Extra commercium doctrine limits trade freedom, yet liquor sales may still be taxed under sales tax law.

Article 301 and Article 304(b) protect only lawful trade or commerce, so trade in intoxicants treated as extra commercium cannot be challenged as a protected freedom of trade. On that basis, the levy of sales tax on country liquor was not vulnerable to attack as an unreasonable restriction under Article 304(b). The same transaction could still amount to a taxable sale under the Bengal Finance (Sales Tax) Act, 1941, because the constitutional character of liquor as unprotected trade did not prevent its taxation under the sales tax law.

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Issues: (i) Whether the levy of sales tax on the sale of country liquor violated Article 304(b) of the Constitution of India and could be struck down on the ground of unreasonable restriction on trade. (ii) Whether the sale of liquor, though treated as extra commercium, could still constitute a sale taxable under the Bengal Finance (Sales Tax) Act, 1941.

Issue (i): Whether the levy of sales tax on the sale of country liquor violated Article 304(b) of the Constitution of India and could be struck down on the ground of unreasonable restriction on trade.

Analysis: The protection under Article 301 and Article 304(b) applies to lawful trade or commerce. Trade in intoxicants was treated as an activity falling outside that protected sphere, since liquor was regarded as extra commercium. On that reasoning, the respondents could not invoke Article 304(b) to challenge the levy as an unreasonable restriction on freedom of trade. The prior presidential sanction and the question of reasonableness did not avail the respondents once the activity itself was outside the constitutional protection claimed.

Conclusion: The levy could not be assailed under Article 304(b), and the challenge failed against the Revenue.

Issue (ii): Whether the sale of liquor, though treated as extra commercium, could still constitute a sale taxable under the Bengal Finance (Sales Tax) Act, 1941.

Analysis: Although trade in liquor is not protected as a constitutional freedom, a sale of liquor may still possess the incidents of a sale within the meaning of the taxing statute. The character of the commodity for purposes of constitutional freedom does not prevent the transaction from being a taxable sale under the sales tax law.

Conclusion: Sale of liquor remained taxable under the Act, and this objection also failed against the Revenue.

Final Conclusion: The constitutional challenge to the impugned levy was rejected and the tax authorities' position was upheld, resulting in allowance of the appeals.

Ratio Decidendi: Article 301 and Article 304(b) protect only lawful trade or commerce, so an activity treated as extra commercium cannot be challenged as a protected freedom of trade, while the same transaction may still be taxed as a sale under the relevant sales tax statute.

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