TMI Blog1990 (8) TMI 373X X X X Extracts X X X X X X X X Extracts X X X X ..... s tax on the first sale in the State and thereafter sell the same outside the State in the course of inter-State trade and commerce. Therefore, their sales in the course of inter-State trade and commerce is subject to tax under the Central Sales Tax Act at a specified rate. But, by virtue of the notification impugned as at annexure A to the petition, the Central Arecanut Marketing and Processing Co-operative Limited, Mangalore, are totally exempted from payment of Central sales tax subject to the only condition that their purchases or sales made by them within the State, have already been subjected to sales tax under the State's Sales Tax Act. Therefore, the petitioners contend that it not only impedes the inter-State sales effected by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent, it lacked competence to issue the notification for the benefit of a dealer. Thrust of the argument was that the power exercised should be so exercised as to include any particular item of goods, but cannot be exercised in order to pick and choose a dealer. He also urged that the notification was discriminatory and violative of article 14 as well as article 301. 6.. We do not think that we should go into the question as to whether sub-section (5) of section 8 of the Act has to be so read as to confine the limit of power of the State Government to exclude dealer from the purview of exemption or reduction in the rate of tax, as the petition may be disposed of on the other grounds urged in support of the illegality and unconstitution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e were such that there was no discrimination against imported goods. As no foreign liquor was produced or manufactured in the State of Orissa, the power to legislate given by article 304 was not available and the restriction which was declared on the freedom of trade, commerce and intercourse by article 304 of the Constitution remained unfettered. 9.. He, therefore, submitted that restriction imposed on the trade by the petitioners in the case of inter-State trade and commerce by providing exemption for the transactions of the second respondent in identical situation was an impediment which could not be said to be in public interest because it only enabled the buyer outside the State to buy it from a single outlet within the State shuttin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve sector supported by two State Governments and substantially financed by the State Governments having nearly 12,000 members from all the four classes which, according to him, included all the arecanut growers in the two States. Therefore, thrust of the argument was that the second respondent was a class by itself and as such, if exemption is granted to it, it could not amount to discrimination. 12.. But no material has been placed before us to substantiate that the majority of growers of the two States are members of the second respondent. On the other hand, certain averments made in the statement of objections of second respondent are indicative that it deals not only with its own members for purchase of arecanut in the State paying ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. 14.. In support of discrimination, Mr. Srinivasan, learned counsel for the petitioner, placed reliance on the decision of the Supreme Court in the case of Indian Cement Ltd. v. State of Andhra Pradesh [1988] 69 STC 305; AIR 1988 SC 567. In the said case, two notifications issued by the State of Andhra Pradesh and one notification issued by the State of Karnataka, in exercise of powers conferred by section 9(1) of the Andhra Pradesh General Sales Tax Act, 1957 and section 8(5) of the Central Sales Tax Act fell for consideration. In so far as the notification of Karnataka was concerned, it was directly under section 8(5) of the Act. We may extract the same: "In exercise of the powers conferred by sub-section (5) of section 8 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in Indian Cement's case [1988] 69 STC 305; AIR 1988 SC 567, was ruled in a subsequent decision to have been confined to the facts of that case and was directly in opposition to the ruling of the Supreme Court in Video Electronics Pvt. Ltd. v. State of Punjab [1990] 77 STC 82; AIR 1990 SC 820. Our attention was drawn to page 106 of [1990] 77 STC (paragraphs 31 and 32 as reported in the All India Reporter). Indeed in the later decision of the Supreme Court, the Supreme Court has recognised the right of the States to promote the regional economic growth by offering incentives under various economic policies including exemptions or incentives under the Sales Tax Act as not impeding or offending the guarantee of free inter-State trade and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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