Discriminatory sales tax exemption for in-State goods violated free trade and equality guarantees, and was struck down.

Notifications granting a lower sales tax rate only to television sets, cameras, monitors and allied goods manufactured within the State, while continuing the higher rate for similar goods imported from outside the State, created a discriminatory fiscal burden on inter-State trade. The distinction operated directly against comparable outside-State goods and was inconsistent with the constitutional protection of freedom of trade, commerce and intercourse and the prohibition against discrimination. The saving provision relied on by the State did not protect the measure, and the notifications were unconstitutional to the extent they confined the concessional rate to in-State manufactured goods.

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Issues: Whether the notifications reducing sales tax to 4 per cent only for television sets, television cameras, television monitors and allied goods manufactured within the State, while continuing the higher rate for similar goods brought from outside the State, violated the freedom of trade, commerce and intercourse and the prohibition against discrimination under the Constitution.

Analysis: The notifications were issued under the exemption power in the sales tax statute and created a lower tax incidence only for goods manufactured in the State. The distinction operated directly against similar goods imported from outside the State, including the petitioners' goods, and therefore imposed a discriminatory fiscal burden on inter-State trade. Such discrimination offended the constitutional guarantees relied upon, and the measure was not protected by the saving provision invoked by the State.

Conclusion: The notifications were unconstitutional and liable to be quashed insofar as they imposed the lower rate only on goods manufactured within the State.

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