Successive dealers and declared goods restrictions shaped the validity of State sales tax on khandsari sugar.

The phrase "successive dealers" in section 3-A of the U.P. Sales Tax Act was read in its ordinary sense to cover a series of dealers one after another, including the first dealer or manufacturer-dealer. The article further explains that, for declared goods like sugar, Article 286(3) subjects State sales tax to Parliamentary restrictions under sections 14 and 15 of the Central Sales Tax Act, as applied through section 7 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957. The earlier U.P. notification was treated as valid but modified to the extent of inconsistency, so the levy could still operate for the last sale within the State.

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Issues: (i) Whether the expression "successive dealers" in section 3-A of the U.P. Sales Tax Act includes the first dealer or manufacturer-dealer; (ii) whether, in view of Article 286(3) of the Constitution, sections 14 and 15 of the Central Sales Tax Act, 1956, and section 7 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957, sales tax could be levied on khandsari sugar under the U.P. notification.

Issue (i): Whether the expression "successive dealers" in section 3-A of the U.P. Sales Tax Act includes the first dealer or manufacturer-dealer.

Analysis: The phrase "successive dealers" was construed according to its ordinary meaning in the context of a plural noun. The term denoted a series of dealers coming one after another and was not confined to dealers after an initial dealer. The first dealer formed part of the successive series, and the Legislature did not require a dealer preceding the manufacturer as a condition for selection of the taxable point.

Conclusion: The expression included the first dealer or manufacturer-dealer, and the answer was against the assessee.

Issue (ii): Whether, in view of Article 286(3) of the Constitution, sections 14 and 15 of the Central Sales Tax Act, 1956, and section 7 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957, sales tax could be levied on khandsari sugar under the U.P. notification.

Analysis: Article 286(3) made a State sales tax law subject to Parliamentary restrictions once the goods were declared goods. Sugar, as declared goods, was therefore governed by the restrictions in section 15 of the Central Sales Tax Act as made applicable by section 7 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957. The Court held that the reference in section 7 to section 15 operated by incorporation for the purpose of ascertaining the restrictions and conditions, that the earlier U.P. notification remained valid but stood modified to the extent of inconsistency, and that the levy could still operate where the sale was the last sale within the State. The challenge based on non-commencement, subsequent amendment, repeal, and the later notification of 14 December 1957 was rejected.

Conclusion: Sales tax on khandsari sugar was leviable in accordance with the applicable restrictions, and the answer was against the assessee.

Final Conclusion: Both referred questions were answered in favour of the taxing authority, and the reference was disposed of accordingly.

Ratio Decidendi: A statutory phrase referring to a series of "successive" dealers includes the first dealer in that series, and where Parliamentary law makes State taxation of declared goods subject to specified restrictions, those restrictions apply according to the legal effect of incorporation by reference and modification of the State levy.

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