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TMI Blog1990 (5) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... d ultra vires and demand created by respondent No. 2 directing the payment of the tax imposed under the aforesaid entry be quashed. The petitioner who is carrying on the business of second-hand clothes imported from other States was imposed tax by the respondent No. 2 vide his order dated August 28, 1986, who issued demand notice for Rs. 7,641.82 for the accounting period 1984-85. It is alleged that the second-hand clothes were exempted from the sales tax in the State up to March 31, 1982, vide entry 62 of Schedule II of S.R.O. No. 157 dated May 15, 1965. However, vide the entry impugned the second-hand clothes imported from outside the State were subjected to tax but such clothes which were not imported from outside the State were exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the goods, persons and classes of persons as specified in Schedule B shall be exempt from payment of tax leviable under the said Act in terms of section 5 of the Act. From the averments made in the petition supported by an affidavit and not controverted by the respondents it is proved that the second-hand clothes and second-hand footwear were exempted from payment of the tax under the Act vide entry No. 62 of the Schedule II of S.R.O. No. 157 dated May 15, 1965. The aforesaid S.R.O. was superseded by S.R.O. No. 80 referred to hereinabove. Entry 71 of the Schedule B reads as under: "Second-hand clothes other than those imported from outside the State and second-hand footwear." A clear distinction is made between second-hand clothes im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be challenged in a petition under article 226 of the Constitution irrespective of the fact that such violation is not a violation of a fundamental right. The State has also the power to impose on goods imported from other States or the Union Territories any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced. If a particular class of goods in a State are exempted from any tax, that tax cannot be levied upon imported goods from other States and if imposed has to be held to be invalid. The tests which are applicable to determine the reasonableness under Part III of the Constitution are also applicable to determin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r produced; and (b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest; Provided that no Bill or amendment for the purposes of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President'." It appears that while a State Legislature may enact a law imposing a tax on goods imported from other States 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 the Firm A.T.B. Mehtab Majid Co. v. State of Madras [1963] 14 STC 355 (SC); [1963] Supp 2 SCR 435; AIR 1963 SC 928, the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufactured or produced in that State and the goods which are imported from other States. This means that if the effect of the sales tax on tanned hides or skins imported from outside is that the latter becomes subjected to a higher tax by the application of the proviso to sub-rule (2) of rule 16 of the Rules, then the tax is discriminatory and unconstitutional and must be struck down." Sales tax imposed on the sale of lottery tickets and exemption granted to the State lottery issued by the Government of Tamil Nadu was considered by the Supreme Court in Anraj v. Government of Tamil Nadu [1986] 61 STC 165 AIR 1986 SC 63 and held: "These aspects cannot obliterate the glaring fact that because of the notification imported goods are at a disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entry No. 71 cannot be held to be made on the basis of reasonable classification. Entry No. 71 of Schedule B of S.R.O. No. 80 dated March 12, 1982, in so far as it makes discrimination between two types of dealers is unconstitutional being contrary to provisions of articles 14, 19, 301 and 304 of the Constitution and cannot be sustained. The entry No. 71 which has been held to be an act of executive discrimination by the respondent-State is, therefore, held unconstitutional and declared void not affecting the rights of the petitioner. In view of the fact that entry No. 71 of Schedule B of S.R.O. No. 80 dated March 12, 1982, has been held to be discriminatory and unconstitutional, the second-hand clothes and footwear are to be treated at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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