TaxTMI 
TaxTMI 
1994 (5) TMI 244
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.... case of goods mentioned in the First Schedule, the tax under the said Act shall be payable by a dealer, at the rate and only at the point specified therein, on the turnover in each year relating to such goods whatever be the quantum of turnover in that year. 4. The First Schedule enumerates goods in respect of which single point tax is leviable under sub-section (2) thereof. Item 103(x) is an entry relevant for our present purpose and the same is couched in the following terms: Serial No. Description of the goods Point of levy Rate of tax (per cent) 103(x) Foods including preparations of vegetables, fruits, milk, cereals, flour, starch, birds' eggs, meat and meat offals, animal blood, fish curstaceans and molluses, At the point of first sale in the State 10 which are the products of any manufacturers or supplies who have registered their products under the Trade and Merchandise Marks Act, 1958 (Central Act 43 of 1958), whether they are sold under the registered brand name or not. 5. Section 17 dealing with the power of the Government to notify exemptions and reductions of tax, reads as follows: "17. Power of Government to not....
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....t has been brought in giving retrospective effect on and from April 1, 1988, which reads as follows: "(v) an exemption in respect of the tax payable by any dealer under the said Act on the sale of appalams, vadams, vathals, vermicelli and bakery products without a brand name or with a brand name not registered under the Trade and Merchandise Marks Act, 1958 (Central Act 43 of 1958) whose total turnover for a year does not exceed rupees three lakhs." 9.. In G.O. P. No. 297 dated April 26, 1989 [No. II(1)/CTRE/44(a-2)/89], a further amendment was brought in, effective from the said date, namely, April 26, 1989, which reads as under: "(v) an exemption in respect of the tax payable by any dealer under the said Act on the sale of vathals, vermicelli and bakery products without a brand name or with a brand name not registered under the Trade and Merchandise Marks Act, 1958 (Central Act 43 of 1958), whose total turnover for a year does not exceed rupees three lakhs." 10.. W.P. Nos. 14117 of 1988 and 12427 of 1989 are relatable to dealers in vermicelli, while W.P. Nos. 18186 to 18188 of 1990 are relatable to dealers in appalams. They challenged the vires of the notificat....
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....y any notification with retrospective effect and to put it otherwise, such a power may be exercised only prospectively. 16.. Originally by issuance of the notification dated March 26, 1981, which came into force on and from April 1, 1981, total exemption had been granted to appalams, vermicelli and certain other products, without a brand name or with a brand name, not registered under the TMM Act. 17.. Such total exemption in respect of those products was sought to be curtailed by the issuance of another notification dated May 30, 1988, which got published in the Tamil Nadu Government Gazette on the June 15, 1988, the date on which it was to come into force. The curtailment effected therein was that vermicelli had been totally omitted from the purview of exemption and that apart, the exemption limit for appalams and certain other products was restricted to a dealer, whose total turnover for a year does not exceed two lakhs of rupees. The curtailment thus effected was applicable to the assessment year 1988-89. 18.. Thereafter, by issuance of the notification dated October 7, 1988, which came into force on April 1, 1988, the curtailment effected by way of omission of vermicelli....
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.... they are not eligible for the single point of levy. 21.. It is rather well-settled that in order to tax something it is not necessary to tax everything. So long as those within the tax net can be legitimately classified together indicating an intelligible differentia vis-a-vis those left out and the classification so made bears a rational nexus with the object sought to be achieved, the classification is clearly permissible and it does not violate article 14 of the Constitution. In other words, those grouped together must possess a common characteristic justifying their inclusion in the group, but distinguishing them from those excluded; and performance of this exercise must bear a rational nexus with the reason for the exercise. 22.. The scope of classification permitted in taxation is greater and unless the classification made can be termed to be palpably arbitrary, it must be left to the legislative wisdom to choose the yardstick for classification in the background of the fiscal policy of the State to promote economic equality as well. It cannot be doubted that if the classification is made with the object of taxing only the economically stronger while leaving out the ec....
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.... 25.. Rather than myself venturing to find out the rationale or reason for such an answer, better it is, I think, to seek to my aid, in an authoritative fashion, a precedent emerging from the apex Court of this country in K.M. Mohamed Abdul Khader Firm v. State of Tamil Nadu [1985] 58 STC 12; AIR 1985 SC 12, wherein their Lordships, while dealing with similar contention, based on article 14, observed as follows: "Dealing with the contention that since the provisions of the Act imposed different rates of tax on different dealers depending upon their turnover there was a violation of article 14 of the Constitution, Mathew, J., who spoke for the court observed: [pages 77-78 of [1974] 34 STC (SC), paras 16-17 of AIR 1974 SC 2272 (Kodar v. State of Kerala)]: 'The last contention, namely, that the provisions of the Act impose different rates of tax upon different dealers depending upon their turnover which in effect means that the rate of tax on the sale of goods would vary with the volume of the turnover of a dealer and are, therefore, violative of article 14 is also without any basis. Classification of dealers on the basis of their respective turnovers for the purpose of graded i....