Valid extension of sales tax law and permissible territorial classification sustain levy on works contract materials despite regional rate differences.
A sales tax law validly extended under parliamentary authority can sustain levy on building materials used in works contracts, and an ineffective or surplus portion of an ancillary notification does not defeat the valid operative extension. Subsequent validating legislation may remove doubts without amounting to a fresh unauthorised State enactment. Territorial differences in sales tax incidence based on distinct historical and reorganisation origins constitute a permissible geographical classification and do not, by themselves, infringe Article 14 merely because fiscal treatment differs between regions.
Issues: (i) Whether the Central Provinces and Berar Sales Tax Act, 1947, as extended and brought into force in Vindhya Pradesh, validly authorised levy of sales tax on building materials used in works contracts. (ii) Whether the differential incidence of sales tax in the former Vindhya Pradesh area and the former Madhya Pradesh area offended Article 14 of the Constitution of India.
Issue (i): Whether the Central Provinces and Berar Sales Tax Act, 1947, as extended and brought into force in Vindhya Pradesh, validly authorised levy of sales tax on building materials used in works contracts.
Analysis: The extension of the Act to Vindhya Pradesh was traced to the parliamentary framework under the Part C States (Laws) Act, 1950, followed by the repeal of the earlier ordinance and the later validating legislation. The Court held that the operative extension was supported by parliamentary authority, that the ineffective portion of the notification did not destroy the valid operative part, and that the Vindhya Pradesh validating enactment only removed doubts and did not amount to a fresh unauthorised legislative imposition by the State Legislature. As the levy stemmed from law validly extended under parliamentary authority, the limitation recognised in the works contract cases did not apply.
Conclusion: The levy was valid and the challenge on this ground failed.
Issue (ii): Whether the differential incidence of sales tax in the former Vindhya Pradesh area and the former Madhya Pradesh area offended Article 14 of the Constitution of India.
Analysis: The Court held that the different sales tax laws in the two areas had distinct historical origins and continued by operation of the reorganisation framework. A geographical classification founded on historical reasons was treated as a permissible basis of differentiation, and the existence of varying fiscal regimes in different territorial units did not, by itself, establish hostile discrimination.
Conclusion: The Article 14 challenge failed.
Final Conclusion: The impugned levy was sustained and the petitions were not maintainable on the merits, so the challenge to the sales tax assessment in Vindhya Pradesh did not succeed.
Ratio Decidendi: Where a tax law is validly extended under parliamentary authority and the invalid portion of an ancillary notification is severable or rendered surplusage by subsequent parliamentary action, the resulting levy remains valid; a territorial fiscal classification based on historical origin does not violate equal protection merely because rates or incidence differ between regions.
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