Case: Steelworth Ltd Vs. State of Assam

The appellant Company is a limited company carrying on in the State of Assam its business of manufacturing, selling and supplying iron and steel materials. It held a Registration Certificate under the Assam Sales Tax Act, as it was before the amendment of 1960. Under that Act all its purchases for use in manufacture or production of goods taxable under the Act were exempt from sales tax but after the amendment of the Act there was a deletion in the Registration Certificate of certain goods, e.g., cast iron, iron plates, steel bars and galvanised wire which were used by the petitioner in the manufacture of its finished products which were also taxable in the State. Consequently it has become liable to pay tax on those goods purchased for use in the manufacture of goods and the cost of production has thereby gone up.

Court's reasoning:
In our opinion this argument is without force. The Legislature, having chosen the articles on which it thinks necessary to impose a tax, has decided to impose the tax and it is difficult to see how it can be said that the goods supplied against a contract and goods manufactured and sold by the petitioner are similarly situated. Besides the provision against discrimination is not on articles but on personsIt has not been shown how the imposition of this tax is an unreasonable restriction on the rights of the petitioner to carry on trade, but it was submitted that by this means the petitioner will not be able to compete with the manufacturers outside the State of Assam. Assuming that this is so, it is clear that goods which are purchased are put to different uses and if the legislature thinks that certain classes of goods should pay the tax and not others that is a question of policy into which the courts cannot enter. We can only say that in such circumstances, per se there is no discrimination. There is no force in the second contention either. In view of our decision on these two points the third point, that is, the refusal of the Sales Tax Officer to amend the registration certificate will have no force.