Declared goods purchase tax upheld where one-stage levy scheme and constitutional limits were read harmoniously.

Section 4-B of the East Punjab General Sales Tax Act, 1948 applied to declared goods, and section 5(3) did not exclude its operation because the provisions were read harmoniously as part of a one-stage levy scheme. Section 4-B was also not ultra vires article 286 of the Constitution or section 15 of the Central Sales Tax Act, 1956, as it conformed to the restriction that declared goods be taxed only at a single stage and prevented double levy by limiting tax to cases where no other tax was payable under the Act. The levy under section 4-B was therefore sustained.

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Issues: (i) Whether section 4-B of the East Punjab General Sales Tax Act, 1948, applied to declared goods and whether section 5(3) excluded its operation; (ii) whether section 4-B was ultra vires article 286 of the Constitution of India and section 15 of the Central Sales Tax Act, 1956.

Issue (i): Whether section 4-B of the East Punjab General Sales Tax Act, 1948, applied to declared goods and whether section 5(3) excluded its operation.

Analysis: The statutory scheme treated sections 4 and 5(1) as charging and quantifying provisions, while section 5(2) dealt with taxable turnover and section 5(3) fixed the stage of levy for declared goods. Section 5(3) operated as a proviso ensuring that declared goods were taxed only at one stage and did not displace the liability created by section 4-B where the purchasing dealer used the goods in the manner specified. The provisions were read together harmoniously, and section 4-B was understood as an amendatory provision giving effect to the existing scheme.

Conclusion: Section 4-B applied to declared goods and section 5(3) did not exclude its operation.

Issue (ii): Whether section 4-B was ultra vires article 286 of the Constitution of India and section 15 of the Central Sales Tax Act, 1956.

Analysis: Article 286 and section 15 restrict State taxation of declared goods to a single stage and subject to specified conditions. Section 4-B was enacted to bring the State law into conformity with that mandate after earlier litigation and, on its terms, prevented double levy by confining taxation to cases where no tax was otherwise payable under the Act. The provision was therefore consistent with the central restrictions and with the constitutional limitation on State taxing power.

Conclusion: Section 4-B was not ultra vires article 286 or section 15 of the Central Sales Tax Act, 1956.

Final Conclusion: The impugned levy under section 4-B was sustained, and the petitions were not maintainable on the challenges raised.

Ratio Decidendi: A provision imposing purchase tax on specified uses of goods is valid if it operates within a one-stage levy scheme and is construed harmoniously with the charging and turnover provisions so as to conform to the restrictions on declared goods.

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