TaxTMI 
TaxTMI 
1968 (8) TMI 115
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....ramukh promulgated the Vindhya Pradesh Sales Tax Ordinance No. II of 1949 for the levy of a tax on sales of goods in Vindhya Pradesh. After Vindhya Pradesh had been included in the list of Part C States in the Schedule in the Constitution the aforesaid Ordinance was applied to the whole of Vindhya Pradesh with effect from April 1, 1950, by a notification No. 2 dated March 28, 1950. The Parliament passed the Part C States (Laws) Act, 1950. Section 2 of that Act authorised the Central Government to extend any enactment to Part C States, which was in force in Part A States by a notification in the official Gazette with power to repeal and amend any corresponding law. In exercise of that power, the Central Government by a notification dated December 29, 1950, extended to the State of Vindhya Pradesh the Central Provinces and Berar Sales Tax Act, 1947, as was in force in the old State of Madhya Pradesh subject to certain modifications. By that notification a new section was added to the C.P. and Berar Sales Tax Act, 1947. The newly added section 29 provided for the repeal and saving and the Vindhya Pradesh Sales Tax Ordinance No. II of 1949 was repealed. On March 20, 1951, the Central G....
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....s the Board of Revenue, centred on the applicability of Article 286 of the Constitution to the former State of Vindhya Pradesh. It was held by the Tribunal that Article 286 was applicable. In the other appeal, i.e., C.A. 628 of 1966, also the same question arose. Certain questions of law were framed in both the cases and referred to the High Court by the Tribunal. These questions need not be mentioned because in the present appeals it is common ground that the decision of the appeals would hinge on the point whether Article 286 applied to Part C States. It may be mentioned that the High Court had agreed with the Tribunal that the said article was applicable. If that view is affirmed it is not disputed that both the appeals will have to be dismissed. Article 264 of the Constitution, as it stood before its amendment by the Constitution (Seventh Amendment) Act, 1956, which appeared in Part XII, Chapter I, provided: "In this Part, unless the context otherwise requires,- (a) .................................................................... (b) 'State' does not include a State specified in Part C of the First Schedule; (C) ...................................................
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....nt of Part C States Act, 1951, in exercise of its powers under Article 240(1). By this Act Parliament made provision for the Legislature, Council of Ministers or Advisers for Part C States. This Act also contained provisions relating to Consolidated Fund for a State which was included in Part C of the First Schedule. Turning to Chapter XII of the Constitution before the amendments of 1956 it has already been noticed that Article 264 which relates to interpretation with reference to the provisions contained in this Part provides that unless the context otherwise required State would not include a State specified in Part C of the First Schedule. In some of the articles, however, in spite of the aforesaid definition of a State given in Article 264 for the purposes of Part XII Part C States were expressly mentioned. For instance Article 268 which relates to duties levied by the Union but collected and appropriated by the States provides inter alia that in case of any State specified in Part C of the First Schedule these duties shall be collected by the Government of India. Article 269 deals with duties and taxes of the nature mentioned therein which shall be levied and collected by ....
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.... taking the view that if the framers of the Constitution thought it necessary to put restrictions on the legislative powers of the State for preventing impediment and discouragement to the free flow of trade within India regarded as one economic unit and for preventing commodities essential for the life of the community throughout India from being subjected to sales tax then there could be no ground whatsoever to differentiate Part C States from Part A or Part B State in the matter of restrictions put by Article 286 on the legislative power of the State. It must be remembered that it was contemplated and provided by the Constitution that Part C States could have their own Legislatures and even an Act was passed, as previously mentioned, in which detailed provisions were made regarding these matters. (The Government of Part C States Act, 1951). In this view of the matter a requirement can certainly be spelt out from the context of Article 286 that the word "State" employed therein should include Part C States. Several anomalies will result if it were to be held that Part C States were immune from the limitations and restrictions imposed by Article 286. The Explanation to Article ....