Sales tax reduction on potatoes was held outside Part XIII, with no need for prior Presidential sanction.

A State amendment reducing sales tax on potatoes from two per cent to one per cent was upheld as constitutionally valid. The measure was treated as an exercise of the State's taxing power under Entry 54 of List II, and Entry 33(b) of List III was held not to limit that power. Applying the settled Part XIII test, the amendment was found not to impose a direct and immediate restriction on the free flow of trade, and therefore did not attract Article 301. Because it created no fresh fiscal impediment or trade restriction, prior Presidential sanction under Article 304(b) was not required.

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Issues: Whether the amendment reducing the sales tax rate on potatoes required previous sanction of the President under Article 304(b) of the Constitution and whether the levy was hit by Article 301 of the Constitution.

Analysis: The charging provision under Section 5(1) of the Mysore Sales Tax Act, 1957, as amended, was considered in the light of the constitutional scheme in Articles 301 and 304(b). The amendment did not impose a fresh burden; it reduced the tax rate on potatoes from two per cent to one per cent. A State sales tax on goods fell within Entry 54 of List II of the Seventh Schedule, while Entry 33(b) of List III did not control the taxing power. Applying the settled test that only a restriction which directly and immediately impedes the free flow of trade attracts Part XIII, the amendment was held not to constitute such a restriction. Since the measure was neither a direct restriction on trade nor an additional fiscal impediment, it did not require prior presidential sanction.

Conclusion: The amendment was constitutionally valid, did not contravene Part XIII of the Constitution, and did not require previous sanction of the President.

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