B. P. Jeevan Reddy, J. - (1.) Leave granted in the special Leave Petitions.
(2.) The Constitution (Sixth Amendment) Act, 1956 recast Article 286 of the Constitution almost in its entirety. It inserted sub-clause (g) in clause (1) of Article 269 and introduced clause (3) in Article 269. The Constitution (Forty-sixth Amendment) Act, 1982 substituted clause (3) of Article 286. As amended by Sixty and Forty-sixth Amendment Acts, Article 286 reads: "286 (1). No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place - (a) outside the State; or (b) in the course of the import of the goods into, or export of the goods out of, the territory of India, (2) Parliament may be law formulate principles for determining when a sale or purchase of goods takes place in any of the ways mentioned in clause (1). (3) Any law of a State shall, insofar as it imposes, or authorises the imposition of,- (a) a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter-State trade or commerce; or (b) a tax on the sale or purchase of goods, being a tax of the nature referred to in sub-clause (b), sub-clause (c) or sub-clause (d) of clause (29A) of Article 366. be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament may by law specify".
(3.) Clause (1) places a restriction upon the power of the State Legislatures to levy taxes on sale or purchase of goods; a State cannot levy tax on a sale which takes place outside that State nor can it tax a sale or purchase taking place in the course of import into or export out of India. Clause (2) empowers the Parliament to formulate principles for determining when a sale takes place outside a State or in the course of import or export, as the case may be. Clause (3) places certain restrictions on the State Legislatures in the matter of system of levy and rate etc. in respect of certain goods and transactions.;