THE STATE OF BOMBAY AND ANOTHER versus THE UNITED MOTORS (INDIA) LTD. AND OTHERS

Citation: [1953] 1 S.C.R. 1069 · Decided: 30-03-1953 · Supreme Court of India · Bench: M. PATANJALI SASTRI · Disposal: Appeal(s) allowed

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Judgment (excerpt)

S.C.R. 
SUPREME COURT REPORTS 
THE STATE OF BOMBAY 
AND ANOTHER 
v. 
THE UNITED MOTORS (INDIA) LTD. 
AND OTHERS. 
UNION OF INDIA, 
. STATE OF BIHAR, 
STATE OF MADRAS, 
STATE OF MYSORE, 
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' ' 
1069 
STATE OF WEST BENGAL, 
STATE OF UTTAR PRADESH, 
STATE OF PUNJAB and 
STATE OF TRAV ANCORE-
I 
)- Interveners. 
COCHIN 
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j 
[PATANJALI SASTRI c. J., MUKHERJEA, 
VIVIAN BosE, GHULAM HASAN and BHAGWATI ,JJ.l 
Bombay Sales Tax Act (XXIV of 1952). ss. 2 (14), 5, 6, 7, 11 
-Bombay Sales Tax Rules, 1952, l'I'. 5, 6-State law imposing 
sales tax-Validity-Powei· of States to levy tax on inter-State sales 
-Limitations-Rules-Whether form part of Act-Constitution of 
India, 1950, arts. 286 (Z) and (2), 14, 301, 304, 226 -ilieaning and 
scope of art. 286 (1) and art. 286 (2)-Application under art. 226 
-D11ty of High Court to find whether fundamental rights have been 
infringed. 
The Legislature of Bombay passed an Act entitled the Bom-
bay Sales Tax ,\ct, 1952, which imposed (by s. 5) a general tax on 
every dealer \Vhose turnover in resper;t of saJes within tho State 
of Bombay during the prescribed period exceeded Rs. 30,000 and 
(by s. 10) a special tax on every dealer whose turnover in respect 
of sales of special goods made within the State of Bombay exceed-
ed Rs. 5,000 during the prescribed period. 
'fhe term 'sale' was 
defined [in s. 2 (l4)] as meaning any transfer of property in goods 
for cash or deferred payment or other valuable consideration, and 
an Explanation to this definition provided th·;t the sale of auy 
goods which have actually been clelivered in the State of Bombay 
as a direct result of such sale for the purpose of consun1ption in 
the said State shall be deemed, for the purposes of the Act, to 
have taken place in the said State irrespective of the fact that 
the property in the goods has 1 hy reason of c;nch sn.le, passed in 
139 
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1963 
Mar~h JO 
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1070 
SUPREME coeRT REPORTS 
[1953] 
1953 
another fltate. 
Rules 5 and 6 of the Bombay Sales Tax Rules, 
1952, which were brought into force on the san~e day on which 
The State of Bom- ss. 5 and 10 of the Bombay Sales Tax \ct came into force provid-
tm11 aml Another ed for the deduction of the following sales in calculating the tax-
v. 
able turnover, ·viz., sales which take place (a) in the course of the 
The Unih'd 
import o! the goods into, or the export of the goods out of, the 
.\lotor« (India) territory of India, and (b) in the course of inter-State trade or 
Ltd. and Other-» commerce (being the two kinds of sales referred to cl. (l)(b) and cl. 
(2) respectively of art. 286 of the Constitution). Rule 5 (2) (i), 
however, required, as a conditon of the aforesaid deductions, tho,t 
the goods should be consigned by a railway, shipping or aircraft 
company or country boat registered for carrying cargo or public 
motor transport service or by registered post. 
In •n application 
under art. 2% of the Constitution challenging the validity of the 
Act and praying inter alia for a writ against the State of Bombay 
and the Collector of Sales Tax, Bombay, restraining them from 
enforcing the provisions of the Act, the High Court of Bombay 
held that the definition of 'sale' in the Act was so wide as to in-
clude the three categories of sale exempted by art. 286 of the 
Constitution from the imposition of tax by the States, and as 
the Act imposed a tax on all such sales, it was wholly void. On 
appeal 
Held, 
per (Pata;ija.li Sastri 0. J., Nukherjea, Ghulam 
Rasan and Bhagwati JJ,-Bose J. dissenting)-that the Bombay 
Sales Tax Act (XXIV of 1952) was not nltra vires the State Legis-
lature on the ground that it contravened art. 14 or art. 286 of the 
Constitution. Bui clause (i) of sub-rule (2) of Rule 5 of the Bombay 
Sales Tax Rules, 1952, was nltra vires in so far as it provided 
that in order that sales mentioned in clause (1) (b) and clause (2) 
of art. 286 of the Constitution may be exempt from tax, the goods 
shall be consigned only through a railway, shipping or aircraft 
company or country boat registered for carrying cargo or public 
motor transport service or by registered post. 
These provisions 
of Rule 5 (2) (i) were, however, severable from the other provisions 
of the Act and could be ignored. 
Per Bose J.-The Bomba)' Sales Tax Act, 1952, is wholly 
ultra vires. 
Per Patanjali Sastri O.J., Mukherjea and Ghulain Hasan JJ. 
-Arbicle 286 (1) (a) of the Constitution read with the Explana-
tion thereto and constrned in the light of art. 

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