Valid dealer classification and limited export immunity upheld; assessment of the last non-exempt dealer was sustained.

Statutory classification between licensed and unlicensed dealers under the sales tax scheme was treated as a valid, reasonable distinction and the Article 14 challenge failed. Purchases made for export were not, by that fact alone, protected as transactions in the course of export under Article 286(1)(b), so export immunity was denied. Liability for sales to agents of non-residents was also upheld because the governing rule fastened assessment on the last dealer not exempt from tax, and the petitioner remained the assessable dealer on the admitted facts. The assessment notices and proposed levy were therefore sustained.

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Issues: (i) Whether the classification between licensed and unlicensed dealers under the sales tax scheme offended Article 14 of the Constitution of India; (ii) Whether purchases integrated with export transactions were protected by Article 286(1)(b) of the Constitution of India; (iii) Whether the petitioner could be assessed in respect of sales to agents of non-residents for export.

Issue (i): Whether the classification between licensed and unlicensed dealers under the sales tax scheme offended Article 14 of the Constitution of India.

Analysis: The distinction drawn by the statutory scheme between licensed and unlicensed dealers had already been upheld in prior binding decisions, and the classification was treated as valid because it did not create an unreasonable discrimination for purposes of equality.

Conclusion: The challenge under Article 14 failed and the classification was held valid.

Issue (ii): Whether purchases integrated with export transactions were protected by Article 286(1)(b) of the Constitution of India.

Analysis: The fact that the goods were purchased for the purpose of export did not by itself make the purchase part of the course of export. The constitutional immunity was confined to transactions that legally fell within the export protection, and the asserted integration was insufficient to attract that protection.

Conclusion: The claim to immunity under Article 286(1)(b) was rejected.

Issue (iii): Whether the petitioner could be assessed in respect of sales to agents of non-residents for export.

Analysis: The rule fastened liability on the last dealer not exempt from taxation, and the unchallenged factual position was that the petitioner was the assessable dealer in respect of those exports. The existence of agents as purchasers did not displace the petitioner's liability on the admitted facts.

Conclusion: The petitioner remained liable to assessment on those transactions.

Final Conclusion: The writ petition raised no tenable ground against assessment, and the tax notices and proposed levy were sustained.

Ratio Decidendi: A statutory classification between licensed and unlicensed dealers is valid if it is reasonable, export immunity does not extend to every transaction connected with export, and liability may attach to the last non-exempt dealer under the governing rule.

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