( 1 ) THESE writ petitions are filed challenging the validity of the Andhra Pradesh Tax on Luxuries Act, 1987 as amended by Act No. 28 of 1996 (hereinafter referred to as the impugned Act) on the ground that it is ultra vires Articles 14, 245, 246, 265, 269, 286, 301 and 304 of the Constitution of India and, therefore, unconstitutional and void as the purported levy of the tax is in effect and substance a tax on sales and, therefore, void, and ultra vires the Section 15 of the Central Sales Tax Act, 1956, and consequently the 1st respondent has forfeited its entitlement to its proportionate share of additional excise duty collected by the 2nd respondent under the provisions of the Additional Duties of Excise (Goods of Special Importance) Act, 1957. WPNo. 16909 of 1996 is filed by M/s. ITC Limited, WP No. 16913 of 1996 is filed by M/s. VSR Industries Limited.

( 2 ) WP No. 16914 of 1996 is filed by M/s. Godfrey Philip Limited and others and WP Nos. 1560 of 1997 and 25071 of 1997 are filed by M/s. Purandas Ranchodas and Sons and others. The 1st respondent is the State of Andhra Pradesh and the 2nd respondent is the Union of India, the 3rd respondent is the Chairman, Central Board of Excise and Customs and the 4th respondent is the Commissioner of Commercial Taxes. By WP No. 16909 of 1996, tie petitioner is challenging the levy of luxury tax on cigarettes and tobacco products at a rate of 5% on manufacturers and importers of all forms of manufactured tobacco including cigarettes. Originally an ordinance was promulgated on 1-8-1996 amending the AP Tax on Luxuries Act 1987 (State Act 24 of 1987 ). The said ordinance later on became an Act (Act No. 28 of 1996 ). The petitioners in other writ petitions also challenged the validity of the Act No. 9 of 1997. The Facts in Brief are as follows:there was a meeting of the National Development Council in December, 1956 and in the said meeting, it was unanimously decided that sales tax levied inter alia on tobacco including manufactured tobacco should be replaced by a surcharge as Central Excise Duty levied on these articles and that the income derived from this measure should be distributed amongst the States. Pursuant to the said meeting there was an agreement between the State and the Centre and the Centre decided to levy an additional excise duty on the three goods viz. , textiles, tobacco and sugar treating these goods as the goods of special importance. By virtue of the said agreement, the States were allowed to share the additional duties of excise collected under the Additional Duties of Excise (Goods of Special Importance) Act of 1957 in lieu of Sales Tax to be levied by the States on the three commodities, hi other words, the States have agreed not to levy sales tax on tobacco as they were given a share in the additional excise duty collected by the Centre under the Additional Duties of Excise (Goods of Special Importance) Act, 1957. However, in spite of the said agreement, the impugned Act was passed levying luxury tax on tobacco. Though the Act imposes a tax on luxuries, it is a sales tax under the guise of luxuries tax. Tobacco cannot be regarded as a luxury as there are number of tobacco products like cigars, cigarettes, zarda, etc. Some of these are very cheap and used by the economically weaker sections of the Society. Therefore, under the original Act, luxury tax is levied on hotels and corporate hospitals only when the daily charge exceed to Rs. 500/- and Rs. 600/- respectively. In the case of tobacco product, tax is imposed on all items without reference to price. Tobacco smoking may be a vice but it is not a luxury.

( 3 ) THE Counsel submitted that the levy of tax on luxuries is in pith and substance a tax on sale for the following reasons:that a tobacconist is subjected to pay a tax on supply of luxuries viz. , tobacco products specified in the Schedule by way of sale or otherwise; that under the 1st proviso, a Tobacconist whose turnover receipt in a yea