MESSRS MOHANLAL HARGOVIND DAS, BIDI MERCHANTS, JABALPUR (M.P.) versus THE STATE OF MADHYA PRADESH & ANOTHER.

Citation: [1955] 2 S.C.R. 509 · Decided: 20-09-1955 · Supreme Court of India · Bench: SUDHI RANJAN DAS · Disposal: Dismissed

Cited by 5 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

2 S.C.R. 
SUPREME COURT REPORTS 
MESSRS MOHANLAL HARGOVIND DAS, 
BID! MERCHANTS, JABALPUR (M.P.) 
v. 
THE STATE OF MADHYA PRADESH & 
ANOTHER. 
[S. R. DAS, ACTING c. J., BHAGWATI, }AGANNADHA-
DAS, }AFF..R IMAM and CHANDRASEKHARA A1YAR JJ.] 
509 
Constitution 
of India-Art. 286(2)-Central 
Provinces and 
Berar Sa!es 
Ta:r Act, 1947 (XX/ of 1947), sA(6)-Petitioners-
Bidi merchants of Madhya Pradesh-Importing tobacco from the State 
of Bombay-Whether mch transactions. of sales of goods-Affected by 
the ban under Art. 286(2) of the Constitution-Petitioners registered 
111 "dealers" under Central Provinces and Berar Sales Ta:r Act, 1947 
and dealers in Bombay selling or supplying tobacco to the petitioners 
also registered as "dealers" under Central Provinces and Berar Sales 
Ta:r Act, 1947-Whether makes the transactions as intra-State trans-
actions between two registered dealers in the State of Madhya Pradesh. 
The petitioners arc carrying on business on a very ·large scale of 
·making and selling bidis having their head office in Jabalpur in the 
State of Madhya Pradesh and arc registered as "dealer" for the pur-
poses of the Central Provinces and Berar Sales Tax Act, 1947. In the 
course of their said business, the petitioners import tobacco from the 
State of Bombay in very large quantities after it is blended in that 
State by the veridors with various other types of indigenous tobacco 
by an elaborate process. 
This finished tobacco, after 
its import within 
the State of 
Madhya Pradesh is rolled into bidis which arc exported to various 
other States, largely to the State of Uttar 
Pradesh. 
The dealers in 
the State of Uttar Pradesh and sur.h other States who buy bidis 
from the petitioners sell the same to various other dealers and 'on-
sumers in those States. 
The Sales Tax authorities in the State of Madhya Prndesh re-
quired the petitioners under threat of criminal prosecution to file a 
statement of return of the total purchases of tobacco made by them 
out of Madhya Pradesh and delivered to them in Madhya Pradesh 
with a view to assess and levy pur~hase tax on the transa.:tions of 
purchases made by the petitioners as stated above. 
Held, that the 
State of Madhya 
Pradesh 
had no authority 
to impose or to 
authorise the imposition of such a tax and that the action of the 
State authorities contravened the provisions of Art. 286(2) of the 
Constitution inasmuch as the transactions in question were in the 
course 
of inter-State trade or commerce :is the finished tobacco 
which was supplied to the petitioners moved from the State of 
Bombay to the State of Madhya Pradesh. 
1955 
M11w1 Molw&lal 
Horgorind Da1, 
Bidi M1rdonls, 
Jab<l/Jfll (M.P.) 
v. 
TNSl.Uof 
Ma4Ji1• """'"° 
"""·-· 
510 
SUPREME COURT REPORTS 
[1955] 
The contention that not only the petitioners were the 
register~. 
ed dealers under Ruic 8 of the Central Provinces and Berar Sales 
Tax Rules, 1947 but the dealers in 
Bombay who sell or supply 
tobacco to them were registered as "dealers" for the purpose of the 
Central Provinces and Bcrar Sales Tax Act, 1947 and therefore the 
transactions were between two registered dealers in the 
St.ate of 
Madhya Pradesh and thus constituted purely internal sales of the 
goods was without force because what one has to look at is the real 
narurc of the transactions and not the outside form and as the tn.nt~ 
actions in dispute invo}vcd movement of the goods across the border 
they were clearly tran~ctions of sales of goods in the course of intu· 
State trade or commerce and were hit by the ban under ArL 286(2) 
of the Constitution. 
OatGINAL 
Juuso1cnoN : 
Petition 
No. 
67 
of. 
1955. 
Under Article 32 of the Constitution of India for 
the enforcement of Fundamental Rights. 
M. C. Setalvad, Attorney-Genoral of India, C. K. 
Daphtary, Solicitor-General of India, 
G. 
S. 
Pathak_, 
(!. B. Dadachanji, A. P. Sen, Rameshtuar Nath .and 
Rajinder Narain, 
with them), for the petitioners. 
T. L. Shevde, Advocate-General of Madhya Pradesh 
(M. Adhikari and /. N. Shroff, with him), for the 
State of Madhya Pradesh. 
1955. 
September, 
20. 
The 
Judgment 
of the 
Court was ddi vered by 
BHAGWATI 
J.-The pet1t1oners 
are a firm carrying 
on business on a very large scale of making and sell-
ing bidis having their head office in Jabalpur in the 
State of 
Madhya 
Pradesh. 
They are registered as 
"dealer" for the purpose of the Central Provinces and 
Berar Sales Tax Act, 1947. 
In 
the course of their said busines, t

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