Rubber cess and class-based exemption under sales tax law were upheld as valid tax treatment and non-discriminatory relief.

Rubber cess paid on the purchase turnover of rubber was treated as part of the taxable purchase turnover under the Kerala General Sales Tax Act, because the earlier Supreme Court declaration was applied as stating the law as it always existed. The exemption notification was upheld as non-arbitrary since it validly confined relief to dealers/traders as a separate class, based on hardship from retrospective application, and did not extend to manufacturers and planters who were treated as differently situated. The assessment was sustained and the challenge to the notification failed.

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Issues: (i) whether rubber cess paid on the purchase turnover of rubber was includible in the taxable purchase turnover under the Kerala General Sales Tax Act; (ii) whether the exemption notification granting relief only to dealers, and not to manufacturers and planters, was discriminatory.

Issue (i): whether rubber cess paid on the purchase turnover of rubber was includible in the taxable purchase turnover under the Kerala General Sales Tax Act.

Analysis: The earlier Supreme Court ruling had conclusively declared that rubber cess forms part of the purchase turnover of rubber for the purpose of purchase tax. That declaration was treated as stating the law as it always stood, and therefore applied to the relevant assessment year.

Conclusion: The inclusion of rubber cess in the purchase turnover was upheld, against the assessee.

Issue (ii): whether the exemption notification granting relief only to dealers, and not to manufacturers and planters, was discriminatory.

Analysis: The exemption was issued under the statutory power to grant exemption and was confined to a separate class, namely dealers/traders, on the stated ground of hardship arising from retrospective implementation of the legal position. Manufacturers and planters were treated as a different class, and the classification was held to have a rational basis.

Conclusion: The exemption notification was held not to be arbitrary or discriminatory, against the assessee.

Final Conclusion: The assessment order was sustained and the challenge to the exemption notification failed, resulting in dismissal of the original petition.

Ratio Decidendi: A judicial declaration on the meaning of a taxing provision operates as a statement of the law as it always existed, and a fiscal exemption based on a rational classification does not offend equality merely because it extends relief only to one distinct class of persons.

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