WEST BENGAL HOSIERY ASSOCIATION & ORS. versus STATE OF BIHAR & ANR.

WEST BENGAL HOSIERY ASSOCIATION & ORS. versus STATE OF BIHAR & ANR.

The notification exempting locally manufactured hosiery goods from sales tax in Bihar is discriminatory, violates Articles 301 and 304(b) of the Constitution, and must be quashed. Such exemption cannot be granted by executive notification but only by legislation, and no justification was provided for such discrimination.

Parties
Petitioner: West Bengal Hosiery Association; Respondent: State of Bihar; Respondent: Commissioner of Commercial Taxes-cum-Special Secretary, Bihar
Jurisdiction
India
Judgment Date
11 August 1988
Procedural Posture
Writ Petition (civil) No. 611 of 1986 / Final Judgment
Outcome
Writ petition allowed; notification quashed.
Legal Topics
Sales Tax, Trade and Commerce, Discrimination in Taxation, Freedom of Trade Under Constitution
Constitutional Law Taxation Sales Tax Trade and Commerce Discrimination in Taxation Freedom of Trade Under Constitution

Case Brief

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Parties

West Bengal Hosiery Association

Petitioner

State of Bihar

Respondent

Commissioner of Commercial Taxes-cum-Special Secretary, Bihar

Respondent

Procedural Posture

Writ Petition (civil) No. 611 of 1986 / Final Judgment

Legal Issues

  1. 1 Whether the exemption of locally manufactured hosiery goods from sales tax in Bihar is discriminatory and violative of Articles 301 and 304 of the Constitution
  2. 2 Whether the notification granting exemption by executive action (and not legislative action) meets constitutional requirements

Ratio Decidendi

The notification exempting locally manufactured hosiery goods from sales tax in Bihar is discriminatory, violates Articles 301 and 304(b) of the Constitution, and must be quashed. Such exemption cannot be granted by executive notification but only by legislation, and no justification was provided for such discrimination.

Court Disposition

Writ petition allowed; notification quashed.

Orders

  • Notification No. SO 934 dated August 1, 1984 is quashed.
  • Respondents directed not to discriminate between hosiery goods imported into Bihar and those manufactured in Bihar for sales tax purposes.