not invalid for want of three months' notice before the enhanced rate became enforceable.

Issue (ii): Whether the impugned levy violated Articles 14 and 19(1)(g) of the Constitution on the ground of discriminatory classification.

Analysis: The levy was tested on the settled principle that Article 14 permits reasonable classification if it is based on an intelligible differentia having a rational relation to the object of the statute. The classification of dealers according to the extent of business and the administrative decision to tax only dealers above a particular turnover threshold was treated as a permissible fiscal classification. It was further held that differential tax treatment based on turnover does not, by itself, amount to unconstitutional discrimination where the legislative object is general taxation and the classification is administratively workable.

Conclusion: The levy did not contravene Articles 14 or 19(1)(g) and was constitutionally valid.

Final Conclusion: The petition failed on both grounds, and the challenge to the notification and the levy was rejected.

Ratio Decidendi: A fiscal classification based on turnover or business extent is valid if it rests on an intelligible differentia with a rational nexus to the taxing statute's object, and a notice clause directed to amendment of a schedule cannot be extended to control the effective date of a separate rate-enhancing notification.

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