Satish Chandra, C.J. - (1.) The petitioners import and sell exercise books. They also manufacture them for sale. They challenge the levy of sales tax on the turnover of exercise books.
(2.) Previously sale of exercise books was exempt though sales tax was leviable on sale of paper used for manufacturing exercise books. This position was effected by the State Government of Uttar Pradesh by issuance of several notifications under the provisions of Section 4 of the U. P.Sales Tax Act, 1948. In 1973, the State Government changed its policy. It confined the exemption from sales tax to exercise books manufactured from paper purchased within the State of Uttar Pradesh. Other kinds of exercise books were made liable to sales tax at the rate of 5 per cent. This included exercise books imported from outside Uttar Pradesh. The levy of sales tax on exercise books was challenged in a group of writ petitions. Laxmi Paper Mart, Agra v. State of Uttar Pradesh 1974 U.P.T.C. 474 held that, the levy of sales tax on exercise books imported from outside Uttar Pradesh violated Article 301 of the Constitution and since similar goods manufactured or produced in the State were not similarly taxed, the imposition was not saved by Article 304(a). In consequence the term "importer" occurring in the relevant notification dated 1st December, 1973, was quashed. The decision was rendered by this Court on 21st August, 1974.
(3.) On 20th May, 1976, the State Legislature enacted the U. P. Sales Tax (Amendment and Validation) Act (23 of, 1976). Section 16 of this amending Act is material for our purposes. By it the exemption of exercise books, if made from paper purchased within Uttar Pradesh, was repealed. All exercise books were liable to sales tax at the rate of 5 per cent. The amendment in the relevant notifications effected by Section 16 was made retrospective with effect from 1st December, 1973, and the imposition of the tax was made valid notwithstanding any judgment, decree or order of any court to the contrary as if the notifications as amended by this section had been in force at all material times.;