Tax on toddy sales upheld: incidental burden on trade did not breach Article 19 or Article 301.

Taxing power was treated as a distinct sovereign power, so a sales tax on toddy did not violate Article 19(1)(g) unless it was so excessive as to extinguish the trade right itself; the challenge failed because the levy was not shown to be confiscatory. The measure was also held not to offend Article 301, because its pith and substance was taxation of sales turnover rather than regulation or impediment of trade movement; the proviso to Article 304(b) therefore was not attracted and absence of Presidential sanction did not invalidate the law. The objection based on Article 207 was likewise rejected, and the amendment was upheld as constitutionally valid.

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Issues: (i) whether the levy of sales tax on toddy under the amended General Sales Tax Act infringed the petitioners' fundamental right to carry on trade under Article 19(1)(g) of the Constitution of India; (ii) whether the levy offended the freedom of trade, commerce and intercourse under Article 301 of the Constitution of India and attracted the proviso to Article 304(b) requiring previous Presidential sanction; (iii) whether the absence of the Governor's recommendation under Article 207 of the Constitution of India invalidated the amendment.

Issue (i): whether the levy of sales tax on toddy under the amended General Sales Tax Act infringed the petitioners' fundamental right to carry on trade under Article 19(1)(g) of the Constitution of India.

Analysis: The taxing power is treated as a distinct sovereign power and is not controlled by the standards applicable to restrictions on business under Article 19(6). A tax law is not tested as a reasonable restriction on the right to trade unless it is shown to be so excessive or destructive as to extinguish the right itself. The amendment merely imposed sales tax on toddy dealers on their turnover; the burden was not shown to be confiscatory, and the indirect character of sales tax made the hardship arguments insufficient.

Conclusion: The challenge under Article 19(1)(g) failed and the levy was upheld.

Issue (ii): whether the levy offended the freedom of trade, commerce and intercourse under Article 301 of the Constitution of India and attracted the proviso to Article 304(b) requiring previous Presidential sanction.

Analysis: Article 301 is concerned with freedom of trade as a whole, and not every tax on traders amounts to a restriction on that freedom. The amendment was a taxing measure under the State's legislative power, and its pith and substance was to impose tax on sales turnover, not to regulate or impede trade movement. On that view, the legislation did not directly curtail the freedom protected by Article 301, and the proviso to Article 304(b) was not attracted.

Conclusion: The challenge under Articles 301 and 304(b) failed and the absence of Presidential sanction did not invalidate the law.

Issue (iii): whether the absence of the Governor's recommendation under Article 207 of the Constitution of India invalidated the amendment.

Analysis: Article 207 governs legislative procedure in financial matters, and alleged irregularities in that procedure are not open to judicial inquiry in the manner suggested. The omission relied upon did not furnish a ground to invalidate the enactment.

Conclusion: The objection based on Article 207 was rejected.

Final Conclusion: The amendment imposing sales tax on toddy was held constitutionally valid, and the petitions were dismissed with costs.

Ratio Decidendi: A taxing statute does not become invalid merely because it incidentally affects trade or business; Article 19(1)(g) and Article 301 are not violated unless the measure is shown to be a direct and destructive restriction on trade, or its true nature is to regulate trade rather than to impose tax.

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