Declared goods purchase tax upheld where sales tax exemption did not bar levy under the statutory scheme.

Section 5A of the Kerala General Sales Tax Act was treated as an independent purchase-tax provision operating only where declared goods were otherwise taxable but tax was not payable in the particular circumstances. The court reasoned that an exemption from sales tax under section 10 does not convert declared goods into non-taxable goods; it merely relieves payment at that point. Reading "levy" in section 15 of the Central Sales Tax Act broadly as imposition and collection, the court held that section 5A did not create prohibited multi-point taxation or violate article 286. The challenge to the purchase tax notices therefore failed.

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Issues: Whether section 5A of the Kerala General Sales Tax Act, 1963, imposing purchase tax on declared goods, is invalid for violating article 286 of the Constitution of India and section 15 of the Central Sales Tax Act, 1956, where sales tax under section 5(1) was exempted under section 10 of the State Act.

Analysis: The declared goods restriction under section 15 of the Central Sales Tax Act, 1956, is directed against multi-point taxation and excessive incidence of tax. Section 5A was construed as an independent charging provision, but its operation was held to be conditional upon the goods being otherwise liable to tax under section 5 and upon the tax not being payable in the particular circumstances. An exemption under section 10 does not convert taxable goods into non-taxable goods; it only relieves the dealer from payment at that point. In the statutory scheme, the word "levy" in section 15 was understood in the broader sense of imposition together with collection, and section 5A did not create an impermissible second levy on the same declared goods at an unascertainable stage. The court distinguished authorities dealing with levy at more than one point and held that section 5A did not transgress the constitutional or statutory restriction.

Conclusion: Section 5A is not ultra vires article 286 of the Constitution of India or section 15 of the Central Sales Tax Act, 1956, and the purchase tax notices were not invalid on that ground.

Final Conclusion: The writ appeals were without merit and the challenge to purchase tax on the declared goods failed.

Ratio Decidendi: Where a State sales tax scheme imposes purchase tax only when tax is otherwise not payable on the declared goods, an exemption from sales tax does not by itself bar the levy of purchase tax, provided the statutory scheme does not result in prohibited multi-point taxation.

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