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TMI Blog1969 (4) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... or refund of the tax already collected, these petitions do not specify the assessments made against the particular members of the association, the tax sought to be collected from them and the extent of tax which they claim back as levied and collected without authority of law. The averments in the petitions by and large, are confined to the constitutionality and invalidity of certain provisions of the Andhra Pradesh General Sales Tax Act as amended in 1961. The gravamen of the charge is that the second amendment introduced by the Amending Act 26 of 1961 is invalid for want of the President's assent; and read with section 7(b) and section 5 of the principal Act it contravenes the constitutional provisions, amongst others, contained in Part XIII and in articles 13, 14, 19 and 286. The petitioner's claim that for the past several decades they were purchasing mica from various States including Andhra Pradesh and were exporting the same sometimes after subjecting it to manufacturing process and at times without it, to foreign countries like United Kingdom, United States of America, Russia, Japan, France, Germany etc. In fact their activity of export entailed a series of integrated tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... request for a writ of mandamus for the reliefs already mentioned. The respondents seriously contest the constitutional position as set up by the petitioners. They aver that, whereas the principal Act had subjected mica to a single point levy at the point of first purchase in the State, the Second Amendment Act of 1961 has subjected it to tax at the point of purchase by the last dealer, who buys in the State, at the rate of Rs. 0.03 p. in the rupee under section 5(2)(b) read with the Second Schedule. Section 7 of the principal Act provides for the stage of levy of taxes in respect of imported and exported goods. In the case of mica exported out of the State and which is subjected to tax only at the point of purchase, the series of purchases are to be deemed to conclude at the stage of purchase effected immediately before the export of mica. However the export sale, that is the last sale immediately occasioning the export of mica, is not sought to be taxed by the impugned Act. Certainly the tax on purchase by the last dealer in the State is not prohibited. By virtue of the imposition of tax on mica at the point of last purchase within the State, the guarantee of freedom of trade, co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annual minimum turnover, and also on a casual dealer and an agent of a non-resident dealer irrespective of his minimum turnover. Sub-section (2)(b) refers to the rate at which tax is leviable and the point of purchase at which it is to be levied with regard to the goods specified in Schedule II. Section 7 refers to the levy of taxes in respect of imported and exported goods. Sub-clause (b) which refers to exports reads thus: "(b) In the case of goods exported out of the State to any place outside the territory of India or to any other State in India be deemed to conclude at the stage of sale or purchase effected immediately before the export of such goods." These are the material impugned provisions which have to be considered. The respondent in his counter, to which reference has been already made, has averred that the said provisions are not hit by article 286 as no tax is being levied on the purchase or sale which immediately occasions the export of mica. Section 7(b), of course, creates a fiction by saying that where in the case of any goods tax is leviable at one point in a series of sales or purchases, such series shall in the case of goods exported out of the State t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Constitution conferring power upon the Union to legislate in respect of taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce. Entry 54 in the State List was amended and substituted by the following entry: "Taxes on the sale or purchase of goods other than newspapers, subject to the provisions of entry 92-A of List I." There was also amendment in article 286. Explanation to clause (1) of article 286 was omitted and clauses (2) and (3) were substituted by fresh clauses. Likewise in article 269(1), clause (g) was added and certain other constitutional amendments were made. Article 286, after its amendment, reads thus: "(1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place- (a) outside the State; or (b) in the course of the import of the goods into, or export of the goods out of, the territory of India. (2) Parliament may by law formulate principles for determining when a sale or purchase of goods takes place in any of the ways mentioned in clause (1). (3) Any law of a State shall, in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of "inter-State sales" and "sales outside the State" and then to declare inter-State sales subject to tax, and to set up machinery for levying and collecting tax on those sales. Transactions in goods which were made subject to tax in the course of inter-State trade or commerce were classified into various categories. Section 38 of the A.P.G.S.T. Act, consistent with the provisions of the Parliamentary Act, has made the provisions of the A.P.G.S.T. Act in relation to those matters inapplicable. So then, if any tax was imposed in contravention of these clear and unequivocal provisions, it was open to the petitioners to seek legal remedy. As already noticed, the petitioners have not referred to any assessment orders nor to the fact that they have been assessed to any particular tax in contravention of the provisions of section 38 of the A.P.G.S.T. Act. It is idle to contend that section 7 or section 5 or the provisions of any Amendment Act could at all be in conflict with section 38 of the A.P.G.S.T. Act. Even if there appeared to be any seeming inconsistency it could be resolved by a harmonious construction of the various provisions. In fact we see no inconsistency at all. The c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icle 301. The question is to what extent article 301 operates to make trade and commerce free has been considered by the Supreme Court in several decisions. One of the earliest of these cases is Atiabari Tea Co. Ltd. v. State of AssamA.I.R. 1961 S.C. 232. Gajendragadkar, J. (as he then was), speaking for himself and Wanchoo and Das Gupta, JJ., has observed that article 301, read in its proper context and subject to the limitations prescribed by the other relevant articles in Part XIII, must be regarded as imposing a constitutional limitation on the legislative power of Parliament and the Legislatures of the States, that it applies not only to inter-State trade, commerce and intercourse, but also to intrastate trade, commerce and intercourse; that the freedom of trade guaranteed by article 301 is freedom from all restrictions except those which are provided by the other articles in Part XIII; that the substance or content of freedom provided for by article 301 is larger than the freedom contemplated by section 297 of the Government of India Act of 1935, and it includes movement of trade which is of the very essence of all trade and is its integral part; and that if the transport o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mudaliar[1968] 22 S.T.C. 376; A.I.R. 1969 S.C. 147., it must be taken as settled law that the restrictions or impediments which directly and immediately hamper the free flow of trade, commerce and intercourse fall within the prohibition imposed by article 301 and subject to the other provisions of the Constitution they may be regarded as void. Normally a tax on sale of goods, as observed in Andhra Sugars Ltd. v. State of Andhra Pradesh[1968] 21 S.T.C. 212; A.I.R. 1968 S.C. 599. , does not directly impede the free movement or transport of goods. But there may be cases where it does so. The question then is whether the impugned levy comes under the said category, and if it does, whether it is saved or justified by the other provisions in Part XIII. In this connection we may notice here, though not in detail, the provisions of Part XIII of the Constitution. Article 302 of the Constitution permits Parliament to impose such restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the territory of India as may be required in the public interest. Article 303 prohibits preferential treatment or discrimination. Article 304 permits r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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