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Issues: Whether imported sugar, answering the description of sugar in Section 14 of the Central Sales Tax Act, 1956, is declared goods irrespective of the place of manufacture, and whether absence of specification of the rate and stage of levy under the State sales tax law disables the State from taxing such sugar.
Analysis: The charging scheme under Section 4 of the Tamil Nadu General Sales Tax Act, 1959, read with Section 3 and the definition in Section 2(h), permits tax on declared goods only at the rate and at the point specified in the Second Schedule. That requirement is not merely procedural but is reinforced by Section 15 of the Central Sales Tax Act, 1956 and the constitutional restriction in Article 286(3) of the Constitution of India. Section 14 of the Central Sales Tax Act identifies sugar by reference to the relevant headings and sub-headings in the Central Excise Tariff Act, 1985, and the expression "covered under" was construed as descriptive, not as confining declared goods to goods manufactured in India. On the admitted facts, the imported sugar satisfied the relevant description and sucrose content requirement, and there was no valid specification in the State enactment fixing the applicable rate and stage of levy for such imported sugar.
Conclusion: Imported sugar is declared goods, but it could not be subjected to tax in the absence of a specified rate and stage of levy under the State Act. The issue is decided in favour of the assessee.
Ratio Decidendi: Goods falling within the description of declared goods under Section 14 of the Central Sales Tax Act, 1956 are taxable by the State only when the State law validly specifies both the rate and the point of levy in conformity with Section 15 of that Act and Article 286(3) of the Constitution of India.
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