M/s. Hill Produce Corporation vs State of Kerala and Others

K.A. Nayar, J.—After hearing arguments of counsel I got an impression that what he wants me to do is to spot a black cat in a dark room which is not there. Elaborate arguments were advanced on consignment tax. According to the petitioner consignment tax was imposed on it which, in the light of the Supreme Court decision reported in Goodyear India Ltd. v. State of Haryana, (1990) 76 S.T.C. 71 is illegal and the respondents are incompetent to levy such tax on it. The prayer in the Original Petition is to declare the provision contained in Sections 5, 5A and 8 of the Kerala General Salestax Act unconstitutional in so far as the levy of salestax on the consignment transfer of goods from Kerala State to any other State in India in the course of inter-State trade or commerce and to quash Ext. P3 assessment order. The petitioner is a firm doing business in pepper, ginger etc. in Baliapattam. The firm purchases hill produce such as pepper, ginger etc. within the State. A portion of the goods so purchased is sold to dealers outside the State pursuant to the contract entered into between the petitioner firm and the buyers outside the State in the course of inter-State trade and the remaining portion of the goods purchases is transported to the petitioners'' agents outside the State on consigning the goods to sell for others. For the assessment year 1980-81 the petitioner firm submitted return under the Act in form No. 8 showing a total turnover of Rs. 82,87,661/- out of which the petitioner firm claimed exemption of Rs. 32,66,000/- representing the turnover, according to it, involved in consignment of goods. Thus the taxable turnover shown in the return was Rs. 50,20,661/-. The second respondent found that the return filed cannot be accepted as the taxable turnover of gunny under S. 5A of the Act has not been declared, for the local sales of pepper for Rs. 1,63,200/- separate purchase account has not been maintained and the total and taxable turnover reported did not agree with the accounts. The second respondent also found that the place of business of the petitioner was inspected by the Intelligence Officer on 9-7-1980 and stock differences were found out. Therefore he rejected the return in Form No. 8 and proposed to assess the petitioner finally for the year 1980-81 on a best judgment basis. Objection to the proposals were invited and the same were perused. Thereafter the total turnover was determined at Rs. 83,14,250,21 giving exemption for turnover of pepper which is not the last purchase, inter-state sales turnover of pepper and Central Salestax. The taxable turnover was fixed at Rs. 81,26,970/-. Objections to the assessment were that out of the total turnover, Rs. 70,42,000/- was the closing stock which was taken into account during the previous year in which the assessment has been completed and further that stock has not attained the character of being the last purchase. The assessing officer rejected the contention on the ground that under S. 8 of the Act in the case of goods on which tax is leviable at one point in a series of purchases in the case of goods exported out of the State to any place outside the territory of India or to any other State in India be deemed to conclude at the stage of the purchase effected immediately before the export of such goods. According to the Officer out of the goods purchased for Rs. 83,75,429.98 the sale within the State was for Rs. 1,63,200/-. Therefore the remaining goods exported to outside the State of Kerala to any-other State in India is to be deemed to acquire the point of levy of tax, that is, the last purchase point. In short, the officer found that the pepper which is taxable at the last purchase point under Entry 23 Schedule 1 at 6% for the relevant year has attained the quality of last purchase point in the State when the goods were dispatched out of State.

The Stand taken in the counter affidavit on behalf of the A first respondent is that there is no consignment tax involved in the case. The averment in paragraph 5 of the counter affidavit is as follows:

The assessee is under the misapprehension that what is taxed in Ext. P3 order is the turnover of consignment sales. No tax has been levied on the consignment sales. Pepper and dry ginger are liable to tax at the point of last purchase in the State by a dealer who is liable to tax under S. 5, The petitioner having purchased pepper and dry ginger, sent the same outside the State. But he did not produce the documents to establish the consignment transfer of goods in which case alone the petitioner could not be treated as last purchaser with respect to the goods involved in such transfer of goods to his agent. Out of the goods purchased taxable at the last purchase point, purchase to the tune of Rs. 83,75.430/-, the sales within the State only for Rs. 1,63,200/- and the remaining goods were taken out side the State and no documents as required under Central Salestax Act and Rules were produced before the Assessing Authority to establish the fact that they related to consignment transfer of goods. Hence the petitioner''s claim that a turnover of Rs. 70,42,000/- is liable to be excluded from taxable turnover on the ground that the said turnover related to consignment transfer of goods was negatived by the Assessing Authority.

It is also stated in paragraph 8 of the counter affidavit as follows:

No tax was levied on the turnover of consignment transfer. The tax was levied on the purchase turnover of the goods on the ground that the petitioner was the last purchaser in respect of such goods within the State. It is respectfully submitted that the grounds raised in the O.P. for declaring Sections 5, 5A and 8 of the K.G.S.T. Act as ultravires are untenable and unsustainable. Section 5, 5A and 8 are not beyond the legislative powers of the State under Entry 54 of List 2 of 7th Schedule to the Constitution. The Petitioner is under the misapprehension that what is taxed in the instant case under Sections 5 and 5A of the Act are the turnover of goods involved in the consignment transfer of goods and hence beyond the legislative competence of the state. It is respectfully submitted that what the Assessing Authority has done in the instant case is to tax the purchase turnover of pepper and dry ginger at the hands of the petitioner treating him as the last purchaser of those goods within the State Since the petitioner was not able to establish by production of records as required under the Statute to show that he was still retaining the title of the goods. In the light of what is stated above, it is respectfully submitted that the O.P. is devoid of merits and that the petitioner is not entitled to any relief prayed for. Hence it is prayed that the O.P. may be dismissed with costs.

Since the petitioner put the ease on the basis of consignment tax and the respondents'' case is that the petitioner has to prove that the turnover of pepper has not attained the quality of last purchase in the State I felt that the petitioner ought to have exhausted the statutory remedy available But counsel invited a decision on the constitutional aspect stated to be involved in the taxation of consignment in the light of the decision aforementioned reported in Goodyear India Ltd. v. State of Haryana, (1990) 76 S.T.C. 71.

On a perusal of the pleadings and Exhibits produced in the case it is seen that the petitioner has been assesssed on the turnover of pepper treating the turnover despatched outside the State as taxable because under S. 8 it has attained the quality of last purchase. The petitioner is admittedly a dealer liable to tax under S. 5 of the Act. Pepper is taxable at the last purchase point in the State under Entry 23 Schedule 1 as it then stood during the year 1980-81 at 6%. S. 5A provides that every dealer who, in the course of his business purchases from a a registered dealer or from any other person any goods the sale or purchase of which is liable to tax under the Act in circumstances in which no tax is payable under S. 5 and either consume such goods in the manufacture of other goods for sale or otherwise or disposes of such goods in any manner other them by way of sale in the State or despatches them to place outside the State except as a direct result of sale or purchase in the course of inter-State trade or commerce, shall whatever be the quantum of the turnover relating to such purchase per year pay tax on the taxable turnover relating to such purchase for the year at the rates mentioned in S. 5. It is provided in S. 8 of the Act that where in the case of any goods tax is leviable at one point in a series of sales or purchases such sales shall (omitting the unnecessary portion) in the case of goods exported to any other State in India be deemed to conclude at the stage of the sale or purchase effected immediately before the expiry of such goods. Therefore under S. 5A and S. 8 the petitioners''s purchase of pepper will become exigible to tax having attained the quality of last purchase when the goods have been exported outside the State''.

The constitutional validity of S. 5A was subject matter of decision of this Court as well as the Supreme Court In Malabar Fruit Product Co. v. Salestax Officer. (1972) 30 S.T.C. 537, examining the schema of S. 5A this Court observed:

It is evident from the provision in Section 5A that in cases where any dealer purchases goods, the sale or purchase of which is liable to tax under the Act in circumstances in which no tax is payable u/s 5, he is liable to tax relating to such purchases in case one of the three conditions is satisfied, namely, (1) the goods are consumed in the manufacture of goods for sale or otherwise, (2) the goods are disposed of in any manner other than by way of sale in the State, and (3) the goods are despatched outside the State except as a direct result of sale or purchase in the course of inter-State trade or commerce. Goods which are purchased by a dealer could either be used by him in the State itself or could be sent outside the State. In cases where goods are sent outside the State as a direct result of sale or purchase in the course of inter-State trade or commerce, there is no liability u/s 5A. But if the goods are sent for any other purpose outside the State whether it be for the purpose of consignment sale or for the purpose of consumption outside the State Section 5A is attracted. Within the State the goods purchased by the dealer could either be consumed by him or could be otherwise disposed of including by way of sale within the State. If it is disposed of inside the State by sale, section 5A will not be attracted in regard to those purchases. But if the goods are disposed of in any other manner including consumption in the manufacture of other goods for sale he becomes liable to pay tax on the purchase turnover. The scheme apparently appears to be that if the goods are not available as such goods for being taxed in the State at some other subsequent point, the dealer is liable to tax on his purchase turnover though but for such a situation he would not be liable to tax on such purchase turnover Viewed in this manner, the case of a sale inside the State in which case it could be taxed by the State and the despatch outside the State as a direct result of inter-state sale or purchase are not really exceptions. The object of section 5A appears to be to tax the goods which would normally have been taxed at some point in the State subsequent to their purchase by the dealer if they are not available for such taxation. This too, only if in regard to the purchase by the dealer the goods did not suffer tax at the purchase point or the sale point.

This decision has been confirmed by a Division Bench of this Court in Yusuf Shabeer and Others Vs. State of Kerala and Others, . The Division Bench noted that under S. 5A sales of certain goods regarding which no tax was payable before the introduction of the Section though the sale or purchase of such goods were generally taxable under the Act, were also made taxable in the hands of the dealer purchasing those goods provided the conditions of the section were Satisfied. The conditions of the Section are (a) consuming such goods in the manufacture of other goods for sale or otherwise (b) disposal of such goods in any manner other than by way of sale in the State and (c) despatches of the goods to any place outside the State except as a direct result of sale or purchase in the course of inter-state trade or commerce. S. 5A of the Act is not subject to S. 5. The contention that the tax imposed by S. 5A is a tax not on purchase but on the use or consumption was held to be unacceptable. For the same reasoning the contention that the tax imposed by S. 5A is a tax not on purchase but on despatch was also, equally unacceptable. The Division Bench held that from the wording of the Section (S. 5A) there can be no doubt that what is taxed is the purchase and not the use or consumption. The Division Bench also noted the contention that S. 5A is violative of Article 301 of the Constitution and held;

It is only discriminatory tax by which the sales or purchases of goods of the State imposing the tax are dealt with one way and similar transactions of goods from another State are dealt with in a different way, that will attract the article.

After referring to the decisions in Atiabari Tea Co., Ltd. Vs. The State of Assam and Others, and Firm A.T.B. Mehtab Majid v. State of Madras, (1963) 14 S.T.C. 355 and other decisions the Division Bench held:

Under Section 5A of the Act no distinction is made between the goods inside the State and goods that came from outside '' the State.

Therefore it was held that the tax imposed under S. 5A is not discriminatory and Article 301 is not attracted. These decisions also are approved by the Supreme Court in State of Tamil Nadu v. Kandaswami, (1975) 36 S.T.C. 191 wherein, referring to a like provision in the Madras Act, namely S. 7A, the Supreme Court held that if after purchasing areca nuts, turmeric and gram the purchasing dealers transported these goods outside the State for sale on consignment basis, their case would also be covered by clause (b) or (c) of S. 7A (1) and such dealers would be liable to tax on the purchase turnover of these goods. The Supreme Court further held as follows:

In our opinion, the Kerala High Court has correctly construed section 5A of the Kerala Act which is in pari materia with the impugned S. 7A of the Madras Act. "Goods the sale or purchase of which is liable to tax under this Act" in Section 7A (1) means "taxable goods", that is, the kind of goods the sale of which by a particular person or dealer may not be taxable in the hands of seller but the purchase of the same by a dealer in the course of his business may subsequently become taxable. We have pointed out and it needs to be emphasised again that Section 7A itself is a charging Section. It creates a liability against a dealer on his purchase turnover with regard to goods, the sale or purchase of which though generally liable to tax under the Act have not, due to the circumstances of particular sales, suffered tax under sections 3, 4 or 5, and which after the purchase, have been dealt with by him in any of the modes indicated in clauses (a), (b), and (c) of Section 7A(1).

The validity of S. 5A was upheld by the Supreme Court and the levy of purchase tax on areca nut, turmeric etc. on the last purchase point was held to be valid under S. 5A when the goods were despatched to any place outside the State except as a direct result of sale or purchase in the course of inter-state trade or commerce.

Counsel for the petitioner submitted that what is taxed in the case is the closing stock and in view of the decision reported] in State of Madras v. Narayanaswami Nadu. (1968) 21 S.T.C. 1, the closing stock of a dealer cannot be subjected to tax The question considered in that case was whether the closing stock will attain the character of last purchase at the close of the assessment year. Dealing with that question the Supreme Court held :

...it seems to us clear that a dealer is not liable to pay a tax on the purchase until the purchases acquire the quality of being the last purchases inside the State. In other words, whenhe files a return and declares the stock in hand, the stock in hand cannot be said to have been acquired by last purchase because he may still during the next assessment year sell it or he may consume it himself or the goods may be destroyed etc.

He would be entitled to claim before the assessing authorities that the character of acquisition of the stock in hand was undetermined; in the light of subsequent events it may or may not become the last purchase inside the State.

This decision is only an authority for the proposition that the closing stock within the State at the end of the assessment year will not attain the quality of last purchase. The question whether closing stock held by the assessee outside the State is liable to be taxed came up for consideration before a Division Bench of this Court in Deputy Commissioner of Salestax v. Keveyam & Co, (1986) 63 S.T.C. 387 and this Court held that the fact the closing stock is held outside the State will not make any difference. The contention of the revenue that as the goods moved outside the State to beheld by the agents of the assessee for consignment sales they became exigible to tax was rejected by this Court. While doing so this Court held:

We are unable to see any distinction between the closing stock of the goods held by an assessee, inside the State and outside the State.

The Division Bench also noted the Full Bench decision of this Court in Season Rubbers v. State of Kerala (1961) 48 S.T.C 256 which held the tax being on the purchase, despite the fact that the purchase attains the character of last purchase later, the rate prevalent at the time of purchase alone would be relevant. These decisions clearly held that what is to be taxed is the last purchase and that the rate applicable is the rate prevalent on the date of the purchase which became last purchase subsequently. It is in this connection S. 8 is referred to by counsel for the respondents. S. 8 state that in the case of any goods taxable at one point in a series of sales or purchases, in the case of goods exported out of the State to any place outside India or to any other State in India, such series be deemed to conclude at the stage of sale or purchase effected immediately before the export of such goods. Therefore if the series is concluded at the export of the goods the subsequent sale or purchase of the same outside the State will not be counted for determining the last purchase point. Hence it has to be held that the purchase of pepper effected by the petitioner became the last purchase liable to be taxed under S. 5, 5A read with S. 8 of the Act, on export.

Counsel for the petitioner submitted that in the light of the recent decision of the Supreme Court in Goodyear India Ltd v. State of Haryana, (1990) 76 S.T.C. 71 which approved the decision in Bata India Ltd. v. State of Haryana, (1983) 54 S.T.C. 226 the provision like S. 5A (1)(c) will have to be held unconstitutional. 1 do not agree. The validity of S. 5A (1) (c) has been upheld by the Supreme Court in the decision reported in State of Tamil Nadu v. Kandaswami, (1975) 36 S.T.C. 191, a Bench of three judges. It cannot be contended that the decision in Goodyear India Ltd., Gedore (India) Pvt. Ltd., Kelvinator of India Ltd. and the Food Corporation of India and Another Vs. State of Haryana and Another, (which is a decision by a Bench of two Judges) has the effect of overruling the said decision. Further the questions arose for consideration in Bata India Ltd. v. State of Haryana, (1983) 54 S.T.C. 226 and Goodyear India Ltd. v. State, of Haryana, (1990) 76 S.T.C. 71 are also entirely different. In the decision in Bata India Limited Vs. The State of Haryana and Another, the question considered was whether the imposition of tax on despatches of manufactured goods to a place outside the State in any manner otherwise than by way of sale was valid. The State of Haryana in that case purported to levy tax on mere consignment of goods outside the State in the course of inter-State trade or commerce by issuing a notification. The High Court of Punjab and Haryana in the decision reported in Goodyear India Ltd. v. State of Haryana, (1983) 53 S.T.C. 163 held that S. 9 of the Haryana General Salestax Act authorises levy of purchase tax in the event of disposal of manufactured goods otherwise than by way of sale. Therefore mere consignment of goods by a manufacturer by himself was not in any way disposal of the manufactured goods. Thereafter the State attempted to being consignment of goods outside the State in the course of inter-state trade or commerce within the Salestax law enabling them to be taxed as the despatch of manufactured goods outside the State, by amending. S. 9 (1)(b) of the State Salestax Act. The relevant portion of S. 9 (1)(b) provides that where a dealer liable to pay tax tinder the Act purchases goods..........from any source in the State and uses them in the State in the Manufacture of any other goods......or despatches the manufactured goods to a place outside the State in any manner otherwise than by way of sale in the course of inter-State trade or commerce a tax on the purchase of goods will have to be paid. The High Court held that in bringing the consignment of manufactured goods within the Salestax law the State has travelled far beyond the scope of Entry 54 List II of the Seventh Schedule of the Constitution. It amounted to an attempt to intrude into the exclusive parliamentary power to tax the consignment of goods by virtue of entry No. 92B of List I of Seventh Schedule in the thin garb of levying a tax on the purported despatch of manufactured goods outside the State. The Court held:

Whilst Parliament would be taxing the consignment of goods in the course of inter-State trade or commerce, the State would be levying the tax on the despatch of manufactured goods to a place outside the State in the course of inter-State trade or commerce. Inevitably it would thus result in a duality of taxation on the same or similar transactions - one by the State of Haryana and other by the Union of India. It is significant to highlight that admittedly the power of taxation herein is not even remotely in the concurrent list and is exclusively in the parliamentary field by virtue of Entry No. 92B. Therefore, allowing the State tax the consignment of goods in inter-State trade or commerce, in the garb of a tax on the despatch of such goods outside the State otherwise than by way of sale in the course of inter-State trade or commerce would, in essence, be negativing the whole constitutional exercise culminating in the relevant provisions of the Fortysixth Amendment for confining the taxation power on inter-State consignment of goods to the Union of India alone.

In short the petitioner in that case purchased packing material and lubricating oil within the State of Haryana for use in their factory and also for packing the manufactured items. The manufactured goods were despatched to their depot outside the State. The tax imposed on the despatch of goods was held to be invalid. This decision has been upheld by the Supreme Court in Goodyear India Ltd., Gedore (India) Pvt. Ltd., Kelvinator of India Ltd. and the Food Corporation of India and Another Vs. State of Haryana and Another, . That decision considered the validity of S. 9 of the Haryana General Salestax Act, 1973 as well as S. 13 AA of the Bombay Salestax Act 1959. Those sections purported to levy of purchase tax but it became exigible not on the occasion or event of purchase but only when the purchaser utilises the goods purchased in the manufacture of taxable goods and the goods so manufactured are despatched otherwise than by way of sale to a place of business situate outside the State. According to the assessee this was nothing but a tax on consignment of goods manufactured in the State despatched to places outside the State camouflaged as a purchase tax by quantifying the levy of the tax with reference to the purchase price of the goods purchased in the State and utilised in the manufacture. The Supreme Court held that even though the tax is described as a purchase tax actually it became effective with reference to a totally different class of goods, and that too only on the happening of the event which is unrelated to the act of purchase The taxable event, the Supreme Court held in that case, is consignment of the manufactured goods and not the purchase. The Supreme Court observed in Goodyear India Ltd. v. State of Haryana 76 S.T.C. 71 at page 96 thus:

It is therefore, necessary in all cases to find out what is the essence of the duty which is attracted. A taxable event is that which is closely related to imposition. In the instant section, there is such close relationship only with despatch. Therefore, the goods purchased are used in manufacture of new independent commodity and thereafter the said manufactured goods are despatched outside the State of Haryana. In this series of transactions the original transaction is completely eclipsed or ceases to exist when the levy is imposed at the third stage of despatch after manufacture. In the instant case the levy has no direct connection with the transaction of purchase of raw materials, it has only a remote connection of lineage. It may be indirectly and very remotely connected with the transaction of the purchase of raw material wherein the present levy would lose its character of purchase tax on the said transaction.

The Supreme Court also distinguished the decision in Malabar Fruit Products Co. v. Salestax Officer (1972) 30 S.T.C. 537 approved in the decision in State of Tamil Nadu v. Kandaswami (1975) 36 S.T.C. 191 holding that in S. 9 in Goodyear India Ltd., Gedore (India) Pvt. Ltd., Kelvinator of India Ltd. and the Food Corporation of India and Another Vs. State of Haryana and Another, the raw materials purchased or used in the manufacture of new goods and thereafter those new goods were despatched outside the State of Haryana whereupon the tax was levied, and observed that the said important factor is wholly missing in Section 7A of the Tamil Nadu Act which was considered in The State of Tamil Nadu Vs. M.K. Kandaswami and Others, . Therefore the decision of the Supreme Court in Goodyear India Ltd., Gedore (India) Pvt. Ltd., Kelvinator of India Ltd. and the Food Corporation of India and Another Vs. State of Haryana and Another, will not help the petitioner at all in this case as it deals with a different situation than the one I am concerned in this case. Placed in this situation the petitioner challenges the validity of S. 8 along with S. 5A of the Act. Under S. 5 of the Act every dealer (other than a casual trader or agent of a non - resident dealer) whose total turnover for a year is not less than one lakh rupees and very casual trader or agent of a non-resident dealer, whatever be his total turnover for the year, shall pay tax on his taxable turnover for that year in the case of goods specified in the First or Second. Schedule at the rates and only at the points specified against such goods in the said Schedules. During the relevant year pepper and ginger were specified: as items 23 and 25 in the First Schedule taxable at the point of last purchase in the State at the rate of 6 percent and 4 percept respectively. Therefore under S. 5 a dealer is liable to pay tax on the taxable turnover of that year at the point of last purchase of pepper and ginger. The ''taxable turnover'' is defined to mean the turnover on which a dealer shall be liable to: pay tax as determined after making such deductions from his total turnover and in such manner as may be prescribed but shall not include the turn-over of purchase of sale in the course of inter-state trade or commerce or in the course of export of the goods out of the territory of India or in the course of import of the goods into territory of India. Therefore to be liable for purchase tax under S. 5 of the Act the taxable turnover must be related to be last purchase of the dealer. As has been explained in Malabar Fruit Products Company and Others Vs. The Sales Tax Officer and Others, S. 5A has to be inserged in the Act by S. 3 of the General Salestax (Amendment) Act as a measure of checking, evasion of salestax. That section brings in the taxing not the sales or purchases which are liable to tax under S. 5 but no tax is payable because the stage attracting the levy of tax under S. 5 has not been reached. S. 5A therefore enumerates the Conditions to be satisfied for attracting S. 5A. As some of: the goods are liable to tax only at one point in a serious of sale or purchase it was required to provide for the conclusion of the series at a particular stage of sale or purchase and S. 8 provided that in the fixation of the point in a series. The series are deemed to conclude at the stage of the sale or purchase effected immediately before the export of such goods. In short, the series of purchases in the State by the petitioner is deemed to have concluded at the stage of purchase effected immediately before the export of the goods. S. 5, 5A and 8 are all legislation coming under Entry 54 of List II of the Seventh Schedule of the Constitution, namely, taxes on the sale or purchase of goods other than newspapers, subject to the provision of Entry 92A of List I. Where the taxing event is the sale or purchase of goods it is a tax under Entry 54 of List II. It is well known that the power to legislate is given to the legislature by Article 246 of the Constitution. The entries in the three lists are only legislative heads or fields of legislation, they demarcate the area over which appropriate legislature can operate (see Harakchand Ratanchand Banthia and Others Vs. Union of India (UOI) and Others, In Union of India (UOI) Vs. Shri Harbhajan Singh Dhillon, the Supreme Court observed:

We are compelled to give full effect to Article 248 because we know of no principle of construction by which we can cut down the wide words of a substantive article like article 248 by the wording of entry in Schedule VII.

In Seth Banarsi Das etc. Vs. Wealth Tax Officer, Special Circle Meerut, etc., the Supreme Court laid down that it may not be possible to import any limitation in interpreting a particular entry in the list by comparing the said Entry or contracting it with any other Entry in that very List. While the court is determining the scope of the area covered by a particular Entry, the Court must interpret the relevant words in the Entry in a natural way and give the said words the widest interpretation. What the Entries purport to do is to describe the area of legislative competence of the different legislative bodies, and so, it would be unreasonable to approach the task of interpretation in a narrow or restrictive manner. To the same effect is the decision reported in Chaturbhai M. Patel Vs. Union of India (UOI) and Others, wherein it was held that in the interpretation of the scope of items in the legislative lists in Schedule VII the widest possible amplitude must be given to the words used and each general word must be held to extend to ancillary or subsidiary matters ''which can fairly be said to be comprehended in it. In Burmah Construction Co. Vs. The State of Orissa and Others, the Supreme Court held that the granting refund of tax improperly or illegally collected and the restriction on the exercise of that right are both ancillary or subsidiary matters relating to the primary head of tax on sale of goods. To the same effect is the decision reported in Rai Ramakrishna v. State of Bihar, AIR 1963 S.C. 1567.

From these it is clear that Ss. 5, 5A and 8 can be justified as legislation coming under Entry 54 of List IT of the Seventh Schedule. What is imposed is purchase tax and the same is exigible as mentioned in S. 5A. S. 8 of the Act provides for termination of the series for the purpose of fixing the last purchase point within the State. These are provisions relating to sale or purchase tax and matters ancillary and incidental thereof and in pith and substance S. 8 also can be justified as coming under Entry 54 List II of Seventh Schedule of the Constitution. These Sections are not unconstitutional or ultravires in view of Entry 92A and B of List I at the Seventh Schedule. I do not find any merit in the Original Petition The Petition is dismissed.