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Report No. 30

106. When imports cease to be imports in U.S.A. (Doctrine of original package: Brown v. Maryland).-For determining under the Constitution of U.S.A. how long the imported wares remained under the protection of Article 1, section 10, clause 2,1 the Supreme Court enunciated the original package doctrine in the leading case of Brown v. Maryland (12 Wheat 419: 6 L. Ed. 678). In that case, the learned Chief Justice Marshall observed:-

1. Article I, section 10, clause 2 of the Constitution of USA says, "No State shall, without the consent of the Congress, lay any imposts or duties on imports or exports

"When the importer has so acted upon the thing imported that it has become incorporated and mixed with the mass of property in the country, it has perhaps lost its distinctive character as an import and has become subject to the taxing power of the State; but while remaining the property of the importer in his warehouse in the original form or package in which it was imported, a tax upon it is too plainly a duty on imports to escape the prohibition of the Constitution.".

107. Warring v. City of Mobile.- In Warring v. City of Mobile, 19 L. Ed. 342 (1868), it was held:-

"When the importer sells the imported articles or otherwise mixes them with the general property of the state of things changes as was said by this Court in the leading case (Brown v. Maryland) as the tax then finds the articles already incorporated with the mass of the property by the act of the importer.".

108. Low v. Austin.-In Low v. Austin, 20 L. Ed. 517 (1872), it was held that goods imported from a foreign country upon which the duties and charges at the customs house had been paid, were not subject to State taxation while remaining in the original cases unbroken and unsold, in the hands of the importer; and that goods imported did not lose their character as imports and become incorporated into the mass of the property of the State until they passed from the control of the importer or were broken up by him from their original cases. In this case, it was observed:-

"Indeed, goods imported while they remain in the hands of the importer in the form and shape in which they were brought into the country, can in no just sense be regarded as part of that mass of property in the State usually taxed for the support of the State Government.".

109. Brown v. Houston.-In Brown v. Houston, (114 US 622), it was held that as soon as the goods were in the State, they became part of the general mass of property and were liable to be taxed in the same manner as the other property of similar character. In the course of its judgment, the Supreme Court observed:-

"Take the city of New York, for example. When the assessor of taxes goes his round, must he omit from his list of taxables all goods which have come into the city from the factories of New England and New Jersey or from the pastures and green fields of the west? If he must, what will be left for taxation? And how is he to distinguish between those goods which are taxable and those which are not?

With the exception of goods imported from foreign countries, still in the original packages and goods in transit to some other place, why may he not assess all property alike that may be found in the city, being there for the purpose of remaining there till used or sold and constituting part of the great mass of its commercial capital-provided always that the assessment be a general one and not discriminative between goods of different States?"

110. In the Constitution of U.S.A. " (1952 Ed.) (Senate Document No. 170 on p. 363), we find the following statement of law:-

"A box, case or bale in which separate parcels of goods have been placed by the foreign seller is regarded as the original package and upon the opening of such container for the purpose of using separate parcels, or of exposing them for sale, each parcel loses its character as an import and becomes subject to taxation as a part of the general mass of property in the State.".



Section 5 of the Central Sales Tax Act, 1956 - Taxation by the States of Sales in the Course of Import Back




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