Prospective tax notification and dealer registration rules upheld for tyres and tubes under a sales tax scheme.

Section 5A empowered the authority to fix the taxable point in a series of sales, and the notification for tyres and tubes operated prospectively from 1 July 1965 rather than only on stock held on 30 June 1965. The proviso did not offend article 14 because registered and unregistered dealers were not similarly situated under the Act, and the different treatment reflected that statutory distinction. Deletion of tyres and tubes from column 3 of the registration certificate only removed the deduction benefit; it did not cancel registration or alter the dealers' status for the proviso. The challenge to the notification and assessment orders therefore failed.

---

---

Issues: (i) Whether the notification issued under section 5A applied only to the existing stock of tyres and tubes on 30 June 1965 or prospectively to subsequent sales as well; (ii) whether the proviso to the notification offended article 14 by treating registered dealers differently from unregistered dealers; (iii) whether deletion of tyres and tubes from column 3 of the registration certificate ceased the petitioners to be registered dealers for the purposes of the proviso.

Issue (i): Whether the notification issued under section 5A applied only to the existing stock of tyres and tubes on 30 June 1965 or prospectively to subsequent sales as well.

Analysis: Section 5A empowered the authority to fix the point of taxation in a series of sales, and the notification stated that the turnover in respect of all kinds of tyres and tubes would be liable to tax only at the specified point with effect from 1 July 1965. The object of the provision was to shift the levy from the point of last sale to the point of first sale by an importer or manufacturer. The language of the notification showed prospective operation and did not confine it to stock existing on the date of issue.

Conclusion: The notification applied prospectively and was not limited to the stock in hand on 30 June 1965.

Issue (ii): Whether the proviso to the notification offended article 14 by treating registered dealers differently from unregistered dealers.

Analysis: The scheme of the Act made a clear distinction between registered and unregistered dealers. A registered dealer, when liable to tax, could collect tax and claim the statutory advantages attached to registration, while an unregistered dealer whose turnover exceeded the taxable quantum was prohibited from carrying on business and from collecting tax. Since the two classes were not similarly situated, differential treatment in the notification did not amount to unconstitutional discrimination.

Conclusion: The proviso did not violate article 14.

Issue (iii): Whether deletion of tyres and tubes from column 3 of the registration certificate ceased the petitioners to be registered dealers for the purposes of the proviso.

Analysis: The liability to tax under the Act was independent of registration, and the registration certificate served distinct purposes in column 2 and column 3. Deletion from column 3 only withdrew the benefit of deduction under section 5(2)(a)(ii); it did not cancel registration or alter the status of the petitioners as registered dealers carrying on the business described in column 2. The petitioners therefore remained registered dealers in respect of tyres and tubes and continued to fall within the proviso.

Conclusion: The deletion did not take the petitioners out of the category of registered dealers for the relevant purpose.

Final Conclusion: The challenge to the assessment orders and the notification failed, and the proceedings were liable to be dismissed.

Ratio Decidendi: A notification under section 5A may prospectively fix the taxable point for a class of goods, and a registration-certificate amendment deleting goods from the deduction column does not cancel registration or exempt the dealer from tax on sales of those goods where the dealer otherwise remains a registered dealer under the Act.

---