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A.K.SARKAR, S.R.DASS, M.HIDAYATULLAH, J.L.KAPUR, RAGHUBAR DAYAL
Firm A. T. B. Mehtab Majid And Company: A. Abdul Shakoor – Appellant
Versus
State Of Madras – Respondent
The legal document indicates that a law or rule which imposes a higher tax rate on imported goods compared to goods produced or manufactured within the local state can be deemed discriminatory and in violation of the constitutional guarantee of the freedom of trade, commerce, and intercourse. Specifically, if the effect of a taxation measure is to impose a higher burden on imported goods or to deny credits or benefits available to local goods, it contravenes the principle that trade should be free and unimpeded across states. Such discriminatory taxation impairs the uniformity and equality of trade conditions, thereby infringing upon the constitutional protections that aim to facilitate the seamless movement of goods and trade throughout the territory.
Judgment
RAGHUBAR DAYAL, J. : This petition under Art. 32 of the Constitution raises the question of the validity of R. 16 of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, hereinafter called the rules. The impugned rule was published on September 7, 1955, and was substituted in the place of old R. 16. The new rule was to be effective from April 1, 1955.
2. The petitioner is a dealer in hides and skins. He sells hides and skins tanned outside the State of Madras, as well as those tanned inside the State. The Deputy Commercial Tax officer, I Moore Market Division, Madras, assessed the petitioner to sales tax for the year 1955-56 on a turnover of Rs. 29,89,624-15-11. Out of this a turnover of Rs. 28,10,625-2-0 represented sales of tanned hides and skins which had been obtained from outside the State of Madras.
3. Sales tax was levied on hides and skins under the provisions of the Madras General Sales Tax Act,, 1939 (Act IX of 1939), hereinafter called the Act. Section 3 is the charging section and its relevant portions read :
"3. (1) Subject to the provisions of this Act,
(a) every dealer shall pay for each year a tax on his total turnover for such year, and
(b) the ta
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