LexCOMMISSIONER OF SALES-TAX, INDORE versus M/S. MOHD. HUSSAIN RAHIM BUX, MAIHAR
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• COMMISSIONER OF SAI..F.S-TAX, INDORE v. M/S. MOHD. HUSSAIN RAHIM BUX, MAIHAR A 11gust 28, 1968 [J. C. SHAH, V. RAMASWAMI AND A. N. GROVER, JJ.] Constiru1ion of India, 1950, Art. 264 (before it.r anu·ndnzt'nt by the Constitution (Seventh) Amendment Act, 1956), providinf? that unless con:ext othen1:ise required the word ''State' in Part XII would not il'ldude a Part C State-State in Art. 286 whether 1vould include Pnrt C S1u1e-· Applicohilitv of Art. 286 to Port C Stmes. The respondent firm r°'isted imp06ition of sale. tax by the cntwbilc State of Vindhya Pradesh for the as.'c.'5mcnt periods between April I, 1950 and March 31, 1951, on the ground that the tax came under the prohibition contained in Art. 286 of the Constitution. The revenue authorities held that Art. 286 did not apply to Part C States becaUSe Art. 264 (as it wa' before it• amendment in 1956) provided that un1.,.. !lie context othe.r\•.:ise required the word 'State' in Part XII would not include a Part C S'.ate. and there.fore the restriction• in Art. 286 applied only to States other than Part C States. The Sales Tax Tribunal and the High Cour1 held in f•1vour df the a.,~c~~ee. The revenue appealed to this Court. HEW : (i) There are sever.ii articles in Part XII which prec<:de and follow Art. 286 about which it cannot he confidently said that the word State used in these Articles would not take in Part C States a., well. Sa.ch Articles are 275. 276, 277. 280. 282, 287 and 291. Thus the meaning of the word 'State' in Art. 286 will have to be dercrmined from the context. It will he quite leftitimate to nOI only look at the context but also the purpose and object for which Art. 286 was enacted. (884 F-G] (ii) The obicct of Arr. 286 was ro prevent impediment and disrourage· mcnt to the fro.; flow of trade within India regarded as one economic unit and to pn.,-vcnt commcxiities essential fdr the life of the community throughout India from being subjected to '"!"" tax. The Constitution contemplated that Part C States could have their own legislature.c;. There. was no ground \\·hat.c;oever to differentiate Part C States from Part A and Part B States in the matter of restrictions put by Art. 286 on the legislative power of the State. In this view of the matter a requirement ca.n cec- tainly he •pelt out from the context of Art. 286 that the word 'Sl&le' employe~ therein should inchKle Part C States. (885 D-FJ Several anomalies \vould result if Pan C States wt:ke hold to be immune from 1he f'e6trictions of Art. 286. '!'here would be mnltlple taxation inasmuch as goodc; \\'hich under the Explanation to Art. 286 (as it \\'as at the relevant time) \\.'ere taxable in another State because they were delivered for consumption there would still he taxable in ttlc Part C St~ttc. The Part C State unlike other Statc1; \\'OUl<l he free to tax inter-Stare c;ales. 'I"hc C,onstitution makers could never have countenanced a ~ituation which \vould have brought in such discrimination between Part C State> and other States. (885 F-886 BJ Del/ti La"·s Act Case, [1951] S.C.R. 747 and Bengal Immunity Co. Ltd. v. State of Hi/tar, (1955] 2 S.C.R. 603, referred to. Civ1t. Arrr.LL\ n Jt:n1srm; no-i : Civil Appeal' Nos. 60!8 and 629 of 1966. A B c D E F G H • ·. A c. s. T. v. RAHIM BUX (Grover, J.) SS 1 Appeals by special leave from the judgments and orders dated July 30, 1964 of the Madhya Pradesh High Court in Misc. Civil Cases Nos: 71 of 1964 and 179 of 1963. [. N. Shroff for the appellant (in both the appeals). N. D. Karkhanis and A. G. Ratnaparkhi for the respondent B (in both the appeals) • The Judgment of the Court was delivered by Grover, 1. The common question on which the disposal of these two appeals by special leave depends relates to the applica- bility of Art. 286 of the Constitution of India read with Art. 264 before the amendments made by the Constitution (VIIth Amend- C ment) Act, 1956 to the erstwhile State of Vindhya Pradesh during the relevant assessment period for the purpose of imposi- tion of sales tax. D E F G H The respondent firm manufactures and deals in bidis having head office at Maihar which was a part of the erstwhile United States of Vindhya Pradesh. The Rajpramukh 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 Pa
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