Transitional tax protection under constitutional saving orders applies only to the same levy actually in force before commencement.

Sales tax on goods purchased within Vindhya Pradesh and immediately exported for consumption outside the State was discussed in light of Article 286 and the President's Sales Tax Order C.O. No. 7 of 26-1-1950. The controlling principle was that transitional protection under the saving order applied only where the same sales tax was actually being levied before the Constitution commenced; a different impost could not be treated as equivalent merely because its economic incidence resembled sales tax. The text distinguishes sales tax, which is triggered by transfer of ownership, from customs duty, which depends on movement or location of goods. It also notes that anti-evasion safeguards may be adopted, but they do not validate an otherwise unlawful levy.

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Issues: Whether sales tax could validly be levied on goods purchased within Vindhya Pradesh and immediately exported for consumption outside the State under Article 286 of the Constitution and the President's Sales Tax Order C.O. No. 7 of 26-1-1950.

Analysis: The controlling question was whether there had been an actual levy of sales tax on exported goods immediately before the commencement of the Constitution so as to attract the transitional protection of the President's Order. The Court distinguished sales tax from customs duty, holding that sales tax is attracted by transfer of ownership, whereas customs duty is attracted by movement or location of goods. A levy described as customs duty could not be treated as the same impost as sales tax merely because its effect or incidence was similar. Since no sales tax was actually being levied on exported articles on the relevant date, the continued levy on exports could not be justified under the President's Order. The Court also noted that administrative measures could be taken to prevent false claims of export, but that did not validate the impugned levy.

Conclusion: The levy of sales tax on goods purchased within Vindhya Pradesh and exported for consumption outside the State was illegal and was not protected by the President's Order.

Final Conclusion: The application succeeded, and the taxing authorities were restrained from levying sales tax on export sales, while retaining liberty to adopt safeguards against evasion.

Ratio Decidendi: Transitional protection for a tax under a constitutional saving order applies only where the same tax was actually being levied before the Constitution commenced, and a different impost cannot be treated as equivalent merely because its economic effect is similar.

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