JUDGMENT L. N. RAY (Judicial Member). - This is a writ application under article 226 of the Constitution of India filed in the High Court at Calcutta and numbered there as C.R. No. 9964(W) of 1980. It stood transferred to this Tribunal under section 15 of the West Bengal Taxation Tribunal Act, 1987, for disposal. The question agitated in this application is whether the provisions of section 6C relating to levy of purchase tax introduced by the West Bengal Taxation Laws (Second Amendment) Act, 1979, are ultra vires the Constitution of India. 2. The case of the applicants is this : Applicant No. 2 is the manager of the applicant No. 1 company, which is engaged in construction business. It is a registered dealer under the Bengal Finance (Sales Tax) Act, 1941 (in short, "the 1941 Act") and the Central Sales Tax Act, 1956. The company undertakes contractual construction works, being indivisible works contracts. The State Legislature had no legislative competence to impose any tax on such transactions. During the years ending March 31, 1978, March 31, 1979 and March 31, 1980, respectively the applicant-company purchased goods valued at Rs. 183.5 lakhs, Rs. 434.98 lakhs and Rs. 514.58 lakhs in respect of works contracts executed in the State of West Bengal. In the year 1979 the West Bengal Taxation Laws (Second Amendment) Act, 1979, was enacted amending several provisions of 1941 Act and inserting section 6C, in terms of which purchase tax became payable. A person who purchased goods in West Bengal for execution of works contract had to pay usual sales tax at the time of making purchases and also had to pay purchase tax at 2 per cent if the notified purchase price exceeded Rs. 50 lakhs during a year. But even if he was a registered dealer, he was not entitled to any concessional rate of sales tax, unlike other registered dealers who purchased goods for resale or manufacture and got the benefit of a concessional rate of tax. Thus, section 6C purported to levy tax on execution of indivisible works contracts on which allegedly the State Legislature had no competence to impose tax, being outside the scope of entry 54 of the State List II of the Seventh Schedule to the Constitution. So, section 6C is allegedly a colourable legislation. Thus, section 6C purported to levy tax on execution of indivisible works contracts on which allegedly the State Legislature had no competence to impose tax, being outside the scope of entry 54 of the State List II of the Seventh Schedule to the Constitution. So, section 6C is allegedly a colourable legislation. Such tax under section 6C being in substance a tax on trade and calling could not exceed Rs. 250 per annum in terms of article 276. There being no rational basis for classification of contractors distinct from other registered dealers, the provisions of the Amendment Act are allegedly violative of articles 14 and 19(1)(g). The Amendment Act of 1979 is hit by article 301, as its provisions impede the free-flow of trade, commerce and intercourse, and such restrictions are neither reasonable nor in the public interest. The impugned provisions were not enacted with the assent or sanction of the President of India. Contractors who purchased goods from other States in the course of inter-State trade were not required to pay purchase tax, whereas contractors purchasing goods in West Bengal had to pay such tax. This is said to be an unreasonable discrimination. Imposition of purchase tax is challenged as a tax of confiscatory nature, since profit does not exceed 2 per cent. Purchase tax is imposed also on goods governed by the West Bengal Sales Tax Act, 1954, and it is thus arbitrary and discriminatory. 3. The case of the respondents is chiefly one of denial of the alleged illegalities and invalidities. In course of their affidavit-in-opposition the respondents maintain that section 6C is a valid piece of legislation. The reply filed by the applicants, inter alia, states that section 6C infringes article 304. 4. Section 6C was incorporated in the Bengal Finance (Sales Tax) Act, 1941, with effect from April 1, 1979, and its operation was terminated on March 31, 1984, by an amendment. With effect from the next date, i.e., April 1, 1984, section 6D was brought into force by which sales tax was imposed on transfer of property in goods involved in the execution of works contracts. The salient features of section 6C are that a purchase tax was made payable by every dealer who purchased goods for use in execution of any contract and whose notified purchase price during the last year ending on or before March 31, 1979, exceeded Rs. 2 lakhs. The salient features of section 6C are that a purchase tax was made payable by every dealer who purchased goods for use in execution of any contract and whose notified purchase price during the last year ending on or before March 31, 1979, exceeded Rs. 2 lakhs. Sub-section (2) of section 6C laid down certain deductions from notified purchase price. Sub-section (3) laid down the rates of tax. The proviso to section 6C(3) laid down a limit to the tax payable. Certain consequential amendments were made in the 1941 Act with effect from April 1, 1979. In section 2(1a) the words - "works contract" were incorporated in the definition of "business". Section 2(ddd) was incorporated to define "notified purchase price" so as to include purchase price of goods for use in execution of contract. Section 2(b), being the definition of "contract" was amended with effect from April 1, 1979, so as to include works contract. Three-fold arguments were advanced by the learned advocate for the applicant challenging the validity of section 6C. It was contended that (i) section 6C is violative of articles 14 and 19(1)(g) of the Constitution, as a discrimination was done in respect of works contractors as dealers by levying a new purchase tax on their transactions of purchase, while no such tax was payable by other dealers on their purchases and by denying them a concessional rate of sales tax on their purchases; (ii) section 6C contravenes article 301, as it amounts to a restriction on free-flow of trade; (iii) it was a colourable legislation, because the State Legislature was not competent to legislate for imposing tax on indivisible works contracts until April 1, 1984, when section 6D came into operation as a consequence of amendment of article 366(29A) of the Constitution, but the Legislature imposed purchase tax on indivisible works contracts, thereby doing something indirectly which could not be done directly. 5. The learned State Representative resisted these submissions by arguing that the Legislature was competent to make classification among the dealers, thereby grouping the works contractors in a separate group of dealers. According to him, such classification was rational having a nexus with the object of section 6C to collect purchase tax on certain specified purchases. 5. The learned State Representative resisted these submissions by arguing that the Legislature was competent to make classification among the dealers, thereby grouping the works contractors in a separate group of dealers. According to him, such classification was rational having a nexus with the object of section 6C to collect purchase tax on certain specified purchases. He also argued that article 301 was not at all attracted to the instant case, because by merely imposing purchase tax on purchases of works contractors, no impediment was created on the free-flow of trade. As regards legislative competence of the State Legislature, the learned State Representative submitted that the taxing event was purchase of goods, not utilisation of the same in the course of execution of works contracts. He further argued that the present challenge to section 6C should not be entertained, as it is purely academic, since operation of section 6C was brought to an end on March 31, 1984. It was also contended that the section was declared valid in the case of Nepal Chandra Banerjee decided by this Tribunal and reported in [1992] 86 STC 130 and again in the judgment dated June 19, 1990, passed by this Tribunal in the case of Debakinandan Mitra, RN-51(T) of 1990. 6. The present application was filed in the High Court under article 226 of the Constitution in the year 1980, namely, in the year following the year during which section 6C was brought into force. For the delay which is inherent in our judicial system, the case has come up for decision after 13 years. Therefore, it cannot be contended that since the operation of section 6C was brought to an end with effect from April 1, 1984, the challenge to its constitutional validity is purely academic or cannot be entertainable. By referring to the decision in Commissioner of Income-tax, West Bengal III v. Balkrishna Malhotra [1971] 81 ITR 759 (SC) Mr. D. Majumdar, learned State Representative, submitted that the interpretation given long ago and holding the field for a long time should not be easily disturbed. We like to agree with Mr. Somen Bose, learned advocate for the applicant, that the ratio of this decision of the Supreme Court does not apply to the present case. Mr. D. Majumdar, learned State Representative, submitted that the interpretation given long ago and holding the field for a long time should not be easily disturbed. We like to agree with Mr. Somen Bose, learned advocate for the applicant, that the ratio of this decision of the Supreme Court does not apply to the present case. Mr. Bose rightly argued that even in the case of Nepal Chandra Banerjee [1992] 86 STC 130 (WBTT), the validity of section 6C was not decided on the basis of any contested dispute. In any case, in the unreported judgment dated June 19, 1990, in the case of Debakinandan Mitra, RN-51(T) of 1990, this Tribunal did not decide the validity of section 6C, but merely referred to the decision in Nepal Chandra Banerjee v. State of West Bengal [1992] 86 STC 130. The case was however decided on consent and therefore it does not support the contention of the learned State Representative. As regards Nepal Chandra Banerjee v. State of West Bengal [1992] 86 STC 130, section 6C was initially challenged in that case, but it will appear from paragraph 31 of the said judgment that the challenges directed at section 6C were not pressed. That being the position, the ratio of decision in the case of Nepal Chandra Banerjee [1992] 86 STC 130, cannot be applied in the present case so as to invoke the doctrine of stare decisis. In other words, the challenges now thrown at the validity of section 6C are to be examined by us. 7. The first challenge is under the articles 14 and 19(1)(g). Mr. Somen Bose contended that prior to incorporation of section 6C, the other taxes levied under the 1941 Act applied to dealers of all descriptions, but since section 6C was brought into force with effect from April 1, 1979, a particular group of dealers, being the works contractors, were subjected to an additional dose of tax in the form of section 6C. Moreover, Mr. Bose urged that works contractors are treated differently from other dealers in the matter of denial of concessional rate of sales tax on the basis of declaration forms at the time of purchase, while that facility was available to other dealers. According to him, all dealers should be treated equally and, therefore, this amounts to an unreasonable discrimination in contravention of article 14. According to him, all dealers should be treated equally and, therefore, this amounts to an unreasonable discrimination in contravention of article 14. As already indicated, the argument has been opposed by the learned State Representative. It is now well-settled that the Legislature enjoys a certain amount of freedom in making classification of dealers and goods while enacting taxing laws. Various economic and social situations are taken into account by the Legislature in formulating such classifications. But, in spite of that, a classification in a taxing law must conform to certain basic and minimum criteria. If certain dealers, here works contractors, are grouped together into a class by themselves, as distinct from other dealers, there is no infirmity, if the class consists of dealers having a common feature and no dealer who does not possess the same common feature is included therein. The other factor which should be kept in view is whether the classification has a nexus with the object of the enactment. Here, the object of section 6C is to raise more revenue by collecting purchase tax on purchases of goods for use in works contracts. It is clear that classification of works contractors as a separate class of dealers has a direct nexus with the said object. Therefore, the challenge to section 6C under article 14 cannot be sustained. Section 6C does not contravene article 14. For the same reasons the challenge under article 19(1)(g) falls through. 8. The next point argued by the learned advocate for the applicant is that imposition of purchase tax by means of section 6C contravenes article 301, and in the absence of enactment thereof with the consent or assent of the President, it also contravenes article 304(b) of the Constitution. Mr. Bose did not explain to us how imposition of the tax amounted to an impediment to the trade, commerce and intercourse throughout India either generally or in the case of the applicant in particular. The object of section 6C is to impose a purchase tax on purchases of goods for use in works contracts. It is well-settled that the restriction on the freedom of trade laid down in article 301 should be direct and immediate. Object of article 301 is to ensure that the economic unity of India may not be broken up by internal barriers. Reference may be made to the cases of Atiabari Tea Co. It is well-settled that the restriction on the freedom of trade laid down in article 301 should be direct and immediate. Object of article 301 is to ensure that the economic unity of India may not be broken up by internal barriers. Reference may be made to the cases of Atiabari Tea Co. Ltd. v. State of Assam AIR 1961 SC 232 , Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan AIR 1962 SC 1406 and State of Madras v. Nataraja Mudaliar [1968] 22 STC 376 (SC). In the present case nothing has been shown to us to the effect that section 6C is creating any economic barrier or directly impeding the free-flow of trade within the State of West Bengal or outside. Therefore, the contention that section 6C is violative of articles 301 and 304(b) is without substance. 9. The next contention is that the period in dispute was prior to enactment of section 6D on the authority of the amended article 366(29A)(b), when indivisible works contracts were not liable to any tax imposed by the State Legislature, because transfer of property in goods involved in the execution of indivisible works contracts was not comprehended within the expression - "sale or purchase of goods" - used in entry 54 of List II of the Seventh Schedule to the Constitution. According to Mr. Bose, the transactions of the applicant during the disputed period related to indivisible works contracts, for which the State Legislature was not competent, until the 46th Amendment of the Constitution came into force, to impose any tax thereon. He pointed out that the 46th Constitution Amendment Act, 1982, came into force with effect from February 3, 1983, when it was published in the Gazette of India together with the assent of the President. In brief, Mr. Bose's contention is that the State Legislature was not competent till February 3, 1983, to levy any tax in respect of any goods used in indivisible works contracts. He also submitted that till section 6D came into force with effect from April 1, 1984, there was no provision in the 1941 Act for levy of any such tax and, therefore, the State Legislature of West Bengal was not competent to impose any tax as done through section 6C up to April 1, 1984. Mr. He also submitted that till section 6D came into force with effect from April 1, 1984, there was no provision in the 1941 Act for levy of any such tax and, therefore, the State Legislature of West Bengal was not competent to impose any tax as done through section 6C up to April 1, 1984. Mr. Bose continued to argue that when the State Legislature had no such competence, it could not impose a purchase tax on goods to be used in works contracts, because it would amount to a colourable legislation or doing something indirectly which the Legislature could not do directly. 10. It may be stated at this stage that all arguments of both the parties in this case proceeded on the footing that the works contracts of the applicant-company were as if indivisble works contracts. In other words, the character of works contracts executed by the applicant-company in West Bengal during the impugned period was not argued before us. 11. The State Legislature, in any case, became competent to legislate for levying tax on the transfer of property in goods used in works contracts, whether divisible or indivisible, with effect from February 3, 1983, when the 46th Constitution Amendment Act of 1982 came into force together with the amended article 366(29A). But there was some delay in enacting section 6D which came into force on and from April 1, 1984. Therefore, during the period from February 3, 1983 to March 31, 1984, the State Legislature had the competence to impose tax on sale or purchase of goods used in the course of execution of works contracts to the extent permitted by amended article 366(29A)(b). That being the position, section 6C, assuming that it imposes tax on goods used in works contracts, as alleged by the applicant, was within the legislative competence of the West Bengal State Legislature at least during the period from February 3, 1983 to March 31, 1984, by reason of the amended article 366(29A)(b). 12. Therefore, the question is whether section 6C was within the legislative competence of the State Legislature up to the February 2, 1983. Mr. Bose contended that the State Legislature is competent to impose purchase tax where taxable event is purchase of goods. 12. Therefore, the question is whether section 6C was within the legislative competence of the State Legislature up to the February 2, 1983. Mr. Bose contended that the State Legislature is competent to impose purchase tax where taxable event is purchase of goods. But according to him, in the instant case the taxable event is not purchase of goods but execution of works contract, because the proximity of taxable event is more to the execution of works contract. He argued that the levy of purchase tax was not made when the goods were purchased. The goods might be stored for any period and part of it may be used in execution of works contract. In such a case, Mr. Bose argued, purchase tax under section 6C is payable only on those goods which are used in execution of works contracts. Therefore, according to him, the taxable event is use of the goods in execution of works contracts or the taxable event is closest to use of the goods in the execution of works contracts. Mr. D. Majumdar, learned State Representative, however, submitted that the taxable event is the purchase of goods, although for use in the execution of works contracts. He submitted that in such a situation it cannot be said that use in the works contracts is the taxable event or taxable event is closest to such use. He relied in this connection on the decision of the Supreme Court in the case of Hotel Balaji v. State of Andhra Pradesh reported in [1993] 88 STC 98 (SC). In that case it was held on the basis of the provisions of the relevant State Acts that although purchase tax was not immediately imposed upon purchase of goods and although imposition depended on certain future contingencies, the tax was a purchase tax within entry 54 of List II of the Seventh Schedule. The purchase tax payable under section 6C is on the notified purchase price or such part thereof as specified in section 6C(2). Notified purchase price has been defined in section 2(ddd) of the 1941 Act as aggregate of purchase prices or parts of purchase prices paid or payable by a dealer during the relevant period in respect of purchase of goods for use in execution of any contract. Mr. Notified purchase price has been defined in section 2(ddd) of the 1941 Act as aggregate of purchase prices or parts of purchase prices paid or payable by a dealer during the relevant period in respect of purchase of goods for use in execution of any contract. Mr. Majumdar submitted that purchase of such goods can occur after a contract is entered by the dealer for execution of a contract. Sale and purchase are but two sides of the same transaction. When a works contractor like the applicant purchases goods for execution of works contract, he pays sales tax to the seller at the time of purchase. He is made liable by section 6C to pay another tax called purchase tax on the same goods for the same transaction. Therefore, we are in agreement with the argument of the learned State Representative that purchase tax under section 6C becomes payable on the event of purchase of the goods. It has really no connection with the transfer of property in the same goods by the contractor to the contractee at the time of use of the goods in the course of execution of works contract. In other words, purchase tax under section 6C was levied on purchases of the goods, may be for use in works contracts, but it was not levied on the event of the actual use of the same goods in works contracts. If we explain a little more, the State Legislature did not possess the competence to impose tax on transfer of property in goods used in execution of works contracts up to February 2, 1983. But the Legislature had the competence prior to February 2, 1983 to impose tax on sale or purchase of goods which might or might not be used in execution of works contracts. These are two completely different events. The event as contemplated in section 6C is the sale of goods by the seller to the works contractor and purchase by the latter for use in works contracts. The State Legislature was not lacking this power in any manner under entry 54, List II of the Seventh Schedule. What the State Legislature was lacking was the power to levy tax on sale or purchase of goods taking place during the execution of works contracts. The State Legislature was not lacking this power in any manner under entry 54, List II of the Seventh Schedule. What the State Legislature was lacking was the power to levy tax on sale or purchase of goods taking place during the execution of works contracts. Prior to the 46th Amendment of the Constitution, the law as settled by the courts was that entry 54 did not comprehend the power to impose tax on transfer of goods by the contractor to the contractee by way of using the goods in the works contracts. If a contractor was building a house for another under an indivisible works contract and using building materials in course of construction, the State Legislature had no competence before February 3, 1983, to impose tax on transfer of the building materials to the owner, treating such transfer as sale or purchase in terms of entry 54. But, the Legislature was clearly competent to levy a tax on other sales or purchases of any goods. There was no bar or no lack of competence in levying tax on purchase of goods by a works contractor for ultimate use thereof in a works contract. Accordingly, we uphold the contention of the learned State Representative and hold that the State Legislature of West Bengal was competent to enact section 6C. The same conclusion is reached, if the tests of directness of legislation and pith and substance are applied (See paragraphs 55 and 56 of the judgment in the case of Atiabari Tea Co. Ltd. v. State of Assam AIR 1961 SC 232 ). 13. The same point was argued by Mr. Bose on behalf of the applicant in a different way, when he contended that the State Legislature enacted section 6C for indirectly imposing a tax, which it was not competent to impose directly. We are unable to agree with this submission, because in our opinion, the State Legislature was quite competent to enact section 6C which imposed tax on purchase of goods, where the purchase may be occasioned by a works contract, but does not take place in the course of execution of a works contract. The submission on this count by Mr. Bose cannot be accepted. 14. No other point was urged or pressed at the hearing. 15. In the result, the writ petition is dismissed without any order for costs. Interim orders are vacated. The submission on this count by Mr. Bose cannot be accepted. 14. No other point was urged or pressed at the hearing. 15. In the result, the writ petition is dismissed without any order for costs. Interim orders are vacated. The sum of Rs. 1,00,000 deposited in terms of interim order dated April 24, 1981, passed by the High Court and extended by this Tribunal's order dated May 22, 1989, shall be adjusted against dues of tax from the applicant under section 6C. S. P. DAS GHOSH (Chairman). - I agree. P. C. BANERJI (Technical Member). - I agree. Petition dismissed.