TMI Blog1955 (11) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner No.1 was registered previously as a "dealer" under section 8A of the U.P. Sales Tax Act and this registration was valid upto 31st March, 1955. The notice was followed by a press note dated 21st November, 1954, issued by the Deputy Commissioner of Sales Tax, U.P., in which it was stated that the ex. U.P. dealers were also liable to pay sales tax on the goods that were delivered in the territory of the State of U.P. for consumption therein. Certain concessions were to be granted to these traders if they carried out the directions contained in the press note and submitted the returns and paid the dues within a reasonable time. A copy of the press note was sent to the petitioner as well by the Sales Tax Officer at Calcutta, drawin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts carry on their business. The transaction of the purchase is said to be completed in Calcutta though the goods are delivered in the State of U.P. and other places. It is argued that on these facts the U.P. State has no jurisdiction to levy a tax on these sales and the U.P. Sales Tax Act would not be valid if it really provides for the imposition of sales tax on the petitioners who carry on their business outside the State, the business being in the nature of inter-State trade. It is said that Article 286 of the Constitution prohibits the imposition of any such tax on a trade of this nature. It is also argued that the petitioners are not dealers within the meaning of section 2(c) of the U.P. Sales Tax Act, nor was the appointment of a Sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unter-affidavit it has been stated that the petitioners admitted before the Commercial Tax Officer, Bengal, that they purchased goods in Calcutta for the purpose of reselling them and obtained an exemption from the Bengal sales tax on that ground. The goods are then despatched by train and delivery takes place inside the State of Uttar Pradesh. Besides this assertion, there is also a vague denial of some of the paragraphs of the affidavit filed along with the petition, but there is no suggestion anywhere in the counter-affidavit that the petitioners have any place of business in the State of Uttar Pradesh or that they have ever carried on any business from any place in Uttar Pradesh. On the other hand, it appears from the averments made in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for consumption in the State. The Government was persuaded to levy sales tax on these traders because of a decision of the Honourable Supreme Court of India contained in the case of State of Bombay v. The United Motors (India) Limited(1). In this case, the Supreme Court had held, by a majority decision, that the State Legislature could impose a sales tax on the sale or purchase of goods which were delivered in the State for the purposes of consumption in that State and reliance for this view was placed on the explanation to Article 286(1) of the Constitution. It was as a result of this decision that the State of U.P., as well as some other States, tried to recover sales tax on sales or purchases of goods delivered within their territories ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in its operation to sub-clause (a) of clause (1) and it has no application to the provisions contained in clauses (2) and (3) of the Article. Clause (2) of this Article says that no law of a State shall impose a tax on the sale or purchase of any goods, where such sale or purchase takes place in the course of inter-State trade or commerce except in so far as the Parliament may by law otherwise provide. This clause has been held to prohibit the making of any law by the Legislature of a State imposing a tax on sale or pur- chase made in the course of inter-State trade or commerce. The facts (1) [1953] 4 S.T.C.133. (2) [1955] 6 S.T.C. 446. of the Supreme Court case were similar to the facts of the instant case and their. Lordships have hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of which contravenes Article 286(2) of the Constitution. The imposition of such a levy interferes with the fundamental right of the petitioners to carry on their trade. The Sales Tax Officers have no jurisdiction to levy the tax and it would be a meaningless procedure to direct the petitioners to submit their returns and to permit the Sales Tax Officers to levy taxes on the petitioners and then direct the petitioners to file appeals against the assessment orders. The legal position is amply clear and the action of the Sales Tax Officers being in contravention of the Constitution the petitioners are entitled to relief under Article 226 of the Constitution. The other two points argued by the learned counsel for the petitioners do not a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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