UNION OF INDIA Vs. UNITED MOTORS INDIA LIMITED

JUDGEMENT

(1.) This is an appeal, from the judgment and order of the High Court of Judicature at Bombay declaring the Bombay Sales Tax Act. 1952 (Act 24 of 1952), ultra vires the State Legislature and issuing a writ in the nature of mandamus against the State of Bombay and the Collector of Sales Tax, Bombay, appellants herein, directing them to forbear and desist from enforcing the provisions of the said Act against the respondents who are dealers in motor cars in Bombay.

(2.) The Legislature of the State of Bombay enacted the Bombay Sales Tax Act, 1952, (hereinafter referred to as "the Act") and it was brought into force on 9-10-1952, by notification issued under S. 1 (3) of the Act, except Ss. 5, 9, 10 and 47 which came into operation on 1-11-1952, as notified under S. 2 (3). On the same day the Rules made by the State Government in exercise of the power conferred by S. 45 of the Act also came into force.

(3.) On 3-11-1952, the respondents 1 to 6, who are companies incorporated under the Indian Companies Act, 1913, and respondent 7, a partnership firm, all of whom are carrying on business in Bombay of buying and selling motor cars, presented a petition to the High Court under Art. 226 of the Constitution challenging the validity of the Act on the ground that it is ultra vires the State Legislature, inasmuch as it purported to tax sales and purchases of goods regardless of the restrictions imposed on State legislative power by Art. 286 of the Constitution. It was also alleged that the provisions of the Act were discriminatory in their effect and, therefore, void under Art. 14 read with Art. 13 of the Constitution. The respondents accordingly prayed for the issue of a writ in the nature of mandamus against the appellants preventing them from enforcing the provisions of the Act against the respondents. A further ground of attack was added by amendment of the petition to the effect that the Act being wholly ultra vires and void, the provisions requiring dealers to apply for registration in some cases and to obtain a licence in some others as a condition of carrying on their business, infringed the fundamental rights of the respondents under Art. 19 (1) (g) of the Constitution.