STATE OF MADHYA PRADESH versus ABDEALT

Citation: [1963] 3 S.C.R. 704 · Decided: 24-08-1962 · Supreme Court of India · Bench: S.K. DAS · Disposal: Appeal(s) allowed

Judgment (excerpt)

19.llB --
704 
SGP·EtEME 001'RT &EPORTS [1963] 
STATE OF MADHYA PRADESH 
v. 
AB1'EALT 
(S. K. DAS, 
J. L. KAPUR, 
A. K. SARKAR, 
M. HIDAYATULLAH and RMlHUBAR DAYAL, JJ.) 
' 
Inter-State Trade-Discrimination-Sales Tax-Exemp-
tion:_Bales of harul·made footwear by manufacturer~Madhya · 
JJharat Sales Tax Act, 1950 (M. B. 30 of 1950), s•. 4(3)-
~onstitution of lndia,.Art. 304(a). 
• 
The respondent, a dealer in imported hand-made shoes 
and chappals, claimed exemption in respect of his sales turn: 
over on the basis of the notification issued under s. 5 of the 
Madhya Bharat Sales Tax Act which exempted hand-made 
shoes and chappals the sale price of which did not exceed 
Rs. 12/8[· in case of sale by the manufacturer or by a member 
of his family. The claim for exemption was rejected by the 
Sales Tax Officer and the respondent was assessed on the 
total turnover. The respondent challenged the assessment by 
a petition under Art. 226 before the Madhya Bharat High 
Court which allowed the petition on the veiw that the 
exemption granted by the notification applied to sales of 
hand-made shoes, chappals, etc., whether made within or 
outside the State and held that any other interpretation of 
the notification would bring it into conflict with Art. 304(a) 
of the Constitution. 
Helil, that the notification lays down three conditions 
for the grant of exemption: (I) that the sale must be of 
such shoes, chappals etc., as are hand.made and not manu-
factured on power machine ; (2) that the sale price must not 
exceed Rs. 12-8-0 per pair ; and (3) that the sale must be 
by the manufacturer or any 
membe1 of his family. 
The 
notification when it uses the expre~sion "in case of sale" has 
reference to the taxable event in the State; in other words, 
it refers to a sale in the State and not outside it. 
Therefore 
the notification has re:(ererice to such sales as would come but 
for the exemption within item 32 of Schedule 3 of the 
notification. 
The interptetation put by the High Court 
would obliterate one of the conditions and is not cOrrect. 
Helrl, 
further, that the 
exemption granted by the 
notification is for the protection and benefit of ·small manu· 
f'\<;tqrers who npke Jund Jll>•:le shoc;s and cha ppals . of sma!! 
.--..,, 
a s.c.R. 
SUPREME COURT REPORTS 
705 
value and are unable to compete with large-scale manufacturers 
of footwear made on machines. 
Such a classification in the 
interests of small manufacturers is valid. 
Orient Weawing Milla (P) Lta. v, Union of lnaia, [1962} 
Supp. 3 S.C.R. 481 and British InrUa Corporation Ltdi, v, 
The Collector of Central Excise, Allahabaa, [!963] 3 S,C.R. 642 · 
refe.rred, 
The exemption creates no discrimination between foot-
wear manufactured or produced in the· State and those 
imported from outside and is not therefore hit by Art.304(a) 
of the Constitution. 
M/s, Ram Narain Sons Lta, v, Assistant Commisiion~r 
of Sales Tax, [1935} 2 S.C.R. 483, held inapplicable. 
CIVIL APPELLATE JuarsDICTION : Civil App-ia,l 
No. 373 of 1961. 
Appeal by special leave from the judgment 
and order dated December l4:, 1959, of the Madhya 
Pradesh High Court in Misc. Petition No. 274 of 
1958. 
B. Sen and I. N. Shroff, for the appellants. 
W. S. Barlingay and A.G. Ratnapakhi, for the 
respondents. 
· 
1962. August 24:. The Judgment of the Court 
was delivered by 
S.K.Das, J.-This is an appeal by special leave 
from the judgment and order of the High Court of 
Madhya Pradesh dated December 14:, 1959, by which 
the said High Cou_rt quashed an assessment of sales 
tax made against the respondent for the assessment 
year 1956-57. The appellant before us are the State 
of the Madhya Pradesh, the Commissioner of Sales 
Tdx, Madhya Pradesh and the Sales Tax Officer, 
Circle No.2, Indore. 
· 
We may first state the circumstances under 
wl:iic4 the resrondent was a~3~3:rnd to sales tax: anq 
1962 
State of 
Madhya P1ades/1 
v. 
Abdeali 
Das.]. 
1982 
St~te:o·j 
Mlrdhy;a P1adis 
v. 
A.bi111di 
Dci• J; 
706. 
SUPREME COURT REPORTS (1963] 
the reasons for which the High Court quashed the 
said assessment. 
The respondent carried on the 
business of importing and selling different types of 
footwear in the State of Madhya Pradesh under the 
name and style of Mun war 8hoe Company, Indore. 
During the assessment year 1956-57 the taxable 
turnover of the goods sold by the respondent was 
determined to be 1t little over Rs. 60,000/-, and he 
was assessed to sales tax on his taxable turnovor in 
accor

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