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Challenge to vires of provisions of Central Provinces and Berar Sales Tax Act 1947 under Article 226 of the Constitution of India. Detailed Analysis: 1. Background and Facts: - The appellant, a company engaged in the cotton business, challenged the imposition of sales tax under the Central Provinces and Berar Sales Tax Act, 1947. - The appellant contested the legality of Explanation II to section 2(g) of the Act, which was declared ultra vires by the High Court of Judicature at Nagpur. 2. Contentions and Arguments: - The appellant argued that the imposition of an illegal tax violates fundamental rights and constitutes an illegal restraint on trade. - The High Court held that sales tax could only be collected in the state where goods were delivered for consumption, rendering the Explanation II unconstitutional. - The appellant sought a writ of mandamus to restrain the State from enforcing the Act based on the High Court's findings. 3. Legal Provisions and Amendments: - Section 2(g) of the Act defined "sale," including the contentious Explanation II which was amended by Act XVI of 1949. - The amended Explanation II expanded the scope of taxable sales or purchases to include goods produced or found in the province at any time after the contract was made. 4. Judicial Precedents and Interpretation: - The Supreme Court, in a previous case, held that sales involving inter-State elements could only be taxed by the State where goods were delivered for consumption. - The High Court's ruling on the ultra vires nature of the Explanation II was in line with the constitutional provisions. 5. Legal Analysis and Decision: - The Advocate-General conceded that the Explanation II was ultra vires, but argued against using a writ of mandamus to challenge the assessment process. - The Supreme Court disagreed, stating that the State's threat of penal provisions without legal authority warranted relief through a writ of mandamus. - The Court emphasized that the appellant's fundamental rights were at stake due to the illegal imposition of sales tax, justifying relief under Article 226 of the Constitution. - The Court overturned the High Court's decision, allowing the appeal, issuing a writ restraining the State from imposing the tax based on the void Explanation II. 6. Conclusion: - The Supreme Court allowed the appeal, holding that the High Court erred in dismissing the application for relief under Article 226. - The Court directed the issuance of a writ restraining the State from imposing or authorizing the tax based on the unconstitutional Explanation II. This detailed analysis highlights the legal intricacies and reasoning behind the Supreme Court's judgment, emphasizing the constitutional principles and precedents that guided the decision in the case.
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