Valid fiscal classification of white kerosene upheld; amended tax entry defeated the earlier exemption from surcharge and resale tax.

Fiscal classification of kerosene for sales tax purposes was treated as valid where the schedule, given statutory force by notification and amendment, separately identified kerosene and white kerosene (superior kerosene oil) for different rates. The differential treatment was upheld because fiscal legislation permits wide classification latitude and the distinction had a rational basis linked to commercial use and prevention of misuse and black marketing in the public distribution system. The earlier exemption from surcharge and resale tax for kerosene was held not to survive the amended schedule, since an exemption notification must yield to the later statutory entry. White kerosene was therefore liable to surcharge and resale tax.

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Issues: (i) Whether the bifurcation of kerosene into kerosene and white kerosene (superior kerosene oil) under the sales tax schedule, with different rates of tax, was arbitrary or unconstitutional. (ii) Whether the exemption from surcharge and resale tax granted for kerosene continued to apply to white kerosene (superior kerosene oil) after the schedule was amended.

Issue (i): Whether the bifurcation of kerosene into kerosene and white kerosene (superior kerosene oil) under the sales tax schedule, with different rates of tax, was arbitrary or unconstitutional.

Analysis: The schedule entry introduced by notification and later by amendment had statutory force and could validly classify commodities for different rates of tax. The Court held that fiscal legislation enjoys wide latitude in classification and that a distinction based on commercial use and the State's policy to prevent misuse and black marketing of public distribution kerosene furnished a rational basis. The plea that kerosene and superior kerosene oil remained the same commodity was rejected as an attack on legislative policy. The constitutional challenge under equality and freedom of trade principles failed.

Conclusion: The bifurcation and differential taxation of white kerosene (superior kerosene oil) were upheld and were not unconstitutional.

Issue (ii): Whether the exemption from surcharge and resale tax granted for kerosene continued to apply to white kerosene (superior kerosene oil) after the schedule was amended.

Analysis: The exemption notification could not be read in isolation once the statutory schedule was amended to treat white kerosene as a separate taxable entry. The Court applied the principle that exemption notifications must yield to the altered taxing scheme and that a later statutory classification can withdraw the benefit by necessary implication. The earlier clarification relying on the pre-amendment understanding of kerosene did not prevail against the amended entry. Consequently, surcharge and resale tax became leviable on white kerosene (superior kerosene oil).

Conclusion: The exemption did not extend to white kerosene (superior kerosene oil) after the amendment, and the levy of surcharge and resale tax was sustained.

Final Conclusion: The legal challenges to the separate taxation of white kerosene (superior kerosene oil) and to the denial of exemption from surcharge and resale tax failed, and the writ petitions were dismissed.

Ratio Decidendi: A commodity may be validly subjected to different tax treatment when the Legislature or delegated legislation makes a rational fiscal classification with a discernible nexus to the object of the levy, and an exemption notification cannot override a later statutory classification that brings the commodity within a separate taxable entry.

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