Power to tax and power to regulate are different matters :
There is distinction between general subjects of legislation and taxation. The general subjects of legislation are dealt with in one group of entries and power of taxation in a separate group. Power to tax cannot be deduced from a general legislative entry as an ancillary power – Hoechst Pharmaceuticals v. State of Bihar AIR 1983 SC 1019 = 154 ITR 64 = (1983) 4 SCC 45 = (1983) 3 SCR 130 = 55 STC 1 (SC 3 member bench) – quoted with approval in Central Bank of India v. State of Kerala (2009) 4 SCC 94 = 21 VST 505 (SC 3 member bench)
Power to regulate does not include power to tax – State of West Bengal v. Purvi Communication (2005) SCC 711 = 140 STC 154 (SC).
List I, entries 1 to 81 mention sever matters over which Parliament has authority to legislate. Entries 82 to 92 emulate the taxes which could be imposed by a law of Parliament. In list II, entries 1 to 44 form one group and entries 45 to 63 in that list form another group and they deal with taxes. Taxation is not intended to be comprised in main matter in which it might on an extended construction be regarded as included, but is treated as separate matter for purposes of legislative competence. Under the scheme of entries in the Lists, taxation is regarded as a distinct matter and is separately set out – MPV Sundaramier & Co. v. State of Andhra Pradesh (1958) SCR 1422 = AIR 1958 SC 468 (SC Constitution Bench) – quoted with approval in State of West Bengal v. Kesoram Industries Ltd. AIR 2005 SC 1646 = 266 ITR 721 = (2004) 10 SCC 201 = 2004 AIR SCW 5998 (SC 5 member Constitution bench 4 v. 1 judgment), where it was held that powers of ‘regulation and control’ does not include power of taxation.
In All India Federation of Tax Practitioners v. UOI (2007) 7 SCC 527 = 10 STT 166 = 9 VST 126 = 7 STR 625 (SC) = AIR 2007 SC 2990, it was held that there are two groups of entries in Constitution in each of the three lists. Main subject of legislation finds place in one group, a tax in relation thereto is separately mentioned in second group. Taxation is not intended to be compromised in the main subject in which an extended construction can be given, as that test cannot be applied to taxation. Taxing entries are distinct entries.