TMI Blog1969 (7) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... ny condition the possession for sale, or cultivation of tobacco. In pursuance of the power given by this section the Dewan was making rules from time to time relating to the matters specified in the Act. Cochin State was integrated with Travancore on April 1, 1960 in order to form the new .State of Travancore-Cochin. On that date, after the Constitution came into force the State of Travancore-Cochin became a Part B State and by the Finance Act, 1960 the Central Excise and Salt Act 1 of 1944 was extended to the Travancore-Cochin State. Section 13(2) of the Act provided that if immediately before the first day of .April, 1960 there was in force in any State other than Jammu Kashmir a law corresponding to, but other than, an Act referred to in sub-s. (1) or (2) of s. 11, such law was repealed with effect from such date. In consequence of this provision in the Finance Act rules which were in force on April 1, 1950 were changed in Cochin and by a notification dated August 3, 1950 the system of auction sales of A and B Class shops was done away with and instead graded licence fees were introduced for various classes of licences including C class licences. The State of Travancore-Coch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,11,750 had been illegally collected as licence fee from 1125 to 1133 M.N. On April 29, 1962 the appellant refunded a sum of ₹ 73,500 but did not return the balance. On December 16, 1963 the Government of Kerala Promulgated Ordinance I of 1963 which was later replaced by Act 9 of 1964. The Ordinance was promulgated in order to avoid the effect of the decision of this Court in A.B. Abdulkhadir Ors v. The State of Kerala([1962] Supp. S.C.R. 741) in respect of the period from August 17, 1950 to December 31, 1957. Section 3 of the Act provides: For the period beginning with the 17th day of August, 1950 and ending on the 31st day of December, 1957 every person rending or stocking tobacco within any area to which this Act extends shall be liable and shall be deemed always to have been liable to pay a luxury tax on such tobacco in the form of a fee for licence for the vend and stocking of the tobacco, at such rates as may be prescribed not exceeding the rates specified in the schedule. Section 4 confers rule making power and states: (1) The Government may, by notification in the Gazette, make rules to carry out the purposes of this Act. (2) In particular, and wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r before the 16th day of April, 1964 where such amount is not so paid, the amount may be recovered from him as an arrear of land revenue under the Revenue Recovery Act for the time being in force. The notification dated January 25, 1951 issued under the Cochin Tobacco Act of 1084 reads as follows: In exercise of the powers conferred by section 5 of the Cochin Tobacco Act VII of 1084 as subsequently amended and as continued in force by the Travancore-Cochin Administration and Application of Laws Act Vl of 1125 and in supersession of all previous notifications and Rules on the subject, the following Rules are prescribed under sanction of His Highness the Raj Pramukh for the import, export, sale, transport, possession, disposal of things confiscated and the grant of rewards under the said Act and for generally carrying out the provisions thereof. . . . . . . . . . Clause 16: (i) Holders (stockist or A Class licences shall be entitled to purchase tobacco from any dealer within or without the State without any quantative restriction. This class of licencees shall sell only to other A Class licencees or to B class licencees. (ii) the annual fees for these licenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India shall be free. Article 302: Parliament may by law impose such restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the territory of India as may be required in the public interest. Article 304: Notwithstanding anything in Article 301 or Article 303, the Legislature of a State may by law: (a) 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 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. The true scope and effect of those Articles was the subject matter of consideration in Atiabari Tea Co. Ltd. v. The State of Assam([1961] 1 S.C.R. 809). The majority view vas expressed by Gajendragadkar J. at p. 860 as f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her s. 21 of the Andhra Pradesh Sugarcane (Regulation of Supply and Purchase) Act which authorised the State Government to levy a tax at such rate ..not exceeding five rupees per metric tonne as may be prescribed on the purchase of cane required for use, consumption or sale in a factory Was constitutionally valid. It was held by this Court that normally a tax on the sale of goods-did not ,directly impede or hamper the flow of trade and s. 21 was no exception and was not violative of Art. 301 of the Constitution. A similar view was expressed in the State of Madras v. K. Nataraja Mudaliar([1968] 3 S.C.R. 829) in which the question at issue was whether ss. 8(2) and 8(5) of the Central Sales Tax Act, 1956 were intra vires of Arts. 301 and 303 of the Constitution. It was pointed out that an Act which was merely enacted for the purpose of imposing.tax which was to be collected and to be retained by the State did not amount to a law giving or authorising the giving of, any preference to one State over another, or making, or authorising the making of, any discrimination between one State and another, merely because of varying rates of tax prevailing in different States. At p. 150 of the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by Art. 301 of the Con stitution remains unfettered. In our opinion the High Court has not correctly appreciated the import of the decision of this Court in the Kalyani Stores case([1966] 1 S.C.R. 865). The appellant in that case challenged the imposition of a duty of excise on foreign liquor imported into the Orissa State which had been levied at ₹ 40 per L.P. Gallon until March 31, 1961 by virtue of a notification issued in 1937 under s. 27 of the Bihar and Orissa Excise Act, 1915 and which had been enhanced with effect from April 1, 1961 by a fresh notification. It was contended on behalf of the appellant that since no foreign liquor was .manufactured within the State and consequently no excise duty was being levied on any locally manufactured foreign liquor countervailing duty could not be charged on such liquor brought from outside the State and that the impost was in violation of Arts. 301,303 and 304 of the Constitution. It was held by the majority of Judges that the notification dated March 31,1961 enhancing the levy by ₹ 30 per L.P. Gallon infringed the guarantee of freedom under Art. 301 and may be saved only if it falls within the exception conta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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