Summarize the following court judgment. vil Appeals Nos. 1166 72 of 1985 etc. From the Judgment and Order dated 24.1.85 of the Punjab & Haryana High Court in C.W.P. Nos. 698 to 703 and 733 of 1984. Raja Ram Aggarwal	 B. Sen	 Dr. Devi Paul	 D.S. Tawatia	 Soli J. Sorabjee	 Kapil Sibal and S.K. Dholakia	 A.N. Haka sar	 D.N. Misra	 Mukul Mudgal	 Ravinder Narain	 P.K. Ram	 section Sukumaran	 section Ganesh	 Mahabir Singh	 H.S. Anand. R. Karania wala	 Mrs. Manik Karanjawala	 A.S. Bhasme and A.M. Khanwil kar for the Appearing Parties. The following Judgments of the Court were delivered: SABYASACHI MUKHARJI	 J. Except civil appeals Nos. 416263 of 1988	 in these appeals along with the special leave petitions and the writ petition	 we are concerned with Sections 9(1) and 24(3) as well as the penalty proceedings initiated under Section 50 of the Haryana General Sales Tax Act	 1974 (hereinafter referred to as 'the Act '). So far as civil appeals Nos. 4 162 63 of 1988 are concerned	 these involve the scope	 effect and validity of Section 13AA of the Bombay Sales 523 Tax Act. 1959 (hereinafter referred to as 'the Bombay Act ') as introduced by the Maharashtra Act No. XXVIII of 1982. It will	 therefore	 be desirable first to deal with the ques tion of the Act	 and then with the provisions of the Bombay Act as mentioned hereinbefore. The appellant/petitioner Goodyear India Ltd.	 was engaged at all relevant times	 inter alia	 in the manufac ture and sale of automobile tyres and tubes. It manufactured the said tyres and tubes at its factory at Ballabhgarh in the district of Faridabad in the State of Haryana. For the said manufacturing activity the appellant had	 from time to time	 to purchase various kinds of raw materials both within the State and outside the State. It is stated that about 7 to 10% of the total needs of raw materials on an all India basis were locally procured by the appellant from Haryana itself. The raw materials purchased in Haryana were: (i) pigments (partly)	 (ii) chemicals (partly)	 (iii) wires (partly)	 (iv) carbon black (partly)	 (v) rubber (partly)	 and (vi) fabric (partly). The rest of the requirements were imported from other States. The appellant had its depots at different places in the State of Haryana as well as in other States. After manufacturing the said tyres and tubes	 about 10 to 12% of the total manufactured products used to be sold in the State of Haryana either locally or in the course of inter State trade & commerce or in the course of export outside the country and also sold locally against Declara tion Form No. ST 15. It was stated that at the relevant time the local sales including sales in the course of inter State trade & commerce and in the course of export from the State of Haryana was about 30 to 35%. The appellant was a regis tered dealer both under the Haryana Act and the 	 and had been submitting its quarterly returns and paying the sales tax in accordance with law	 according to the appellant. In 1979	 the assessing authority	 Farida bad	 imposed upon the appellant the purchase tax under Sec tion 9 of the Act for the assessment year 1973 74 and subse quently for the years 1974 75 and 1975 76 as well on the despatches made by the appellant on the manufactured goods to its various depots outside the State. Subsequently	 the relevant revenue authorities sought to impose purchase tax under Section 9(1) of the Act and imposed purchase tax on despatches of manufactured goods	 namely	 tyres and tubes	 to its various depots in other States. This led to the filing of various writ petitions in the Punjab & Haryana High Court by the appellant/petitioner. In respect of the assessment years 1976 77 to 1979 80. these questions were considered by the Punjab and Haryana High Court	 and the writ. petitions were decided in favour of the appellant on December 524 4	 1982. The said decision being the decision in Goodyear India Ltd. vs The State of Haryana & Anr. is reported in 53 STC 163. The Division Bench of the High Court in the said decision held that both on principle and precedent	 a mere despatch of goods out of the State by a dealer to his own branch while retaining both title and possession thereof	 does not come within the ambit of the phrase "disposes of the manufactured goods in any manner otherwise than by way of sale"	 as employed in section 9(1)(a)(ii) of the Act. The High Court further held that the decision of this Court in The State of Tamil Nadu vs M.K. Kandaswami	 [1975] 36 STC 191 was no warrant for the proposition that a mere despatch of goods was within the ambit of disposing them of. The High Court also distinguished the decision of this Court in Ganesh Prasad Dixit vs Commissioner of Sales Tax	 M.P.	 [1969] 24 STC 343	 and held that Notification No. S.O. 119/H.A. 20/73/Ss. 9 & 15/74 dated July 19	 1974 issued under Section 9 (prior to its amendment by Act No. 11 of 1979) was ultra vires of Section 9 of the Act. It was held that whereas the section provided only for the levy of purchase tax on the disposal of manufactured goods	 the impugned notification by making a mere despatch of goods to the dealers themselves taxable	 in essence	 legislates and imposes a substantive tax which it obviously could not. It was held that this was contrary to and in conflict with the provisions of section 9. The High Court referred to the relevant portion of unamended Section 9 of the Act with which it was confronted and the notification. In order to appreciate the said decision and the position	 it will be appropriate to set out the said provisions	 namely	 the unamended provisions of Section 9 as well as the notifica tion: "9. Where a dealer liable to pay tax under this Act purchases goods other than those specified in Schedule B from any source in the State and (a) uses them in the State in the manufacture of	 (i) goods specified in Schedule B or (ii) any other goods and disposes of the manufactured goods in any manner otherwise than by way of sale whether within the state or in the course of inter State trade or commerce or within the meaning of sub section (1) of Section 5 of the 	 in the course of export out of the territory of India	 525 (b) exports them	 in the circumstances in which no tax is pay able under any other provision of this Act	 there shall be levied	 subject to the provi sions of section 17	 a tax on the purchase of such goods at such rate as may be notified under section 15. " The relevant notification was as follows: "Notification No. S.O. 119/H. A. 20/73/Ss. 9 and 15/74 dated the 19th July	 1974. In exercise of the powers conferred by section 9 and subsection (1) of section 15 of the Haryana General Sales Tax Act	 1973	 the Governor of Haryana hereby directs that the rate of tax payable by all dealers in respect of the purchases of goods other than goods specified in Schedules C and D or goods liable to tax at the first stage notified as such under section 18 of the said Act	 if used by them for purposes other than those for which such goods were sold to them shall be the rate of tax leviable on the sale of such goods: Provided that where any such dealer	 instead of using such goods for the purpose for which they were sold to him	 despatches such goods or goods manufactured therefrom at any time for consumption or sale outside the State of Haryana to his branch or commission agent or any other person on his behalf in any other State and such branch	 commission agent or other person is a registered dealer in that State and produces a certificate from the assessing authority of that State or produces his own affidavit and the affidavit of the consignee of such goods duly attested by a Magistrate or Oath Commissioner or Notary Public in the form appended to this notifica tion to the effect that the goods in question have been so despatched and received and entered in the account books of the consignee	 the rate of tax on such goods shall be three paise in a rupee on the purchase value of the goods so despatched." The High Court	 as stated before	 referred to section 9 and held that the expression 'disposes of ' was not basically a term of legal art and	 therefore	 it was proper and neces sary to first turn to its ordinary 526 meaning in order to determine whether a mere despatch of goods by a dealer to himself would connote 'disposal of ' such goods by him. The High Court referred to the dictionary meaning of 'disposes of ' in Webster 's Third New Internation al Dictionary. Reference was also made to 27 Corpus Juris Secundum	 P. 345	 and ultimately it came to the conclusion that the phrase 'disposes of ' or 'disposal ' cannot be possi bly equated with the mere despatch of goods by a dealer to himself. After referring to the relevant provisions with which this Court was concerned in Kandaswami 's case (supra)	 the High Court held that that case was no warrant for con struing the expression 'despatch ' as synonymous to 'dispos al '. On the other hand	 the court held that the decision of this Court emphasises that the expression 'disposal ' of goods is separate and distinct from despatch thereof. Ac cording to the High Court	 the same position was applicable to Ganesh Prasad Dixit 's case (supra)	 and in those circum stances held that the term 'disposes of ' cannot be synony mous with 'disposal '	 and once that is held then the notifi cation mentioned above travelled far beyond what is provided in Section 9 of the Act	 while the said provision provided only for levy of purchase tax on disposal of manufactured goods. The High Court observed as follows: "Once it is held as above	 the impugned Notification No. S.O. 119/H.A. 20/73/Ss. 9 and 15/74 dated 19th July	 1974 (annexure P 2)	 plainly travels far beyond the parent section 9 of the Act. Whereas the said provision provided only for the levy of a purchase tax on the disposal of manufactured goods	 the notification by making a mere despatch of goods to the dealers themselves taxable in essence	 legislates and imposes a substantive tax which it obviously cannot. Indeed	 its terms run contrary to and are in direct conflict with the provisions of section 9 itself. There is thus no option but to hold that the notification	 which is a composite one	 is ultra vires of section 9 of the Act and is hereby struck down. " The High Court also noted that though the challenged assessment orders were appealable	 however	 as the challenge was to the very validity of the notification which was obviously beyond the scope of the appellate authority	 the writ petitions were entertainable as the assessment was based on the notification which was frontally challenged. As a result	 the High Court quashed the notification and set aside the assessment orders. The said decision is under challenge in appeal to this Court. 527 It may be mentioned that sub section (1) of section 9 of the Act had been introduced by the Haryana Act	 55 of 1976 in the Act. After the aforesaid decision of the High Court	 the Haryana Legislature intervened and enacted the Haryana General Sales Tax (Amendment & Validation) Act	 1983 by which Section 9 of the principal Act was amended as follows: "Amendment of Section 9 of Haryana Act 20 of 1973 in Section 9 of the principal Act	 (a) in sub section (1) 	 (i) for clause (b)	 the following clause shall be substituted and shall be deemed to have been substituted for the period commencing from the 27th day of May	 1971	 and ending with the 8th day of April	 1979	 namely: "(b) purchases goods	 other than those speci fied in Schedule B	 from any source in the State and uses them in the State in the manu facture of any other goods and either disposes of 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 or in the course of export outside the territory of India within the meaning of Sub section (1) of Section 5 of the ; or"	 (ii) after clause (b)	 the following clause shall be deemed to have been inserted with effect from the 9th day of April	 1979	 name ly: "(bb) purchases goods	 other than those speci fied in Schedule B except milk	 from any source in the State and uses them in the State in the manufacture of any other goods and either disposes of the manufactured goods in any manner otherwise than by way of sale in the State 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 or in the course of export outside the territory of India within the meaning of Sub Section (1) of Section 5 of the ; or"; 528 {iii) the following proviso shall be added	 namely: "Provided that no tax shall be leviable under this section on scientific goods and guar gum	 manufactured in the state and sold by him in the course of export outside the territory of India within the meaning of Sub section (3) of Section . of the ."; and (b) in sub section (3)	 the words "other than Railway premises" shah be omitted." After the aforesaid amendment the writ petitions were filed in the High Court by Bata India Ltd. In the meantime	 the petitioner Company also filed writ petitions for the assessment years 1973 74 to 1975 76 and 1980 81 in the High Court challenging the assessment. The High Court decided these matters on August 2	 1983. The said decision Bata India Ltd. vs The State of Haryana & Anr. has been reported in 1983 Vol. 54 STC 226. The High Court held that "mere despatch of 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" is synonymous with or is in any case included within the ambit of the consignment of goods either to the person making it or to any other person in the course of inter State trade or commerce as specified in Article 269(1)(h) and Entry No. 92 B of List 1 of the 7th Schedule to the Constitution. Hence	 the levy of sales or purchase tax on such a despatch or consignment of goods and matters ancillary or subsidiary thereto	 will be within the exclu sive legislative competence of Parliament to the total exclusion of the State Legislature. Therefore	 section 9(1)(b) of the Haryana General Sales Tax Act	 1973	 as amended by the Haryana General Sales Tax (Amendment & Vali dation) Act	 1983	 insofar as it levies a purchase tax on the consignment of goods outside the State in the course of inter State trade or commerce is beyond the legislative competence of the State of Haryana and is void and inopera tive. It was held that the retrospective validation of the notification of 19th July	 1974 referred to hereinbefore	 and the consequential validation of all actions taken there under were liable to be quashed. The High Court further held that mere manufacture and consignment of goods outside the State to himself by a manufacturer is not sale or disposal thereof with the result that it will not be within the ambit of Entry No. 54 of List II of the 7th Schedule to the Con stitution. Consequently	 it was held that irrespective of the 46th Amendment	 an attempt to tax the mere consignment or despatch of manufactured goods outside the State in the course of inter State trade 529 or commerce will not come within the ambit of Entry No. 54 of List II of the 7th Schedule	 and consequently of the competence of the respective State Legislatures. Even before the 46th Amendment	 the mere consignment of goods in the course of inter State trade or commerce was beyond the scope of the said Entry and thus not within the legislative compe tence of the States and was entirely within the parliamen tary field of. legislation by .virtue of Article 248 and the residuary Entry No. 97 of List I. The High Court was of the view that neither the original purchase of goods nor the manufacture thereof into the end product by itself attracts purchase tax and consequently are not even remotely the taxable events. What directly and pristinely attracts the tax and can be truly labelled as the taxing event under section 9(1)(b) of the Act is the three fold exigency of; (i) disposal of the manufactured goods in any manner otherwise than by way of sale in the State; or (ii) despatch of 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	 or (iii) disposal or despatch of the manufactured goods in the course of export outside the territory of India. It was these three exigencies only which were the taxable events in the amended section 9(1)(b) of the Act. Consequently	 in a Statute where the taxable event is the despatch or consignment of goods outside the State	 the same would come squarely within the wide sweep of Entry No. 92B of List I of the Constitution	 and thus excludes taxation by the States. The High Court was of the view that section 9 of the Act must be strictly construed as it was a charging section. If the charging section travels beyond the legislative Entry and thereby transgresses the legislative field	 then the same cannot possibly be sustained. The constitutional changes brought by the 46th Amendment in article 269 of the Constitution read with the insertion of Entry No. 92B in the Union List	 leave no doubt that the legislative arena of tax on the consignment of goods (whether to one 's ownself or to any other person) in the course of inter State trade or commerce and all ancillary or complementary or consequential matters	 are now declared to be exclusively reserved for parliamentary legislation and any intrusion into this field by the State Legislatures would be barred. In my opinion	 the High Court correctly noted in the said decision that the provisions of constitutional change have to be construed	 and such problems should not be viewed in narrow isolationism but on a much wider. spectrum and the principles laid down in Heydon 's case 530 ; are instructive. Hence	 in a situation of this nature	 it was just and proper to see what was the position before the 46th Amendment of the Constitution	 and find out what was the mischief that was sought to be reme died and then discover the true rationale for such a remedy. In Black Clawson International Ltd. vs Papierwerke Waldhof Aschaffenburg Ag. 	 ; 	 Lord Reid observed as follows: "One must first read the words in the context of the Act as a whole	 but one is entitled to go beyond that. The general rule in construing any document is that one should put oneself 'in the shoes ' of the maker or makers and take into account relevant facts known to them when the document was made. The same must apply to Acts of Parliament subject to one qualifica tion. An Act is addressed to all the lieges and it would seem wrong to take into account anything that was not public knowledge at the time. That may be common knowledge at the time or it may be some published information which Parliament can be presumed to have had in mind. It has always been said to be impor tant to consider the mischief which the Act was apparently intended to remedy. The word 'mischief ' is traditional. I would expand it in this way. In addition to reading the Act you look at the facts presumed to be known to Parliament when the Bill which became the Act in question was before it	 and you consider whether there is disclosed some unsatisfactory state of affairs which Parliament can properly be supposed to have intended to remedy by the Act . " The state of affairs that the Parliament has sought to remedy by the 46th Amendment of the Constitution	 was that prior to the promulgation each State attempted to subject the same transaction to tax on the nexus doctrine under its sales tax laws. Consequently	 on the basis of one or the other element of the territorial nexus	 the same transaction had to suffer tax in different States with the inevitable hardship to trade and consumers in the same or different States. The framers of the Constitution being fully aware of the problems sought to check the same by a somewhat complex constitutional scheme and by imposing restrictions on the States ' power with regard to levy tax on the sale or pur chase of goods under article 286. The High Court in the judg ment referred to hereinbefore	 mentioned these factors. It is in 531 this background that article 269 was amended and clause (3) was added to it. The effect	 inter alia	 is that the power to levy tax on the sale or purchase of goods is now referable to the legislative power vested in the States by virtue of Entry No. 54 in List II of the 7th Schedule. However	 this legislative authority of the States is restricted by three limitations contained in Articles 286(1)(a)	 286(1)(b) & 286(3) of the Constitution. It may be mentioned that Parlia ment by the 6th Amendment to the Constitution	 enacted the 	 with the object to formulate principles for determining when a sale or purchase of goods takes place in the course of inter State trade or commerce or outside a State or in the course of import into or export from India	 to provide for the levy	 collection and distri bution of taxes on sales of goods in the course of inter State trade or commerce and to declare certain goods to be of special importance and specify the restrictions and conditions to which State laws imposing taxes on the sale or purchase of such goods shall be subject. In this connection	 the High Court referred to the various propositions as mentioned by the Law Commission in its 61st Report rendered in May	 1974. It is not necessary to set out the same in detail. It was in the aforesaid historical background that the High Court construed the provisions in question and came to the conclusion that a plain reading of these would leave little manner of doubt that the legislative power to tax consignment transfers of goods from one branch of an insti tution to another branch thereof outside the State and all matters incidental	 ancillary or complementary thereto were then declared to be vested in the Union of India to the total exclusion of the States. The High Court referred to the observations of this Court in Khyerbari Tea Co. Ltd. vs State of Assam; 	 ; Navinchandra Mafatlal vs The Commissioner of Income tax	 Bombay City	 [1955] SCR 829 and Waverly Jute Mills Co. Ltd. vs Raymon & Co. (1) Pvt. Ltd.; 	 	 and concluded that Entry 92B enabled the Union of India not only to tax the consignment of goods in the strict sense but also embraced all ancillary and complementary areas as well to the exclusion of the State Legislature therefrom. In the aforesaid light the High Court construed section 9(1)(b) of the Haryana Act	 1983. Analy sing the provisions in detail it observed that Section 9 of the Act was a charging section for the levy of purchase tax. It imposed liability for payment of purchase tax	 therefore	 it should be distinguished from the machinery section. The High Court examined the real nature of the business outside the State and found that there was merely a change in the physical situs of the goods without any change in the basic incidents of ownership and control. Therefore	 in its true nature a mere despatch of goods outside the State to another branch of the original institution is not and never 532 can be the equivalent of a sale either as a term of art in the existing sales tax legislation and not remotely so in common parlance	 and construing section 9(1)(b) of the Act	 the High Court was of the view that the real taxing event is the despatch of 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. The High Court found that there was no distinction between the despatch as defined in the said amended section and the consignment of goods by the manufacturer to himself or any other person in the course of inter State trade or commerce	 and referred to the meanings of the expressions 'despatch ' and 'consign '	 which are similar and almost interchangeable when used in specific commercial sense. The High Court referred to Webster 's New International Diction ary	 Shorter Oxford English Dictionary and also to Random House dictionary for their meanings. On construction	 the High Court came to the conclusion that the amended provi sions of section 9(1)(b) of the Act attempt to levy an identical tax in the garb of a levy on the despatch of manufactured goods to places outside the State of Haryana	 and therefore intruded and trespassed into an arena exclu sively meant for taxation by the Union of India. The High Court also viewed from another point of view	 namely	 who was liable as it was the consignment of goods which attract ed the liability of purchase tax and in pristine essence was the "taxable event" under section 9(1)(b) of the Act. The High Court also analysed it from the point of view that under section 9(1)(b)	 where a dealer purchases goods for the express purpose of manufacturing other goods within the State	 then in strict sense such purchase by itself did not attract any tax under the provisions. Hence	 the High Court set aside the amended provision so far as it sought to levy purchase tax on the consignment of goods outside the State in the course of inter State trade or commerce	 consequently it also set aside the retrospective validation of the noti fication and the consequential validation of all actions taken thereunder. Special leave petitions were filed in this Court against the said decision of the High Court. These are special leave petitions Nos. 8397 to 8402 of 1983. During the pendency of the special leave petitions	 show cause notices were issued by the assessing authority in respect of the assessment years 1973 74 to 1980 81 (except for 1978 79 & 1979 80) and also for 1982 83 asking the petitioner to show cause why in addition to purchase tax	 it should not be liable to penalty as well. The petitioner Company again filed writ petitions in Punjab & Haryana High Court chal lenging the validity of those notices. It appears that in the meantime	 a Full Bench of the High Court decided the question again in the case of Des Raj Pushap 533 Kumar Gulati vs The State of Punjab & Anr. This decision was rendered on January 24	 1985	 and is reported in 58 STC 393. The assessment years involved in all appeals are 1973 74 to 1982 83. According to the Full Bench	 the taxing event is the act of purchase and not the Act of despatch or con signment as held in Bata India Ltd.	 (supra). In the prem ises	 it was held that section 9(1)(b) as amended	 was neither invalid nor ultra vires and overruled the decision of Bata India Ltd. The writ petitions filed were also dis missed. The petitioner Company filed special leave petitions against the aforesaid judgment of the Punjab & Haryana High Court which were admitted in Civil Appeals Nos. 1166 72/85. Goodyear India also filed writ petition No. 3834 of 1985 in respect of the assessment year 1981 82	 as the notices for assessment and penalty were received after the decision of Punjab & Haryana High Court in Des Raj Pushap Kumar 's case (supra). The said decision was passed in appeal against the decision of the said court in Goodyear India reported in 53 STC 163	 number being 1514 (NT) of 1984. All these questions are the subjectmatters of these appeals. It is well settled that what is the taxable event or what necessitates taxation in an appropriate Statute	 must be found out by construing the provisions. The essential task is to find out what is the taxable event. In what is considered to be indirect tax	 there is a marked distinction between the consequence of manufacture and the consequence of sale. It is well to remember that in construing the expres sions of the Constitution to judge whether the provisions like Section 9(1)(b) of the Act	 are within the competence of the State Legislature	 one must bear in mind that the Constitution is to be construed not in a narrow or pedantic sense. Constitution is not to be construed as mere law but as the machinery by which laws are to be made. It was ob served by Lord Wright in James vs Commonwealth of Australia	 at 614	 that the rules which apply to the interpretation of other Statutes	 however	 apply equally to the interpretation of a constitutional enactment. In this context	 Lord Wright referred to the observations of the Australian High Court in The Attorney General for the State of New South Wales vs The Brewery Employees Union etc. ; 	 where it was observed that the words of the Constitution must be interpreted on the same principles as any ordinary law	 and these principles compel us to consider the nature and scope of the Act	 and to remember that the Constitution is a mechanism under which laws 534 are to be made	 and not a mere Act which declares what the law is to be. Hence	 such mechanism should be interpreted broadly	 bearing in mind in appropriate cases	 that the Supreme Court like ours is a nice balance of jurisdictions. A Constitutional Court	 one must bear in mind	 will not strengthen	 but only derogate from its position if it seeks to do anything but declare the law; but it may rightly reflect that a Constitution is a living and organic thing	 which of all instruments has the greatest claim to be con strued broadly and liberally. See the observations of Gwyer	 C.J. in Re: Central Provinces & Berar Sales of Motor Spirit and Lubricants Taxation Act	 1938	 AIR 1939 PC 1 at 4). Mr. Justice Sulaiman in his judgment at p. 22 of the report observed that the power to tax the sale of goods is quite distinct from any right to impose taxes on use or consump tion. It cannot be exercised at the earlier stage of produc tion nor at the later stage of use or consumption	 but only at the stage of sale	 (emphasis supplied). The essence of a tax on goods manufactured or produced is that the right to levy it accrues by virtue of their manufacture. On the other hand	 a duty on the sale of goods cannot be levied merely because goods have been manufactured or produced. Nor can it be levied merely because the goods have been consumed or used or even destroyed. The right to levy the duty would not at all come into existence before the time of the sale. In this connection	 reference may be made to the observations of Chief Justice Gwyer in The Province of Madras vs M/s. Boddu Paidanna & Sons	 AIR 1942 FC 33. Mr Raja Ram Agarwala	 learned counsel for the appellant/assessees	 contended before us that it is neces sary to find out or identify the taxable event. If on a true and proper construction of the amended provisions of section 9(1)(b) it is the despatch or consignment of the goods that is the taxable event as contended by the petitioners and appellants	 then the power is beyond the State 's competence. If	 on the other hand	 it is the purchase of the goods that is the taxable event as held by the Full Bench of the High Court	 then it will be within its competence. The Full Bench in Des Raj Pushap Kumar 's case (supra) has relied on the background of the facts and the circumstances which necessi tated the introduction of the amendment. Mr. Tewatia	 learned counsel appearing for the State canvassed before us the historical perspective and stated that Haryana State came into being as a result of the Punjab State Reorganisation Act	 1966	 therefore	 part of the legislative history of the taxing Statute like any other Statute is shared by the Haryana State with the Punjab State	 and as such it is proper to notice the concept of purchase tax as it 535 evolved in the State of Punjab. Purchase tax was introduced in the State of Punjab for the first time by the East Punjab General Sales Tax (Amendment) Act	 1958. Section 2(ff) was introduced for the first time to define the expression 'purchase '. The definition of the term 'dealer ' was changed to include therein a purchaser of goods also. The definition of the term 'taxable turnover ' was also altered. Some deal ers who crushed oil seeds	 were called upon to pay purchase tax on the raw material purchased by them on the ground that the raw material had not been subjected to a manufacturing process as the process of crushing oil seeds did not involve a process of manufacturing. He referred to the fact that Punjab had originally exempted purchase tax on the purchase of raw material by the dealers if such raw material was to be used for the manufacture of goods for sale in Punjab and thus generate more revenue to the State as a result of the sales tax on such manufactured goods. But when the dealers started avoiding this condition for sale in Punjab by var ious ingenious devices after having escaped the payment of purchase tax on the raw material purchased by them	 the Legislature amended the Act and Punjab Act No. 18 of 1960 was brought on the statute book w.e.f. April 1	 1960. Sec tion 2(ff) of the Act was amended and it provided that all the goods mentioned in Schedule C when purchased shall be exigible to purchase tax and thus the concession given to the manufacturers was withdrawn. Explaining this background	 Mr. Tewatia contended that section 9	 sub section (i) of the Act envisages payment of tax at such rate as may be notified under Section 15 on the purchase of goods from any source within the State by a dealer liable to pay tax under the Act when such goods	 not being Schedule 'B ' goods	 were consumed either in producing Schedule 'B ' goods or when the manufac tured goods were other than Schedule 'B ' goods	 the same not being sold within the State or in the course of inter State trade or commerce	 or in the course of export outside the territory of India	 or the purchased goods were exported outside the State. After referring to the relevant provisions and the provisions of section 9(1)(b)	 Mr Tewatia emphasised that the contingency contemplated by "or despatches the manufac tured 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 or in the course of export outside the territory of India within the meaning of section 5(1) of the ; or" as well as clause (c) of section 9(1) which encompasses "purchases goods	 other than those specified in Schedule B	 from any source in the State and exports them	 in the circumstances in which no tax is payable under any other provision of 536 this Act	 there shall be levied	 subject to the provisions of Section 17	 a tax on the purchase of such goods at such rate as may be notified under Section 15."	 have to be judged for determining their validity in the true historical perspective as well as bearing in mind the remedial aspect of the provisions for the purpose of which these were enact ed. Therefore	 the main question is whether the tax envis aged by section 9(1) is a tax on purchase/sale of given goods or is a tax on the despatch/ consignment of such goods and that depends on	 as to whether the taxable event is a purchase/sale of goods or despatch/consignment of such goods. As mentioned hereinbefore	 Mr. Tewatia laid great deal of emphasis on the background of the provisions of section 9(1). He urged that the said section is both a taxing as well as a remedial provision	 as would be evident from the scheme of the Act. The legislative policy was to see that all goods except non taxable goods i.e. Schedule 'B ' goods	 must yield tax/revenue to the State in the hands of a dealer	 at one stage or the other	 according to Mr. Tewatia. He analysed the scheme and referred us to section 6 along with section 27 of the Act	 and then submitted that the provision of section 9(1) along with subsection (3) of section 24 of the Act are both composite provisions	 i.e. they are both charging provisions as also remedial provi sions. According to him	 such composite provisions of a fiscal Statute deserve to be interpreted properly and in such a manner as to further remedy and thus effectuate the legislative intent and suppress the mischief intended to be curbed. Reliance was placed by the High Court as well as Mr. Tewatia before us on the observations of this Court in The State of Tamil Nadu vs Kandaswami	 (supra)	 where at p. 198 of the Sales Tax Cases	 this Court while dealing with sec tion 7A of the Tamil Nadu (Amendment) Act	 observed that it was at once a charging as well as a remedial provision. Its main object was to plug leakage and prevent evasion of tax. In interpreting such a provision	 a construction which would defeat its purpose and	 in effect	 obliterate it from the statute book	 should be eschewed. If more than one construc tion is possible	 that which preserves its workability and efficacy is to be preferred to the one which would render it otiose or sterile	 observed this Court in that case. While bearing the aforesaid principle in mind	 it has to be exam ined as to how far the application of this provision can be construed with the well settled principle of fiscal legisla tion and the terms and conditions of the present legisla tion. It has been said and said on numerous occasions that fiscal laws must be strictly construed	 words must say what these mean	 nothing should be presumed or implied	 these must say so. The true test must always be the language used. 537 On behalf of the assessee	 Mr. Rajaram Agarwala	 howev er	 further contended that the ratio of Kandaswami 's case (supra) to which Mr. Tewatia referred	 must be understood in the light of the question involved in that case. The said decision of this Court was concerned with the limited point as to whether the Madras High Court was right in observing "whether one could say that the sale which is exempted is liable to tax and then assume that because of exemption	 the tax is not payable". This Court held that the language of section 7A of the said Act was far from clear as to its intention and did not concern with the identification of the taxing event. Furthermore	 it has to be borne in mind	 as emphasised by Mr. Agarwala	 that if at all the taxing event was spelt out	 it was on the assumption that the goods in question were generally taxable and these were to be put to tax under section 7A of the Tamil Nadu Act	 if these came to be purchased without payment of tax and then sought to be dealt with in any manner as to escape payment of State sales/purchase tax within the State. Mr. Tewatia drew our attention to the observations of this Court in Kandaswami 's case (supra) to prove that the observations in Malabar Fruit Products Co. vs The Sales Tax Officer	 Palai	 30 STC 537	 where these questions were decided by Justice Poti of the Kerala High Court	 who spelt out that the taxing event was not the event of despatch but the event of purchase/sale of goods. It has	 however	 to be borne in mind that the questions involved in Malabar Fruit Products ' case and Kandaswami 's case (supra) were not con cerned with the actual argument with which we are concerned in the instant matter. It is well settled that a precedent is an authority only for what it actually decides and not for what may remotely or even logically follows from it. See Quinn vs Leathem	 ; and The State of Orissa vs Sudhansu Sekhar Misra & Ors.	 ; Therefore	 the ratio of the said decision cannot be properly applied in construing the provisions of section 9(1)(b) in this case to determine what is the taxable event. It was contended by Mr. Rajaram Agarwala that clause (b) of Section 9(1) dealt with non exempted goods purchased in the State	 used in the manufacture of any goods whether exempted or not	 but when despatched outside the State of Haryana i.e. by way of stock transfer consignment will attract the tax liability under this section	 hence	 the event of despatch or consignment is the immediate cause which attracts the tax liability under section 9. The quali ty or the character of goods which should be liable to tax under section 9 in clause (1)(a) is the non exempted goods purchased in the State; while 538 under the first part of clause (b) the quality of goods liable to tax is the non exempted goods purchased in the State and under the second part of clause (b)	 the quality of goods must be non exempted goods purchased and manufac tured in the State	 whether exempted or not in the State which is liable to tax on despatch outside Haryana; and under clause (c) the goods purchased in Haryana without undergoing any further change or use is the quality of goods liable to tax when exported. The submission of the State is that the taxable event is the purchase of goods in Haryana while the obligation to pay is postponed on the fulfilment of certain conditions. The further argument is that there is a general liability to purchase tax which the dealer avoids on furnishing a Decla ration in S.T. Form 15 as provided by section 24 at the time of purchase	 wherein certain conditions are mentioned and when those conditions are not fulfilled	 those revive. It was further argued that the conditions are incorporated in section 9 of the Act. For testing which of the contentions are nearer to find out the exact taxable event	 certain indicias and illustrations may be seen. Their analysis will indicate that there is no liability to pay sales tax under the Haryana Act on the purchaser. It is admitted that on such sales the selling dealer is liable to pay sales tax. On such purchases	 the sale and purchase being the two sides of the same coin	 no purchase tax is imposed under the Act. This has been the accepted position by the State also for	 while replying to the question of double taxation counsel for the State admitted that sales as well as purchase tax is to be imposeable under the scheme of the Act which are of two sides. Hence	 it was rightly urged by Mr. Rajaram Agar wala that the first contention for attracting the applica bility of section 9(i)	 "whether a dealer is liable to pay tax under this Act purchases goods"	 is missing when the section (1) talks of a dealer liable to pay tax under the Act	 obviously it is with reference to his purchasing activ ity and if on that activity no purchase tax is payable	 section 9(1) would not be applicable. To accept the submissions advanced by Mr. Tewatia	 assumptions and presumptions are to be made. It is not permissible to do so in a fiscal provision. See in this connection the observations of this Court in C.S.T.U.P. vs The Modi Sugar Mills Ltd.; 	 and Baidyanath Ayurved Bhawan (P) Ltd.	 Jhansi vs Excise Commissioner	 U.P. & Ors. ; 	 at 592. In that background it must be noted that section 9 of the Act nowhere makes a reference to section 24 or any declaration furnished by the purchasing dealer on the basis of which he was granted temporary exemp tion and thereby revival of 539 the original purchase tax on the breach of declaration as such. Section 9 of the Act opens with the expression "where a dealer liable to pay tax under this Act" and not "whether a dealer has paid tax or has not paid tax". The phrase 'liable to pay tax ' under the Act must relate to liability to pay sales tax on such purchases. It is well settled that the main test for determining the taxable event is that on the happening of which the charge is affixed. The realisation often is postponed to further date. The quantification of the levy and the recov ery of tax is also postponed in some cases. It is well settled that there are three stages in the imposition of tax. There is the declaration of liability	 that is the part of the Statute which 'determines what persons in respect of what property are liable. Next	 there is the assessment. Liability does not depend on assessment	 that exhypothesi has already been fixed. But assessment particularises the exact sum which a person is liable to pay. Lastly comes the method of recovery if the person taxed does not voluntarily pay. Reference may be made to the observations of Lord Dunedin in Whitney vs Commissioner of Inland Revenue	 at p. 52 and of the Federal Court in Chatturam & Ors. vs C.I.T.	 Bihar	 15 ITR FC 302 at 308. Taxable event is that which on its occurrence creates or attracts the liability to tax. Such liability does not exist or accrue at any earlier or later point of time. The identi fication of the subject matter of a tax is to be found in the charging section. In this connection	 one has to analyse the provisions of section 9(2)(b) as well as section 9(1)(b) and 9(1)(c). Analysing the section	 it appears to us that the two conditions specified	 before the event of despatch outside the State as mentioned in section 9(1)(b)	 namely	 (i) purchase of goods in the State and (ii) using them for the manufacture of any other goods in the State	 are only descriptive of the goods liable to tax under Section 9(1)(b) in the event of despatch outside the State. If the goods do not answer both the descriptions cumulatively	 even though these are despatched outside the State of Haryana	 the purchase of those goods would not be put to tax under sec tion 9(1)(b). The focal point in the expression "goods	 the sale or purchase of which is liable to tax under the Act"	 is the character and class of goods in relation to exigibil ity. In this connection	 reference may be made to the obser vations of this Court in Andhra Sugars Ltd. vs State of Andhra Pradesh	 ; On a clear analysis of the said section	 it appears that section 9(1)(b) has to be judged as and when liability accrues under that section. The liability to pay tax under this section does not accrue on purchasing the goods simpliciter	 but only when these are despatched or consigned out of 540 the State of Haryana. In all these cases	 it is necessary to find out the true nature of the tax. Analysing the section	 if one looks to the alleged purchase tax under section 9	 one gets the conclusion that the section itself does not provide for imposition of the purchase tax on the transac tion of purchase of the taxable goods but when further the said taxable goods are used up and turned into independent taxable goods	 losing its original identity	 and thereafter when the manufactured goods are despatched outside the State of Haryana and only then tax is levied and liability to pay tax is created. It is the cumulative effect of that event which occasions or causes the tax to be imposed	 to draw a familiar analogy it is the last straw on the camel 's back. In this connection	 reference may be made to the obser vations of Justice Vivian Bose in The Tata Iron & Steel Co. Ltd. vs The State of Bihar	 ; at 1381	 where he observed as follows: "I would therefore reject the nexus theory in so far as it means that any one sale can have existence and entity simultaneously in many different places. The States may tax the sale but may not disintegrate it	 and	 under the guise of taxing the sale in truth and in fact	 tax its various elements	 one its head and one its tail	 one its entrails and one its limbs by a legislative fiction that deems that the whole is within its claws simply because	 after tearing it apart	 it finds a hand or a foot or a heart or a liver still quivering in its grasp. Nexus	 of course	 there must be but nexus of the entire entity that is called a sale	 wherever it is deemed to be situate. Fiction again. Of course	 it is fiction	 but it is a fiction as to situs imposed by the Constitution Act and by the Supreme Court that speaks for it in these matters and only one fiction	 not a dozen little ones. " It is	 therefore	 necessary in all cases to find out what is the essence of the duty which is attracted. A taxa ble 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 trans action is completely eclipsed or ceases to exist when the levy is imposed at the third stage of despatch of manufac ture. 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 541 remotely connected with the transaction of the purchase of raw material wherein the present levy would lose its charac ter of purchase tax on the said transaction. Mr. Rajaram Agarwala submitted that the measure of tax is with reference to the value of purchased goods in the State of Haryana. As mentioned before	 reference has been made to the decision of Kandaswami 's case (supra)	 where this Court dealt with section 7A of the Tamil Nadu Act	 which was not identical but similar to section 9 of the Act. There at p. 196 of the report	 this Court observed as fol lows: ". Difficulty in interpretation has been experienced only with regard to that part of the sub section which relates to ingredients (4) & (5). The High Court has taken the view that the expression "goods	 the sale or pur chase of which is liable to tax under this Act"	 and the phrase "purchases . in circum stances in which no tax is payable under Sections 3	 4 or 5 are a "contradiction in terms". Ingredients Nos. 4 & 5 are as follows: "4. The goods purchased are "goods	 the sale or purchase of which is liable to tax under this Act". Such purchase is	 "in circumstances	 in which no tax is payable under sections 3	 4 or 5	 as the case may be;" The relevant ingredient involved	 as mentioned at page No. 196	 was as under: "6. The dealer either (a) consumes such goods in the manufacture of other goods for sale or otherwise or (b) despatches all such goods in any manner other than by way of sale in the State or (c) despatches them to a place outside the State except as a direct result of sale or purchase in the course of inter State trade or commerce. " This ingredient was neither argued nor was considered	 so the 542 passing reference based on the phraseology of the section is not the dictum of Kandaswami 's case. Secondly	 in section 9	 in the instant case	 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. This important factor is wholly missing in Section 7A of the Tamil Nadu Act	 which was considered in Kandaswami 's case. In that decision	 this Court approved the Kerala High Court 's decision in Malabar Fruit Products	 (supra)	 which was confined to the interpretation of the words 'goods '	 the sale or purchase under the Act. A deci sion on a question which has not been argued cannot be treated as a precedent. See the observations of this Court in Rajput Ruda Maha & Ors. vs State of Gujarat	 [1980] 2 SCR 353 at 356. The decision of the Division Bench of the Kerala High Court in Yusuf Shabeer & Ors. vs State of Kerala & Ors.	 32 STC 359 is clearly distinguishable. In Ganesh Prasad Dixit 's case (supra) the question of constitutional validity was not argued. A reference was made by Mr. Tewatia to the decision of the High Court in The Coffee Board vs Commissioner of Commercial Taxes & Ors.	 60 STC 142 and the decision of this Court in Coffee Board	 Karnataka vs Commis sioner of Commercial Taxes	 Karnataka	 70 STC 162. In these cases the question involved was the acquisition of coffee by the Coffee Board under compulsory acquisition or purchase or sale of goods. That question is entirely different from the question with which we are concerned in these appeals. Prior to 46 the Amendment	 Entry 54 of List II of the 7th Schedule of the Constitution of India which demarcated the exclusive field of State Legislation	 read with Article 246(3) of the Constitution conferred power on the State Legislature to impose tax on the transactions of sale or purchase of goods. The said Entry read as follows: "Taxes on the sale or purchase of goods other than Newspapers	 subject to the provisions of Entry 92 A of List I". Entry 92A of List I	 which is in the exclusive domain of the Union	 was to the following extent: "Taxes on the sale or purchase of goods other than Newspapers	 where such sale or purchase takes place in the course of inter State trade or commerce." The mere consignment of goods by a manufacturer to his own branches outside the State does not in any way amount to a sale or 543 disposal of the goods as such. The consignment or despatch of goods is neither a sale nor a purchase. The first judg ment in case of Goodyear India was on December 4	 1982 when it was held that the Notification was beyond the Act	 as the word 'disposal ' did not include the word 'mere despatch ' as mentioned in the notification. The Constitution (46th Amend ment) Act	 1982 came into force on February 2	 1983	 whereby section 9 was amended. This amendment was after 46th Consti tutional Amendment Act	 1982. The 46th Constitution Amend ment Act in the Statement of Objects & Reasons	 inter alia	 stated as follows: "There were reports from State Government to whom revenues from sales tax have been as signed	 as to the large scale avoidance of Central Sales Tax leviable on inter State sales of goods through the device of consign ment of goods from one State to another and as to the leakage of local Sales Tax in works contracts	 hire purchase transactions	 lease of films etc. Though	 Parliament could levy a tax on these transactions	 as tax on sales has all along been treated as an item of revenue to be assigned to the States	 in regard to these transactions which are semble sales also	 it is considered that the same policy should be adopted. " The Law Commission of India in its 61st Report made	 as indicated before	 certain recommendations	 and noticed that the provisions of existing were insuf ficient to tax the consignment transfers from branch to another	 as it was beyond the concept of sale	 and its recommendations are contained in paragraph 2.23 of Chapter II (at page 66)	 it recommended that the definition of sale in the 	 after carrying out the requi site Constitution Amendment be amended somewhat on the lines indicated by them in their report. The Union of India	 in part	 accepted the recommendations but instead of amending the definition of sales in 	 inserted a new Entry in the Union List in the shape of Entry 92B and also inserted a new sub clause (4) after subclause (g) in article 269 (1) of the Constitution. The Parliament also amend ed clause (3) of Article 269. It appears to us that the effect of the aforesaid amend ment is that the field of taxation on the consignment/des patch of goods in the course of inter State trade or com merce expressly come within the purview of the legislative competence of the Parliament. It is wellsettled that the nomenclature of the Act is not conclusive and for 544 determining the true character and nature of a particular tax	 with reference to the legislative competence of a particular Legislature	 the Court will look into its pith and substance. See the observations of Governor General in Council vs Province of Madras	 [1945] 72 IA 91. There	 Lord Simonds observed as follows: " . . For in a Federal Constitution	 in which there is a division of legislative powers between Central and provincial legisla tures it appears to be inevitable that contro versy should arise; Whether one or other legislature is not exceeding its own	 and encroaching on the others Constitutional Legislative Power	 and in such a controversy it is a principle	 which their Lordships do not hesitate to apply in the present case	 that it is not the name of the tax	 but its real nature	 "it is pith and substance"	 as it has some times been said which must determine into what category it fails. " We must	 therefore	 look not to the form but to the substance of the levy. See the observations of the Federal Court in Ralla Ram vs The Province of East Punjab	 AIR 1949 FC 81. Therefore	 the nomenclature given by the Haryana Legis lature is not decisive. One has to find out whether in pith and substance	 a consignment tax is sought to be imposed	 a tax on despatch in the course of inter State trade or com merce. I have no hesitation in holding that it is a tax on despatch. Inter state trade or commerce	 it has been empha sised	 is of great national importance and is vital to the federal structure of our country. As the imposition of consignment tax requires very deep consideration of all its aspects and certain amount of consensus among the States concerned	 especially with regard to the rates	 grant of exemption	 and ratio relating to distribution of proceeds amongst the States inter se	 the actual imposition of tax is bound to take some time till an agreeable solution is found	 but that would not make the consignment tax to be in sus pended animation in the State	 and make us hold that a tax which is in essence a tax on consignment should be taxed by the States by the plea either that otherwise there is ample scope of evasion and further States are without much re sources in these days when there is such a tremendous demand on the revenue of the States. It is well settled that the Entries in the Constitution only demarcate the legislative fields of the respective legislatures and do 545 not confer legislative powers as such. The tax on despatch of goods outside the territory of the State certainly is in the course of inter State trade or commerce	 and in other words	 amounts to imposition of consignment tax	 and hence the latter part of section 9(1)(b) is ultra vires and void. In these cases	 we are concerned with the validity of the latter part of section 9(1)(b) of the Haryana Act which imposes a tax on despatch of manufactured goods outside the territories of Haryana. If it is accepted that section 9(1)(b) is ultra vires	 the penalty proceedings would auto matically go as they are in substance	 based on the viola tion of section 9(1)(b) of the Act and the consequent pro ceedings flowing therefrom. It is in that context that in writ petition No. 3834 of 1985	 Mr. Soli Sorabjee urged that the attempt and action of the State in imposing tax and attempt to penalise are bad. In this connection	 it may be mentioned that before the Full Bench of the Punjab & Haryana High Court on behalf of the State	 a statement was made	 which has been recorded in 58 STC 393 at p. 408	 as follows: "Counsel appearing for the State of Haryana made a statement that if the Full Bench held that Bata India Limited 's	 case (1983)54 STC 226 did not lay down the correct law and the amendment effected by Act No. 11 of 1984 to Section 9 was intra vires	 then the provision of sub section (3) of section 24 regarding the rate of tax shall not be enforced and only the old rate will be leviable. " In view of the aforesaid statement	 no higher rate except the old rate admissible factually would be applica ble. Section 24(3) was introduced by the Haryana Act with retrospective effect from May 27	 1971	 which is as follows: "Notwithstanding any other provisions of this Act or any Judgment	 decree or order of any Court or other authority to the contrary if a dealer who purchases goods	 without payment of tax under Sub section (1) and fails to use the goods so purchased for the purpose specified therein he shall be liable to pay tax on the purchase value of such goods	 at the rates notified under Section 15 without prejudice to the provisions of Section 50 provided that the tax 546 shall not be levied where tax is payable on such goods under any other provision of this Act. " This provision without making any change in the substan tive provision purports to give a direction to ignore the judgment	 in other words	 purports to overrule the judg ments	 namely	 Goodyear and Bata India	 which is beyond the legislative competence of the State Legislature and this provision is void in view of the decision of this Court. See Shri Prithvi Cotton Mills Ltd. vs Broach Borough Municipali ty	 [1969] 2 SCC 283 at 286. For the same reason	 applying the main section instead of section 9(1)	 section 24 should also fail as amended. Civil appeal No. 15 15/84 is also liable to be dismissed in view of the judgment of this Court in Dy. Commissioner of Sales Tax (Law)	 Board of Revenue (Taxes) vs M/s. Thomas Stephen & Co. Ltd.	 Quilon	 ; 	 where this Court observed that "disposal means transfer of title in the goods to any other person"	 and therefore it would not include mere despatch to own self or to its agents or to its branch offices or depots. In the premises	 the decision of the Punjab & Haryana High Court in Goodyear India Ltd.	 53 STC 163 is correct on merits as well. In the aforesaid view of the matter	 it cannot be held that section 9(1) and sub section (3) of section 24 are constitutionally valid. In civil appeals Nos. 1633 (NT) of 1985 and 3033/86 which are the appeals by the Food Corporation of India	 Mr. Sen submitted that the FCI is a service agency of the Govt. of India and is discharging the statutory functions of distribution of foodgrains by procuring/purchasing from the surplus States and despatching the same to the deficit States in accordance with the policy of the Govt. of India. He further submitted that the Corporation procures food grains from the farmers through commission agents in the Mandis of Haryana and despatch them to its own branches in the deficit States of the country. The Corporation branches in the recipient States supply these stocks to the State agencies/fair price shops and also pay tax as per the provi sions of the Sales Tax law of the respective States. Some of the stocks are distributed within Haryana for the Public Distribution System (PDS) for which sales tax is charged and deposited with the Sales Tax depot as per the provisions of the Haryana General Sales Tax Act. In case the stocks are also sold in the course of inter State trade or commerce	 central sales tax is levied and deposited with the Haryana Sales Tax authorities. Some of the grains are also exported out of India on which there is exemption on payment of any tax. 547 In fact	 the points at which the tax is to be levied have been indicated in Schedule 'D ' to the Act. It is clear from the perusal of the Schedule that in case of Paddy	 the taxable event is the last purchase. Similarly	 in case of rice the taxable event is the first sale point in the State. In case of wheat and other cereals the point of taxation is the last sale to the consumer by a dealer liable to pay tax under the Act. In respect of inter State despatch of wheat and other foodgrains by FCI to its own branches	 tax is attracted at the time of despatch under section 9(1)(c) of the Haryana Act. Section 9 is	 therefore	 the charging section for taxation in case where the goods are purchased for export. There is no other provision for levy of purchase or sales tax in such cases of export. Incidentally	 "export" has been defined in section 2(e) of the Act which reads as follows: "2(e) "export" means the taking out of goods from the State to any place outside it other wise than by way of sale in the course of inter State trade or commerce or in the course of export out of the territory of India;" No tax is payable under the Haryana Act when exports outside the State take place either in the course of inter State sale or export out of the territory of India. No tax is therefore payable in regard to export outside India but the tax is payable for sale in the course of inter State trade and commerce i.e. under the . It is only when the goods are despatched/consigned to the depots of the FCI in other States that tax is levied under section 9 of the Haryana Act. This is in addition to the sales tax paid by the FCI on the sale of grains in the recipient States. On perusal of sections 14 & 15 of the 	 it becomes clear that wheat is one of the commodities specified as 'declared goods ' and in respect of which the intention is clear that the tax is payable only once on the declared goods. In the case of inter State sale if any tax has been paid earlier on declared goods inside the State the same is to be refunded to the dealer who is paying tax on such inter State sales. On these transactions no tax is liable in the recipient State	 while in case of inter State despatches	 the tax is leviable twice. The appeals of. the FCI are confined to section 9(1)(c)	 which insofar as it purports to tax export	 is beyond the legisla tive competence of the State of Haryana. On behalf of the State in Bata Co. Ltd. vs State of Haryana (supra)	 the submission of the State was on the basis that it had power to tax consignment or despatches of goods. But after the 46th Amend 548 ment	 the State Legislature is incompetent to legislate about consignments/despatches otherwise than by way of sale under which no purchase/sales tax is leviable under the Haryana Act. It is the Parliament alone which is legisla tively competent to enact a legislation on consignment. Now	 it is necessary to deal with civil appeals Nos. 4 162 63/85 which deal with the validity of section 13 AA of the Bombay Sales Tax Act. These appeals are by Hindustan Lever Ltd. and Wipro Products the appellants herein. The appellants	 at all material times	 manufacture	 make and deal in vanaspati	 soaps	 etc.	 chemicals and agro chemicals	 and they used to purchase various types of VNE oils for their manufacture of vanaspati	 soaps and other products. Since the appellants had a wide net of distribution of their products all over India	 they appointed 40 and more clearing and forwarding agents in the country. The appellant used to despatch the goods so manufactured from their factory to the clearing and forwarding agents. They also used to purchase VNE oils and other raw materials and paid 4% tax by way of purchase tax under section 3 of the Bombay Sales Tax Act	 1959 (hereinaf ter called 'the Bombay Act '). The raw materials are used in the manufacture of said goods and as the said manufactured goods are despatched outside the State to the several dis tributing agencies	 the appellant companies were held to be liable to pay	 under section 13 AA of the Act	 an additional tax @ 2% on purchase of the said goods. The question	 therefore	 that arises	 is: whether the levy of additional tax at 2% under Section 13 AA of the Act is a tax on purchases failing under Entry 54 of List II of the 7th Schedule or it is a tax on the despatch of consign ment of the manufactured goods outside the State. In case of latter	 the State Legislature will have no power to impose any tax on such consignment or despatch of goods outside the State. If it is the former	 then it will be valid. The question is that under the true constructions of section 13 AA of the Act	 on which the imposition of tax is made	 or in other words	 what is the incidence of that taxation or taxable event? In both these appeals	 namely	 civil appeals No. 4162/ 88 and 4163/88	 the appellants M/s Wipro Products Ltd. and Hindustan Lever Ltd. are contending that the levy is bad. The issue involved in both the appeals is the con stitutional validity and legality of the provisions of section 13 AA of the Act	 which was introduced into the Act by the Maharashtra Act XXVIII of 1982. The appellant 549 had a factory at Amalnar in Jalgaon district in the State of Maharashtra wherein it uses non essential oil purchased by it for the manufacture and transport. The finished products	 namely	 vanaspati manufactured by the appellant used to be despatched to their various marketing depots in the State of Maharashtra	 Madhya Pradesh	 Karnataka	 Andhra Pradesh	 U.P.	 Tamil Nadu and Kerala etc. On July 1	 1981 the rate of purchase tax payable on VNE oils (falling under Schedule C	 part I at Entry 35) purchased within the State of Maharash tra from non registered dealers increased from 3% to 4%	 by the Maharashtra Act 32 of 1981. Section 13 AA was introduced into the Act providing for levy of 2% additional purchase tax on the purchase of goods	 input goods	 specified in part I of the Schedule from a non registered dealer if such goods were used in the manu facture of taxable goods within Maharashtra and thereafter the manufactured goods were transferred outside Maharashtra in the manner indicated in the said section. The appellants filed writ petitions. An order was passed by the Bombay High Court on July 19	 1988 in respect of these two writ petitions by the Wipro Products as well as Hindustan Lever Ltd. The decision of the High Court is reported in [1989] 72 STC 69. Dismissing the petitions of the appellants the High Court held that (i) three different phases are contemplated in section 13 AA of the Act	 namely	 the initial purchase of the raw material	 the consumption thereof in the manufacture of taxable goods	 and the despatch of the manufactured goods outside the State. If the goods purchased remain in the same form within the State	 the question of levying additional tax would not arise. The High Court came to the conclusion that there was no ground to hold that the additional tax was levied on the despatch of goods and was unconnected with the initial transaction of purchase	 as it was required to be paid in addition to the sales or purchase tax paid or pay able in respect of the same goods which had been so pur chased before the conditions specified in section 13 AA are fulfilled	 (ii) in the context of the other provisions of the Act	 a sort of concession is given at the time of pur chase on the quantum of tax payable on the purchase of goods which fall under Part I of Schedule C. However	 there is a clear mandate of law	 which is clearly understood between seller and buyer	 that though tax at the concessional rate is paid	 the obligation to pay the additional tax on the happening of certain events	 namely	 use of such goods in manufacture of finished goods	 and despatch of finished goods outside the State	 is undertaken 550 by the purchaser; and (iii) implicit in the low rates of tax prescribed on raw material attributable to goods in Part I of Schedule C is the condition precedent that to avail of this concession the goods in question are required to be sold in the State after being used in the manufacture of other taxable goods. The High Court	 further	 was of the opinion that a manufacturer who purchases raw material at a concessional rate on the strength of declaration in Form 15 cannot transfer the goods manufactured out of such raw material outside the State. The High Court held that if he does so	 he is liable to pay purchase tax at the full rate on the raw material under section 14. According to the High Court	 similarly	 a manufacturer who purchases goods covered in Part III of Schedule C	 uses them in the manufacture of other taxable goods which he despatches outside the State	 is liable to pay tax at rates ranging from 6% to 15%. Sec tion 13 AA	 therefore	 far from being discriminatory	 serves to wipe out any discrimination between the two categories of manufacturers mentioned above and manufacturers purchasing raw material covered by Part I of Schedule C	 according to the revenue. The High Court was of the opinion that the additional purchase tax leviable under section 13 AA of the Bombay Act	 is on the purchase value of VNE oil used in the manufacture of goods transferred outside the State and not on the value of the manufactured goods so transferred. It further held that the tax levied under section 13 AA of the Bombay Act	 falls squarely and exclusively under Entry 54 of the State List in the 7th Schedule to the Constitution of India and the State Legislature was competent to levy it. It does not even remotely fall under Entry 92B of the Union List	 according to the High Court. The High Court was also of the view that the goods taxed under section 13 AA of the Bombay Act	 are consumed in the State as raw material in the process of producing other commodities. Hence	 there was no question of any hindrance to a free flow of trade bringing into operation Article 301 of the Constitution. According to the High Court	 the peti tioners had not brought forth any material to show how the free flow of trade has been affected by this additional rate of tax; and held that section 13AA is not violative of Article 14 of the Constitution; and that section 13AA of the Bombay Act and the orders requiring the appellants to pay additional tax @ 2% on purchase of VNE oil used by them as raw material in the manufacture of goods despatched outside the State	 were valid. The High Court in the judgment under appeal has set out the relevant provisions of the Act	 which was enacted to consolidate and 551 amend the law relating to levy of tax on the sale or pur chase of certain goods in the State of Bombay. Section 2 contains some of the definitions. Section 24 deals with authorisations of turnover etc. Section 13AA of the Bombay Act with which the High Court and these appeals are con cerned	 is in the following terms: "13 AA. Purchase tax payable on goods in Schedule C	 Part I	 when manufactured goods are transferred to outside branches. Where a dealer	 who is liable to pay tax under this Act	 purchases any goods speci fied in Part I of Schedule C	 directly or through Commission agent	 from a person who is or is not a Registered dealer and uses such goods in the manufacture of taxable goods and despatches the goods	 so manufactured	 to his own place of business or to his agent 's place of business situated outside the State within India	 then such dealer shall be liable to pay	 in addition to the sales tax paid or payable	 or as the case may be	 the purchase tax levied or leviable under the other provi sions of this Act in respect of purchases of such goods	 a purchase tax at the rate of two paise in the rupee on the purchase price of the goods so used in the manufacture	 and accordingly the dealer shall include purchase price of such goods in his turnover of pur chases in his return under section 32	 which he is to furnish next thereafter. " The questions involved in these appeals are: whether section 13AA of the Bombay Act is beyond the legislative competence of the State Legislature; and it is violative of Article 14 of the Constitution; and thirdly	 whether the said provision is violative of Article 301 of the Constitu tion. It was contended on behalf of the appeallant that section 13AA of the Act is a charging section and imposes a charge of an additional rate of 2% in the rupee if the following conditions laid down therein are satisfied: (i) the charge is levied upon a dealer who is liable to pay tax under the Act; (ii) such a dealer purchases any goods speci fied in Part I of Schedule C	 directly or through commission agent	 from a person who is or is not a registered dealer; (iii) the goods so purchased are used in the manufacture of taxable goods; and (iv) the goods which are so manufactured (and not the goods on which purchase tax had been paid) are despatched to the dealer 's own place of business or to his agent 's place of business situated outside the State. 552 According to the appellant	 the said section lays down the person who is liable to pay tax	 the goods on which the same is leviable and the taxable event which would attract the liability of additional tax of two paise in the rupee	 namely the despatch or consignment of goods by the dealer/manufacturer outside the State. According to Dr. Pal	 counsel for the appellant	 the taxable event is not the purchase of goods as such which is the raw material	 but it is the despatch or consignment of goods manufactured by the dealer/manufacturer to its own branch outside the state; and that thus manufactured goods are different from commercial commodity	 distinct and sepa rate from the raw materials on which purchase tax has al ready been paid. It is well settled	 it was reiterated before:us	 that in case of excise duty	 the taxable event is the manufacture of goods and the duty is not directly on the goods but on the manufacture thereof. In case of sales tax	 taxable event is the sale of goods. Hence	 though both excise duty and sales tax are levied with reference to the goods	 the two are different imposts	 in one case the impo sition is on the act of manufacture or production while in case of other the imposition is on the act of sale. But in neither case the impost is a tax directly on the goods. See in this connection	 the observations of this Court in re: The Bill to amend section 20 of the and section 3 of the Central Excises & Salt Act	 1944; 	 at 821 and M/s. Guruswarny & Co. vs State of Mysore	 [ at 562. The power to tax the sale or purchase of goods is dif ferent from the right to impose taxes on use or consumption. According to Dr. Pal such power to levy sales tax cannot be exercised at the earlier stage of import or manufacture/production nor the said power can be exercised at the later stage of use or consumption but only at the stage of sale or purchase. In respect of sales tax	 the right to levy duty would not at all come into being before the time of sale/purchase. Sales tax cannot be imposed unless the goods are actually sold and may not be leviable if there is a transfer in some other form. See in this connection the observations of the Federal Court in Mukunda Murari Chakravarti & Ors. vs Pabitramoy Ghosh & Ors.	 at 22. Therefore	 in this case it is necessary to ascertain what is the taxable event under section 13 AA of the Act which attracts duty. A taxing event is that event the occurrence of which immediately attracts the levy or the charge of tax. In the fiscal legislations normally a charge is created. The mischief of taxation occurs on the happening of the taxable event. Diffe 553 rent taxes have different taxable events. In the instant case	 Dr. Pal canvassed before us that the incidence of the levy of additional tax of two paise in the rupee is not on the purchase of goods but such a levy is attracted only when (a) the goods which so purchased on payment of pur chase tax are used in the manufacture of taxable goods; and (b) the goods so manufactured are despatched to his own place of business or to his agent 's place of business out side the State. Therefore	 the incidence of tax is attracted not merely on the purchase but only when the goods so pur chased arc used in the manufacture of taxable goods and are despatched outside the State. In our opinion	 it was rightly submitted that it is the effect of section 13AA of the Act. It was further highlighted by Dr. Pal on behalf. of the assessee that additional tax is not levied on the goods purchased on payment of purchase tax and despatched outside the State. The goods which are purchased on payment of purchase tax are used in the manufacture of taxable goods. What is despatched is not the raw material which have been purchased on payment of purchase tax but a completely dif ferent commodity	 namely	 vanaspati and soap. If the raw materials as such purchased on payment of purchase tax are despatched outside the State	 the additional tax under section 13 AA of the Act is not attracted. Hence	 the inci dence of additional tax has no nexus with the purchase of the raw materials	 as was contended by Mr. S.K. Dholakia	 appearing for the State and as held by the High Court. Purchase tax under section 3 of the Act is attracted when the taxable event i.e. the purchase of goods occurs	 but the taxable event for the imposition of additional tax of two paise in the rupee occurs only when the goods so purchased are used in the manufacture of taxable goods and such taxable goods are despatched outside the State by a dealer manufacturer. Dr. Pal drew our attention to some of the observations of this Court in Kedarnath Jute Mfg. Co. Ltd. vs Commissioner of Income tax (Central)	 Calcutta	 82 ITR SC 363 and State of Madhya Pradesh & Ors. vs Shyama Charan Shukla	 29 STC SC 215 at 218 219. On the other hand	 Mr. Dholakia submitted that the submission of the appellant proceeded on the assumption that the liability to pay is the same as the obligation to pay but this was wrong. These two are different. It was submitted that the obligation to pay is not the same thing as liability to tax; and that it was wrong to proceed on the basis that because 'obligation to pay ' is a later event	 'the despatch of goods ' is the taxa ble event. This is a fallacy	 according to Mr. Dholakia. In this connection	 reliance was placed on the observations of this Court in R.C. Jail vs Union of India	 [1962] Suppl. 3 SCR 436	 where this Court reiterated that subject always to the legislative com 554 petence of the enacting authority	 the tax can be levied at a convenient stage	 so long as the character of the impost is not lost. The method of collection does not affect the essence of the machinery of collection for administrative convenience. Reliance was also placed on the observations of Union of India vs Bombay Tyre International Ltd.	 ; It was submitted by Mr. Dholakia that the correct ap proach is to first determine whether the State Legislature	 having regard to Entry 54 of List II to the 7th Schedule to the Constitution	 can levy tax on purchase of a class of goods	 which class is to be identified by reference to the condition of use of such goods into other taxable goods and despatch of such taxable goods outside the State. He submit ted that if it is accepted that the State could have the power to tax purchases of goods meant for use into manufac ture of other taxable goods and despatch outside thereafter	 then next question is whether the State enactment (like section 13AA of the Bombay Act) is so formulated as to come within the framework described. He admitted that even if it did	 it would still have to be subject to (a) the doctrine of pith and substance	 (b) the fundamental rights	 and (c) Article 301. According to Mr. Dholakia	 the Act contains a charging section which is section 3. It levies tax on turnover of sales and purchases within section 2(36) and 2(35) respec tively of the said Act. Section 13 of the Act levies tax on purchases in accordance with rates prescribed in Schedule C if the goods are purchased from an unregistered dealer. Section 13A levies a concessional tax on purchases if the goods are purchased from a registered dealer	 provided a declaration in the prescribed form is given under section 12(b) of the Act	 if the purchaser buys directly	 or one under section 12(d) if the purchaser buys through a commis sion agent. In both the forms the relevant conditions are: (a) that the goods fall within Part ii of Schedule C; and (b) that the goods bought would be used for manufacture of other taxable goods within the State and sold within the State. Mr. Dholakia submitted that on giving the aforesaid declaration	 the purchaser would have to pay only 4% tax. The rates prescribed in Schedule C are as under: Schedule 'C ' Part Minimum Rate Maximum Rate I 2% 4% II 6% 15% 555 The effect of section 13A without section 13 AA	 accord ing to Mr. Dholakia	 was that only those who bought goods which fell into Part II	 would have benefitted by the decla ration	 since the rate mentioned in section 13A was 4%. Hence	 those buying goods falling within Part I of Schedule C had not to give any declaration under section 12(b) or 12(d)	 as the case may be	 and still manufacture the taxable goods and despatch them outside the State. According to him	 as a result of this situation	 two results emerged	 i.e. (i) the State lost revenue because the goods manufactured with the help of the infrastructure provided by the State escaped further tax	 by goods being resold outside the State; and (ii) the purchasers of raw materials used by the manufactur ers for producing new taxable goods	 were not being treated equitably because those whose purchases of goods which fell into Part II had to give a declaration to get the benefit of reduced rate. On the other hand	 those whose purchases of goods fell in Part I	 need not give such a declaration. According to him	 from the standpoint of the object of encouraging resale within the State	 the classification in form of Part I and II had no rational nexus. Therefore	 that construction should be made which may make section 13 AA of the Act	 to avoid this mischief. According to Mr. Dholakia	 section 13AA speaks of the requirement of additional purchase tax from those who have paid purchase tax	 if the object of the purchases is to use the goods falling in Part I of Schedule C for manufacture of taxable goods and the despatch of such goods outside the State. He alleged it to be a fair and reasonable construc tion and it will subserve the purpose of the amendment. It is well settled that reasonable construction should be followed and literal construction may be avoided if that defeats the manifest object and purpose of the Act. See Commissioner of Wealth tax	 Bihar & Orissa vs Kripashankar Dayashankar Worah	 at 768 and Income tax Commis sioners for city of London vs Gibbs	 10 ITR Suppl. 121 HL at 132. Mr. Dholakia further submitted that the Statement of Objects & Reasons also helps this construction. In our opinion	 he rightly submitted that because the accounts had to be maintained in a particular manner	 is no criterion or evidence for determining when the liability arises. The law is that the liability to tax would be determined with refer ence to the interpretation of the Statute which creates it. It cannot be determined by referring to another Statute. As contended by both the sides	 it is well settled that the doctrine of pith and substance means that if an enactment substantially falls within the powers expressly conferred by the Constitution upon the Legislature 556 which enacted it	 it cannot be held to be invalid merely because it incidentally encroches upon matters assigned to another Legislature. See Kerala State Electricity Board vs Indian Aluminium Co	 [1976] SCR 552 and Prafulla Kumar Mukherjee & Ors. vs Bank of Commerce Ltd.	 AIR 1947 PC 60 at 65. Therefore	 the proper question which one should address to oneself is	 whether section 13AA is in pith and sub stance	 not levying tax on purchase but one levying tax on consignment. Depending upon the answer to the question	 the validity of the action can be judged. Mr. Dholakia submitted that the Act is in pith and substance	 an Act levying tax on purchase and not one levying tax on consignment	 and re ferred to the observations of this Court in State of Karna taka vs Shri Ranganatha Reddy; 	 According to him	 the consignment contemplated in section 13 AA is only of manufactured goods and no tax is levied under sec tion 13AA in respect of such manufactured goods. He empha sised as aforesaid. It is well settled that while determin ing nature of a tax	 though the standard or the measure on which the tax is levied may be a relevant consideration	 it is not the conclusive consideration. One must have regard to such other matters as decided by the Privy Council in Gover nor General in Council vs Province of Madras	 (supra) not by the name of tax but to its real nature	 its pith and sub stance which must determine into what category it fails. See the observations of R.R. Engineering Co. vs Zila Parishad Bareilly & Anr.	 ; ; in re: A reference under the Govt. of Ireland Act	 1920	 at 358 and Navnitlal C. Javeri vs K.K. Sen	 Appellate Asstt. Commis sioner of Income Tax	 'D ' Range	 Bombay; 	 at 915. On an analysis we find that the goods which are des patched are different products from the goods on the pur chase of which purchase tax was paid. The Maharashtra legis lation has to be viewed in the context of 46th Amendment to the Constitution. The 46th Amendment introduced Article 269 (1)(h) which lays down that the proceeds of the tax on consignment of goods (whether the consignment is to the person making it or to any other person) where such consign ment takes place in the course of inter State trade or commerce	 will be assigned to the States. The said Amendment also introduced Entry No. 92B in List I of the 7th Schedule. The said Amendment was made on the consideration of the 61st Report of the Law Commission. Entry 92B in List I of the 7th Schedule and Article 269(1)(h) of the Constitution bring within its sweep the consignment of goods by a person either to himself or to any other person in the course of inter State trade or 557 commerce. Article 269(3) gives the power to Parliament to formulate the principles for determining when a consignment of goods takes place in the course of inter State trade or commerce. If Entry 92B in List I is to be given the widest interpretation	 as it should be	 it would be clear that the constitutional changes introduced by the 46th Amendment in Article 269 read with the Entry	 the tax on consignment of goods now comes within the exclusive legislative field of Parliament. The true test to find out what is the pith and substance of the legislation is to ascertain the true intent of the Act which will determine the validity of the Act. If the Parliament in exercise of its plenary power under Entry 92B of List I imposes any tax on the despatch or consignment of goods	 Parliament will be competent to do so. It is	 therefore	 not possible to accept the argument that the chargeable event was lying dormant and is activated only on the occurrence of the event of despatch. The argument on the construction of the enactment is misconceived. The charging event is the event the occurrence of which immediately attracts the charge. Taxable event cannot be postponed to the occurrence of the subsequent condition. In that event	 it would be the subsequent condition the occurrence of which would attract the charge which will be taxable event. If that is so	 then it is a duty on despatch. In that view of the matter	 this charge cannot be sustained. As mentioned hereinbefore	 the section has been chal lenged as being violative of Article 14 of the Constitution. This attack is based on the discrimination between the two types of taxes but in the way we have construed the section	 in our opinion	 this question does not survive. It was further submitted by Dr. Pal that section 13AA of the Act is violative of Article 301 of the Constitution. It makes a discrimination between the dealer/manufacturer who despatch es the goods outside the State and the other dealer/manufac turer. Both the dealer/ manufacturers purchase the goods on payment of purchase tax and use them in the manufacture of taxable goods. The incidence of additional tax on the pur chase of goods is attracted only when such manufactured goods are despatched outside the State. If a dealer/manufac turer has to despatch the goods outside the State	 he has to pay a higher rate of tax and thus he is discriminated as compared to the other dealer/manufacturer who purchases the raw material on payment of 4% purchase tax	 but despatches the raw material straightaway outside the State and uses them in the manufacturer of goods outside the State. The High Court held that there was no violation of Article 301 of the Constitution. Reference was made to the decision of this Court in Atiabari Tea Co. Ltd. vs The State of Assam & Ors.	 ; ; 558 The Automobile Transport (Rajasthan) Ltd. vs The State of Rajasthan	 [1963] 1 SCR 491; Andhra Sugars Ltd. vs State of Andhra Pradesh	 (supra)	 State of Madras vs N.K. Nataraja Mudaliar	 ; and State of Kerala vs A.B. Abdul Khadir & Ors.	 ; One has to determine: does the impugned provision amount to restriction directly and immediately	 on the trade or commerce movement? As was observed by this Court in Kalyani Stores vs The State of Orissa & Ors. 	 ; 	 imposition of a duty or tax in every case would not tanta mount per se to any infringement of Article 301 of the Constitution. Only such restrictions or impediments which directly or immediately impede free flow of trade	 commerce and intercourse fall within the prohibition imposed by Article 301. A tax in certain cases may directly and immedi ately restrict or hamper the flow of trade	 but every impo sition of tax does not do so. Every case must be judged on its own facts and its own setting of time and circumstances. Unless the court first comes to the finding on the available material whether or not there is an infringement of the guarantee under Article 301 the further question as to whether the Statute is saved under Article 304(b) does not arise. The goods taxed do not leave the State in the shape of raw material	 which change their form in the State itself and there is no question of any direct	 immediate or sub stantial hindrance to a free flow of trade. On the evidence adduced	 we are in agreement with the High Court that the challenge to the imposition in the background of Article 301 cannot be sustained and	 therefore	 no question whether such imposition is saved under Article 304(b) of the Constitution arises. In the aforesaid view of the matter and for the reasons mentioned hereinbefore	 it must be held that so far as the appeals in respect of the Haryana Act are concerned	 the High Court was right in the view it took in Goodyear India Ltd 's case	 53 STC 163 as well as the views expressed by the High Court in Bata India Ltd. vs The State of Haryana & Anr.	 54 STC 226 are correct and are affirmed. The views of the High Court expressed in Des Raj Pushap Kumar Gulati 's case (supra) are incorrect for the reasons mentioned herein before. The last mentioned judgment and the judgment and orders following passed by the Punjab & Haryana High Court are	 therefore	 set aside. In the premises	 Civil Appeals Nos. 1166 72/85 (M/s Goodyear India Ltd. vs State of Har yana & Anr.)	 Civil Appeal No. 1173 77 (NT)/85 (Gedore (I) Pvt. Ltd. vs State of Haryana & Anr.)	 civil appeal No. 2674/86 (M/s. Kelvinator of India Ltd. & Anr. vs State of Haryana & Ors.)	 Civil Appeal No. 1633 (NT)/85 F.C.I. vs State of Haryana & Anr.) and 559 Civil Appeal No. 3033 (NT)/86 F.C.I.	 Karnal vs The State of Haryana & Ors.) are allowed and the judgment and order of the High Court are set aside. Civil Appeals Nos. 15 12 (NT)/84 [State of Haryana & Anr. vs Gedore Tools (P) Ltd.] and 1515/84 [State of Haryana & Anr. vs Goodyear India Ltd. ] are dismissed. Special leave petitions Nos. 83988402/83 are dismissed	 and for the rea sons mentioned hereinbefore	 civil appeal Nos. 4162/88 (M/s. Wipro Products Ltd. vs State of Maharashtra & Anr. and 4163/88 [Hindustan Lever Ltd. & Anr. vs State of Maharashtra & Anr. ] are allowed and the judgment and order of the High Court passed therein	 are hereby set aside. In the facts and the	 circumstances of this case	 the parties will pay and bear the respective costs. So far as the civil appeals Nos. 1633/85 and 3033/86 are concerned	 wherein the appellants are the Food Corpn. of India	 I allow these appeals and setting aside the judgment of the High Court on the ground that tax on despatch or consignment was not within the competence of the State Legislature. I am	 however	 not dealing with or expressing any opinion on the other contentions of the F.C.I. that in view of the nature of its business it was not liable to tax in respect of the sales tax. This contention will be decided in the appropri ate proceedings. So far as the contention regarding penalty under the Haryana Act	 these proceedings fail because the charging provisions fail. In so far as the penalty proceedings are impugned on other grounds apart from the failure of the charging provisions	 I am expressing no opinion on these aspects. RANGANATHAN	 J. I agree but wish to add a few words. The question raised in these appeals is a fairly tick lish one. Simply stated	 Section 9 of the Haryana General Sales Tax Act	 1973 as well as section 13AA of the Bombay Sales Tax Act	 1959	 purport only to levy a purchase tax. The tax	 however	 becomes exigible not on the occasion or event of purchase but only later. It materialises only if the purchaser (a) utilises the goods purchased in the manu facture of taxable goods and (b) despatches the goods so manufactured (otherwise than by way of sale) to a place of business situated outside the State. The legislation	 howev er	 is careful to impose the tax only on the price at which the raw materials are purchased and not on the 560 value of the manufactured goods consigned outside the State. The States describe the tax as one levied on the purchase of a class of goods viz. those purchased in the State and utilised as raw material in the manufacture of goods which are consigned outside the State otherwise than by way of sale. On the other hand	 according to the respondentsasses sees	 this is nothing but a tax on consignment of goods manufactured in the State 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. To me it appeared as plausible to describe the levy as a tax on purchase of goods inside the State (which attaches itself only in certain eventualities) as to describe it as a tax on goods consigned outside the State but limited to the value of the raw material purchased inside the State and utilised therein. 1	 therefore	 had considerable doubts not only during the arguments but even some time thereafter as to whether so long as the tax purports to be a tax on purchases and has a nexus	 though a little distant	 with purchase of goods in the State	 the State Government 's competence to impose such a tax should not be upheld. But	 on deeper thought	 I am inclined to agree with the conclusion of my learned brother. It is one thing to levy a purchase tax where the character and class of goods in respect of which the tax is levied is described in a particular manner (vide	 Andhra Sugars Ltd. & Anr. vs State	 ; and a case like the present where the tax	 though described as purchase tax	 actually becomes effective with reference to a totally different class of goods and	 that too	 only on the happening of an event which is unrelated to the act of purchase. The "taxable event"	 if one might use the expres sion often used in this context	 is the consignment of the manufactured goods and not the purchase. I also agree with my learned brother that the decision in State of Tamil Nadu vs Kandaswami	 [1975] 36 S.T.C. 191	 though rendered in the context of an analogous provision	 does not touch the issue in the present case. The above distinction becomes significant particularly in the background of the constitutional amendments referred to in the judgment of my learned brother. These indicate that there were efforts at sales tax avoidance by sending goods manufactured in a State out of raw materials purchased inside to other States by way of consignments rather than by way of sales attracting tax. This situation lends force to the contention of the assessees that the States	 unable to tax the exodus directly	 attempted to do so indirectly by linking the levy ostensibly to the "purchases" in the State. 561 Viewing the impugned statutory provisions from the perspectives indicated above	 I agree with my learned broth er that the appeals have to be allowed as held by him. T.N.A. Appeals and petitions disposed of.

The appellant/petitioner company Good Year India Limit ed a registered dealer both under the Haryana General Sales Tax Act	 1973 and 	 was manufac turing automobile tyres and tubes at Ballabgarh in the State of Haryana. For the said manufacturing activity it was purchasing various kinds of raw materials both within the State and from outside the State of Haryana. The Company was despatching these manufactured goods viz. tyres and tubes to its own branches and sales depots outside the State of Haryana. The assessing authority imposed upon the appellant company the purchase tax under section 9 of the Haryana General Sales Tax Act	 1973 in view of the despatches made by it of the manufactured goods to its various depots out side the State. The petitioner company filed writ petition in the Punjab and Haryana High Court challenging the validity of the Notification levying the tax. A Division Bench of the High Court allowed the petition holding that disposal of goods being separate and 'distinct from despatch thereof	 a mere despatch of goods out Of the State by a dealer to his own branch while retaining both 'the title and possession there of does not come within the ambit of the phrase "disposes of the manufactured goods in any manner otherwise than by way of sale"	 as employed in Section 9(i)(a)(ii) of the Act. Accordingly the High Court set aside the assessment orders and quashed the impugned Notification as ultra vires of section 9 on the ground that whereas Section 9 provided only for the levy of purchase tax On the disposal of the manufac tured goods	 the impugned Notification makes mere despatch of goods to the dealer themselves taxable. To override the effect of the said judgment the Haryana Legislature enacted Haryana General Sales Tax (Amendment and Validation) Act 1983 where by Section 9 of the Act was amended with retro spective effect to include within its sweep the despatch of manufactured goods to a place outside the State in any manner otherwise than by way of sale. The impugned Notifica tion and the con 513 sequential action taken thereunder were also validated. The petitioner company filed writ petitions challenging the assessments. The High Court allowed the petitions hold ing section 9(1)(b) of the Haryana General Sales Tax Act 1973 as amended by the Haryana General Sales Tax (Amendment and Validation) Act	 1983 in so far as it levied a purchase tax on the consignment of goods outside the State in the course of inter State trade or commerce was beyond the legislative competence of the State of Haryana and was void and inoperative because it intruded and trespassed into an arena exclusively meant for taxation by the Union of India under Entry 92 B of List I of the Seventh Schedule. Accord ingly the High Court set aside the amended provisions of section 9 as also the retrospective validation of the Noti fication and the consequential validation of all actions taken thereunder. Against this decision of the High Court	 State of Haryana preferred Special Leave Petitions in this Court. During the pendency of these Special Leave Petitions	 the assessing authority issued Show cause notices asking the petitioner company to show cause why in addition to the purchase tax	 it should not be liable to penalty as well. The Petitioner company again filed writ petitions in the Punjab & Haryana High Court challenging the validity of these notices. In the meantime a Full Bench of the High Court decided the question again and overruling the decision of the earlier Division Bench held that the taxing event was the act of purchase and not the act of despatch of the consignment. The Full Bench of the High Court held that section 9(1)(b) as amended was neither invalid nor ultra vires. Against the aforesaid judgment of the Full Bench the Petitioner Company filed appeals in this Court. All these questions are the subject matters of these appeals. In the connected appeals	 the Food Corporation of India was procuring food grains from the farmers through commis sion agents in tile mandis of Haryana and despatching them to its own branches in the deficit State of the country. The Corporation branches in the recipient States were supplying these stocks to the State agencies/Fair Price Shops and were also paying tax as per the provisions of the Sales Tax law of the respective States. Some of the stocks were distribut ed within the State of Haryana for the public distribution system for which sales tax was charged. and deposited with the sales tax depots as per the Haryana General Sales Tax Act	 1973. In respect of the inter State despatch of wheat and other food grains by the Food Corporation of India to its own branches tax was attracted at the time of despatch 514 under section 9(1)(c) of the Haryana Act. The Food Corpora tion of India impugned the levy of tax. In the other connected appeals the appellant companies Hindustan Lever Ltd. and Wipro Products were manufacturing vanaspati	 soaps	 chemicals and agro chemi cals. For the said manufacturing activities	 they were purchasing non essential vegetable oil (VNE oil) and other raw materials and were paying purchase tax @4% under section 3 of the Bombay Sales Tax Act	 1959. The VNE oil was subse quently used by the appellant companies in the manufacture of vanaspati and soaps. The finished products manufactured by the appellant companies viz. vanaspati and soaps used to be despatched outside the State of Maharashtra to their clearing and forwarding agents. The assessing authority levied additional purchase tax @ 2% under section 13 AA of the Act on the purchase of said goods VNE oil. The appellant companies filed writ petitions in the High Court challenging the orders of the assessing authority levying the additional tax of 2% and also the vires of section 13 AA of the Bombay Sales Tax Act	 1959 under which the additional tax was levied	 contending that the addition al tax of 2% levied on raw materials	 where the finished goods manufactured therefrom were despatched outside the State was in the nature of consignment tax which was not within the legislative competence of the State Legislature. The High Court dismissed the petitions holding (i) the additional purchase tax levied under section 13 AA of the Act was on the purchase value of VNE oil used in the manu facturing of goods transferred outside the State and not on the value of the manufactured goods so transferred; (ii) the State Legislature was competent to levy the tax under Entry 54 of the State List in the Seventh Schedule to the Consti tution	 and (iii) Section 13 AA was not violative of either Article 14 or Article 301 of the Constitution of India. Against the decision of the High Court appellant compa nies filed appeal in this Court. Disposing of the matters	 this Court	 HELD: (Per Mukharji	 J.) 1. Analysing section 9 of the Haryana General Sales Tax Act	 515 1973 it is clear that the two conditions specified	 before the event of despatch outside the State as mentioned in section 9(1)(b)	 namely	 (i) purchase of goods in the State and (ii) using them for the manufacture of any other goods in the State	 are only descriptive of the goods liable to tax under Section 9(1)(b) in the event of despatch outside the State. If the goods do not answer both the descriptions cumulatively	 even though these are despatched outside the State of Haryana	 the purchase of those goods would not be put to tax under Section 9(1)(b). The liability to pay tax under section 9(1)(b) does not accrue on purchasing the goods simpliciter	 but only when these are despatched or consigned out of the State of Haryana. The section itself does not provide for imposition of the purchase tax on the transaction of purchase of the taxable goods but when fur ther the said taxable goods are used up and turned into independent taxable goods	 losing its original identity	 and thereafter when the manufactured goods are despatched out side the State ' of Haryana and only then tax is levied and liability to pay tax is created. It is the cumulative effect of that event which occasions or causes the tax to be im posed. [539F H; 540A B] 1.1 A taxable event is that which is closely related to imposition. In the instant section viz. section 9(1)(b) there is such close relationship only with despatch. 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 cease to exist when the levy is imposed at the third stage of despatch of manufacture. The levy has no direct connection with the transaction of purchase of raw materi als	 it has only a remote connection of lineage. The mere consignment of goods by a manufacturer to his own branches outside the State does not in any way amount to a sale or disposal of the goods as such. The consignment or despatch of goods is neither a sale nor a purchase. The tax imposed under Section 9(1)(b) is a tax on despatch. The tax on despatch of goods outside the territory of the State cer tainly is in the course of inter State trade or commerce and amounts to imposition of consignment tax	 and hence the latter part of section 9(1)(b) is ultra vires and void. [540G H; 542H; 543A; 544E; 545A] Tata Iron & Steel Co. vs State of Bihar	 ; 	 referred to. Good Year India Ltd. vs State of Haryana	 53 STC 163 and Bata India Ltd. vs State of Haryana & Anr.	 54 STC 226	 approved. 516 Des Raj Pushap Kumar Gulati vs The State of Punjab	 58 STC 393	 overruled. Yusuf Shabeer & Ors. vs State of Kerala & Ors.	 32 STC 359; Coffee Board vs Commissioner of Commercial Taxes & Ors.	 60 STC 142 and Coffee Board	 Karnataka vs Commissioner of Commercial Taxes	 Karnataka	 70 STC 162	 distinguished. State of Tamil Nadu vs M.K. Kandaswami	 36 STC 191; Ganesh Prasad Dixit vs Commissioner of Sales Tax	 M.P.	 [1969] 24 STC 343 and Malabar Fruit & Company vs Sales Tax Officer	 Pallai	 30 STC 537	 distinguished. 1.2 The effect of the Constitution (Forty sixth Amend ment) Act	 1982 is that the field of taxation on the con signment/despatch of goods in the course of inter State trade or commerce expressly comes within the purview of the legislative competence of the Parliament. [543H] 2. If section 9(1)(b) is ultra vires	 the penalty pro ceedings would automatically go as they are in substance	 based on the violation of section 9(1)(b) of the Act and the consequent proceedings flowing therefrom. [545B] 3. Section 24(3) of the Haryana General Sales Tax Act	 1973 without making any change in the substantive provision purports to give a direction to ignore the judgments in Goodyear and Bata India Ltd. cases. This provision is void. [546B] Shri Prithvi Cotton Mills Ltd. vs Broach Borough Munici pality	 [1969] 2 SCC 283 and Dy. Commissioner of Sales Tax (Law) Board of Revenue (Taxes) vs M/s Thomas Stephen & Co. Ltd. Quilon; 	 	 followed. In respect of inter State despatch of wheat and other food grains by Food Corporation of India to its own branch es	 tax is attracted at the time of despatch under Section 9(1)(c) of the Haryana Act. Section 9 is the charging sec tion for taxation in case where the goods are purchased for export. There is no other provision for levy of purchase or sales tax in such cases of export. [547B] 4.1 No tax is payable under the Haryana Act when exports outside the State take place either in the course of inter State sale or export out of the territory of India. But the tax is payable for sale in the course 517 of inter State trade and commerce i.e. under the . It is only when the goods are despatched/consigned to the depots of the FCI in other States that tax is levied under section 9 of the Haryana Act. This is in addition to the sales tax paid by the FCI on the sale of grains in the recipient States. In view of sections 14 & 15 of the 	 it becomes clear that wheat is one of the commodities specified as 'declared goods ' and in respect of which the intention is clear that the tax is payable only once on the declared goods. In the case of inter State sale if any tax has been paid earlier on declared goods inside the State the same is to be refunded to the dealer who is paying tax on such inter State Sales. On these transactions no tax is liable in the recipient State	 while in case of inter State despatch es	 the tax is leviable twice. Section 9(1)(c)	 which inso far as it purports to tax	 exports	 is beyond the legisla tive competence of the State of Haryana. [547E G] 5. The incidence of the levy of additional tax of two paise in the rupee under Section 13 AA of the Bombay Sales Tax Act	 1959 is not on the purchase of goods	 but such a levy is attracted only when (a) the goods which so pur chased on payment of purchase tax are used in the manufac ture of taxable goods; and (b) the goods so manufactured are despatched to his own place of business or to his agent 's place of business outside the State. Therefore	 the inci dence of tax is attracted not merely on the purchase but only when the goods so purchased are used in the manufacture of taxable goods and are despatched outside the State. The incidence of additional tax has no nexus with the purchase of the raw materials. [553A B; D] 5.1 Purchase tax under section 3 of the Act is attracted when the taxable event i.e. the purchase of goods occurs but the taxable event for the imposition of additional tax of two paise in the rupee occurs only when the goods so pur chased are used in the manufacture of taxable goods and such taxable goods are despatched outside the State by a dealer manufacturer. The goods which are despatched are different products from the goods on the purchase of which purchase tax was paid. It is therefore not possible to accept the argument that the chargeable event was lying dormant and is activated only on the occurrence of the event of despatch. [553E; 556F; 557C] 5.2 The charging event is the event the occurrence of which immediately attracts the charge. Taxable event cannot be postponed to the occurrence of the subsequent condition. In that event	 it would be the subsequent condition the occurrence of which would attract the Charge which will be taxable event. Therefore the charge under 518 section 13 AA is a duty on despatch. Accordingly this charge can not be sustained.[557D] The Bill to amend section 20 of the and section 3 of the Central Excises & Salt Act	 [1944]; 	 ; M/s Guruswamy & Co. vs State of Mysore	 ; Mukunda Murari Chakravarti & Ors. vs Pabitramoy Ghosh & Ors.	 ; Kedar Nath Jute Mfg. Co. Ltd. vs C.I.T.	 82 ITR SC 363; State of M.P. vs Shyam Charan Shukla	 29 STC SC 215; R.C. Jail vs Union of India	 [1962] Suppl. 3 SCR 436; Union of India vs Bombay Tyre International Ltd.	 ; and State of Karnataka vs Shri Ranganatha Reddy	 ; 	 referred to. Wipro Products vs State of Maharashtra	 [1989] 72 STC 69 Bom. 	 Reversed. 5.3 Imposition of a duty or tax in every case would not tantamount per se to any infringement of Article 301 of the Constitution. Only such restrictions or impediments which directly or immediately impede free flow of trade	 commerce and intercourse fail within the prohibition imposed by Article 301. A tax in certain cases may directly and immedi ately restrict or hamper the flow of trade. but every impo sition of tax does not do so. Every case must be judged on its own facts and its own setting of time and circumstances. Unless the court first comes to the finding on the available material whether or not there is an infringement of the guarantee under Article 301 the further question as to whether the Statute is saved under Article 304(b) does not arise. [558B C] 5.4 In the instant case. the goods taxed do not leave the State in the shape of raw material	 which change their form in the State itself and there is no question of any direct	 immediate or substantial hindrance to a free flow of trade. Therefore Section 13 AA of the Bombay Sales Tax Act 1959 is not violative of Article 301. [558D E] Atiabari Tea Co. Ltd. vs The State of Assam & Ors.	 ; ; The Automobile Transport (Rajasthan) Ltd. vs The State of Rajasthan	 [1963] 1 SCR 491; Andhra Sugars Ltd. vs State of Andhra Pradesh	 ; ; State of Madras vs N.K. Nataraja Mudaliar	 ; and State of Kerala vs A.B. Abdul Khadir & Ors.	 ; 	 referred to. Kalyani Stores vs The State of Orissa & Ors.	 ; 	 relied on. 519 6. The provisions of constitutional changes have to be construed not in a narrow isolationism but on a much wider spectrum and the principles laid down in Heydon 's case are instructive. [529H; 530A] Black Clawson International Ltd. vs Papierwerke Waldhof Aschaffenburg	 ; 	 referred. Heydon 's case; 	 	 relied on. In construing the expressions of the Constitution to judge whether the provisions of a statute are within the competence of the State Legislature	 one must bear in mind that the Constitution is to be construed not in a narrow or pedantic sense. The Constitution is not to be construed as mere law but as the machinery by which laws are to be made. [533F] James vs Commonwealth of Australia	 ; The Attorney General for the State of New South Wales vs The Brewery Employees Union etc. ; 	 ; Re. Central Provinces & Berar Sales of Motor Spirit and Lubri cants Taxation Act 1938	 A.I.R. 1939 F.C.I. and The Province of Madras vs M/s Boddu Paidanna & Sons	 A.I.R. 1942 F.C. 33	 referred to. The nomenclature of the Act is not conclusive and for determining the true character and nature of a particular tax	 with reference to the legislative competence of a particular Legislature	 the Court will look into its pith and substance. [543H; 544A] Governor General in Council vs Province of Madras	 [1945] 72 I.A. 91 and Ralla Ram vs The Province of East Punjab	 A.I.R. 1949 F.C. 81	 referred to. The doctrine of pith and substance means that if an enactment substantially falls within the power expressly conferred by the Constitution upon the Legislature which enacted it	 it cannot be held to be invalid merely because it incidentally encroaches upon matters assigned to another legislature. [555H; 556A] Kerala State Electricity Board vs Indian Aluminium Co.	 [1976] 1 S.C.R. 552 and Prafulla Kumar Mukherjee & Ors. vs Bank of Commerce	 A.I.R. 1947 PC 60	 referred to. 9.1 The true test to find out what is pith and substance of the 520 legislation is to ascertain the true intent of the Act which will determine the validity of the Act. [577B] 10. There are three stages in the imposition of tax. There is the declaration of liability	 that is the part of the Statute which determines what persons in respect of what property are liable. Next	 there is the assessment Liabili ty does not depend on assessment	 that exhypothesi has already been fixed. But assessment particularises the exact sum which a person is liable to pay. Lastly comes the method of recovery if the person taxed does not voluntarily pay. [539B C] Whitney vs Commissioner of Inland Revenue	 [1926] A.C. 37 and Chatturam & Ors. vs C.I.T.	 Bihar	 15 I.T.R. F.C. 302	 referred to. While determining nature of a tax	 though the stand ard or the measure on which the tax is levied may be a relevant consideration	 it is not the conclusive considera tion. [556C] Governor General in Council vs Province of Madras	 [1945] 72 I.A. 91; R.R. Engineering Co. vs Zila Parishad Bareilly & Anr.	 ; ; In Re A reference under the Government of Ireland Act	 1920	 and Navnitlal C. Javeri vs K.K. Sen	 Appellate Asstt. Commis sioner of Income Tax 'D ' Range Bombay; 	 	 referred to. The liability to tax would be determined with reference to the interpretation of the Statute which creates it. It cannot be determined by referring to another Statute. [555G] 13. In fiscal legislations normally a charge is creat ed. The. mischief of taxation occurs on the happening of the taxable event. Different taxes have different taxable events. A taxing event is that event the occurrence of which immediately attracts the levy or the charge of tax. What is the taxable event or what necessitates taxation in an appro priate Statute must be found by construing the provisions. The main test for determining the taxable event is that on the happening of which the charge is affixed. [552H; 553A: 552G: 533E; 539B] 14. Fiscal laws must be strictly construed. n is not permissible to make assumptions and presumptions in a fiscal provision. [536H; 538G] C.S.T.	 U.P. vs The Modi Sugar Mills Ltd.	 ; and Baidyanath Ayurved Bhawan (P) Ltd.	 Jhansi	 vs Excise Commis 521 sioner	 U.P. & Ors.	 ; 	 referred to. While interpreting a Statute a reasonable construc tion should be followed and literal construction may be avoided if that defeats the manifest object and purpose of the Act. [555F] Commissioner of Wealth tax	 Bihar & Orissa vs Kripashan kar Dayashankar Worah	 and Income Tax Commis sioners for City of London vs Gibbs	 10 I.T.R. (Suppl.) 121 H.L.	 referred to. The Entries in the Constitution only demarcate and legislative fields of the respective legislatures and do not confer legislative powers as such. [544H; 545A] 17. A precedent is an authority only for what it actual ly decides and not for what may remotely or even logically follows from it. [537E] Quinn vs Leathem	 ; and The State of Orissa vs Sudhansu Sekhar Misra & Ors.	 ; 	 followed. 17.1 A decision on a question which has not been argued cannot be treated as a precedent. [542B] Rajput Ruda Maha & Ors. vs State of Gujarat	 [1980] 2 S.C.R. 353	 followed. (Per Ranganathan	 J.) (Concurring) 1. Section 9 of the Haryana General Sales Tax Act	 1973 as well as section 13 AA of the Bombay Sales Tax Act	 1959 purport only to levy a purchase tax. The tax	 however	 becomes exigible not on the occasion or event of purchase but only later. It materialises only if the purchaser (a) utilises the goods purchased in the manufacture of taxable goods	 and (b) despatches the goods so manufactured (other wise then by way of sale) to a place of business situated outside the State. The legislation	 however	 is careful to impose the tax only on the price at which the raw materials are purchased and not on the value of the manufactured goods consigned outside the State. [559G H; 560A] 2. It is one thing to levy a purchase tax where the character and class of goods in respect of which the tax is levied is described in a particular manner and a case like the present where the tax	 though described as purchase tax	 actually becomes effective with reference to 522 a totally different class of goods and	 that too	 only on the happening of an event which is unrelated to the act of purchase. [560D E] 2.1 The "taxable event"	 if one might use the expression often used in this context	 is the consignment of the manu factured goods and not the purchase. [560E] 2.2 The background of the Constitutional (Forty sixth Amendment) indicates that there were efforts at sales tax avoidance by sending goods manufactured in a State out of raw materials purchased inside to other States by way of consignments rather than by way of sales attracting tax. This situation lends force to the view that the State	 unable to tax the exodus directly	 attempted to do so indi rectly by linking the levy ostensibly to the "purchases" in the State. [560G H] Andhra Sugar Ltd. & Anr. vs State	 ; 	 re ferred to. State of Tamil Nadu vs Kandaswami	 [1975] 36 S.T.C. 191	 distinguished.