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TMI Blog1997 (2) TMI 447X X X X Extracts X X X X X X X X Extracts X X X X ..... e, for the respondent. R.C. Verma and R.B. Misra, Advocates, for the appellants. -------------------------------------------------- The judgment of the Court was delivered by B.P. JEEVAN REEDY, J. -A simple measure by the State of Uttar Pradesh has invited the wrath of article 301 read with article 304(a) of the Constitution of India. Two notifications were issued by the Government of Uttar Pradesh on December 1, 1973. The effect of these two notifications was that exercise books made from paper purchased within Uttar Pradesh were exempt from sales tax whereas all other kinds of exercise books were liable to sales tax at 5 per cent. The High Court dealt with three categories of cases, (1) exercise books made from paper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered a situation where the State of Madras subjected tanned hides and skins imported from outside the State of Madras and sold within the State of Madras to a higher rate of tax than the tax imposed on hides or skins tanned and sold within the State. (It had also subjected the hides or skins imported from outside the State after purchase in their raw condition and then tanned inside the State to a higher rate of tax than the hides or skins purchased in raw condition in the State and tanned in the State). The following holding in the said decision is relevant: "It is therefore now well-settled that taxing laws can be restrictions on trade, commerce and intercourse, if they hamper the flow of trade and if they are not what can be termed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of levy of tax-and this is important to bear in mind-the clause tells the State Legislatures: 'tax you may the goods imported from other States/Union Territories, but do not, in that process, discriminate against them vis-a-vis goods manufactured locally'. In short, the clause says: levy of tax on both ought to be at the same rate. This was and is a ringing declaration against the States creating what may be called 'tax barriers'-or 'fiscal barriers', as they may be called-at or along their boundaries, in the interest of freedom of trade, commerce and intercourse throughout the territory of India guaranteed by article 301." Once the discrimination is made out, the enquiry by court ends. The price structure of the imported goods vis-a-vis th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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