MESSRS MOHANLAL HARGOVIND DAS, BIDI MERCHANTS, JABALPUR (M.P.) versus THE STATE OF MADHYA PRADESH & ANOTHER.

MESSRS MOHANLAL HARGOVIND DAS, BIDI MERCHANTS, JABALPUR (M.P.) versus THE STATE OF MADHYA PRADESH & ANOTHER.

The transactions of purchase of tobacco by the petitioners from suppliers in Bombay were in the course of inter-State trade and thus not liable to sales or purchase tax under Article 286(2) of the Constitution; registration under the Sales Tax Act or declarations under Rule 26 do not alter the inter-State character or create liability contrary to the constitutional ban.

Parties
Petitioner: Messrs Mohanlal Hargovind Das, Bidi Merchants, Jabalpur (M.P.); Respondent: The State of Madhya Pradesh; Respondent: Another (Commissioner of Sales Tax, Madhya Pradesh)
Jurisdiction
India
Judgment Date
20 September 1955
Procedural Posture
Petition Under Article 32 of the Constitution of India / Final Judgment
Outcome
petition allowed
Legal Topics
Inter State Commerce, Sales Tax, Fundamental Rights Under Article 32
Constitutional Law Tax Law Inter State Commerce Sales Tax Fundamental Rights Under Article 32

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Parties

Messrs Mohanlal Hargovind Das, Bidi Merchants, Jabalpur (M.P.)

Petitioner

The State of Madhya Pradesh

Respondent

Another (Commissioner of Sales Tax, Madhya Pradesh)

Respondent

Procedural Posture

Petition Under Article 32 of the Constitution of India / Final Judgment

Legal Issues

  1. 1 Whether the State of Madhya Pradesh had authority to levy sales or purchase tax on tobacco imported from Bombay due to the ban under Article 286(2) of the Constitution.
  2. 2 Whether the transactions between registered dealers in Bombay and in Madhya Pradesh constituted intra-State or inter-State sales.
  3. 3 Whether declarations made under Rule 26 of the Sales Tax Rules affect liability under section 4(6) of the Central Provinces and Berar Sales Tax Act, 1947.

Ratio Decidendi

The transactions of purchase of tobacco by the petitioners from suppliers in Bombay were in the course of inter-State trade and thus not liable to sales or purchase tax under Article 286(2) of the Constitution; registration under the Sales Tax Act or declarations under Rule 26 do not alter the inter-State character or create liability contrary to the constitutional ban.

Court Disposition

petition allowed

Orders

  • Respondents restrained from enforcing the Central Provinces and Berar Sales Tax Act, 1947, and its provisions against the petitioners with regard to these transactions.
  • Respondents restrained from imposing tax on the purchase price of goods purchased on declarations under Rule 26 being goods specified in the registration certificate as intended for use as raw material for manufacture and sale by actual delivery in Madhya Pradesh, but utilised for any other purpose under section...