Declared goods need a clearly fixed single-point sales tax levy; cotton yarn assessment failed without a valid notification.

Cotton yarn, being declared goods under the Central Sales Tax Act, could not be subjected to State sales tax unless the State law or a valid notification clearly fixed a definite single point of levy. The statutory scheme under the Bengal Finance (Sales Tax) Act did not itself ascertain the taxing point, and no applicable notification under the enabling provision was produced for the relevant assessment year. As section 15 of the Central Sales Tax Act requires declared goods not to be taxed at more than one stage, the assessment on the turnover of cotton yarn failed for non-compliance with that requirement and could not be sustained.

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Issues: Whether the turnover of cotton yarn could be validly subjected to sales tax when the State Act did not itself prescribe the single point of levy and no notification under the enabling provision had been issued for the relevant assessment year.

Analysis: Cotton yarn was declared goods under section 14 of the Central Sales Tax Act, 1956, and section 15 required that any State tax on such goods must not exceed the prescribed maximum and must not be levied at more than one stage. A State law imposing single-point taxation must therefore specify, expressly or by necessary implication, the ascertainable point of levy, or empower a delegate to do so. The Court found that no such single point could be implied from section 5(2)(a)(ii) of the Bengal Finance (Sales Tax) Act, 1941, as the statutory scheme did not itself fix the taxing point. The Court further held that section 5A of that Act conferred power on the Chief Commissioner to specify the point of taxation by notification, but no notification applicable to the assessment year was produced.

Conclusion: The requirement of section 15 of the Central Sales Tax Act, 1956 that declared goods not be taxed at more than one stage was not satisfied, and the assessment on the turnover of cotton yarn was invalid.

Final Conclusion: The assessment could not be sustained and the turnover of cotton yarn was directed to be quashed.

Ratio Decidendi: For declared goods, a State sales tax levy is valid only if the statute or a valid notification clearly fixes a definite single point of taxation; in the absence of such specification, the levy fails for non-compliance with section 15 of the Central Sales Tax Act, 1956.

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