BOMBAY CO LTD Vs. STATE

JUDGEMENT

(1.) THE prayers in all these petitions are for the issue of writs of certiorari and prohibition under Art. 226 (1) of the Constitution of india for the purpose of quashing the orders passed by the Sales Tax authorities of the State. THE State is impleaded as the common respondent with the authority concerned as additional respondent. THE contention of the petitioner in each of these petitions is that the levy of the sales tax is illegal being in contravention of the provisions of Art. 286 of the Constitution of India. This contention seems to us to be superfluous in view of the fact that the article is bodily incorporated in the local Sales Act as S. 26, and, therefore, the question resolves itself into whether the levy of the sales tax is opposed to the provisions of this section. THE main point arising from the arguments in each of these applications relates, therefore, to the construction of this article which is incorporated as S. 26 of the Sales Tax Act. THE case of the petitioners is that the transactions in respect of which the sales tax has been imposed by the second respondent are exempted under these provisions from the imposition of such a tax.

(2.) IT would be convenient in the circumstances to consider the scope of the provisions of Art. 286 with the object of deciding whether its provisions would be attracted to save the transactions from the imposition of sales tax, Art. 286 is worded as follows "286 (1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place. (a) outside the State; or (b) in the course of the import of the goods into, or export of the goods out of, the territory of India. Explanation:- For the purpose of sub-cl. (a), a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State, notwithstanding the fact that under the general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State" (2) x x x x x x x (3) x x x x x x x IT is not necessary to read Cls. (2)and (3) of the Article which do not apply to the facts of these cases.

(3.) FROM the official report of the debates in the constituent Assembly when Art. 286 was passed, it is clear that the expression "in the course of" occurring in Cl. (i) (b) of Art. 286 was chosen by the framers of the Constitution advisedly. After the discussion the Hon'ble Member who was responsible for piloting the Constitution gave an assurance that if better phraseology was found to be necessary, he would see that the wording was altered. But there was no alteration and therefore, it may be assumed that in the opinion of the framers even after the discussion in the Constituent assembly, the words that are to be found in the Article would convey the meaning they wished to convey as clearly as possible. Some of the members of the Assembly stressed the fact that the expression "in the course of" occurring in Cl. (b) would furnish "a loophole to businessmen to escape taxation" and that it would lead to loss of income to various States. There was an attempt made to substitute the words "at the initial stage of import into India" and "at the ultimate stage of export out of india" but it did not find favour with the majority of the members who attended the session of the Assembly.