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Report No. 30

67. Bengal Immunity case.-

In the Bengal Immunity Co. v. State of Bihar, S.R. Das acting C.J. (as he then was) pointed out the various bans which the Constitution makers had put in the Constitution, in regard to different aspects of sales or purchases of goods and the various checks on the legislative powers of the State at "different angles". In Article 286(1)(b), they had considered sales and purchases from the point of view of foreign trade, and placed a ban on the States' taxing power in order to make such trade free from interference by the States by imposing sales tax.

68. After referring to the two Travancore cases, the Chief Justice said-1

"It should further be remembered that the dominant, if not the sole, purpose of Article 286 is to place restriction on the legislative powers of the States subject to certain conditions in some cases and with that end in view Article 286 imposes several bans on the taxing power of the States in relation to sales or purchases viewed from different aspects. In some cases the ban is absolute as, for example, with regard to outside sales covered by clause (1)(a) read with the Explanation, or with regard to imports and exports covered by clause (1)(b)."

1. Bengal Immunity Co. v. State of Bihar, (1955) 2 SCR 603 (646): AIR 1955 SC 661: 6 STC 446.

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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