Case: V. M. Syed Mohammad &amp; Company Vs. State of Andhara Pradesh &amp; Others

2. The petitioners are tanners carrying on business in Eluru, West Godawari District, which is now part of the newly created State of Andhra. They make large purchases of untanned hides and skins and after tanning them in their tanneries they export the tanned hides and skins or sell the same to local purchasers. In the High Court the appellants impugned the Act and the Rules on the following grounds:(a) the Provincial Legislatures had no power under the Government of India Act of 1935 to enact a law imposing a tax on purchasers;(b) The liability to pay tax on sales is thrown on the purchaser not by the statute but by the rules. This is an unconstitutional delegation by the legislature of its functions to the executive and the imposing of the tax is accordingly illegal;(c) The Act has become void under Article 14 of the Constitution, as it singles out for taxation purchasers in some trades and is, therefore discriminatory; and(d) The rules framed under the Act are inconsistent with the provisions enacted in the body of the Act and are voidThe High Court repelled each of the aforesaid grounds except that under item (d) it held that Rule (16(5) was ultra vires in that it offended against S. 5 (vi) of the Act and dismissed their applications. Hence the present appeals by the appellants under the certificate granted by the High Court that it was a fit case for appeal to this Court.

Reasoning:
In our opinion, the decisions of the High Court on those grounds are substantially well-founded and correct.On the question of legislative competency, the learned Advocate drew our attention to entry 54 in List II of the seventh Schedule to the Constitution of India and argued that this entry clearly indicates that entry 48 in List II of the Seventh Schedule to the Government of India Act, 1935, under which the impugned Act was passed was much narrower in its scope and could not be read as authorising the making of a law with respect to taxes on the purchase of goodsThis argument appears to us to be fallacious, for the intention of the Constituent Assembly as expressed in entry 54 in List II of the Seventh Schedule to the Constitution cannot be a guide for ascertaining the intention of a totally different body namely the British Parliament, in enacting entry 48 in List II of the Seventh Schedule to the Government of India Act, 1935. Further, we agree with the High Court that entry 48 in list II of the Seventh Schedule to the Government of India Act, on a proper construction, was wide enough to cover a law imposing tax on the purchaser of goods as well and that the Constituent Assembly in entry 54 of List II in the Seventh Schedule to the Constitution accepted this liberal construction of the corresponding entry 48 and expressed in clearer language what was implicit in that corresponding entry4. The next point urged by the learned Advocate was founded on Article 14 of the Constitution. The Appellants grievance is that the impugned Act singles out for taxing purchasers of certain Specified commodities only but leaves out purchasers of all other commodities.The Principle underlying the equal protection clause of the Constitution has been dealt with and explained in ----- Charanjit Lal Chowdhury v. Union of India. AIR 1951 S. C. 41 (A), and several subsequent cases and need not be reiterated. It is well settled that the guarantee of equal protection of laws does not require that the same law should be made applicable to all persons. Article 14, it has been said, does not forbid classification for legislative purposes, provided that such classification is based on some differentia having a reasonable relation to the object and purpose of the law in question. As pointed out by the majority of the Bench which decided Charanjitlal Chowdhurys case (A), there is a strong presumption in favour of the validity of legislative classification and it is for those who challenge it as unconstitutional to allege and prove beyond all doubt that the legislation arbitrarily discriminates between different persons similarly circumstanced. There is no material on the record before us to suggest that the purchasers of other commodities are similarly situated as the purchasers of hides and skins. The majority decision in Charanjitlal Chowdhurys case (A) clearly applies to the case before us and there is, no getting away from the position that the appellants before us have not discharged the burden of proof that according to the majority decision, was upon them to do5. Lastly, the learned Advocate urges that R. 16(5) clearly contravenes the provisions of S. 5 (vi) of the Act. This sub-rule has been held to be ultra vires by the High Courtand, indeed, the learned Advocate-General of Madras did not in the High Court, as before us, dispute that R. 16(5) was repugnant to S. 5 (vi). That sub-rule, however affects only unlicensed dealers and the appellants who are admittedly licensed dealers are not affected by that sub-rule. Further, it has not been suggested before us that the appellants were ever called upon to pay any tax on purchase of the hides or skins in respect of which tax had been previously paid by some prior purchasers. That sub-rule is clearly severable and cannot affect that validity of the rules which may otherwise be within the ambit of the Act. Our attention has not been drawn to any other infirmity in the rules.