Case: State of Karnataka and Another Vs. Messrs Hansa Corporation

registered, to maintain accounts or to submit returns. The High Court also found the registration fee of Rs. 25 prescribed under the rules, the liability to maintain accounts in the manner prescribed and to submit monthly and yearly returns as constituting unreasonable restriction s on the fundamental right of the petty dealers to carry on their trade or business.20. Learned Attorney-General urged that this contention was no where to be found in the petition filed by the petitioners in the High Court and, therefore, the High Court was in error in entertaining the contention. Unfortunately, the judgment does not show that learned Advocate-General who appeared for the State raised such an objection to the entertaining of the contention on behalf of the petitioners by the High Court. Not only has the High Court permitted the contention to be raised but accepted the same. In fairness to the petitioners it would be unjust to shut out the contention on this technical ground, though we must note that Mr. S. T. Desai learned counsel who appeared for the respondents found it difficult to pursue the contention. We, however, propose to deal with the contention on merits.21. The taxing event under the statute is entry of scheduled goods in a local area for consumption, use or sale therein at the instance of a dealer. The expression dealer has the same meaning as assigned to it in clause (k) of s. 2 of Karnataka Sales Tax Act, 1957, which defines dealer to mean any person who carries on the business of buying, selling, supplying or distributing goods, directly or otherwise, whether for cash or for deferred payment, or for commission, remuneration or other valuable consideration and includes amongst others, a casual trader. Sect ion 10(1) makes it obligatory upon every dealer whose total turnover in any year is not less than the specified sum to get himself registered under the Act. Sub-s. (2) carves out an exception to sub-s. (1) that notwithstanding anything contained in sub-s. (1) every casual trader dealing in goods mentioned in the Third Schedule or the Fourth Schedule irrespective of the quantum of his total turnover in such goods shall get himself registered. And in passing it may be mention ed that Schedule Three includes 12 items and Schedule Four includes seven items. In other words, casual trader who is included in the expression dealer in respect of the goods mentioned in the Third or Fourth Schedule, irrespective of his turn over, has to get himself registered. Therefore, it cannot be said that all petty dealers are excluded from the application of Karnataka Sales Tax Act. That apart, the taxing event under the impugned Act being entry of scheduled goods in a local area at the instance of a dealer, the volume or quantum of business of the dealer is not at all relevant. The situation now obtaining may be contrasted with the situation when octroi was levied. Octroi was payable by anyone irrespective of the fact whether he was a dealer in the goods or not, on goods which were liable to octroi when they were brought within the octroi limits. It was payable at the octroi limits where there used to be an office called octroi naka. This was found to be cumbersome and the present Act seeks to replace to some extent that infamous octroi. The noteworthy departure made by the Act is that now unlike every importer only a dealer dealing in the scheduled goods will have to pay the tax and that too not at the octroi limit but afterwards while submitting returns. It would be a case of wild imagination that a dealer in scheduled goods would bring within the local area scheduled goods in such a small quantity as to make maintenance of acc ounts a very difficult task as also a registration fee of Rs. 25 so heavy as to dub it an unreasonable restriction on his right to carry on trade or commerce. Only three items are included in scheduled goods and it is legitimate to believe that a dealer not dealing in either of the scheduled goods would not be required to get himself registered. And if he is going to deal in the goods his turnover would not be so small in scheduled goods as to make maintenance of accounts and payment of registration fee of Rs. 25 so disproportionately heavy as to render it as an unreasonable restriction on his right to carry on trade.22. Looking at the matter from a slightly different angle it must be confessed that if the contention of the respondents were to be upheld it would provide a fruitful source for evasion of tax. If petty dealers are to be excluded some criterion will have to be provided relatable to his turnover in scheduled goods for classifying who are petty dealers. That turnover will have to be kept reasonably high to make it rational but in that event the big registered dealer can always conveniently defeat the tax by bringing into the local area scheduled goods in the name of such petty dealer. It would be an incentive to a big registered dealer to set up a number of petty dealers and import scheduled goods into local area in the name of those petty dealers. To avoid any such contingency, if the tax is levied on the entry of scheduled goods in the local area at the hands of a dealer irrespective of his turnover a potential source of evasion can be checkmated. Viewed from either angle, non-exemption of petty dealers from the operation of the Act does not lead to the conclusion that the impugned legislation constitutes unreasonable restrictions on the fundamental right of the petty dealers to carry on their trade or business. The High Court was, therefore, in our opinion, in error in striking down the impugned legislation on the ground that the Act imposes unreasonable restrictions on the fundamental right of the petty dealers to carry on their trade.23.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]There is aanswer to the contention that upon a literal grammatical construction of s. 3 the State has no choice in the matter of selecting local areas and that choice is limited to specifying rates but after choosing rates all local areas will have to be covered for the levy of tax. It is easy to read the section with a pause and punctuation after the word ad valorem so that the expression as may be specified by the State Government would qualify both the expressions local area and such rate. This would be clear from the fact that the last expression in the section different rates may be specified for different local areas would be an adjectival clause to the word rate so that the power to choose and specify different rates is not implicit in the words such rate but in the expression different rates may be specified for different local areas. Thus an express power of choosing and specifying different rates subject to maximum for different local areas is conferred on the St ate Government not by the expression such rate but by the expression rates with the adjectival clause different rates may be specified for different local areas. It was, therefore, not necessary to qualify the expression such rate again by the expression as may be specified by the State Government because that is covered by the express power conferred by the expression different rates may be specified for different local areas. In approaching the matter from this angle the expression as may be specified by the State Government would qualify the expression local area and this construction would be further reinforced by use of Article a prefixing local area meaning thereby not every local area but any lo cal area. In this connection reference may be made with advantage to In re. Sankers; ex parte Sergeant, wherein the expression under the hand of the Judge of a county court came up for construction. The construction canvassed for was that a county court would not mean any county court but the country court having jurisdiction in the matter. Repelling this construction the Court, after ascertaining the object of the legislation, held that a county court would mean any county court , an approach dictated by strict grammaticalif, therefore, a literal grammatical construction were to be adopted, on a proper reading o f the section power is conferred on the State Government by s. 3 not only to specify different rates for different areas but also to specify local areas entry into which of scheduled goods would provide the taxing event. There is thus a power to choose and specify local areas as well as choose and specify rate of taxation subject to maximum prescribed in theour reading of the section is not correct, there is another way of approaching the matter. It cannot be gains aid that the State Government is empowered to specify the different rates of tax not exceeding the maximum in respect of different scheduled goods for different local areas. This implies that even though the taking event is entry of scheduled goods in a local area, nonetheless different rates may be prescribed for different local areas and express power in that behalf is conferred on the Government by providing in section 3 that different rates may be specified for differen t local areas. If at this stage the definition of local area is recalled which means an area in a city governed by the Karnataka Municipalities Act or a municipal corporation governed by the Karnataka Municipal Corporations Act it would immediately appear that local areas vary immensely both in dimension, population, industrial growth, economic development and scale and kind of municipal service rendered. One has to keep in view a local area like Bangalore City, a highly industrially advanced capital city of Karnataka and a small municipality having a population of 10, 000. Now, if the expression a local area in s. 3 is interpreted to mean every local area as contended on behalf of the respondents, before any tax can be levied under s. 3 it would be obligatory on State Government to levy tax on entry of scheduled goods in every local area in Karnataka State for consumption, use or sale therein. The contention thus is that coverage of all local areas for levy o f tax would provide outside maximum limit of power under s. 3. The question is: Is it a minimum condition for exercise of power ? If it is, the rates of tax will have to vary considerably in direct relation to the local area for which the rate is being prescribed. It would be unjust and inequitable to levy tax on entry of goods at the same rate for such local area as Bangalore Municipal Corporation and a small municipal area, the two local areas being uncomparable with regard to area, population, industrial growth and consumption of such scheduled goods in the area. Now, if the impact of the tax is to be equitable keeping in view cost of its collection, a tax levied at such a small rate as one paise for goods worth Rs. 100 ad valorem for a small local area and 2% ad valorem for such industrially developed local area like Bangalore Corporation, it would make nonsense of the levy apart from the uneconomic outcome keeping in view the administrative cost of collection. If the Government is obliged on the construction canvassed on behalf of the respondents to encompass all local areas for the purpose of levying tax under the statute, the rates would have to be varied so much to avoid the evil of making the impost unjust and if the rates have to be varied from area to area the administrative cost in smaller areas with lower rates and negligible entry of scheduled goods in such area would make the tax wholly uneconomic. It must, therefore, logically follow that choice to select local area is a necessary concomitant of a choice to select rates, which power is admittedly conferred on the State Government. Purpose underlying the statute, namely, to provide financial assistance to the municipalities would be better effectuated if the tax realised considerably outweighs the administrative cost involved in collecting the tax. And it is a well known canon of construction that the purpose underlying the statute would provide a reliable external aid for proper construction because the Court would adopt that construction which would effectuate theHigh Court unfortunately approached the matter from the standpoint of literal grammatical construction of the section overlooking the object underlying the Act, the historical background which the High Court itself had noticed, and holding that unless the section isas understood by the High Court, the State Government had no power to pick and choose localys a presumption of constitutionality of a statute. If the language is rather not clear and precise as it ought to be, attempt of the Court is to ascertain the intention of the legislature and put that construction which would lean in favour of the constitutionality unless such construction is wholly untenable. However, where one has to look at a section not very well drafted but the object behind the legislation and the purpose of enacting the same is clearly discernible, the Court cannot hold its hand and blame the draftsman and chart an easy course of striking down the statute. In such a situation the Court should be guided by a creative approach to ascertain what was intended to be done by the legislature in enacting the legislation and so cons true it as to give force and life to the intention of the legislature. This is not charting any hazardous course but is amply borne out by an observation worth reproducing in extensoin Seaford Court Estates Ltd. v.was also observed that legislature which is competent to levy a tax must inevitably be given full freedom to determine which articles should be taxed, in what manner and at what rate. It would, therefore, be idle to contend that a State must tax everything in order to tax something. In tax matters, "the State is allowed to pick and choose districts, objects, persons, methods and even rates for taxation if it does so reasonably" (see Willis on Constitutional Law, p.question, therefore, is, whether a tax of a certain kind can be levied on entry of goods in certain local areas, the classification of local areas, if found to be reasonable, the levy of tax would not be invalid on the ground that choosing certain areas only excluding some others would violate Article 14. Whether in this case the classification is reasonable would be presently examined but the contention that if the State Government is granted a choice in the matter of selection of local area, ipso facto, the statute would be unconstitutional as being violative of Art. 14, must beorder to ascertain whether the classification of local areas for the purposes of levy of tax is reasonable or not, a reference may be made to the impugned notification. Table annexed to the notification shows in all 27 local areas selected for levy of tax. They are again divided into three groups, A, B and C for selecting rates to be levied on different scheduled goods. A mere glance at the local areas selected and those according to the petitioner excluded, viz., areas within the jurisdiction of various Gram Panchayats would bring in bold relief that population criterion appears to have been adopted in selecting local areas for levy of tax. Does population criterion provide a reasonable basis for classificationa tax levied on entry of goods in the area ? It would be undeniable that population basis would provide a reasonable criterion for selecting local areas for the purpose of levy tax simultaneously excluding those which do not answer the population criterion. One unquestionable element scientifically established about a taxing statute is that the yield from the tax must be sufficiently in excess of cost of collection so that the tax which is levied for augmenting public finances to be utilised for public good would be productive. Where the cost of administrative machinery required to be set up for collecting tax is either marginally lower or equal or marginally higher than the yield from the tax, the measure would be uneconomic if not counterproductive. Now, if the tax in this case is levied on the entry of scheduled goods in local areas, the yield would be directly proportionate to the consumption of the good s in local areas and the consumption of goods is directly related to the population within the local area. Viewed from this angle, population criterion would provide a reasonable basis for classification for selectively levying the tax by choosing local area and by specifying different rates so as to make the tax productive. Therefore, there is no substance in the contention that the classification in this case was unreasonable. The High Court was accordingly in error in holding that s. 3 did not permit the State Government to pick and choose local areas for the levy of tax and that levy of tax under s. 3 in all local areas within Karnataka State was a minimum condition for exercise of the power under s. 3. The contention must , accordingly bethe contention it was said that the abolished octroi would have been less oppressive in its application than the tax under the impugned legislation falling on petty dealers. W hat appealed to the High Court was that if a petty dealer brought within the local area scheduled goods of the value of Rs. 5 for consumption, use or sale therein, he is to get himself registered after paying the registration fee , maintain accounts for his dealings in such goods and submit monthly and annual returns and to appear before the assessing authority when called upon to do so. The High Court thereafter contrasted the position of a dealer under the Karnataka Sales Tax Act, 1957, and observed that a dealer whose total turnover is less than Rs. 25, 000 was not liable to pay sales tax and one whose turnover was less than Rs. 10, 000 was not required to get registered, to maintain accounts or to submit returns. The High Court also found the registration fee of Rs. 25 prescribed under the rules, the liability to maintain accounts in the manner prescribed and to submit monthly and yearly returns as constituting unreasonable restriction s on the fundamental right of the petty dealers to carry on their trade orthe judgment does not show that learnedwho appeared for the State raised such an objection to the entertaining of the contention on behalf of the petitioners by the High Court. Not only has the High Court permitted the contention to be raised but accepted the same. In fairness to the petitioners it would be unjust to shut out the contention on this technical ground, though we must note that Mr. S. T. Desai learned counsel who appeared for the respondents found it difficult to pursue the contention. We, however, propose to deal with the contention ontaxing event under the statute is entry of scheduled goods in a local area for consumption, use or sale therein at the instance of a dealer. The expression dealer has the same meaning as assigned to it in clause (k) of s. 2 of Karnataka Sales Tax Act, 1957, which defines dealer to mean any person who carries on the business of buying, selling, supplying or distributing goods, directly or otherwise, whether for cash or for deferred payment, or for commission, remuneration or other valuable consideration and includes amongst others, a casual trader. Sect ion 10(1) makes it obligatory upon every dealer whose total turnover in any year is not less than the specified sum to get himself registered under the Act.(2) carves out an exception to(1) that notwithstanding anything contained in(1) every casual trader dealing in goods mentioned in the Third Schedule or the Fourth Schedule irrespective of the quantum of his total turnover in such goods shall get himself registered. And in passing it may be mention ed that Schedule Three includes 12 items and Schedule Four includes seven items. In other words, casual trader who is included in the expression dealer in respect of the goods mentioned in the Third or Fourth Schedule, irrespective of his turn over, has to get himself registered. Therefore, it cannot be said that all petty dealers are excluded from the application of Karnataka Sales Tax Act. That apart, the taxing event under the impugned Act being entry of scheduled goods in a local area at the instance of a dealer, the volume or quantum of business of the dealer is not at all relevant. The situation now obtaining may be contrasted with the situation when octroi was levied. Octroi was payable by anyone irrespective of the fact whether he was a dealer in the goods or not, on goods which were liable to octroi when they were brought within the octroi limits. It was payable at the octroi limits where there used to be an office called octroi naka. This was found to be cumbersome and the present Act seeks to replace to some extent that infamous octroi. The noteworthy departure made by the Act is that now unlike every importer only a dealer dealing in the scheduled goods will have to pay the tax and that too not at the octroi limit but afterwards while submitting returns. It would be a case of wild imagination that a dealer in scheduled goods would bring within the local area scheduled goods in such a small quantity as to make maintenance of acc ounts a very difficult task as also a registration fee of Rs. 25 so heavy as to dub it an unreasonable restriction on his right to carry on trade or commerce. Only three items are included in scheduled goods and it is legitimate to believe that a dealer not dealing in either of the scheduled goods would not be required to get himself registered. And if he is going to deal in the goods his turnover would not be so small in scheduled goods as to make maintenance of accounts and payment of registration fee of Rs. 25 so disproportionately heavy as to render it as an unreasonable restriction on his right to carry onat the matter from a slightly different angle it must be confessed that if the contention of the respondents were to be upheld it would provide a fruitful source for evasion of tax. If petty dealers are to be excluded some criterion will have to be provided relatable to his turnover in scheduled goods for classifying who are petty dealers. That turnover will have to be kept reasonably high to make it rational but in that event the big registered dealer can always conveniently defeat the tax by bringing into the local area scheduled goods in the name of such petty dealer. It would be an incentive to a big registered dealer to set up a number of petty dealers and import scheduled goods into local area in the name of those petty dealers. To avoid any such contingency, if the tax is levied on the entry of scheduled goods in the local area at the hands of a dealer irrespective of his turnover a potential source of evasion can be checkmated. Viewed from either angle,of petty dealers from the operation of the Act does not lead to the conclusion that the impugned legislation constitutes unreasonable restrictions on the fundamental right of the petty dealers to carry on their trade or business. The High Court was, therefore, in our opinion, in error in striking down the impugned legislation on the ground that the Act imposes unreasonable restrictions on the fundamental right of the petty dealers to carry on theirone stage there was some controversy whether a tax law was within the inhibition of Part XIII of the Constitution, but this controversy is no more res integra and it has been set at rest by the majority view in Atiabari Tea Co. Ltd. v. The State of Assam &Ors., Gajendragadkar, J. speaking for the majority, observed that the intrinsic evidence furnished by some of the Articles of Part XIII shows that taxing laws are not excluded from the operation of Art. 301 which means that tax laws can and do amount to restrictions freedom from which is guaranteed to trade under the saidthe contention that all taxes should be governed by Art. 301 whether or not their impact on trade is immediate or mediate, direct or remote, was negatived. The majority view in Atiabari Tea Co. Ltd. case (Supra) wasand affirmed in The Automobile Transport (Rajasthan) Ltd. v. The State of Rajasthan &Ors. Das,law was thus further clarified by pointing out that all taxes should and could not be prohibited by Art. 301 and must of necessity for their sustenance seek the coverage of Art. 304. If a measure is shown to be regulatory or the tax imposed is compensatory in character meaning the tax instead of hampering trade or commerce would facilitate the same, it would be immune from a challenge under Art, 301. In other words, if the tax is shown to be compensatory in character irrespective of the fact whether i t is saved by Art. 304 or not it does not come within the inhibition of Art. 301. Accordingly, if validity of a tax law is challenged on the ground that it violates freedom ofcommerce, trade and intercourse, guaranteed by Art . 301, the contention may be repelled by showing (i) that the tax is compensatory in character as explained in The Automobile Transport (Rajasthan) Ltd. case (Supra); or (ii) that it satisfies the requirements of Art.a conspectus of these decisions it appears well settled that if a tax is compensatory in character it would be immune from the challenge under Art. 301. If on the other hand the tax is not shown to be compensatory in character it would be necessary for the p arty seeking to sustain the validity of the tax law to show that the requirements of Art. 304 have beenState did not attempt in the High Court to sustain the validity of the impugned tax law on the submission that it was compensatory in character. No attempt was made to establish that the dealers in scheduled goods in a local area would be availing of municipal services and municipal services can be efficiently rendered if the municipality charged with a duty to render services has enough and adequate funds and that the impugned tax was a measure for compensating the municipalities for the loss of revenue or for augmenting its finances. As such a stand was not taken, it is not necessary for us to examine whether the tax is compensatory in304 lifts the em bargo placed on the legislative power of State to enact law which may infringe the freedom oftrade and commerce if its requirements are fulfilled. Article 304(a) imposes a restriction on the power of legislature of a State to levy tax which may be discriminatory in character by according discriminatory treatment to goods manufactured in the State and identical goods imported from outside the State. The effect of Art. 304(a) is to treat imported goods on the same basis a s goods manufactured or produced in a State. This article further enables the State to levy tax on such imported goods in the same manner and to the same extent as may be levied on the goods manufactured or produced inside the State. If a State tax law accords identical treatment in the matter of levy and collection of tax on the goods manufactured within the State and identical goods imported from outside the State, Art. 304(a) would be complied with.ing assumption in Art. 304(a) that such a tax when levied within the constraints of Art. 304(a) would not be violative of Art. 301 and State legislature has the power to levy suchunder the impugned legislation would be levied on scheduled goods either manufactured or produced within Karnataka State or imported from outside on their entry in a local area. Thus, this tax isin that it does not discriminate between scheduled goods manufactured or produced within Karnataka Stat e or those imported from outside. And the microscopic discrimination relied upon by the respondents that there is differential treatment accorded to goods produced within a local area and those imported from outside the local area is hardly relevant for the purpose of Art. 304(a). The High Court was accordingly right in concluding that the impugned tax satisfies the requirements of Art.order to satisfy the requirements of Art. 304(b) it must be shown that the restrictions imposed by the tax law onfreedom of trade and commerce are reasonable and are in public interest as also the bill for the purpose of levy of such tax has been introduced or moved in the State legislature with the previous sanction of the President. To the extent the impugned tax is levied on the entry of goods in a local area it cannot be gainsaid that its immediate impact would be on movement of goods and the measure would fall within the inhibition of Art. 301. Can it, however, be said that this tax imposes restrictions which in the facts and circumstances of the case could not be said to be reasonable? It was cont ended on behalf of the respondents that the tax not being single point tax it would impose a heavy burden and a very burden of tax would certainly constitute unreasonable restriction on the freedom of trade andthe tax would have to be paid every time when scheduled goods enter a local area. In other words, it is not a single point tax and, therefore, if some scheduled goods successively enter different local areas for consumption, use or sale therein, there would be multiple levy. But no attempt was made to substantiate this charge by showing as to how goods are taken from one local area to another local area to third local area for successive sales because if they are taken for consumption or use, there is no question of taking the scheduled goods from one local area to another local area. It is, therefore, difficult to conceive a situation realistically that the impost would be very heavy so as to make it unreasonable. The High Court negatived the contention and in our opinion rightly observing that the petitioners have not been able to show that the burden of the tax was so heavy as to constitute unreasonable restriction on the freedom of trade and commerce. In this connection, however, reliance was placed on the decision of this Court in Kalyani Stores v. State of Orissa &Ors. In that case the State enhanced the duty in respect of foreign liquors from Rs. 40 to Rs. 70 per L.P. gallon and this levy was challenged on the ground that it infringed the guarantee of Art. 301. The State attempted to save the levy by contending that it was saved by Art.has been pointed out earlier, the levy was to compensate the loss suffered by abolition of octroi. without a demur. After removing the obnoxious features of octroi a very modest impost is levied on entry of goods in a local area and that too not for further augmenting finances of the municipalities but for compensating the loss suffered by the abolition of octroi is certainly a levy in public interest. As has been repeatedly observed by this Court, the taxes generally are imposed for raising public revenue for better governance of the country and for carrying out welfare activities of our welfare State envisaged in the constitution and, therefore, even if a tax to some extent imposes an economic impediment to the activity taxed, that by itself is not sufficient either to stigmatise the levy as unreasonable or not in publicproviso imposes an obligation to obtain the Presidential sanction before introducing the bill or amendment for the purpose of clause (b) of Art. 304 in the legislature of a State. It cannot be gainsaid that Presidential sanction was not obtained before introducing the bill which was ultimately enacted into the impugned Act but after the bill was enacted into an Act the same was submitted to the President for his assent and it is common ground that the President has accorded his assent. If prior presidential sanction is a sine qua non, the requirement of the proviso is not satisfied but in this context it would be advantageous to refer to Art. 255 which provides that no Act of Parliament or of the Legislature of a State and no provision in any such Act shall be invalid by reason only that so me recommendation or previous sanction required by the Constitution was not given if assent to that Act was given by the President. Now, in this case it is common ground that the President did accord his sanction to the impugned Act. Therefore, th e requirement of the proviso issum up, the impugned tax is not discriminatory in character as envisaged by Art. 304(a) and it does impose restrictions but the restrictions imposed are reasonable and in public interest and the Ac t subsequently having received the assent of the President, the proviso to Art. 304(b) is complied with and, therefore, the impugned Act is saved by Art. 304 and could not be struck down on the ground that it was violative of Art. 301. The contention must accordingly becontention overlooks the specific guideline to be found in t he charging section itself. The taxing event is the entry of scheduled goods into a local area. The tax becomes payable on the entry of scheduled goods in a local area. Therefore, the price of the scheduled goods at the time of entry paid by t he dealer who is the importer of goods within the scheduled area would be the ad valorem price on the basis of which tax would be computed. No subsequent rise or fall in price has any relevance to the computation of the tax. The charging section says that the tax shall be levied and collected on the entry of scheduled goods in a local area at specified percentage not exceeding two per cent ad valorem. Therefore, the price of the scheduled goods at the time when the tax becomes chargeable irrespective of the fact that it would be computed at a later date when the dealer submits his return as required by the other provisions of the Act, would be the price for computation of tax. And there is no ambiguity or any vagueness in t his behalf. There is thus specific guideline in the charging section itself for taking into account the price according to which tax would be computed. The High Court negatived this contention by observing that it would be open to the dealer to choose either the sale price or the purchase price whichever is favourable to him for computation of his liability to tax. This approach overlooks the specific language of s. 3 which clearly indicates what price is to be taken into account for computing the tax. When the goods are brought within the local area they have a certain price. The price may be the price which the importer of goods has paid before bringing the goods within the local area. Even if the dealer is the manufacturer of goods at a place outside the local area and brings the goods within the local area he must have determined the price of the goods. Therefore, the dealer has some specific price of the scheduled goods which are being brought within the local area at the time of entry in the local area and the entry being the taxing event that would be the price which alone can be taken into account for computing the tax ad valorem. Therefore, we find it difficult to agree with the reasoning adopted by the High Court in rejecting the contention but for the reasons hereinabove mentioned the contention is devoid of merits and accordingly it must be negatived. 846