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TMI Blog1986 (3) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... place within the State. It had started manufacturing carbon black from January, 1984 onwards. 2.. As per exhibit P1 notification produced in O.P. Nos. 3301 and 3302 of 1984, the six items mentioned therein, manufactured within the State and sold for use in the manufacture of tyre within the State, were exempted from liability to sales tax. Carbon black is item 2 in that notification. As per exhibit P2 notification dated 28th February, 1984, sale of carbon black manufactured within the State is exempted from sales tax for a period of three years from the date of the notification. Exhibit P3 notification was issued by the Government shortly after these original petitions were filed. It exempts tax payable under the Act on the sale of carbo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry of India shall be free. Article 304(a) authorises the State Legislature to impose a countervailing duty on goods imported from other States where similar goods produced within the State are subject to any tax. The countervailing duty should not, however, be discriminatory between the goods imported and the goods manufactured within the State. 5.. Exhibit P3 is in supersession of exhibit P2 and exhibit P2 is no longer in force. Since the benefit of exhibit P3 is available to all manufacturers of carbon black, both within and outside the State if they have started production on or after 1st January, 1984, we fail to see how the exemption from taxation granted to all such manufacturers can be said to be in violation of articles 301 and 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rotection to infant industries and manufacturing units against competition from established manufacturers whose products are well-known in the market. Since the benefit of exhibit P3 is not confined to manufacturers within the State and is available to all manufacturers both within and outside the State for the period mentioned in the notification, it cannot be said that the notification is in any way violative of article 301 or 304(a) of the Constitution. The submission that exhibit P3 is a colourable exercise of power by the Government vested in it under section 10 of the Act with a view to benefit the 4th respondent, is also not made out in the case for the reason that the benefit of exemption is available also to other manufacturing uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufactured outside the State. It is not shown how the benefit conferred on the manufacturer of goods within the State under the notification, exhibit PI, is entitled to the protection of article 304(a). As earlier stated, article 304(a) authorises the State Legislature to impose a countervailing duty on articles imported from outside the State to make the duty in conformity with the duty imposed on similar articles produced within the State. In the light of the principle laid down by the Supreme Court in the decisions referred to above, there cannot be any doubt that the notification, exhibit P1, exempting the goods produced within the State from sales tax is clearly violative of article 301 of the Constitution. Since the challenge is confi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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