Discriminatory sales tax on imported goods offends trade freedom and is not saved by Article 304(a); refund denied in writ.

A sales tax on imported bardana at the first point in Rajasthan was held discriminatory where locally produced bardana was exempted and no equivalent burden on similar local goods was shown. The levy was not established as compensatory or regulatory, so it was treated as impeding the free flow of trade and commerce and not protected by Article 304(a); the levy was therefore unconstitutional. A refund was not directed in writ jurisdiction because the petition lacked adequate particulars of the tax payment and the State had no proper opportunity to meet the claim. Assessment orders and penalties founded on the invalid levy could not stand, but repayment was left to appropriate proceedings.

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Issues: (i) Whether the sales tax levied on imported bardana at the first point in Rajasthan was invalid as offending the freedom of trade and commerce under Article 301 and not protected by Article 304(a) of the Constitution of India. (ii) Whether refund of the tax could be directed in writ jurisdiction.

Issue (i): Whether the sales tax levied on imported bardana at the first point in Rajasthan was invalid as offending the freedom of trade and commerce under Article 301 and not protected by Article 304(a) of the Constitution of India.

Analysis: The notification under section 4(2) of the Rajasthan Sales Tax Act, 1954 exempted bardana produced in Rajasthan but subjected imported bardana to tax at the first point in the State. The expression bardana was treated as covering all kinds of containers, not merely gunny bags. Since the State did not establish that similar goods manufactured or produced in Rajasthan were also subjected to an equivalent tax, the levy discriminated against imported goods. The tax was not shown to be a compensatory or regulatory levy, and therefore it directly impeded the free flow of trade and commerce.

Conclusion: The levy on imported bardana was unconstitutional and invalid, and the assessee succeeded on this issue.

Issue (ii): Whether refund of the tax could be directed in writ jurisdiction.

Analysis: Although tax realised under an invalid levy may be repayable in law, the Court declined to grant a refund direction because the petition did not furnish sufficient particulars of the amount paid or the time and manner of payment, and the State had no adequate to meet the refund claim.

Conclusion: No refund direction was issued in the writ petition.

Final Conclusion: The assessment orders and the penalties founded on the invalid levy could not stand, but the request for repayment of tax was left to be pursued in appropriate proceedings.

Ratio Decidendi: A sales tax that discriminates against imported goods by taxing them while similar locally produced goods are not subjected to the same burden is not saved by Article 304(a) and is hit by Article 301.

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