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PETITIONER: SADIQ BAKERY ETC.

       Vs.

RESPONDENT: STATE OF A P. & ORS.

DATE OF JUDGMENT24/11/1987

BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) RANGNATHAN, S.

CITATION:  1988 AIR  322            1988 SCR  (2)   7  1987 SCC  Supl.  440     JT 1987 (4)   515  1987 SCALE  (2)1187

ACT:      Constitution of  India, 1950: Articles 14 and 19(1)(b)- Sales Tax-Different  rates for  bread and  biscuits-A  .  P. Sales Tax  Act, 1952  Schedule 1  Item  Nos.  117  and  129- Validity of.      Andhra Pradesh  Sales Tax  Act, 1957:  Schedule I  Item Nos. 117 & 129-Bread and biscuits-Imposition of sales tax at different rates, whether constitutionally valid and legal.      Statutory Interpretation:  Economic wisdom  of a tax or lack of  it-Within the  exclusive domain of the legislature- Court to see that capacity to pay tax increases by and large with increase of receipts. D

HEADNOTE: %      In a  batch of  Writ Petitions  filed in this Court the petitioners challenged  the  imposition  of  sales  tax  and surcharge on  bread, rusk  and bun  under the A.P. Sales Tax Act, 1957  as illegal,  contending that  bread and  biscuits belonged to  one homogeneous  class  but  had  been  treated differently for  purposes of taxation under Schedule 1, Item No. 117 and Item No. 129 of the Act, that the purchasers and sellers of  bread and  biscuits had  been differently taxed, and that the multiple point tax violated Article 19(1)(g) of the Constitution.      Dismissing the writ petitions, ^      HELD: The  economic wisdom  of a  tax or lack of it are within the  exclusive domain  of the  legislature. The  only question for  the Court  to consider  is  whether  there  is rationality in  that behalf of the legislature that capacity to pay  the tax  increased by and large with the increase of receipts. From  any point  of view,  there is rationality in this  proposition.   It  is  sound  commonsense  and  is  in consonance with  social justice. Therefore, the challenge to the imposition, under Article 14 as well as Article 19(1)(g) of the Constitution is not sustainable. [9D-F]      State of  Andhra Pradesh  & Anr.  v. Nalla Raja Reddy & Ors. [1967]  3 SCR  28; New Menek Chowk Spinning and Weaving Mills Co. 8

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Ltd. and  Ors. v.  Municipal  Corporation  of  the  City  of Ahmedabad and  others., [1967]  2 SCR 679; Annapurna Biscuit (Mfg.) Co.  and Another  v. The  State of  U.P. and Another, [1975] 35  S.T.C 127  and Hoechst  Pharmaceuticals Ltd.  and Another Etc.  v. State  of Bihar and others, [1983] SCR 130, referred to.

JUDGMENT:      ORIGINAL  JURISDICTION:  Writ  Petitions  (Civil)  Nos. 5117/ 81,  7340/81, 3656-84/82,  6381-82, 6951-52/82,  8010- 19/82, 8108-11/82,  90 19-20/82,  5241-60/83, 1734-35/83 and 559-560/83.      (Under Article 32 of the Constitution of India).      B. Kanta Rao for the Petitioners.      C. Seetharamiah, T.V.S.N. Chari, Ms. Vrinda Grover, Ch. Badri Nath,  A.K. Sanghi,  G.S. Chatterjee  P.N. Mishra, A.V Rangam, Pramod  Swarup, D. Goburdhan and M.N. Shroff for the Respondents.      The Judgment of the Court was delivered by      SABYASACHI MUKHARJI, J.      W.P. Nos: 5117/81, 3656-84/82, 5241-5260/83. & 7340/81      These four  batches of  Writ  Petitions  challenge  the imposition of  sales tax  on bread,  rusk and  bun under the A.P. Sales  Tax Act  1957 as illegal. The main and the first contention was  that the  bread and  biscuits belong  to one homogeneous class  but these  have been  differently treated for taxation  under Schedule I, Item No. 117 and Schedule I, Item No. 129 of the said Act. In other words, the contention of the  petitioners is  that the  bread and biscuits are the same, they  should not  be differently taxed. The purchasers and sellers  of bread  and biscuits  have  been  differently taxed In  support of  this contention reliance was placed on certain decisions of this Court, namely:-      State of  Andhra Pradesh  & Anr.  v. Nalla Raja Reddy & Ors., [1967]  3 SCR 28; New Manek Chowk Spinning and Weaving Mills Co. Ltd. and Ors. v. Municipal Corporation of the City of Ahmedabad  and others,  [1967] 2  SCR 679. We do not find any proposition  in  those  decisions  in  support  of  this contention of the petitioners. The decision of the Allahabad High Court  in Annapurna  Biscuit (Mfg.)  Co. and Another v. The State of U.P. and Another, [1975] 35 S.T.C. 9 127 does not deal with this contention at all. A      The second  contention sought to be raised was that the multiple  point   tax  violates   Article  19(1)(g)  of  the Constitution.   The   petitioners   being   Bakeries,   this contention is not open to the petitioners.      The third  contention sought  to  be  raised  was  that excise duty  and sales  tax are  imposed on  the same items. This also  does not arise in the case of the petitioners who are Bakeries.  Apart from  that the  taxable events in these two impositions  are different. So this contention cannot in any event be raised.      The fourth  contention sought  to  be  raised  was  the surcharge.  This  point  in  our  opinion  does  not  arise. Furthermore this  point is  concluded by the observations of this Court  in the  case of  Hoechst Pharmaceuticals Ltd and Another Etc.  v. State  of Bihar and others, [1983] 3 S.C.R. 130. Indeed  all these  contentions raised  on behalf of the petitioners  have  been  negatived  by  this  Court  in  the aforesaid decision.      We reiterate  that the economic wisdom of a tax or lack of it  are within  the exclusive  domain of the legislature.

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The only question for the Court to consider it whether there is rationality  in  that  behalf  of  the  legislature  that capacity to  pay the  tax increases  by and  large  with  an increase of  receipts. From  any  point  of  view  there  is rationality in this proposition. It is sound commonsense. It is in  consonance  with  social  justice  to  which  we  are committed by our Constitution.      In that  view  of  the  matter  the  challenge  to  the imposition under  Article 14  as well as Article 19(1)(g) of the Constitution are not sustainable.      These  Writ  Petitions  must  fail  and  are  dismissed accordingly. There  will be  no order  as to  costs. Interim orders, if  any, are  vacated W.P.  Nos.  6381-82/82,  6951- 52/82, 8010-19/82 8108-11/82, 9019-20/ 82, 1734-35/83 & 559- 560/83.      In view  of the  Judgment in  W.P. Nos.  5117/81, 3656- 84/82, 524 1-5260/83 and 7340/8 1, these petitions must also fail and  are accordingly  dismissed. There will be no order as to costs. N.P.V.                                  Petitions dismissed. 10