Tax classification based on end use upheld for white kerosene; equality challenge and exemption claim failed.

White kerosene was validly placed in a separate taxable entry from PDS kerosene because the classification rested on different end uses and an anti-diversion policy aimed at curbing smuggling and adulteration. The equality challenge failed since the legislature could distinguish the commodities on a rational basis linked to the object of the tax measure, and the schedule amendment made under delegated power had legal effect. The claimed exemption did not displace the statutory levy, so resale tax and surcharge remained payable.

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Issues: Whether white kerosene could be validly placed in a separate taxable entry and taxed at a higher rate than PDS kerosene; whether the amendment creating the distinction was arbitrary or discriminatory; and whether resale tax and surcharge were leviable notwithstanding the claimed exemption.

Analysis: The amended schedule, introduced under the power to modify the schedule, treated white kerosene and domestic PDS kerosene as distinct for taxation purposes. The differentiation was upheld as a legislative policy measure aimed at curbing diversion, smuggling, and adulteration, especially the misuse of white kerosene as a substitute for diesel. The classification was supported by the different end uses of the commodities and by material showing large-scale misuse. The challenge based on equality failed because the legislature was entitled to classify the commodity according to its use and the object sought to be achieved. The court also held that the dealers remained liable to resale tax and surcharge in view of the statutory levy and the rejection of the claimed exemption.

Conclusion: The higher tax rate on white kerosene was held valid and non-discriminatory, and the liability to resale tax and surcharge was upheld.

Final Conclusion: The appeals failed and the writ petitions stood dismissed, leaving the amended tax treatment of white kerosene and the related levies intact.

Ratio Decidendi: A statutory tax classification based on different end use and anti-diversion objectives is valid if it rests on a rational basis and is not arbitrary, and a schedule amendment made under delegated legislative power carries the force of law.

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