TMI Blog1988 (8) TMI 370X X X X Extracts X X X X X X X X Extracts X X X X ..... No. S.O. 934 dated August 1, 1984 is void and we quash the same. As quashing of this notification on the ground that it was void ab initio might lead to undue hardship for the dealers in the State of Bihar who might have sold locally manufactured hosiery goods without taking into consideration any amount on account of the liability to sales tax in view of the exemption granted by the said notification dated August 1, 1984.In order to obviate this hardship, we direct that the arrears of sales tax which would become payable by the dealers in the State of Bihar in respect of sales of local hosiery goods made during the period when the said notification was in operation should not be collected. - Writ Petition (Civil) No. 611 of 1986 - - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any discrimination between hosiery goods imported into the State of Bihar and hosiery goods manufactured in the State of Bihar in the levy of Bihar sales tax. The writ petition can be very shortly disposed of because the point raised in the writ petition is directly covered by decisions of this Court. By a notification dated 30th September, 1983, on and from October 1, 1983, Bihar sales tax at the rate of 5 per cent ad valorem was imposed on all hosiery goods sold within the State of Bihar irrespective of the place whether the hosiery goods were manufactured. On August 1, 1984, a notification bearing No. S.O. 934 was issued whereby the hosiery goods manufactured by hosiery industries in Bihar were exempted from the levy of sales tax. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose 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." A plain reading of these articles would show that it is not open to any State to levy any tax on goods imported from other States or Union territories so as to discriminate between goods so imported and goods manufactured and produced in that State subject to the limitations contained in clause (b). In the present case, clause (b) has no application whatsoever because the exemption granted to the sales of hosiery g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion before the Division Bench could not be said to be a measure regulating any trade or a compensatory tax levied for the use of trading facilities. Sales tax which had the effect of discriminating between goods of one State and goods of another might affect the free flow of trade and would offend against article 301 and would be valid only if it came within the terms of article 304(a). The real question to be considered was whether the direct and immediate result of the impugned notification was to impose an unfavourable and discriminatory tax burden on the imported goods which in that case were lottery tickets of other State when they were sold within the State of Tamil Nadu and the State of West Bengal as against indigenous goods and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... criminatory levy of sales tax is bound to affect the free flow of hosiery goods from outside States into the State of Bihar and would, therefore, amount to hampering the free flow of trade and commerce. The State of Bihar has not chosen to file any counter to the petition or to justify this discriminatory levy as a regulatory measure or a compensatory tax. The result is that the discrimination made must be regarded as violating the provisions of article 301 read with article 304(b) of the Constitution. This brings us to the question as to the relief to which the petitioners are entitled. This Court in Weston Electroniks v. State of Gujarat [1988] 70 STC 52; (1988) 2 SCC 571 dealt with a situation like the one in the case before us. In tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndard of levy. The lower rate applied to local manufacturers represents a departure from or exception to the general norm. In such a case the court should, when granting relief, choose the alternative which would give effect to the statutory intention; and, following this principle, it was held that the impugned notifications reserving a lower rate of tax for local manufacturers must be quashed. In the case before us we find that the general rate of sales tax on hosiery goods was 5 per cent and it was the exemption for locally manufactured hosiery goods, granted by the said Notification No. S.O. 934 dated August 1, 1984, which constituted the departure. It is, therefore, really this notification which is discriminatory and which must be s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
