Imported goods tax classification upheld where reasonable classification justified the higher levy despite a bilateral trade agreement.

Imported goods may be treated as a separate class for sales tax purposes where the classification rests on intelligible differentia and reasonable classification. Applying an earlier Division Bench ruling upholding the same provisions, the Madras HC held that the Tamil Nadu General Sales Tax Act amendments imposing a higher rate on imported goods, including goods imported from Bhutan, were not unconstitutional or inapplicable. The bilateral trade agreement did not override the domestic levy in this context, and the authorities cited by the petitioner did not alter that position. The writ challenge therefore failed, and the amended provisions were held valid and applicable.

---

---

Issues: Whether the amendment to the Tamil Nadu General Sales Tax Act imposing a higher rate of tax on imported goods, including goods imported from Bhutan, was unconstitutional or otherwise inapplicable in view of the bilateral trade agreement.

Analysis: The challenge to the levy was considered in the light of the earlier Division Bench decision upholding the very same provisions. The Court noted that the issue had already been negatived, that imported goods could be treated as a separate class for tax purposes, and that the impugned classification was based on intelligible differentia and reasonable classification. It also held that the trade agreement did not displace the State levy in the present context, and that the authorities relied on by the petitioner did not alter the position.

Conclusion: The challenge to the levy failed, and the impugned amendments were held applicable and valid for the purpose of the writ petition.

Ratio Decidendi: Imported goods may be validly subjected to a distinct tax classification where the classification is reasonable and founded on intelligible differentia, and a bilateral trade arrangement does not by itself override the domestic taxing statute.

---