The classification of goods for the purpose of taxation must be based on a rational and intelligible differentia and must have a reasonable relation to the object sought to be achieved by the taxing statute. A tax cannot be imposed on the sale or purchase of goods in the course of export.

( 1 ) THIS batch of applications has been filed under Article 226 of the Constitution of India for issuing writs of mandamus against the respondent to forbear from enforcing against them the provisions of the Madras General Sales tax Act (IX of 1939) as amended by Andhra Act XIV of 1955.

( 2 ) AS the main question raised in all the applications relates to the constitutional validity of Act XIV of 1955, it is not necessary to give in detail the facts of each case. All the applicants are merchants carrying on export business in tobacco. They purchase tobacco in the local market with a view to export it to foreign countries like Great Britain, Honkong, China and Japan. Under the Madras General sales Tax Act IX of 1939), no sales tax is payable in regard to raw tobacco. But by Act XIV of 1955 in Section 5 of the original Act after Item (vi), Item (vii) and the following Item (viii) were added :" (viii) raw tobacco (except country variety thereof) whether cured or uncured, shall be liable to tax under section 3, sub-section (1) only at the point of the first purchase effected in the State of Andhra by a dealer who is not exempt from taxation under section 3. , sub-section (3) but at the rate of seven and half pies for every rupee on his turnover. "explanation.-For the purpose of this item, country variety of tobacco means variety of tobacco other than Virginia and other similar varieties of tobacco.

( 3 ) THE constitutional validity of Item (viii) is impugned on the ground that it is obnoxious to the doctrine of equal protection of laws enshrined in Article 14 of the constitution of India. The State, the argument proceeds, by selecting Virginia tobacco from the other categories of tobacco and by imposing tax thereon has discriminated against dealers in that variety without any rational basis and without any reasonable relation to the object sought to be achieved, namely, the raising of revenue and, therefore, the said discrimination offends the provisions of Article 14 of the Constitution of India.

( 4 ) TO appreciate the argument advanced, it is necessary at the outset to notice the doctrine of the equal protection of laws and its impact on the laws of taxation. The doctrine of equality of laws and the equal protection of laws and the principle of classification which softened the rigour of the doctrine and made it capable of application to the realities of life have been so well settled and it would be pedantic on our part to attempt to trace them in detail to the classical judgments of the supreme Court of America. The twin principles have been auhoritatively restated by the Supreme Court of India in Budhan Chowdhry v. Sate of Bihar , (1955) SCJ 163 thus : "it is now well-established that while Article 14 forbids class legislation, it does not forbid reasonable classification for the purposes of legislation in order, however, to pass the test of permissible classification, two conditions must be fulfilled, namely, (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.

( 5 ) THE classification may be founded on different basis, namely, geographical, or according to objects or occupations or the like. What is necessary is that there must be a nexus between the basis of classification and the object of the Act under consideration. It is also well-established by the decisions of this Court that Article 14 condemns discrimination not only by a substantive law but also by a law of procedure . This is a concise but complete statement prescribing the limits of the rule of classification. A Division Bench of this Court, of which one of us was a member in Pichayya v. The Government of Andhra, (1956) An. W. R. 322. after considering the relevant decisions, have summarised the law th