Judgment

BALAKRISHNA ERADI, J. :- In these Writ Petitions, the petitioners have challenged the constitutional validity of the provisions of Tamil Nadu Additional Sales Tax Act, 1976 (Act 2 of 1976). By the said Act section 2 of the Tamil Nadu Additional Sales Tax Act, 1970 was amended by substituting a new provision in the place of what existed before, section 3 was omitted and section 3A was newly introduced to the Act. As the points raised in all these Writ Petitions are identical, they were heard together and are disposed of by this common judgment.

2. Before we proceed to set out the provisions of the impugned, Act, it is necessary to narrate in brief the legislative history that preceded its enactment. The basic statute providing for the levy of Sales tax in the State of Tamil Nadu is the Tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as "the Act of 1959). In the year 1970, the State Legislature enacted the Tamil Nadu Additional Sales Tax Act 14 of 1970 (hereinafter called the 1970 Act) - which was brought into force with effect from May 28, 1970. The said Act provides for the levy of an additional tax on the sale or purchase of goods. Section 2 of the Act which is the charging section was in the following terms : -

"2. Levy of additional tax in the case of certain dealers - (1) The tax payable under the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act of 1959) (hereafter in this section referred to as the said Act), shall, in the case of a dealer whose total turnover for a year exceeds ten lakhs of rupees, be increased by an additional tax at the rate of (ten per cent) of the tax payable by that dealer for that year and the provision of the said Act shall apply in relation to the said additional tax as they apply in relation to the said tax payable under the said Act.

Provided that where in respect of declared goods as defined in clause (h) of section 2 of the said Act, the tax payable by such dealer under the said Act together with the additional tax payable under this sub-section, exceeds (four per cent) of the sale or purchase price thereof, the rate of additional tax in respect of such goods shall be reduced to such an extent that the tax and the additional tax together shall not exceed (four per cent) of the sale or purchase price of such goods."

3. It will be noticed that the scheme of this section was to levy the additional tax by the process of increasing the tax payable under the Act of 1959 by ten per cent the said increase representing the quantum of the additional tax. The proviso to the section stipulates for a concessional treatment in respect of the declared goods. It is unnecessary for us to deal with the said proviso or with section 3 of the said Act as these provisions have no relevance to the determination of the points raised in the cases now before us.

4. In September, 1971, the State Legislature enacted the Tamil Nadu Sales Tax (Surcharge) Act, 1971 with retrospective effect from June, 1971. Under section 3 of that Act, every dealer liable to pay tax under the Act of 1959 was subjected to a further liability to pay a surcharge at the rate of five per cent of such tax. The first proviso to the said section states that in the city of Madras the rate of surcharge shall be ten per cent for the period commencing on the June 19, 1971 and ending with the June 28, 1971. The second proviso extended certain concessions in the rate of surcharge in respect of declared goods.

5. Thereafter followed the impugned statute namely, the Tamil Nadu Additional Sales Tax (Act 2) of 1976, which was brought into force with effect from 1-4-1976. Section 2 of the said Act amended section 2 of the Tamil Nadu Additional Sales Tax Act, 1970 by substituting the following provision in replacement Of the original section :

"2. Levy of additional tax in the case of certain dealers -

1. (a) The tax payable under the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act 1 of 1959) (hereinafter in this section referred