TaxTMI 
TaxTMI 
TaxTMI 
1989 (12) TMI 290
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....diture in bringing the said goods to Andhra Pradesh for the purpose of sale. Under the Act, tamarind was item No. 14 of the Second Schedule and was subjected to sales tax at the point of first purchase in the State irrespective of whether it was purchased within the State or outside the State. The subject-matter of challenge in this application under article 226 of the Constitution before the Andhra Pradesh High Court, was the validity of an amendment to the Schedule to the Act modifying the point of taxability of tamarind in question. Prior to the amendment tamarind was taxable as mentioned hereinbefore at the first purchase point, being item No. 14 in the Second Schedule to the Act. The entry therein read as follows: ------------------------------------------------------------------------- "S. No. Description of goods Point of levy Rate of tax ------------------------------------------------------------------------- 14. Tamarind (2014) At the point of first 4 paise in purchase in the State. the rupee." ------------------------------------------------------------------------- By virtue of the amendment, the said entry was amended. Tamarind which is purchased wi....
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....Both the tamarind purchased within, and outside the State are taxed uniformly. On behalf of the appellants, reliance was placed on Firm A.T.B. Mehtab Majid & Co. v. State of Madras [1963] 14 STC 355 (SC), wherein on an analysis of the relevant provisions it was held that the provisions of rule 16(2) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939 (substituted in the place of the old rule with effect from April 1, 1955) discriminate between hides and skins imported from outside the State and those manufactured or produced inside the State and as such contravened the provisions of article 304(a) of the Constitution, and therefore were invalid. It was reiterated by this Court that taxing laws can be restrictions on trade, commerce and intercourse, if they hamper the flow of trade and if these are not compensatory taxes or regulatory measures. It was further held that sales tax on hides and skins imposed under the Madras General Sales Tax Act, 1939, and the Rules framed thereunder could not be said to be a measure regulating any trade or compensatory tax levied for the use of trading facilities. The similarity contemplated by article 304(a) is in the nature of th....
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....d at the point of first purchase, and in the case of imported tamarind, i.e., purchased outside the State, the tax is levied at the point of first sale in the State. It was contended by Mr. P. Rama Reddy, learned Advocate for the appellant, that tax in the case of imported tamarind would be more because its price will include freight charges and other State taxes. Hence, it was submitted that the sales tax will also be more. That may be so but it cannot be said to be the effect of what law has amended. Tamarind will be imported only when it can be sold in the market here at the same price as the tamarind produced within the State. Only when after bearing the other State tax and freight charges, if it is able to compete with the locally produced tamarind, it will normally be imported from outside the State. If there is any difference in prices because of market conditions and other factors, that cannot be said to be due to discrimination prohibited by clause (a) of article 304 of the Constitution. In order to ensure this, it would be necessary that imported goods must always be taxed at a lower rate than the corresponding goods within the State because of freight and other charges.....
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.... directly impinged upon the freedom of trade, commerce and intercourse provided for in article 301 of the Constitution of India. It was held that the variations in the rates of local and inter-State sales tax affected free trade and commerce and created a local preference, which was contrary to the scheme of Part XIII of the Constitution of India; and as such the notifications were bad. This decision was rendered in the peculiar facts of that case. While there can be no dispute about the principle enunciated by the court in the said decision that taxation was a deterrent, in some cases, against free flow of trade, and as a result of favourable or unfavourable treatment by way of taxation, the course of flow of trade gets regulated either adversely or favourably, and that if the scheme of Part XIII guarantees has to be preserved in the national interest, it is imperative that the provisions of article 301 must be strictly complied with, we are of the opinion that the ratio of the said decision in the facts and circumstances of this case would not be relevant. In our opinion, the provisions of the Constitution should be strictly complied with not only with the letter but also with th....