Declared goods taxation and Finance Act amendment principles upheld for jute levies within the statutory ceiling.

A Finance Act amendment increasing the ceiling in section 15 of the Central Sales Tax Act from two per cent to three per cent was held to operate permanently, not only for financial year 1966-67, so State sales tax levies within that limit were not ultra vires. Raw jute and finished jute goods were treated as distinct commercial commodities: section 14(v) covered jute fibre, and the words "baled or otherwise" related only to packing. The restriction against taxing declared goods at more than one stage applies to successive sales or purchases of the same commodity, not to manufacture of a new commodity from declared goods. The constitutional and statutory challenges therefore failed.

---

---

Issues: (i) Whether the substitution of "three per cent" for "two per cent" in section 15 of the Central Sales Tax Act, 1956 by the Finance Act, 1966 was temporary and confined to the financial year 1966-67, so that the State levy under the Bengal sales tax laws was ultra vires. (ii) Whether raw jute and finished jute goods are the same declared commodity, so that levy of tax on raw jute and again on manufactured jute goods contravened the restriction that declared goods could not be taxed at more than one stage.

Issue (i): Whether the substitution of "three per cent" for "two per cent" in section 15 of the Central Sales Tax Act, 1956 by the Finance Act, 1966 was temporary and confined to the financial year 1966-67, so that the State levy under the Bengal sales tax laws was ultra vires.

Analysis: The amendment made by the Finance Act, 1966 was not expressed to be temporary. A Finance Act enacted to give effect to annual financial proposals may nevertheless contain provisions of general and permanent operation. The increase of the permissible ceiling in section 15 was intended to form part of the general law and was not limited to the year 1966-67. Once the ceiling stood at three per cent, the State enactments imposing tax within that limit did not offend article 286 or section 15 of the Central Sales Tax Act, 1956.

Conclusion: The challenge to the State levy on the ground that the Finance Act amendment had expired was rejected, and the State provisions were held not to be ultra vires.

Issue (ii): Whether raw jute and finished jute goods are the same declared commodity, so that levy of tax on raw jute and again on manufactured jute goods contravened the restriction that declared goods could not be taxed at more than one stage.

Analysis: Section 14(v) of the Central Sales Tax Act, 1956 declared only jute fibre as goods of special importance. The expression "baled or otherwise" related to the manner of packing and did not extend the entry to finished goods manufactured from jute fibre. The prohibition in section 15 against taxation at more than one stage refers to successive sales or purchases of the same commodity, not to different stages in manufacture. Raw jute and the finished products manufactured from it were treated as distinct commercial commodities, and the State levy on raw jute under one statute and on finished jute goods under another did not amount to double taxation of the same declared goods at more than one stage.

Conclusion: The contention that the impugned levies offended the single-stage restriction was rejected.

Final Conclusion: The petitioners' constitutional and statutory challenges to the assessment proceedings failed, and the writ rules were discharged with the impugned levies sustained.

Ratio Decidendi: A Finance Act amendment to a taxing statute is permanent unless the legislature makes it temporary, and the restriction against taxing declared goods at more than one stage applies only to successive sales or purchases of the same commodity, not to a new commercial commodity produced by manufacture from the declared goods.

---