The main legal point established in the judgment is the prohibition of multipoint levy on declared goods, emphasizing the importance of minimizing the tax burden on such goods due to their special importance in inter-State trade and commerce, as mandated by the restrictions and conditions in Art.286(3)(a) of the Constitution of India and the mandatory provisions of S.15(a) of the Central Sales Tax Act.

Shanmugan J.

The above original petitions are filed seeking for a declaration that the provisions contained in S.5(1)(vi) and VI th Schedule of the Kerala General Sales Tax Act thereinafter, referred to as. "the K.G.S.T. Act as amended by Kerala Finance Act, 1994 (Act 19 of 1994), in so far as they relate to the levy of tax on the declared goods 'iron and steel' as unconstitutional and void. All the petitioners are dealers of iron and - 'steel. According to them, they purchase iron and steel from the Steel Authority of India as well as from other wholesalers within the State and outside the State and sell them in their original form itself to the direct consumers, manufacturers, work shops, small scale retailers, etc. within the State. Iron and steel arc declared goods on which 4% tax alone is leviable at a definite single point as per S.15(a) of the Central Sales Tax Act. In view of the present amendment in the K.G.S.T. Act, the petitioners are made liable to pay tax on iron and steel at all points of sale at a rate higher than 4%. This, according to the petitioners, is violation of Art.286(3) of the Constitution of India read with Ss.14 and 15 of the Central Sales Tax, Act thereinafter referred to as 'the C.S.T. act. ). Petitioners alleged that by interdicting the provisions contained in S.15 of the C.S.T. Act. read with Art.286 of the Constitution of India, the State Legislature has transgressed the limits of the legislative power conferred on it by Entry 54 of List II of the Constitution of India. The proviso added (o S.5(1)(vi) of the K.G.S.T. Act cannot be validated by exempting the value already subjected to tax during the previous stage of sale. Petitioners further contended that by taking out of the Entry 'iron and steel' from the Second Schedule of the Act from among the other declared goods in the Schedule, "iron and steel" has been treated differently. But their insertion in the said Entry of the Vlth Schedule consisting of luxurious consumer goods is a discrimination meted out to "iron and steel" only and thereby violating Art.14 of the Constitution of India. Petitioners further contend that the new levy will affect the inter-state trade and commerce and will affect freedom of trade.

2. Learned Additional Advocate General while repelling the arguments and contentions raised on behalf of the petitioners, staled that the value added tax on 'iron and steel' is subject to the restrictions contained in S.15 of the C.S.T. Act. So the total tax incidence on the turnover of 'iron and steel' shall not exceed 4% in the State and if in any case, the tax incidence on the sales turnover on a particular sale would come to more than 4% the tax shall automatically get reduced by the quantum by which such. tax does not go beyond 4% by the operation of Section 15 of the C.S.T. Act. According to the learned Additional Advocate General, the proviso to S.5(1)(vi) of the K.G.S.T. Act ensures that every part of the turnover in respect of item included in the VI th Schedule is taxed only at one stage. By levying value added tax on iron and steel items the intention is only to levy tax on the 'value a deed' on the commodity in the subsequent stage. What is taxed at one point is only that part of the turnover which had not suffered tax on the proceeding sales in the State. The ultimate result is that there is no increase in the rate of tax above 4% and mat every rupee in the turnover of the goods is taxed at only one stage. Entry 54 of List II of VII th Schedule to the Constitution authorises the State Legislature to levy tax on the 'sale or purchase' of goods. What is sought to be taxed in respect of 'iron and steel' is also turnover which is defined under Clause (xxvu) of S.2 of the Act to mean'the aggregate amount for which goods are either bought or sold, supplied or distributed by a dealer " and the tax is therefore a tax on the sale or purchase of goods. Unlike in the case of a multistage levy, the levy is only on the turno