Inter-State sales tax cannot be enhanced by State additional tax provisions where the Central Act permits only reduction or exemption.

A State additional sales tax meant to increase tax under the Kerala General Sales Tax Act could not be applied to inter-State sales governed by the Central Sales Tax Act unless that Act expressly authorised such enhancement. Section 8(2A) only limits levy where the corresponding intra-State sale is exempt or taxed at a lower rate; it does not permit a State to add tax under the Central enactment. Section 8(5) allows only reduction or exemption by notification, not an increase. On that reasoning, the notices seeking additional tax on the inter-State sales were stated to be without authority and invalid.

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Issues: Whether the additional sales tax imposed under the Kerala Additional Sales Tax Act, 1978 could be levied on inter-State sales taxed under the Central Sales Tax Act, 1956, and whether the demand notices issued for such levy were valid.

Analysis: Section 2 of the Kerala Additional Sales Tax Act, 1978 increases the tax payable under the Kerala General Sales Tax Act, 1963 and is a State levy confined to transactions within the State. The Central Sales Tax Act, 1956 is a separate enactment governing inter-State sales, and the State authorities can act under it only to the extent specifically authorised by that Act. Section 8(2A) of the Central Sales Tax Act merely curbs the levy where the corresponding intra-State sale is exempt or taxed at a lower rate; it does not confer any power on the State to enhance the tax payable under the Central Act. Section 8(5) permits the State Government only to reduce or exempt tax by notification in public interest, and not to increase it. The notification governing coconut oil and cake fixed the inter-State tax at 1 per cent subject to specified conditions, and the petitioners fell within its scope. The impugned notices sought to impose an additional tax on inter-State sales without authority under the Central Act or the State enactment.

Conclusion: The additional tax could not lawfully be levied on the petitioners' inter-State sales, and the demand notices were without jurisdiction and void.

Final Conclusion: The writ petition succeeded and the impugned notices were quashed as invalid for want of authority to impose the additional tax on inter-State transactions.

Ratio Decidendi: A State enactment increasing sales tax under the State law cannot be applied to inter-State sales governed by the Central Sales Tax Act unless the Central Act itself expressly authorises such levy or enhancement; provisions enabling reduction or exemption of tax cannot be used to impose an additional charge.

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