9911796707
TMI Blog1988 (8) TMI 370X X X X Extracts X X X X X X X X Extracts X X X X ..... d dealers in the State of West Bengal against the State of Bihar and the Commissioner of Commercial Taxes-cum-Special Secretary, Bihar, praying for a direction to the respondents to forbear from levying or imposing or collecting any sales tax on the sale of hosiery goods imported into the State of Bihar from other States for sale during the tenure of Notification No. S.O. 934 dated August 1, 1984, exempting from such tax sales of hosiery goods manufactured or produced in the State of Bihar and to refund the amount of sales tax levied and collected on the sale of hosiery goods imported into the State of Bihar from other States in India from August 1, 1984. The petitioners have also prayed for a writ of mandamus commanding the respondents to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cent, whereas the sales of hosiery goods manufactured by hosiery industries in Bihar are exempted from such levy and thus the hosiery industries outside the State of Bihar are clearly discriminated against. It is submitted by the learned counsel that this discrimination violates the provisions of article 301 of the Constitution of India. The relevant articles to consider in order to appreciate the contention of the petitioners are articles 301 and 304 of the Constitution of India. The said articles run as follows: "301. Subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free. 304.. Notwithstanding anything in article 301 or article 303, the Legislature of a State may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent made to the Tamil Nadu General Sales Tax Act, 1959, and the orders and notifications issued thereunder whereby, in effect, exemption from the payment of sales tax was granted to lottery tickets issued by the Government of Tamil Nadu but the lottery tickets issued by other Governments and sold within the State of Tamil Nadu were subjected to sales tax, was violative of article 301 read with article 304 of the Constitution. A similar challenge was also made to the validity of the West Bengal Taxation Laws (Second Amendment) Act, 1984 and, Notification No. 1020 FT dated March 29, 1984, issued by the State of West Bengal. The court took the view for the purposes of questions raised in that case lottery tickets could be regarded as "goods". ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5; [1963] Supp 2 SCR 435. A similar view has been taken by a Division Bench of this Court comprising Ranganath Misra and M.M. Dutt, JJ., in a judgment delivered as recently as January 12, 1988 in Indian Cement Ltd. v. State of Andhra Pradesh [1988] 69 STC 305; (1988) 1 SCC 743 where it has been observed (page 319 of STC; page 759 of SCC) as follows: "Variation of the rate of inter-State sales tax does affect free trade and commerce and creates a local preference which is contrary to the scheme of Part XIII of the Constitution." In the present case, a perusal of the notifications referred to earlier shows that prima facie a clear discrimination is made against hosiery goods manufactured outside the State of Bihar and sold in the State of B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... outside the State. In 1981, while the rate of tax on electronic goods entering the State for sale therein was maintained at 15 per cent, the rate in respect of locally manufactured goods was reduced to 6 per cent. By a notification dated March 29, 1986, issued under sub-section (2) of section 49 of the said Act which empowered the State Government to exempt in part or whole, in public interest, any specified class of sales from the payment of the whole or any part of the tax payable under that Act, in 1986, the rate of sales tax in respect of television sets imported from outside the State was reduced from 15 per cent to 10 per cent and for goods manufactured within the State, the rate of sales tax was reduced to 1 per cent. The petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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