Report No. 61
Complexity of the subject.- I have dealt at length with the two Travancore cases to show their supreme importance in relation to the restrictions on the power of the States to impose by law taxes on the sale or purchase of goods when such sale or purchase takes place in the course of import or export. The matter is highly complex and difficult. In my opinion, it becomes easy to grasp their true meaning, scope and content in the background of actual facts. Except in such background, our ideas may continue to remain hazy and our vision blurred. Law is a social science dealing with the actual problems faced by man as a member of society in connection with his affairs and dealing with other men. Hence it makes for clarity if legal problems are considered in the context of the realities of life.
To use the language of the great German legal philosopher and sociological jurist, Rudolf Von Jhering, we are concern not so much with jurisprudence of conceptions as with jurisprudence of actualities. That Article 286(1)(b) is capable of more interpretations is readily seen from the long dissenting judgment of S.R. Das, J. and I shall presently show that this divergence of views on the scope, meaning and interpretation of Article 286(1)(b) of the Constitution and section 5 of the Central Sales Tax Act is still persisting. Therefore I should try my level best to define the scope of these, provisions so that in future, doubts, conflicts and divergences may be reduced to the minimum if not altogether eliminated.
It may be pointed out here with great respect to the views of Das, J. that his view that "a sale or purchase occasioning export or import" includes the last sale before export of the goods and the first purchase after import of the goods may not be universally acceptable as it was not acceptable to the majority of the Judges in the second Travancore case. The last sale or the first purchase, however it may appear to be in the interests of foreign trade of our country cannot but impinge beyond reasonable limit upon the power of the States to levy sales tax. One may take the view that to include in the name of integrated activities, such a sale or such a purchase as taking place in the course of export or import does not appear to be based upon very sound reason.
For in the case of the last sale or purchase before the export-sale, where is the certainty that after such last sale or purchase and before such export-sale, the exporter will not change his mind or that the goods will not be lost, destroyed, pilfered, damaged or rendered less valuable? And in the case of the first sale or purchase after the import is completely at an end, on what rational basis can it be said that such first sale or purchase is integrally connected with the import even if such first sale or purchase is in pursuance of a contract previously entered into between the importer and the first purchaser?
There is no doubt however that the two Travancore cases decided by the Supreme Court before the Sixth Amendment of the Constitution are landmarks in our constitutional history in relation to the construction and interpretation of Article 286 of the Constitution.