Case: State of Rajasthan &amp; Another Vs. Ghasiram Mangilal &amp; Others

was bound to repay the amount which had been collected but it declined to grant any relief on the ground that nothing had been stated in the writ petition as to how much amount of tax had been paid by the respondent and when the same had been paid.5. The principal contention that has been raised by the learned counsel for the State is that the notification had been validly promulgated in exercise of the power conferred under Section 4(2) of the Act. It exempted from tax the sale of "Bardana" which meant gunny bags made from jute and did not mean containers of all kinds made from wood or metal, etc. The exemption, however, contained an exception or a saving clause, namely, that it did not cover the levy of sales tax "on the first point at the hands of an importer in the series of sales in the State." It is submitted that the High Court was in error in holding (a) that "Bardana" meant all kinds of containers and was not confined merely to gunny bags and (b) that there was contravention of Article 301 of the Constitution and Article 304(a) could be of no assistance to the State.6. Articles 301 and 304 of the Constitution may be noticed at this stage. Article 301 appears in the beginning of Part XIII which is headed as "trade, commerce and intercourse within the territory of India". According to this Article subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free. Article 304(a) lays down that notwithstanding anything in Article 301 or Article 303 (with which we are not concerned) the Legislature of a State may by law impose on goods imported from other States or the Union Territories any tax to which similar goods manufactured or produced in that State are subject so as not to discriminate between goods so imported and goods so manufactured or produced. The construction or interpretation which has been commended by the learned counsel for the State of Article 304(a) is that the State has been empowered to impose tax on goods imported from other States or from the Union Territories where goods of the same nature are not being manufactured in the State and if they are being manufactured then the tax had to be levied in such a way that there should be no discrimination between the goods so imported and the goods which are manufactured or produced in the State. It is pointed out that in the present case gunny bags made of jute are imported from outside Rajasthan and admittedly they are not being manufactured in the State. The tax can, therefore, be levied as no question of discrimination can arise. On the other hand, learned counsel for the respondent has called attention to a decision of this Court in Kalyani Stores v. The State of Orissa and Others (1966 (1) SCR 865 ) in which the facts are some-what apposite. There an excise duty had been imposed on "foreign liquor" imported into the State. In the majority judgment this is what was observed at page 872 :"Exercise of power under Article 304(a) can only be effective if the tax or duty is imposed on goods imported from other States and the tax or duty imposed on similar goods manufactured or produced in that State are such that there is no discrimination against imported goods. As no foreign liquor is produced or manufactured in the State of Orissa the power to legislate given by Article 304 is not available and the restriction which is declared on the freedom of trade, commerce or intercourse by Article 301 of the Constitution remains unfettered."7. In our opinion it is altogether unnecessary to go into the question of the applicability of Articles 301 and 304(a) because the decision of the High Court on the question of discrimination is apparently correct. The meaning of "Bardana" as given in the Hindi dictionary is as follows :8. According to this meaning the word "Bardana" does not mean gunny bags alone but it can also mean boxes, wooden packing, etc., in which merchandise had been packed for the purpose of despatch (from one station to another). It has not been suggested that the other kind of Bardana, namely, boxes, wooden packing material, etc., are not being produced or manufactured in the State of Rajasthan. Thus an element of discrimination has been introduced in the exception to the exemption granted by virtue of the notification in the matter of Bardana inasmuch as "Bardana" of the type of gunny bags would be subjected to tax whereas the other kinds of "Bardana" in the shape of gunny bags and other types of Bardana would not be so subjected. No reasonable basis has been suggested for making a separate classification of "Bardana". The learned Judge of the High Court who are likely to be familiar and fully conversant with Hindi which is the official language in the State of Rajasthan had no doubt that the word "Bardana" could not be confined to gunny bags and must be regarded as including other containers of the nature mentioned. This is particularly so because in the notification the word "container" is used.9. On this view the exception to the exemption in the notification which is clearly severable has been and can be rightly struck down as unconstitutional on the ground of discrimination. It has been pointed out on behalf of the respondent that the amount of tax was duly determined (vide the assessment orders copies of which have been shown) and refund should have been ordered as the amounts of tax had been paid for the assessment years in question. It will be for the High Court to hear both sides on this matter and make appropriate directions for refund of such amounts as have been shown to have been paid by the respondent on accounts of tax on "Bardana" for the two assessment years.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]7. In our opinion it is altogether unnecessary to go into the question of the applicability of Articles 301 and 304(a) because the decision of the High Court on the question of discrimination is apparently correct.According to this meaning the word "Bardana" does not mean gunny bags alone but it can also mean boxes, wooden packing, etc., in which merchandise had been packed for the purpose of despatch (from one station to another). It has not been suggested that the other kind of Bardana, namely, boxes, wooden packing material, etc., are not being produced or manufactured in the State of Rajasthan. Thus an element of discrimination has been introduced in the exception to the exemption granted by virtue of the notification in the matter of Bardana inasmuch as "Bardana" of the type of gunny bags would be subjected to tax whereas the other kinds of "Bardana" in the shape of gunny bags and other types of Bardana would not be so subjected. No reasonable basis has been suggested for making a separate classification of "Bardana". The learned Judge of the High Court who are likely to be familiar and fully conversant with Hindi which is the official language in the State of Rajasthan had no doubt that the word "Bardana" could not be confined to gunny bags and must be regarded as including other containers of the nature mentioned. This is particularly so because in the notification the word "container" is used.9. On this view the exception to the exemption in the notification which is clearly severable has been and can be rightly struck down as unconstitutional on the ground of discrimination. It has been pointed out on behalf of the respondent that the amount of tax was duly determined (vide the assessment orders copies of which have been shown) and refund should have been ordered as the amounts of tax had been paid for the assessment years in question. It will be for the High Court to hear both sides on this matter and make appropriate directions for refund of such amounts as have been shown to have been paid by the respondent on accounts of tax on "Bardana" for the two assessment years.