Article 14 and tax classification: unintended drafting defects and fortuitous escape from taxation do not by themselves invalidate a levy.

Article 14 is not offended merely because a taxing scheme operates unevenly due to drafting defects or the fortuitous escape of some dealers. Under the Madras General Sales Tax Act scheme on hides and skins, licensed dealers were the class on whom single-point tax was collected, while the apparent benefit to unlicensed dealers arose from the imperfect working of the rules, not from a deliberate hostile classification. The text notes that earlier decisions had upheld the statutory scheme in substance and that the number of unlicensed dealers was negligible in the relevant years. The levy on licensed dealers was therefore valid and not unconstitutional discrimination.

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Issues: Whether the levy of sales tax on licensed dealers in hides and skins, while unlicensed dealers escaped taxation because of the drafting and operation of the rules, offended Article 14 of the Constitution of India.

Analysis: The relevant scheme under the Madras General Sales Tax Act and the rules made thereunder imposed a single-point levy on hides and skins and treated licensed dealers as the class on whom tax was to be collected. Earlier decisions had upheld the statutory scheme in substance and had only struck down the rule which purported to tax unlicensed dealers multi-pointwise. The inequality that resulted was found to be unintended and attributable to the imperfect working of the rules, not to a deliberate hostile classification by the Legislature or rule-making authority. The Court held that Article 14 is concerned with intentional and designed discrimination, and that a law is not invalid merely because, owing to drafting defects or fortuitous circumstances, some persons escape taxation. The Court also held that the complaint of discrimination lacked factual substance, because the number of unlicensed dealers was negligible in the relevant years.

Conclusion: The levy on licensed dealers was not violative of Article 14 and was valid.

Ratio Decidendi: Unequal operation caused by unintended drafting defects or fortuitous escape of some persons from a taxing scheme does not, by itself, amount to unconstitutional discrimination under Article 14 unless the law embodies a designed and arbitrary classification.

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