BURN AND CO LTD Vs. STATE OF BIHAR

JUDGEMENT

(1.) In this case the assessee is an incorporated Company carrying on the business of iron and steel manufacture and exporting the manufactured articles, with its head office in the town, of Calcutta and having its factory for manufacturing the above commodities at Burnpur in the State of West Bengal. For the period from 26-1--1950 to 31-3-1951 the assessee was ordered to pay a sum of Rs. 57,533 and odd as Sales tax by the Superintendent of Commercial Taxes, Central Cirde, Patna, with regard to the articles which were sold and delivered for consumption within the territorial limits of Bihar. For the period from 1-4-1951 to 31-3-1952 the assessee was ordered to pay as sales tax a sum of Rs. 36,204 and odd by me Superintendent Commercial Taxes, Central Circle, with regard to sale of goods and machinery which were delivered for consumption within the territorial limits of Bihar. It was objected on behalf of the assessee before the taxing authorities that the sales made by the assessee were made in the course of inter-State trade and commerce and so taxation was barred under the provisions of Article 286(2) of the Constitution. This argument was rejected by all the taxing authorities. At the instance of the High Court the Board of Revenue has stated a case on the following question of law:

(2.) With regard to the period from 1st April, 1951 to 31st March, 1952, which is the subject-matter of Miscellaneous Judicial Case No. 616 of 1956, learned counsel on behalf of the assessee conceded that the point is covered by the decision of this Court in Tobacco Manufacturers (India) Ltd. v. Commissioner of Sales Tax, Bihar, AIR 1957 Pat 288. and the ban imposed by Article 286 (2) of the Constitution has been surmounted by Central Act 7 of 1956, and the taxation has been validly imposed.

(3.) With regard to the period from 26-1-1950 to 31-3-1951, which is the subject-matter of Miscellaneous Judicial Case No. 615 of 1956, learned counsel for the assessee made the submission that there was no lawful imposition of sales tax because of the ban under Article 286(2) of the Constitution which operated with regard to this period. We do not accept the argument of learned counsel on this point as correct. Article 286 of the Constitution, as it stood before the Sixth Amendment of the Constitution read in the following terms;