- (1.) This appeal is brought by special leave from the judgment of the Madhya Pradesh High court dated 26/11/1965, in Miscellaneous Civil Case No. 318 of 1964.
(2.) The respondent, who carries on business of selling manganese ore, was assessed to sales tax under section 18 (3) of the Madhya Pradesh General Sales Tax Act, 1958 (2 of 1959) for the period 1/10/1957, to 30/09/1958, by the Sales Tax Officer, Balaghat, in respect of sales of manganese ore by the respondent of the value of Rs. 2,77,976.45. The respondent took the matter in appeal to the Appellate Assistant Commissioner of Sales Tax. It was contended on behalf of the respondent that the entire turnover was of sales in the course of export of manganese ore out of India and alternatively, the sales were inter-State sales, and, therefore, not liable to be taxed under the Madhya Pradesh General Sales Tax Act, 1958 (hereinafter called "the Act"). The objection was rejected by the Appellate Assistant Commissioner who dismissed the appeal. In second appeal the Board of Revenue accepted the contention of the respondent that the sales were in the course of inter-State trade or commerce, and, therefore, could not be assessed to sales tax under the Act. Taking this view the Board of Revenue remanded the matter to the Sales Tax Officer for assessment under the central Sales Tax Act, 1956. At the instance of the respondent, the Board of Revenue made a reference to the Madhya Pradesh High court under section 44 of the Act on the following question of law :- "Whether, in the facts and circumstances of the case, the disputed sales of manganese amounting to Rs. 2,77,976.45 were sales in the course of inter-State trade and commerce or were intra-State sales -
(3.) By its judgment dated 26/11/1965, the High court answered the question holding that the disputed sales were in the course of inter-State trade of manganese ore. The sales of manganese ore were effected during the period 1/10/1957, to 30/09/1958. Before the commencement of this period, article 286 of the Constitution was amended on 11/09/1956, by the Constitution (Sixth Amendment) Act, 1956. By the amendment, the explanation to the first clause of article 286 was omitted and for clauses (2) and (3) the following clauses were inserted : " (2) Parliament may by 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, in so far as it imposes, or authorises the imposition of, 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, 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. ";