LexSTATE OF BIHAR & ORS. versus HARIHAR PRASAD DEBUKA ETC.
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STATE OF BIHAR & ORS.
v.
HARIHAR PRASAD DEBUKA ETC.
FEBRUARY 21, 1989
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[G.L. OZA AND K.N. SAIKIA, JJ.)
Constitution of India: Articles 30 I and 304--Freedom of trade,
commerce and intercourse-Not absolute-Is subject to reasonable,
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regulatory and compensatory measures in public interest.
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Reasonable restrictions-Whether can be imposed by. executive
action-Reasonability of restrictions-How determined.
Legislature-Power of-To make laws-Also has ancillary and
incidental power to make that law effective.
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Bihar Finance Act, 1981: Section 31(2-a) (As substituted by Bihar
Finance Act, 1984)-Notification No. S.O. 1432 dated 28.12.85-
Adopting permits in Form XXVIIJ A or XXVIIJ B-Validity a/-
Whether violative of Articles 301and304.
Words and Phrases: 'Free Trade'-'Trade and Business'-
E "Throughout the Territory of lndia"-'De Minimis Non Curat Lex'-
Meaning of.
In exercise of the powers conferred by sub-section (2-a) of section
31 of the Bihar Finance Act, 1981 the Commissioner of Commercial
Taxes, Bihar issued a Notification dated 28th December, 1985 adopting
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Forms XXVIII A and XXVIII B as the declaration for the purposes of
verification and assessment of the sales-tax payable. Clause l of the
Notification provided that a person transporting goods, exceeding the
quantity notified under section 35, on a goods carrier or a vessel shall
carry Form XXVIII A or XXVIII B duly filled up in respect of goods
being brought into the State or being sent out of the State. Clause 2 of
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the Notification provided that in case a form is found blank or not
containing all the particulars, it shall be deemed to be a violation of the
provisions of Sub-section (2-a) of section 31 of the Act.
The respondent, a registered dealer under the Bihar Sales Tax
Act and the Central Sales Tax Act purchased 165 hags of mustard in the
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State of Rajasthan and was transporting the same therefrom to
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STATE OF BIHAR v. H.P. DEBUKA
797
+ Jamshedpur in the State of Bihar. The officers of the Ir.vestigation
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Bureau Jamshedpur Division seized the vehicle along with the goods on
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the ground that in the road permit the bill number had not been
mentioned iu column No. 9 in Form XXVIII B. On a representation by
the Singhbhum Chamber of Commerce and Industry the truck along
with the goods was released. The Inspecting Officer issued a demand
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notice to the respondent imposing a penalty of Rs.8,330 and rejected the
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contention of the respondent that no permit was necessary because it
was violative of the respondent's Constitutior.al right of freedom of
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inter-State trade and commerce;
The appellant tiled a writ petition in the Patna High Court
challenging the validity of the Notification on the ground of its being c
violative of Articles 301 and 304 and also the demand notice imposing
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penalty.
The High Court held that the Notification imposed unwarranted
restrictions on the inter-State trade and commerce and accordingly
quashed the Notification as violative of Articles 301 and 304 and set
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aside the penalty order with demand notice.
In this appeal by special leave on the question whether the
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impugned Notification and the adoption of Forms XXVIII A and
XXVIll B, for the purposes of preventing evasion of sales-tax, was
violath·e of Articles 301and304 of the Constitution.
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Allowing the appeals and setting aside the judgment of the High
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Court,
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HELD:l. Article.301 mandates free trade, commerce and inter-
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course throughout the territory of India. The words "throughout the
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territory of India" extends the freedom not only to inter-State but also
to intra-State transactions and movements. The mobility of goods
throughout the territory of India has to be free. Free trade throughout
the territory of India would be one with no tariffs and no restrictions or
disadvantages of any kind of importing or exporting from the different
States. Free trade means complete freedom of inter-State trade without
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any restrictions on the movement ·of goods between the States. Anyone
aggrieved by infringement of the provisions of Article 301 can seek his
remedy from the Court against the offending legislative or executive
action. [808C-E)
2. The word 'trade' has been used synonymously with the word
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79.8
SUPREME COURT REPORTS
I 1989] 1 S.C.R.
'business'. Trade or business would mean some real substantial
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