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2001 Supreme(AP) 652
Andhra Pradesh High Court
Judges : S.ANANDA REDDY, S.R.NAYAK
Venkateswara Chemicals - Appellant
Versus
GGovernment Of A.P., REVENUE DEPT. - Respondent
Decided On : 07-03-01
Headnote:Constitution of India - Articles 14, 19(1)(g) ; A.P. General Sales Tax Act, 1957 - First Schedule, Entry 80-A - Vires of - Constitution not be struck down on ground of malafides - No motive can be imputed to Legislature - Under no circumstances, court can enquire into motive of Legislature to enact a law.
Held : It is well settled law that a law made by Parliament or Legislature can be struck down by Courts only on two grounds and those two grounds are, viz. , (1) lack of legislative competence, and (2) violation of any of the fundamental rights guaranteed in part III of the Constitution or of any other constitutional provision. It is also well settled law that no enactment can be struck down by just saying that it is arbitrary or unreasonable.
Nothing is placed before us to prove that the items included in Entry 80-A are the integral and essential constituents of poultry feed and cattle feed. The terms "poultry feed and cattle feed" are not defined and therefore they should be understood as the common man understands those terms in ordinary parlance. Since the petitioners have not contested the correctness of the statement made by the State in its counter that poultry feeds contain mainly either maize, starch or rice bran, decoild cakes, fish feed and the feed supplements are only added as an option in different quantities depending upon the stages of life of birds or other livestock, it cannot be said that items in entry 80 and items in Entry 80-A are the same so as to attract equal protection clause embodied in Article 14 of the Constitution. Therefore, in our opinion it would be permissible for the Legislature to tax differently the goods included in entry 80-A and therefore the incorporation of Entry 80-A would not offend either article 14 or 19 (1) (g) of the Constitution. In view of the above, we hold that there is no discrimination violating Article 14 and 19 (1) (g) of the Constitution as contended by the learned Counsel for the petitioners.
There is no merit in the other contention of the learned Counsel for the petitioners that the Andhra Pradesh State legislature to wriggle out of the consequence of the judgments of the supreme Court and this Court has deliberately introduced Entry 80-A with a motive and for extraneous consideration to generate more revenue for the State and therefore the impugned amendment is nothing but a piece of colourable legislation. This contention of the learned Counsel has to be noticed only to be rejected.
Essentially, the question of constitutionality is always a question of power. It is needless to state that the whole doctrine of colourable legislation revolves itself into the question of competency of a particular Legislature to enact a particular law.
No motive can be attributed to legislature and such a plea could never be entertained at all where constitutionality of an enactment is assailed. Legislature does not act on extraneous consideration and that an enactment cannot be struck down on the ground of mala fide and that no motive could be imputed to the legislature. The Court, under no circumstances, can enquire into the motive of the Legislature to enact a law. What persuaded the Legislature to enact a law cannot be subject matter of judicial scrutiny.
Even tax statutes have to satisfy the test of reasonableness prescribed by Article 19 (6) and the fundamental right of equality before law guaranteed by Article 14 of the constitution. State has wide discretion in respect of classification of objects, persons and things for the purposes of taxation. As to what article should be taxed is a question of policy and there cannot be any complaint merely because legislature has decided to tax certain articles and no others. The freedom of the legislature is conceded not only in the choice of the articles to be taxed but also as regards the manner and rate of taxation i. e. , to prescribe different rates for different categories of goods, persons and transactions. The Court would be slow to interfere with the legislative discretion in the matter of choice of persons, transactions or objects or different rates, even if no reasons are disclosed for such choice, unless it is shown to be capricious or whimsical, in the circumstances of the case.
If the Legislature takes care to reasonably classify persons or things for legislative purposes and if it deals equally with all persons and things belonging to a well-defined class, it is not open to the charge of denial of equal protection on the ground that the law does not apply to other persons. However, in order to pass the test of permissible classification, two conditions must be fulfilled, viz. , (i) that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group and (ii) that, that differentia must have a rational relation to the object sought to be achieved by the statute in question. In the counter-affidavit filed on behalf of the State, it is stated that the items included in Entry 80 and feed supplements and other items included in Entry 80-A are added in appropriate quantities in different ratios depending upon the stages of life of birds or other livestock. It is also stated that new entry 80-A has been incorporated by way of amendment with objective to get more revenue for developmental activities of the state. What is necessary is that there must be a nexus between the basis of classification and the object of the Act under consideration as held by the Apex Court in kedar Nath Bajoria vs. State of W. B. P. B. Roy vs. Union of India. Article 14 does not insist that legislative classification should be scientifically perfect or logically complete. In fact such expectation would be totally irrational having due regard to the diverse and complex fields of legislative activities. The Court would not interfere unless the classification results in pronounced inequality. It is also true that there should be no discrimination between one person and another if as regards the subject-matter of the legislation their position is the same as held by the Supreme Court in Chiranjit lal Anand vs. State of Assam (supra ). In other words, its action must not be arbitrary but must be based on some valid principle which itself must not be irrational or discriminatory as opined in Ramana dayaram Shetty vs. I. A. A. I. , Kasturi Lal lakshmi Reddy (M/s.) vs. State of Jandk. The doctrine of equal protection embodied in article 14 does not take away from the state, the power of classifying persons and things for legitimate purposes. The legislature is competent to exercise its discretion and make classification. Every classification is in some degree likely to produce some inequality, and mere production of inequality is not enough as opined by the Apex Court in State of Bombay vs. Balasara F. N. Further, the Supreme court in Ameeroonissa Begum vs. Mehboob begum, Babulal Amthalal Mehta vs. Collector of Customs, Calcutta, Gopi Chand vs. Delhi administration has opined that differential treatment does not per se constitute violation of Article 14. It denies equal protection only when there is no reasonable basis for the differentiation. If a law deals equally with members of things of a well-defined class, it is not obnoxious and it is not open to the charge of denial of equal protection or discrimination on the ground that it has no application to other persons and things. It is for the Legislature to determine what categories it would embrace within the scope of legislation and merely because certain categories which would stand on the same footing as those which are covered by the legislation are left out would not render the legislation which has been enacted in any manner discriminatory and violative of Article 14.
( 1 ) THE petitioners in this batch of writ petitions are engaged in the manufacture and sale of poultry feed supplements and medicine etc. In these writ petitions, they have assailed the constitutionality of the incorporation of the new Entry 80-A in the first Schedule of the Andhra Pradesh general Sales Tax Act, for short the APGST act , by Amendment Act 27 of 1996 with effect from 1-8-1996. In W. P. No. 12121 of 1998, the petitioner has also sought for a direction that the poultry feed supplements are taxable only at the rate of 4% with effect from 1-8-1996. The constitutionality of the impugned Entry is assailed on the ground that it is arbitrary, discriminatory and violative of Articles 14 and 19 (l) (g) of the constitution of India.
( 2 ) THE pleading of the petitioner as set out in the affidavit filed in support of the writ petitions, to state briefly, is as follows: the petitioners are proprietorship concerns or limited companies incorporated "under the provisions of the Companies Act and they are engaged in the manufacture and sale of poultry feed supplements, medicines etc. Prior to 1-8-1996 with effect from which date Amendment Act 27 of 1996 was brought into force, the petitioners were assessed to tax under Entry 80 of the First schedule to the APGST Act. Before the amendment, this Court and the Supreme court in number of cases had opined that the poultry feed ingredients/poultry feed supplements are to be treated as poultry feed and as such the rate of tax applicable to both should be the same. In view of this settled position in law, the Commercial Tax officers in the State of Andhra Pradesh who are levying tax on the poultry feed supplements as the item railing under entry 80 of the First Schedule to the APGST act at the rate of 4%. The State Legislature by amending the APGST Act by amendment Act 27 of 1996 added new entry, Entry 80-A, and in view of this amendment, the poultry feed supplements which were hitherto subjected to tax at 4% are liable to be taxed at higher rate of 9%. Poultry feed and poultry feed supplements constitute as one commodity and therefore the classification sought to be made by the amendment Act 27 of 1996 by adding a new Entry 80-A for poultry feed supplements is ex facie discriminatory and violative of Article 14 read with 19 (l) (g) of the Constitution of India. Under the amended Entry 80-A, manufacturers and dealers of poultry feed supplements are liable to be assessed to tax at the rate of 9% whereas the other dealers who deal with poultry feed as such are liable to be taxed only at the rate of 4% under Entry 80 of the first Schedule of the APGST Act. The amended Act has made a classification between poultry feed and poultry feed supplements without any rational basis for the purpose of applying differential rate of tax.
( 3 ) IN response to rule nisi, the respondents have filed counter-affidavits. The contents of counter-affidavits in all these writ petitions are substantially same. In the counter-affidavits, the respondent authorities of the Commercial Tax department have contended that the new entry 80-A was introduced in the First schedule to the APGST Act with effect from 1-8-1996 for the items viz. , Feed supplements, Nutrients, Mineral Mixture, vitamins, Medicines and other categories for Feed Supplements which are used in poultry feed, Fish feed, Prawn feed and feed of livestock by Amendment Act 27 of 1996. The petitioners-assessees are the manufacturers of the items specified in entry 80-A of the First Schedule and therefore the relevant turnovers were liable to be taxed at 9%. The items included in entry 80 and Entry 80-A are distinct and different goods and there is every legal justification to treat them differently for the purpose of taxation. The intention of the legislature in introducing new Entry 80-A is clear and it is intended to keep the feed supplements in a separate category. The poultry feed contains either maize, starch or rice bran, decoiled
