Uncontrolled taxing discretion under sales tax law was struck down for excessive delegation and article 14 discrimination.

A taxing clause in section 3-A(1) of the U.P. Sales Tax Act was found unconstitutional because it gave the State Government uncontrolled discretion to pick goods for single-point taxation and impose an enhanced rate without a guiding policy or effective safeguard. The court held that this created hostile discrimination under article 14, including by extending single-point taxation to goods ordinarily sold only once. The offending clause was severable and was struck down, while the remainder of the charging scheme continued to operate. The impugned notifications issued under the invalid clause also failed, and the turnover in question was required to be assessed under the general charging section.

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Issues: Whether the added clause in section 3-A(1) of the U.P. Sales Tax Act, 1948, empowering the State Government to subject goods not ordinarily sold at more than one point to single-point taxation, was invalid for excessive delegation and hostile discrimination, and whether the impugned notifications issued under that provision were consequently invalid.

Analysis: The Act, as amended, conferred on the State Government an unrestricted power to select any goods or class of goods for single-point taxation and to impose an enhanced rate without any guiding principle or effective safeguard. The saving provision in section 3-A(3) did not furnish adequate control. The impugned clause extended the power even to goods ordinarily sold only once, such as bricks, and thereby created an arbitrary distinction between commodities subjected to multiple sales and those subjected to a single sale, without any rational basis. That offending part of section 3-A(1) was severable from the rest of the section. Once severed, the remaining provision continued to operate and sales of bricks fell back within the general charging section 3. The notifications issued under the invalid clause could not survive.

Conclusion: The offending clause in section 3-A(1) was struck down as unconstitutional. The impugned notifications were invalid. The petitioners' turnovers were required to be assessed only under section 3.

Ratio Decidendi: A taxing provision that leaves the selection of taxable goods and the incidence of enhanced taxation to uncontrolled executive discretion, without a guiding policy or effective safeguard, is vulnerable both for excessive delegation and for violation of article 14; an offending severable clause may be struck down while leaving the remainder of the charging scheme intact.

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