TaxTMI 
TaxTMI 
1986 (3) TMI 296
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.... a dealer under Andhra Pradesh General Sales Tax Act, 1957, as well as the Central Sales Tax Act, 1956, hereinafter called the "State Act" and the "Central Act" respectively. The appellant purchases raw hides and skins in the State of Andhra Pradesh and tans the same. The appellant used mostly to sell such tanned hides in the course of inter-State trade. The first respondent, i.e., the Commercial Tax Officer, Vizianagaram, by his order dated 30th January, 1969, had assessed the appellant's inter-State sales turnover at Rs. 16,23,194.29 and levied a tax of Rs. 48,695.82 under the Central Act. The local purchase turnover of raw hides was assessed at Rs. 7,92,585 and a tax of Rs. 23,777.66 was also levied. The appellant had filed previously Writ Petition No. 3236 of 1969 challenging the validity of the Central Sales Tax (Amendment) Act, 1969. That petition, however, was withdrawn in view of the judgment in the Andhra Pradesh High Court in January, 1971. The appellant thereafter filed the present petition out of which this appeal arises for declaring item 9(b) of Schedule III of the State Act as unconstitutional and void and further declaring that no tax could be levied or was leviab....
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...., therefore, discriminated against the import of raw hides and skins for bringing them inside the State. It was submitted that this offended article 304(a) of the Constitution inasmuch as the goods manufactured or produced locally got a more favourable treatment than the goods imported from other States. After considering the decisions of this Court in Firm A.T.B. Mehtab Majid & Co. v. State of Madras [1963] 14 STC 355 (SC); [1963] Supp 2 SCR 435, A. Hajee Abdul Shukoor & Co. v. State of Madras [1964] 15 STC 719 (SC); [1964] 8 SCR 217, State of Madras v. N.K. Nataraja Mudaliar [1968] 22 STC 376 (SC); [1968] 3 SCR 829 and Rattan Lal & Co. v. Assessing Authority [1970] 25 STC 136 (SC); [1969] 2 SCR 544, the High Court was of the view that every tax did not interfere with the freedom of trade guaranteed under article 301 of the Constitution. There was interference only in case the legislation directly and immediately restricted or hampered the free flow of trade, commerce or intercourse. It was highlighted that the discrimination must be direct and arise out of the taxing provisions themselves. Any discrimination arising out of any indirect effect was not within the purview of articl....
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....ion under article 226 of the Constitution. The High Court held that sub-sections (2), (2A) and (5) of section 8 of the Central Act, as these stood at the relevant time, imposed or authorised the imposition of varying rates of tax in different States on similar inter-State transactions and the resultant inequality in the burden of tax affected and impeded inter-State trade, commerce and intercourse and thereby offended articles 301 and 303(1) of the Constitution. The application of section 9(3) of the Act was also considered. Against the said decision there was an appeal to this Court. This Court noted that the view taken by the High Court was influenced by two decisions of this Court on the interpretation of article 304(a), namely, in Firm A.T.B. Mehtab Majid & Co. v. State of Madras [1963] 14 STC 355 (SC); [1963] Supp 2 SCR 435 and A. Hajee Abdul Shukoor & Co. v. State of Madras [1964] 15 STC 719 (SC); [1964] 8 SCR 217. This Court was of the view that in the above two mentioned cases, the differential treatment was held to have violated article 304(a) of the Constitution, which authorised the legislature of a State notwithstanding anything in articles 301 and 303 by law to "impose....
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....TC 719 (SC); [1964] 8 SCR 217, upon which reliance was placed on behalf of the appellant before us. On a plain reading of article 304 along with the provisions of the Central Act, we are in respectful agreement with the view expressed by this Court in Rattan Lal & Co. v. Assessing Authority [1970] 25 STC 136 (SC); [1969] 2 SCR 544. It further appears to us that there is another aspect. The levy by the State Act is in consonance with the scheme of the Central Act. By sub-section (2) of section 8 of the Central Act, the tax payable by any dealer on his turnover in so far as the turnover or any part thereof relates to the sale of goods in the course of inter-State trade or commerce not falling under sub-section (1), shall be at the rate specified in sub-section (2) of section 8. It is common ground that these goods do not fall in sub-section (1) of section 8. Section 8(2), in so far as it was material at the relevant time was as follows: "(2) The tax payable by any dealer on his turnover in so far as the turnover or any part thereof relates to the sale of goods in the course of inter-State trade or commerce not falling within sub-section (1)- (a) in the case of declared goods, sha....