A notification granting exemption from sales tax on hand-made shoes, chappals, and footwear does not contravene Art. 304(a) of the Constitution if it applies equally to both footwear manufactured or produced in the State and footwear imported from other States.

Judgment

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 Court quashed an assessment of sales tax made against the respondent for the assessment year 1956-57. The appellants before us are the State of Madhya Pradesh, the commissioner of Sales Tax Madhya Pradesh and the Sales Tax Officer, Circle No. 2, Indore.

2. We may first state the circumstances under which the respondent was assessed to sales tax and 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 Munwar Shoe Company, Indore, During the assessment year 1956-57 the taxable turnover of the goods sold by the respondent was determined to be a little over Rs. 60,000, and he was assessed top sales tax on his taxable turnover in accordance with item 32 of Sch. 3 of the notification dated October 24, 1953 issued under S. 5 of the Madhya Bharat Sales Tax act, 1950 (Act 30 of 1950) (hereinafter referred to as the Act). Sections 3 of the Act is charging section which imposes the tax. Section 4(3) empowers the Government to grant exemption by means of a notification in respect of the sale of any goods or class of goods, Section 5 of the Act fixes the rate of tax and states that the tax payable by a dealer under the Act shall be at a single point. It permits the State Government to notify the goods and the point of their sale at which the tax is payable, item 32 of Sch. 3 of the notification referred to above was in these terms

"S. No. Name of goods Point of sale in Madhya Bharat at which tax is payable.

32 All leather goods and all shoes, chappals (footwear etc.) Sale by importer or manufacturer".

Though the item in question made all leather goods and all shoes, chappals, etc. liable to sales tax at the point of sale by the importer or manufacturer, an exemption was granted in respect of certain sales of footwear by means of a notification issued S. 4(3) of the Act. We may now refer to these notifications. The first notification was dated May 27, 1955 and was in these terms :

"In exercise of the powers conferred by S. 4(3) of Madhya Bharat Sales Tax Act Samvat 2007 the Rajpramukh has passed Order exempting from the payment of sales tax, all such shoes, the selling price of which does not exceed rupees ten per pair and such country shoes which are prepared by the manufacturer himself and for the production of which power is not used in any stage if the same are sold by the manufacturer himself or any member of his family."

This notification was later superseded by another notification dated January 28, 1956 which read as follows :

"In exercise of the powers conferred by S. 4, sub-section (3) of the Madhya Bharat Sates Tax Act, Samvat 2007 the Rajpramuckh in supersession of the notification No. 59(c) (t) P. R. 412 - 54 dated 27 -5 - 1955 of this department has exempted from the payment of sales tax, in case of sale by the manufacturer or any member of his family, the sale of all such shoes, chappals, country shoes and footwear which are hand-made and which are not manufactured on power machine and whose sale price does not exceed Rs. 12-8-0".

The respondent contended before the Sales Tax Officer that he was not liable to pay any sales tax on the sale of hand-made shoes, chappals and other types of footwear whose sale price did not exceed Rs. 12-8-0 per pair on the ground that such footwear was exempt from tax by reason of the notification dated January 28, 1956. The Sales Tax Officer negatived this contention. He pointed out in his Order dated March 25 1958, that the condition laid down in the notification to the effect that the sale must be by the manufacturer or any member of his family was not fulfilled, and as the respondent was an importer and dealer of footwear and not manufacturer, or a member of the family