JUDGMENT
Syed Shah Mohammed Quadri, J.
1. The Division Bench which dealt with this case, having regard to the contentions raised before it about the competence of the State Legislature to impose sales tax : (a) upon “pan masala” and “gutka”; and (b) at the rate exceeding 4 per cent, referred the case to a Full Bench. Accordingly the matter has come up before us.
2. The petitioner, a company registered under the Indian Companies Act, is engaged in the business of products, “pan masala” and “gutka” under the brand name “pan parag”. The distinction between the two appears to be that when tobacco is added to “pan masala” it is called “gutka”. Till 1996 there was no impost on the said products in this State. By Andhra Pradesh Ordinance No. 19 of 1996, which later became Andhra Pradesh General Sales Tax (Amendment) Act, 1996 (Act No. 27 of 1996), entry No. 194 was inserted in the First Schedule to the Andhra Pradesh General Sales Tax Act, 1957 (for short “the APGST Act”) and they were taxed at the point of first sale in the State at the rate of 10 paise in a rupee with effect from February 8, 1996. By Andhra Pradesh Ordinance No. 3 of 1997 that entry was amended by increasing the rate of tax to 50 paise in a rupee. It is this amendment which gave rise to the present writ petition which is filed by the C & F agent of the petitioner-company.
3. The petitioner has given the ingredients of pan masala and the rates at which they are taxed as follows :
————————————————————————
Description of goods Sl. No. in APGST Act Rate of tax
in the First Schedule
under which tax
is levied
------------------------------------------------------------------------
(a) Betel nut powder 158 10 paise in a rupee
(b) Catechu 184 9 paise in a rupee
(c) Lime 10 paise in a rupee
(d) Permitted spices 182 9 paise in a rupee
(e) Flavours 36 20 paise in a rupee
----
Total tax paid 58 paise in a rupee
----
The total tax paid on the ingredients in pan masala is 58 paise.
------------------------------------------------------------------------
4. When 7 per cent tobacco is mixed in the said ingredients, the mixture is termed as “gutka”. It is stated that as tobacco is exempt under the Fourth Schedule to the APGST Act and “gutka” is only chewing tobacco so no sales tax can be levied on “gutka”. It is submitted that under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (for short “the Additional Duties of Excise Act”) in respect of goods mentioned in the First Schedule, each of the States mentioned in the Second Schedule to that Act, is paid a fixed percentage of net proceeds of the duties and under an arrangement with the Central Government, those States are precluded from imposing sales tax on them. Tobacco is the second item in the said First Schedule and the State of Andhra Pradesh which is one of the States in the said Second Schedule, gets 7.680 per cent of the net proceeds. Further in the event of the State Government levying and collecting any tax on the purchase of tobacco or other items in the said First Schedule, it will not be entitled to the payment specified in the Second Schedule. The explanation appended to the Fourth Schedule to the APGST Act, as substituted by Act No. 27 of 1996, mentions that entries 5, 6 and 7 of the Schedule shall be goods included in the relevant heads and the sub-heads of the First Schedule to the Additional Duties of Excise Act but does not include goods where no additional duties of excise are levied under that Schedule. Therefore, inclusion of “pan masala” and “gutka” in the First Schedule to the APGST Act and taxing the same at the rate of 50 paise in a rupee, particularly when neighbouring States taxed them only at 10 paise in a rupee, is exorbitant, unconstitutional and arbitrary and infringes fundamental right of the petitioner and is violative of article 19(1)(g) and article 14 of the Constitution of India.
5. The Assistant Secretary to the Government in Revenue Department filed counter-affidavit stating that “pan masala” and “gutka” are distinct and separate commercial commodities. The table given by the petitioner showing the total tax as 58 paise on the ingredients indeed, works out to roughly 10 per cent. It is admitted that sale of tobacco is exempt from payment of sales tax under the APGST Act. It is stated that to claim exemption in respect of any goods it must be shown that it falls in any one of the types of tobacco enumerated under the Additional Duties of Excise Act and that by long line of judgments, the honourable Supreme Court has categorically held that no person has fundamental right for carrying on trade in harmful or noxious product which harms the health of the citizens of India and that the products “pan masala” and “gutka” are injurious to health of the people consuming them. The levy of tax does not in any way interfere with the carrying on of the trade by the petitioner. The petitioner is paying excise duty on the those two products, therefore, it cannot deny that two independent commercial products have been manufactured. It is stated that the provisions of the Fourth Schedule have been interpreted by a Division Bench of this Court in State of Andhra Pradesh v. Feno Plast Private Limited and in view of the observation of the court the explanation has been enacted. Tobacco had been exempted from the payment of the sales tax in view of the share being available to the State Government from tax collected under the Additional Duties of Central Excise Act. Pursuant to the arrangement between the States and the Central Government, the States will be reimbursed from out of the amounts collected by the Central Government by levying an additional duty of Central excise for the loss that they would incur due to their forbearance to tax certain products under the respective Sales Tax Acts. It is in that context taht the explanation to the Fourth Schedule has been inserted and it is specified that entries 5, 6 and 7 therein would not include goods on which no additional duties of excise are levied. As in the instant case no additional duties of excise are levied on “gutka”, the State Government which was losing revenue on that product, decided to levy sales tax on “gutka”. There is no bar on the States for levying sales tax on any of the commodities on which additional duties of excise is being collected but in that event they would have to forgo their share in the duties of additional excise collected by the Central Government. It is further submitted that though “gutka” is a product of tobacco it cannot be termed as “tobacco” within the meaning of entry No. 7 of the Fourth Schedule to the APGST Act. Thus there is no violation of section 8 read with entry No. 7 of the Fourth Schedule to the APGST Act.
6. The petitioner filed reply affidavit paraphrasing the pleas taken in the writ affidavit and refuting the pleas taken by the respondent.
7. Mr. Mohan Parasaran, the learned counsel for the petitioner, urged three contentions : his first contention is that “pan masala” is a mixture of various ingredients which are taxed individually, therefore “pan masala” as such cannot be taxed again as it would amount to double taxation. We are unable to accept this contention. By Andhra Pradesh Act No. 27 of 1996, entry No. 194 is inserted in the First Schedule to the APGST Act. That entry reads as follows :
———————————————————————–
S. Description of goods Point of levy Rate of tax Effective
No. from
-----------------------------------------------------------------------
194. Pan masala including At the point of 10 paise in 8-2-1996
gutka sold in sealed first sale in the rupee
containers or pouches State
or any other type of
packages
-----------------------------------------------------------------------
The petitioner mentions the ingredients of the "pan masala" as follows :
-----------------------------------------------------------------------
Description of goods Sl. No. in APGST Act in Rate of tax
the First Schedule under
which tax is levied
-----------------------------------------------------------------------
(a) Betel nut powder 158 10 paise in a rupee
(b) Catechu 184 9 paise in a rupee
(c) Lime 10 paise in a rupee
(d) Permitted spices 182 9 paise in a rupee
(e) Flavours 36 20 paise in a rupee
----
Total tax paid 58 paise in a rupee
----
The total tax paid on the ingredients in pan masala is 58 paise.
-----------------------------------------------------------------------
8. These ingredients are taxable under the entries mentioned against them. Incidentally we may point out that in the entry in the last column, viz., rate of tax payable is shown as 58 paise in a rupee but in fact 58 paise are taxed in five rupees but not in one rupee. It is not seriously disputed that mixing together of the aforementioned ingredients, would not automatically result into “pan masala”. The ingredients have to be mixed according to the know how which involves manufacturing process. The product is called “pan masala” and accordingly it is subjected to duty under the Central Excise Act. It is also well-settled that once a new commercial product comes into existence from a combination of one or more taxable goods, the same is taxable under the APGST Act. (See Deccan Engineers v. State of Andhra Pradesh and State of Andhra Pradesh v. Venkatesh Foundry .
9. For these reasons it cannot be said that levy of sales tax on “pan masala” under entry No. 194 of the First Schedule would amount to levy of double taxation. Here we would like to make it clear that double taxation as such is not alien to the scheme of the APGST Act; goods mentioned in the Fifth Schedule and the Sixth Schedule to the APGST Act are subjected to levy at every point of sale in the State though it is true that under the APGST Act some relief has been provided to avoid double taxation. It follows that on the ground of double taxation entry No. 194 cannot be said to be illegal. In all fairness to Mr. Parasaran we may observe that he did not seriously press this contention.
10. The second and the third contentions urged by Mr. Parasaran are : “gutka” is a product of tobacco which is found as item No. 7 in the Fourth Schedule to the APGST Act, so it is exempt from taxation; and in view of sections 14 and 15 of the Central Sales Tax Act, 1956 (for short “the CST Act”), the maximum rate of tax on the products cannot exceed 4 per cent, as such the rate of tax prescribed at 50 per cent by Ordinance No. 3 of 1997, is illegal and the Ordinance has to be struck down.
11. The learned Advocate-General contends that even though “tobacco”, item No. 7 in the Fourth Schedule, is exempt, “gutka” does not fall in the relevant heads or sub-heads of the First Schedule to the Additional Duties of Excise Act, within the meaning of the term “tobacco” as given in the explanation. He further submits that “gutka” is included in chapter 21 and not within the description of the various relevant heads and sub-heads in chapter 24 of the Additional Duties of Excise Act referred to in section 14(ix) of the CST Act, so the claim of the petitioner in respect of restriction of the rate of tax under section 15 of the CST Act is untenable.
As these two contentions are inter-connected, we shall deal with them together.
We shall have a quick look at the various relevant provisions on the subject – section 8, entry No. 7 in the Fourth Schedule of the APGST Act; sections 14 and 15 of the CST Act and chapters 21 and 24 of the Additional Duties of Excise Act.
Section 8 of the APGST Act reads as follows :
“8. Exemption from tax in respect of certain goods. – Subject to such restrictions and conditions as may be prescribed including conditions as to licences and licence fees, a dealer who deals in the goods specified in the Fourth Schedule shall be exempt from tax under this Act in respect of such goods.”
From a plain reading of section 8 it is manifest that a dealer who deals in goods specified in the Fourth Schedule shall be exempt under the APGST Act in respect of such goods. Item 7 of the Fourth Schedule and the explanation appended to the Schedule may be noticed here :
————————————————————————
Sl. No. Description of goods
------------------------------------------------------------------------
..............
7. Tobacco
..............
Explanation. - The goods mentioned in entries 5, 6 and 7 of
this Schedule shall be goods included in the relevant heads and
sub-heads of the First Schedule to the Additional Duties of Excise
(Goods of Special Importance) Act, 1957, but does not include goods
where no additional duties of excise are levied under that Schedule."
-----------------------------------------------------------------------
12. The explanation says : (1) goods mentioned in the entries 5, 6 and 7 shall be goods included in the relevant heads and sub-heads of the First Schedule to the Additional Duties of Excise Act; and (2) such goods do not include goods where no additional duties of excise are levied under that Schedule. It follows that if any of the goods mentioned in the entries 5, 6 and 7 are included in the relevant heads and sub-heads of the First Schedule to the Additional Duties of Excise Act but if they are not subjected to additional duties under that Schedule they will not fall within the description of the explanation for purposes of the Fourth Schedule to the APGST Act and consequently such goods will not be exempt from tax under section 8 of the APGST Act.
13. The present explanation is substituted for the earlier explanation by Act No. 27 of 1996 with effect from February 8, 1996 in view of the observation in the judgment of the Division Bench of this Court in State of Andhra Pradesh v. Feno Plast Private Limited .
14. Be that as it may, according to the explanation, the import of the expression “tobacco” in entry No. 7 of the Fourth Schedule of the Act, has to be understood in terms of the relevant heads and sub-heads of the First Schedule to the Additional Duties of Excise Act, more precisely in terms of Schedule to the Central Excise Tariff Act. And to claim exemption on the sale or purchase of “gutka”, under section 8 read with Fourth Schedule of the APGST Act, it should not only be shown that it falls under the relevant heads and sub-heads of the First Schedule to the Central Excise Tariff Act but also that it has suffered additional duties under that Schedule.
15. The Central Excise Tariff Act, 1985 contains four sections and 96 chapters. Each chapter contains a table, inter alia, specifying against the description of “goods” in each sub-heading the rates at which both the basic duty as well as the additional duty are levied. Chapter 21 deals with “Miscellaneous Edible Preparations”. Note 3 thereof says that in that chapter “pan masala” means any preparations containing betel nuts and any one or more of the following ingredients, namely, lime, katha (cateechu) and tobacco, whether or not containing any other ingredients, such as cardamom, copra and menthol. Having regard to the ingredients of “gutka”, noted above, it falls within the meaning of “pan masala” and it is covered by head 21.60 and is subjected to basic duty of Central excise of 40 per cent but no additional duty is levied on it. Chapter 24 deals with “Tobacco and manufactured tobacco substitutes, etc.”. There is no reference to “gutka” as such in any one of the headings and sub-headings of that chapter.
16. Mr. Parasaran has argued that “gutka” is nothing but “chewing tobacco” so it falls within the meaning of “chewing tobacco and preparations containing chewing tobacco” in sub-heading 2404.40, as such no sales tax can be levied on it. The learned Advocate-General has contested this proposition firstly on the ground that “gutka” is covered by the specific sub-head 21.06 – “pan masala” in chapter 21 and as such it will not be covered by the general sub-head – 2404.40 “chewing tobacco and preparations containing chewing tobacco” in chapter 24; and secondly on the ground that goods falling under that sub-heading and “gutka” are two independent commercial commodities.
17. We shall now examine whether “gutka” can be brought within the ambit of “chewing tobacco and preparations containing chewing tobacco” in sub-heading 2404.40 of heading 24.04 of the Central Excise Tariff Act. The said sub-heading reads as follows :
————————————————————————
Heading Sub-heading Description of goods Rate of duty
No. No. ----------------------
Basic Additional
------------------------------------------------------------------------
24.04 Other manufactured
tobacco and manufactured
tobacco substitutes;
homogenised or
"reconstituted"
tobacco; tobacco
extracts and essences.
.................
2404.40 Chewing tobacco and 40% 10%
preparations containing
chewing tobacco.
------------------------------------------------------------------------
There is not doubt that the sub-heading “chewing tobacco and preparations containing chewing tobacco” is comprehensive enough to take in its fold “gutka” which contains 7 per cent chewing tobacco.
The expressions “tobacco” and “tobacco products” used in State Sales Tax Act fell for consideration of different High Courts.
18. In Shamdas v. State of Andhra Pradesh [1967] 19 STC 412 (AP) the question before a Division Bench of our High Court was whether “zarda” can be subjected to sales tax in view of the then entry No. 7 in the Fifth Schedule to the APGST Act. The Commercial Tax Officer did not accept the contention that it was a product of tobacco falling in item 7 of the then Fifth Schedule and was therefore exempt. On appeal the Assistant Commissioner held that as “zarda” did not suffer additional excise duty, levy of sales tax was justified and so holding he dismissed the appeal. That view was confirmed on appeal by the Sales Tax Appellate Tribunal. In revision against the order of the Tribunal, our High Court accepted the contention that “zarda” was nothing but “chewing tobacco” and as such a “tobacco product” so it was exempt from tax under section 8 of the APGST Act. The Bench pointed out that the Government issued G.O.Ms. No. 2328, Revenue, dated December 13, 1957 exempting tobacco and all its products from tax under the APGST Act and that no rule was made restricting the operation of the exemption or imposing any limitation on the relief granted under the Act. The court summarised the position serving that if “tobacco” was considered in its dictionary meaning, there would be no difficulty in holding that “zarda” being a variety of “chewing tobacco” would fall within the exemption. There also the definition of “tobacco” was given as in the Additional Duties of Excise Act, though the expression was worded differently; it was on the basis of the G.O.s and the wording of the explanation, as it stood then, the Bench held that “zarda” was not exigible to sales tax. In the instant case we are on the question as to whether “preparation of chewing tobacco” embraces “gutka”. Having regard to the wide amplitude of the sub-heading, we have no doubt that “gutka” falls within the meaning of “chewing tobacco and preparations containing chewing tobacco” and consequently in the sub-heading.
19. Here it would be pertinent to point out that the clarification issued by the Government in CCT’s Ref. A1(1)3202/92 dated October 26, 1994 to the effect that “gutka” is covered under entry No. 7A of the Fourth Schedule under section 8 of the APGST Act and is exempt from tax, was subsequently withdrawn by the Government in CCT’s Ref. A1(3)1547/95 dated January 31, 1996.
20. In Jagabandhu Roul v. State of Orissa [1970] 26 STC 234, a Division Bench of the Orissa High Court held that in the absence of the definition of the expression “tobacco product” in the Orissa Sales Tax Act, it was difficult to hold that preparations of tobacco could not be said to be “tobacco products”. There the question was whether “mitha gundi” containing small percentage of tobacco, was a “tobacco product”. The Government of Orissa had issued notification exempting “tobacco” and “tobacco products” from the exigibility to sales tax. The court held that the Tribunal was in error in not treating “mitha gundi” as “tobacco product” for purposes of the exemption.
21. In State of Orissa v. Samsuddin Akbar Khan & Co. [1975] 35 STC 179 (Orissa) the question which fell for consideration of the Division Bench of the Orissa High Court, was whether “gudakhu” manufactured out of “tobacco” and having as its other constituents lime, molasses, gerumati and some essence to give it flavour was covered by the expression “tobacco” as defined in section 2(c) of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 and was exempt from tax under the Orissa Sales Tax Act, 1947 and Central Sales Tax Act, 1956. The Bench held that “gudakhu” was covered by the expression “tobacco” as defined in section 2(c) of the Additional Duties of Excise Act and was exempt from tax. That judgment of the Orissa High Court was confirmed by the Supreme Court in State of Orissa v. Radheshyam Gudakhu Factory [1988] 68 STC 92.
22. In State of Gujarat v. Sukhram Jagannath [1982] 50 STC 76 a Division Bench of the Gujarat High Court held that mixture of sopari, variyali, dhana-dal, sweet flavoured powder, etc., sold under the popular name of “pan masala” did not amount to “manufacture” but then it must be noted that there as a question of fact the Tribunal found that the constituent ingredients composing both the varieties of “pan masala” retained their original form and that the substantial identity of those articles continued and it was on that finding of fact the High Court took the above view. The second question which the Gujarat High Court considered was whether sale of “pan masala” would amount to sale of a form of “tobacco” within the meaning of item 4 of the First Schedule to the CST Act and the First Schedule to the Gujarat Sales Tax Act and exempt from tax; the Division Bench of the Gujarat High Court answered the question in the affirmative holding that it amounted to sale of “tobacco” within the meaning of the abovesaid goods. On that aspect also the Tribunal found that the form of “tobacco” in “pan masala” did not change inspite of the fact that it was treated with “chunna” or accompanied with “sopari”.
23. In Parimala Agencies v. State of Orissa [1990] 76 STC 319 in a writ petition, the Division Bench of the Orissa High Court was called upon to consider whether “zarda” could be treated as a commodity different from “chewing tobacco” within the meaning of the notifications issued by the Orissa Government. The Bench held that the manufacturing process of “zarda” was quite different and complicated and so “zarda” was a distinct item of goods from “chewing tobacco” and that whereas “zarda” was meant for affluent class of citizens, “chewing tobacco” was meant for poor and lower middle class people. Having considered various notifications issued by the Government from time to time, the Division Bench held that subsequent changes deleting the entries in the notification resulted in making “gudakhu”, “pan masala”, “gundi”, “zarda” and “snuff” with mixture of tobacco taxable at the rate of 4 per cent, so the law laid down by the Division Bench of the Orissa High Court in State of Orissa v. Samsuddin Akbar Khan & Co. [1975] 35 STC 179 (Orissa) and confirmed by the Supreme Court in State of Orissa v. Radheshyam Gudakhu Factory [1988] 68 STC 92 would not apply. Adverting to the judgment of the Division Bench of this Court in Shamdas v. State of Andhra Pradesh [1967] 19 STC 412 it was observed that the provisions of the Orissa Act were quite different from the provisions of the Andhra Pradesh Act and that there was no such provision like section 8 of the APGST Act in the Orissa Sales Tax Act, as such that judgment was distinguishable.
24. We are, however, of the view that having regard to the provisions of the existing explanation of the Fourth Schedule to the APGST Act with reference to the heads and sub-heads in the Central Excise Tariff Act, 1985 in ascertaining the real import of the expression “chewing tobacco and preparations containing chewing tobacco” what is relevant, is the amplitude of the expressions used in the entry or sub-heading or in a notification or statute and from that aspect, we have no hesitation in coming to the conclusion that “gutka” falls within the wide language of the said expression. But then sub-heading “2404.40 Chewing tobacco and preparations containing chewing tobacco” is a general sub-head. It is well-settled that a specific reference prevails over a general entry. We have already held above that “gutka” falls within the meaning of “pan Masala” in the sub-heading 21.06. There can be no doubt that “pan masala” is a specific sub-head even assuming that it falls within the meaning of “chewing tobacco”. Therefore, we find no difficulty in accepting the contention of the learned Advocate-General that in view of the specific head “pan masala” in chapter 21, it gets excluded from the general sub-head “2404.40 Chewing tobacco and preparations containing chewing tobacco”. Having perused all the heads and sub-heads in chapters 21 and 24 of the Central Excise Tariff Act, 1985, we conclude that though “gutka” falls within the meaning of “pan masala” in chapter 21 under sub-head 21.06 yet as it is not subjected to additional duty, an essential condition envisaged by the explanation for claiming exemption, is lacking. A mere correlation of the goods mentioned in the Fourth Schedule to the APGST Act with the entries in the relevant heads or sub-heads of the Central Excise Tariff Act is not enough, it has also to be shown that additional duty of excise has been levied on the goods in question under the First Schedule to that Act and the burden of so showing is on the person who claims exemption. In this case the burden that “gutka” has suffered additional duty falls on the petitioner and no effort is made to discharge that burden. On the contrary the respondent has categorically stated that no additional duty of excise is levied on “gutka”. For these reasons it cannot be held that “gutka” is exempt from tax.
25. The other submission which is more seriously pursued, is that in view of sections 14 and 15 of the Central Sales Tax Act, 1956, levying of sales tax at the rate of 50 paise in a rupee being in contravention of the said provisions, is illegal and arbitrary and the impugned Ordinance has to be quashed.
Section 15 of the CST Act in so far as it is relevant for our purpose, reads as follows :
“15. Restrictions and conditions in regard to tax on sale or purchase of declared goods within a State. – Every sales tax law of a State shall, in so far as it imposes or authorises the imposition of a tax on the sale or purchase of declared goods, be subject to the following restrictions and conditions, namely :
(a) the tax payable under that law in respect of any sale or purchase of such goods inside the State shall not exceed four per cent of the sale or purchase price thereof and such tax shall not be levied at more than one stage;
…………”
This section imposes restrictions and conditions in regard to levy of tax on sale or purchase of the declared goods within a State. There are two restrictions, viz. :
(i) the rate of tax payable in respect of sale or purchase of goods referred to in section 14 shall not exceed 4 per cent of the sale or purchase price thereof; and
(ii) such tax shall not be levied at more than one stage.
It is evident that this section applies in respect of goods referred to in section 14 of the CST Act which are generally termed as “declared goods”.
Clause (ix) of section 14 of the CST Act deals with “tobacco” and “tobacco products” which runs thus :
“14. Certain goods to be of special importance in inter-State trade or commerce –
(i) to (viii)……………
(ix) unmanufactured tobacco and tobacco refuse covered under sub-heading No. 2401.00 cigars and cheroots of tobacco covered under heading No. 24.02, cigarettes and cigarillos of tobacco covered under sub-heading Nos. 2403.11 and 2403.21 and other manufactured tobacco covered under sub-heading Nos. 2404.11, 2404.12, 2404.13, 2404.19, 2404.21, 2404.29, 2404.31, 2404.39, 2404.41, 2404.50 and 2404.60 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986).
……………”
From a perusal of clause (ix) of section 14, extracted above, it is manifest that only the following sub-heading Nos. 2404.11, 2404.12, 2404.13, 2404.19, 2404.21, 2404.29, 2404.31, 2404.39, 2404.41, 2404.50 and 2404.60 are included in the “declared goods”.
26. A combined reading of sections 14 and 15 leads to the irresistible conclusion that only in respect of the declared goods enumerated in section 14(ix) of the CST Act, viz., sub-heading Nos. 2404.11, 2404.12, 2404.13, 2404.19, 2404.60, the sales tax payable under any State law in respect of any sale or purchase of such goods inside the State, shall not exceed 4 per cent of the sale or purchase price thereof and that such tax shall not be levied at more than one point.
27. For the purpose of this contention, even assuming that “gutka” falls within sub-heading “2404.40 chewing tobacco and preparations containing chewing tobacco” and it does not get excluded by sub-heading 21.06(2106) “pan masala” from chapter 24, it is evident that this sub-heading is not included in the list of the “declared goods” in clause (ix) of section 14 of the CST Act. As such we hold that the restrictions imposed in section 15 of the CST Act have no application to “gutka” which falls in entry No. 194 of the First Schedule to the APGST Act. Therefore, it follows that “chewing tobacco and preparations containing chewing tobacco” are excluded from the list of “declared goods”. This is perhaps for the reason that “pan masala” with or without “tobacco” which takes in its fold “gutka”, is included in chapter 21 under sub-heading 21.06.
28. For all these reasons it cannot be said that Ordinance No. 3 of 1997 enhancing the rate of tax to 50 paise in rupee on items falling under the said entry No. 194, is violative of sections 14 and 15 of the CST Act.
29. In the result, we find no merit in the writ petition; it is accordingly dismissed. Having regard to the circumstances of the case, we make no order as to costs.
30. Immediately, after pronouncement of the judgment, an oral application under article 134-A of the Constitution for grant of certificate under article 132 of the Constitution to appeal to the Supreme Court, is made. In our view the case does not involve a substantial question of law as to interpretation of the Constitution, so the oral application is rejected.
31. Writ petition dismissed.