Judgment

SHAH, J.-This appeal is filed with certificate granted by the High Court of Patna under Article 138(1) (a) of the Constitution.

2. The appellant Hansraj Bagrecha carries on business in jute. In the course of his business the appellant buys raw jute from producers in West Bengal, transports it to Kishanganj Railway Station (which is within the State of Bihar) and then re-exports it to purchasers in West Bengal. He also buys raw jute in Bihar and exports it to the merchants or mill owners in West Bengal by rail from Kishanganj Railway Station.

3. The Bihar Sales Tax Act, 1959, as originally enacted did not provide for levy of purchase tax. By the Bihar Finance Act, 1966, with effect from April 1, 1967, among others the following sections were incorporated in the Bihar Sales Tax Act, 1959 :

"Section 3-A.-The State Government may from time to time, by notification declare any goods to be liable to purchase tax on turnover of purchase :

Provided that general sales tax and special sales tax shall not be payable on the sale of goods or class of goods declared under this section."

"Section 5-A.-The purchase tax on goods declared under Section 3-A shall be levied at the point of purchase made from a person other than a registered dealer."

By a notification, dated September 14, 1966, the Governor of Bihar declared jute as a commodity liable to purchase tax at the rate specified in the notification.

4. Section 42 of the Bihar Sales Tax Act by the first sub-section provided :

"No person shall transport from any railway station, steamer station, air-port, post office or any other place, whether of similar nature or otherwise, notified in this behalf by the State Government, any consignment of such goods, exceeding such quantity, as may be specified in the notification, except in accordance with such conditions as may be prescribed and such conditions shall be made with a view to ensuring that there is no evasion of tax payable under this Act."

Section 46 of the Act invested the State Government with power to make rules for all matters expressly required or allowed by the Act to be prescribed and generally for carrying out the purposes of the Act and regulating the procedure to be followed, forms to be adopted and fees to be paid in connection with proceedings under the Act and all other matters ancillary or incidental thereto:

5 In exercise of the powers conferred under Section 46(1) the State of Bihar promulgated under Rules 31-B and 8-C. Rule 31-B, which provided :

"(1) No person shall tender at any railway station, steamer station, air-port, post-office or any other place, whether of similar nature or otherwise, notified under Section 42, any consignment of such goods exceeding such quantity, as may be specified in the notification, for transport to any place outside the State of Bihar, unless such person has obtained a despatch permit in Form XXVIII-D, from the appropriate authority referred to in the Explanation to Rule 31 and no person shall accept such tender unless the said permit is surrendered to him."

Rule 8-C(1) provided :

"The first purchase of goods declared under Section 14 of the Central Sales Tax Act, 1956, shall be leviable to tax in terms of Sections 3, 3-A and 5-A of the Act and no subsequent sales or purchases in respect of the said goods shall be liable to any tax under the Act."

After the enactment of Sections 3-A and 5-A the State Government issued a notification, dated December 26, 1967. purporting to exercise power under Section 42 of the Bihar Sales Tax Act, 1959, read with Rule 31-B of the Bihar Sales Tax Rules, 1959, notifying that no person. shall tender at any railway station mentioned in Schedule II, any consignment of goods mentioned in Schedule I exceeding the quantity specified for transport to any place outside the State of Bihar and no person shall accept such tender m accordance with the conditions prescribed in Rule 31-B of the Bihar Sales Tax Rules, 1959. Under Schedule I Jute exceeding 800 kg. could