BIPIN SYNTHETICS PVT LTD Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) The petitioner is engaged in the business of import of fabrics which are sold after import pursuant to clearance through the Customs on payment of duty within the State of Maharashtra. The State of Maharashtra has enacted Bombay Sales Tax Act, 1959 (which hereafter shall be referred to as "BST Act"). Parliament has enacted the Central Sales Tax Act, 1956 (hereinafter referred to as "CST Act").

(2.) By the present petition, the petitioners seek to challenge the levy of Sales Tax on fabrics imported into India on which the Additional Duty of Excise in lieu of Sales Tax has already been paid under the Act of 1957. The petitioners challenge the Constitutional validity of Entry 9 of Schedule "B" of the Act. At the hearing of this petition, on behalf of the petitioners, the learned Counsel has challenged the levy of Sales Tax on fabrics imported from outside India on the following two grounds:

(3.) A few additional facts may be set out. Parliment has enacted the Additional Duties of Excise (Goods of Special Importance) Act, 1957. Section 3 of that Act provides that in respect of certain goods which include sugar, tobacco, fabrics produced or manufactured, a levy of duty of excise at the rate or rates specified in the First Schedule to this Act. This will be in addition to a duty of excise chargeable under the Central Excise Act, 1944 or any other law for the time being in force. Under Section 12 of the Customs Act, 1962 in respect of goods imported into India, duties are inter alia levied in terms of the Customs Tariff Act, 1975 ("CTA" for short) or any other law for the time being in force. Under Section 3(1) of the CTA, any article which is imported into India shall, in addition, be leviable to duty referred to as "Additional Duty" equal to the excise duty for the time being leviable on a like article if produced or manufactured in India. By virtue of Section 3(1) of CTA, fabrics imported into India are, inter alia, charged to Additional Duty of excise under the Act of 1957. After clearance for home consumption, such fabrics cleared on payment of duty including the Additional Duty of Excise under the Act of 1957 ceases to be "imported goods" as defined under Section 2(25) of the Customs Act.