The judgment of the court was delivered by

GOVINDAN NAIR, AG. C.J. - These writ appeals arise from the judgment of Subramonian Poti, J., dismissing a batch of original petitions. The decision is Malabar Fruit Products Company v. Sales Tax Officer, Palai, and Others ([1972] 30 S.T.C. 537; 1972 K.L.T. 246).

2. The question that arose for decision was the validity of section 5A of the Kerala General Sales Tax Act, 1963, for short the Act. This section was inserted by an amendment effected to the Act by section 3 of Act 14 of 1970, which came into operation on 1st April, 1970. Section 5A(1), the relevant provision which has to be construed, is in these terms :

"5A. Levy of purchase tax. - (1) Every dealer who in the course of his business purchases from a registered dealer or from any other person any goods, the sale or purchase of which is liable to tax under this Act, in circumstances in which no tax is payable under section 5, and either -

(a) consumes such goods in the manufacture of other goods for sale or otherwise; or

(b) disposes of such goods in any manner other than by way of sale in the State; or

(c) despatches them to any place outside the State except as a direct result of sale or purchase in the course of inter-State trade or commerce."

3. Several arguments were urged before the learned single Judge and those may be grouped under five heads :

(i) The object sought to be achieved by the introduction of section 5A of the Act had not been accomplished because the section is vague.

(ii) Assuming that the section is clear enough and can be treated a charging section, the section imposes a tax not on the sale or purchase of goods but on its use or consumption. The State Legislature has no competency to impose tax on the use or consumption of goods and so the section is ineffective.

(iii) The provision in section 5A infringes the guarantee under article 301 of the Constitution that commerce and intercourse throughout the territory of India should be free.

(iv) As far as the appellant in Writ Appeal No. 51 of 1972 (petitioner in O.P. No. 145 of 1971) is concerned no tax could be imposed on him because none of the conditions under sub-section (1) of section 5A had been satisfied.

(v) The goods that the appellant in Writ Appeal No. 51 of 1972 purchased were not taxable as they were exempt under item 10 of the Third Schedule to the Act read with section 9 thereof.

4. These arguments were repeated before us. We shall deal with these contentions seriatim. Now turning to the first of these contentions, it seems to us the matter is concluded by the decision of the Supreme Court in Ganesh Prasad Dixit v. Commissioner of Sales Tax, Madhya Pradesh ([1969] 24 S.T.C. 343 (S.C.)). The Supreme Court dealt with a similar contention which arose from a challenge of section 7 of the Madhya Pradesh General Sales Tax Act. That section is in these terms :

"Every dealer who in the course of his business purchases any taxable goods, in circumstances in which no tax under section 6 is payable on the sale price of such goods and either consumes such goods in the manufacture of other goods for sale or otherwise or disposes of such goods in any manner other than by way of sale in the State or despatches them to a place outside the State except as a direct result of sale or purchase in the course of inter-State trade or commerce, shall be liable to pay tax on the purchase price of such goods at the same rate at which it would have been leviable on the sale price of such goods under section 6 ..........."

5. Counsel for the appellant in Writ Appeal No. 51 of 1972, who led the arguments in this batch of cases contended that such a view was possible on the sections of the Madhya Pradesh General Sales Tax Act, but that the same view cannot be taken on the provisions of the Act. The reasons for this is said to be that under the Madhya Pradesh General Sales Tax Act there are two sections, sections 4 and 6, which provided separately for the incidence