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TMI Blog1988 (4) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... (109)-TH dated 23rd July, 1981 and No. (GHN-22) GST 1086/(S. 49) (173)-TH dated 29th March, 1986 prescribing a lower rate of tax for local manufacturers in respect of television sets and other electronic goods are quashed - Writ Petition No. 1032 of 1986 - - - Dated:- 29-4-1988 - PATHAK R.S. AND RANGANATH MISRA JJ. G.A. Shah, Senior Advocate (M.N. Shroff, Advocate, with him), for the respondents. Soli J. Sorabjee, Senior Advocate (Mrs. Nisha Bagchi and Miss Sushma Relan, Advocates, with him), for the petitioners. -------------------------------------------------- The judgment of the Court was delivered by R.S. PATHAK, C.J. -The petitioners manufacture electronic goods, including television sets, television ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cent to 10 per cent, and for goods manufactured within the State, the sales tax was reduced to 1 per cent by Notification No. (GHN-22) GST 1086/(S. 49) (173)-TH dated 29th March, 1986. The petitioner contends that by lowering the rate of tax in respect of goods manufactured within the State, the State Government has created an invidious discrimination which is adversely affecting the free flow of inter-State trade and commerce, resulting in a contravention of article 301 of the Constitution. It is pointed out that a purchaser buying a television set manufactured within the State of Gujarat pays about Rs. 250 to Rs. 300 less for a black and white model and Rs. 750 to Rs. 1,000 for a colour model. It is said that the sales of electronic good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es as is levied on similar goods manufactured in that State, the imposition must not be such as to discriminate between goods so imported and goods so manufactured. In a Firm A.T.B. Mehtab Majid Co. v. State of Madras [1963] 14 STC 355; [1963] Supp 2 SCR 435, this Court was called upon to consider the validity of rule 16 of the Madras General Sales Tax Rules under which tanned hides and skins imported from outside the State of Madras were subject to a higher rate of tax than the tax imposed on hides and skins tanned and sold within the State. Referring to its earlier decisions in Atiabari Tea Co. Ltd. v. State of Assam [1961] 1 SCR 809 and Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan [1963] 1 SCR 491, where the scope and si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x imposed by the State of Tamil Nadu on lottery tickets issued by other States and sold within the State of Tamil Nadu while exempting from such levy lottery tickets issued by the Government of Tamil Nadu. In answer to the writ petition, the respondents point out that the rate of tax was reduced in the case of goods manufactured locally in order to provide an incentive for encouraging local manufacturing units. Reference is made to clauses (b) and (c) of article 39 of the Constitution. We do not think that any support can be derived from the two clauses of article 39. Clause (a) of article 304 is clear in meaning. An exception to the mandate declared in article 301 and the prohibition contained in clause (1) of article 303 can be sustai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the normal standard of levy. The lower rate applied to local manufacturers has been applied by invoking sub-section (2) of section 49 of the Act. It represents a departure from, or exception to, the general norm. In cases such as this, the court should, when granting relief, choose the alternative which would give effect to the statutory intention. And, therefore, in this case what is called for is the quashing of the impugned notifications reserving a lower rate of tax for local manufacturers. Accordingly, the writ petition is allowed and the Notifications No. (GHN-51) GST 1081/(S.49) (109)-TH dated 23rd July, 1981 and No. (GHN-22) GST 1086/(S. 49) (173)-TH dated 29th March, 1986 prescribing a lower rate of tax for local manufacturers in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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