TMI Blog1989 (12) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... UKHARJI, J.- Leave granted. This is an appeal from the judgment and order of the High Court of Andhra Pradesh, dated November 12, 1986. The appellants challenged the validity of an amendment to the Schedule to the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter called "the Act"). The appellants are dealers in tamarind in Parvathipuram in Srikakulam district, a border district in Andhra Pradesh. They had purchased tamarind from the State of Orissa paying tax there and incurring expenditure in bringing the said goods to Andhra Pradesh for the purpose of sale. Under the Act, tamarind was item No. 14 of the Second Schedule and was subjected to sales tax at the point of first purchase in the State irrespective of whether it was purchased within the State or outside the State. The subject-matter of challenge in this application under article 226 of the Constitution before the Andhra Pradesh High Court, was the validity of an amendment to the Schedule to the Act modifying the point of taxability of tamarind in question. Prior to the amendment tamarind was taxable as mentioned hereinbefore at the first purchase point, being item No. 14 in the Second Schedule to the Act. The entry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... milar goods manufactured or produced in the State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced. The question is whether as a result of the said amendment, there has been any infraction of clause (a) of article 304 of the Constitution. We are unable to accept the contention that there was any such discrimination. The High Court in the judgment under appeal has so held. We are of the opinion that the High Court was right. Both the tamarind purchased within, and outside the State are taxed uniformly. On behalf of the appellants, reliance was placed on Firm A.T.B. Mehtab Majid Co. v. State of Madras [1963] 14 STC 355 (SC), wherein on an analysis of the relevant provisions it was held that the provisions of rule 16(2) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939 (substituted in the place of the old rule with effect from April 1, 1955) discriminate between hides and skins imported from outside the State and those manufactured or produced inside the State and as such contravened the provisions of article 304(a) of the Constitution, and therefore were invalid. It was reiterated by this Court th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tanned stage. But in view of the facts involved in the instant case, we are unable to accept that the principles of the said decision have any scope of application to the facts of the instant case. In the instant case the tamarind purchased within the State and outside the State, are taxed at the same rate. But the point of taxability has necessarily to be different in both the cases. In the case of tamarind purchased within the State, i.e., produced within the State, the tax is levied at the point of first purchase, and in the case of imported tamarind, i.e., purchased outside the State, the tax is levied at the point of first sale in the State. It was contended by Mr. P. Rama Reddy, learned Advocate for the appellant, that tax in the case of imported tamarind would be more because its price will include freight charges and other State taxes. Hence, it was submitted that the sales tax will also be more. That may be so but it cannot be said to be the effect of what law has amended. Tamarind will be imported only when it can be sold in the market here at the same price as the tamarind produced within the State. Only when after bearing the other State tax and freight charges, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8, 1987, the State of Karnataka passed a similar notification reducing the rate of tax on inter-State sale of cement from 15 per cent to 2 per cent. The petitioners, of whom some were manufacturers of cement having their manufacturing units in Tamil Nadu and others were stockists having places of business in the States of Karnataka, Kerala and Tamil Nadu, filed writ petitions before this Court challenging the validity of these notifications on the ground that these created trade barriers and directly impinged upon the freedom of trade, commerce and intercourse provided for in article 301 of the Constitution of India. It was held that the variations in the rates of local and inter-State sales tax affected free trade and commerce and created a local preference, which was contrary to the scheme of Part XIII of the Constitution of India; and as such the notifications were bad. This decision was rendered in the peculiar facts of that case. While there can be no dispute about the principle enunciated by the court in the said decision that taxation was a deterrent, in some cases, against free flow of trade, and as a result of favourable or unfavourable treatment by way of taxation, the co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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