1. Original Petitions Nos. 813, 815, 817, 819, 822, 931, 959, 969, 996, 1006, 1081 of 2002 are filed by the petitioners for declaration, declaring that serial No. 8 of Part G to the First Schedule as introduced by Tamil Nadu Act No. 18 of 2002 as it stood between March 27, 2002 and June 30, 2002 as ab initio void and ultra vires articles 14, 265, 286, 301 and 304(a) of the Constitution of India.
2. Original Petitions Nos. 814, 816, 818, 820, 902, 930, 942, 958, 970, 1007, 1080, 1103, 1115 of 2002 and 115 of 2003 are filed by the petitioners to issue declaration, declaring serial No. 9 of the Eleventh Schedule to the Tamil Nadu General Sales Tax Act, 1959 as introduced by Tamil Nadu Act No. 22 of 2002 with effect from July 1, 2002 ultra vires articles 14, 265, 286, 301 and 304(a) of the Constitution of India.
3. As all these original petitions are filed challenging Tamil Nadu Acts Nos. 18 of 2002 and 22 of 2002, we state the relevant facts in Original Petitions Nos. 813 and 814 of 2002 as under : The petitioner who is a registered dealer under the Tamil Nadu General Sales Tax Act, 1959 and the Rules made thereunder files return and paying taxes. The petitioner is acting as authorised dealer from the year 1996 onwards to Ford cars. Initially, the petitioners used to effect purchases from Nasik factory of Ford Motors and subsequently, the sales were made by Ford from their Chennai stockyard at Maraimalai Nagar from 1999 onwards. Ford Mondeo cars are not manufactured by Ford India. They, acting on behalf of the petitioners, place orders with Ford Works AG, Belgium, the foreign supplier, who despatch the consignments of Ford Mondeo cars made, for the petitioners from Belgium. As and when the cars are arrived at JNPT Port at Navasheva, Mumbai, Ford clears the goods on behalf of the petitioners and on payment of customs duty despatches them to the petitioners, who pay the freight requirements for the movement. On such importation, the goods become part of the general mass of goods produced and traded within India. As and when the cars enter the State of Tamil Nadu, the petitioners pay 13 per cent entry tax under the provisions of the Tamil Nadu Act on Entry of Motor Vehicles into Local Areas Act, 1990. The petitioners, while making sales inside Tamil Nadu, collect 13 per cent entry tax from their customers and pay it over to the respondents. No sales tax is collected from the customers because of the reduction in liability under the Act, as provided for by Section 4(1) of the Entry Tax Act, 1990. Between December, 2001 and March 26, 2002, the rate of entry tax was 13 per cent whereas the rate of tax under the Act was 12 per cent. By Act No. 18 of 2002, the First Schedule to the Act was substituted. Entry 8 of Part G of the First Schedule imposes 20 per cent tax on cars imported from outside India but sold within. By Act No. 22 of 2002, further amendments were carried out and Section 3C2-C) was introduced as a charging provision in the case of goods mentioned in the Eleventh Schedule. Part G of the First Schedule was omitted and Sl. No. 9 of the Eleventh Schedule was introduced which imposes a rate of 20 per cent on the sales of imported motor cars which fall under serial No. 22 of Part D to the First Schedule. In view of serial No. 9 of the Eleventh Schedule, Ford Mondeo cars sold by the petitioners attract tax at 20 per cent from March 27, 2002 onwards. The petitioners made representation seeking the rate of tax to be reduced to 12 per cent. Ford Mondeo cars sold by the petitioners are commercially known as "D" segment cars which normally includes the cars priced between Rs. 10 and Rs. 25 lakhs.
However, there are other cars in the "D" segment such as Hyundai Sonata and Honda Accord cars, Hyundai Sonata cars are assembled in Hyundai Motor India Ltd., near Chennai and Honda Accord cars are assembled by Honda SIEL Cars India Ltd., in their factory at Noida, Uttar Pradesh. Those cars come to India in only semi-knocked down condition (SKD) and those manufacturers are fundamentally engaged only in assembling SKD kits in India. The sales tax levied against those cars presently stand only at 12 per cent whereas the petitioners have to pay higher rate of tax at 20 per cent. This has brought about a hostile discrimination between Ford Mondeo cars and other "D" segment cars.
4. Original Petitions Nos. 813 of 2002, 815 of 2002, 817 of 2002 and 819 of 2002 are filed by the authorised dealers of Ford cars. Original petitions Nos. 931 of 2002, 959 of 2002 and 1006 of 2002 are filed by dealers in cellular phone, (ii) Original Petition No. 969 of 2002 is filed by dealers in VCD Player and Recorder and LCD Projector, Handy Camera and Computer Monitors, (iii) Original Petition No. 996 of 2001 is filed by dealers in Beauty Equipments (imported goods), (iv) Original Petition No. 1081 of 2002 is filed by dealers in Vinyl flooring and mineral fibre board, G.I. Channel, etc., and are also challenging similar provision of Act No. 18 of 2002. Though the petitioners in O.P. No. 822 of 2002 challenge G.O. Ms. No. 29, C.T., dated March 27, 2002, in substance and reality, they challenge Act No.18 of 2002.
5. The petitioners in Original Petition No. 814 of 2002 challenge Act No. 22 of 2002 on the very same grounds. Original Petitions Nos. 814, 816, 818 and 820 of 2002 are filed by dealers of Ford Mondeo cars, (ii) Original Petition No. 902 of 2002 is filed by dealers of Electric cooker and microwave oven, (iii) Original Petitions Nos. 930 of 2002, 958 of 2002 and 1007 of 2002 are filed by dealers of cellular phone, (iv) Original Petition No. 942 of 2002 is filed by dealers in beauty equipments (imported goods), (v) Original Petition No. 970 of 2002 is filed by dealers in VCD players, recorder and LCD projectors, handy camera and computer monitors, etc., (vi) Original Petition No. ,1080 of 2002 is filed by dealers in vinyl flooring and mineral fibre boards, G.I. Channel, etc., (vii) Original Petition No. 1103 of 2002 is filed by dealers in padlocks, (viii) Original Petition No. 1115 of 2002 is filed by dealers in confectionery (chocolates), fruit juices and oats and Original Petition No. 115 of 2003 is filed by Federation of Madras Merchants and Manufacturers Association, Chennai. challenging Act No.22 of 2002 questioning the levy of 20 per cent tax on imported items.
6. Serial No. 8 of Part G of the First Schedule in Act No. 18 of 2002 was in force between March 27, 2002 to June 30, 2002. Serial No. 9 of the Eleventh Schedule to the Tamil Nadu General Sales Tax Act, 1959 introduced by Act No. 22 of 2002 with effect from July 1, 2002 is in force till date. The petitioners herein challenge both the Acts.
7. The petitioners' case fall under Part XIII of the Constitution of India dealing in trade, commerce and inter-course within the territory of India. Under Part XII! of the Constitution, articles 301 to 307 fall. The petitioners have also relied on articles 265 and 286 of the Constitution of India. Part XII deals with finance, property, contracts and suits. Article 265 of the Constitution of India is the basis for levy of tax which says that "no tax shall be levied or collected except by authority of law". Accordingly, the requirements of article 265 are : (i) There must be a law, (ii) the law must authorise the context and (iii) the tax must be levied and collected according to the law. Any tax imposed should have the authority of law to collect tax.
8. Article 286 of the Constitution of India deals with restrictions as to the imposition of tax on the sale or purchase of goods. Clause (29-A) of article 366 was introduced for collection of tax on the sale or purchase of goods.
9. The major argument raised in these cases are in respect of Part XIII of the Constitution of India. Article 301 says : "Articles 301. Freedom of trade, commerce and inter-course.--Subject to the other provisions of this Part, trade, commerce and inter-course throughout the territory of India shall be free." "304. Restrictions on trade, commerce and inter-course among States.--Notwithstanding anything in article 301 or article 303, the Legislature of a State may by law-- (a) impose on goods imported from other States (or the Union territories) any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced ; and (b) impose such reasonable restrictions on the freedom of trade, commerce or inter-course with or within that State as may be required in the public interest : Provided that no Bill or amendment for the purpose of Clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President." The petitioners and the Revenue have relied on a decision of the Supreme Court in Atiabari Tea Co. Ltd. v. State of Assam AIR 1961 SC 232 wherein their Lordships of the Supreme Court have held at para 34 : "In drafting the relevant articles of Part XIII the makers of the Constitution were fully conscious that economic unity was absolutely essential for the stability and progress of the federal polity which had been adopted by the Constitution for the governance of the country. Political freedom which had been won, and political unity which had been accomplished by the Constitution, had to be sustained and strengthened by the bond of economic unity. It was realised that in the course of time different political parties believing in different economic theories or ideologies may come in power in the several constituent units of the Union and that may conceivably give rise to local and regional pulls and pressures in economic matters.
Local or regional fears or apprehensions raised by local or regional problems may persuade the State Legislatures to adopt remedial measures intended solely for the protection of regional interests without due regard to their effect on the economy of the nation as a whole. The object of Part XIII was to avoid such a possibility. Free movement and exchange of goods throughout the territory of India is essential for the economy of the nation and for sustaining and improving living standards of the country. The provision contained in article 301 guaranteeing the freedom of trade, commerce and intercourse is not a declaration of a mere platitude, or the expression of a pious hope of a declaratory character ; it is not also a mere statement of a directive principle of State policy ; it embodies and enshrines a principle of paramount importance that the economic unity of the country will provide the main sustaining force for the stability and progress of the political and cultural unity of the country." "In our opinion, therefore, the argument that tax laws are outside Part XIII cannot be accepted.
That takes us to the question as to whether article 301 operates only in respect of the entries relating to trade and commerce already specified. Before answering this question it would be necessary to examine the scheme of Part XIII, and construe the relevant articles in it. It is clear that article 301 applies not only to inter-State trade, commerce and intercourse but also intra-State trade, commerce and inter-course." "When article 301 refers to the freedom of trade it is necessary to enquire what freedom means. Freedom from what Is the obvious question which falls to be determined in the context. At this stage we would content ourselves with the statement that the freedom of trade guaranteed by article 301 is freedom from all restrictions except those which are provided by the other articles in Part XIII. What these restrictions denote may raise a larger issue, but in the present case we will confine our decision to that aspect of the matter which arises from the provisions of the Act under scrutiny.
It is hardly necessary to emphasise that in dealing with constitutional questions courts should be slow to embark upon an unnecessarily wide or general enquiry and should confine their decision as far as may be reasonably practicable within the narrow limits of the controversy arising between the parties in the particular case.
The non obstante clause referring to article 301 would go with article 304(a), and that indicates that tax on goods would not have been permissible but for article 304(a) with the non obstante clause. This incidentally helps to determine the scope and width of the freedom guaranteed under article 301 ; in other words, article 304(a) is another exception to article 301.
There are, however, obvious differences in the powers of the Parliament and State Legislatures. In regard to an Act which the State Legislature intends to pass under article 304(b) no Bill can be introduced without the previous sanction of the President, and this requirement has obviously been inserted in order that regional economic pressures which may inspire legislation under the said clause should be duly examined in the light of the interest of national economy : such legislation must also be in the public interest which feature is common with the provision contained in article 302 ; such legislation must also satisfy the further test that the restrictions imposed by it are reasonable.
Thus considered we think it would be reasonable and proper to hold that restrictions, freedom from which is guaranteed by article 301, would be such restrictions as directly and immediately restrict or impede the free-flow or movement of trade. Taxes may and do amount to restrictions ; but it is only such taxes as directly and immediately restrict trade that would fall within the purview of article 301. The argument that all taxes should be governed by article 301 whether or not their impact on trade is immediate or mediate, direct or remote, adopts, in our opinion, an extreme approach which cannot be upheld. If the said argument is accepted it would mean, for instance, that even a legislative enactment prescribing the minimum wages to industrial employees may fall under Part XIII because in an economic sense an additional wage bill may indirectly affect trade or commerce. We are, therefore, satisfied that in determining the limits of the width and amplitude of the freedom guaranteed by article 301 a rational and workable test to apply would be : Does the impugned restriction operate directly or immediately on trade or its movement It is in the light of this test that we propose to examine the validity of the Act under scrutiny in the present proceedings."Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan AIR "Regulatory measures or measures imposing compensatory taxes for the use of trading facilities do not come within the purview of the restrictions contemplated by article 301 and such measures need not comply with the requirements of the proviso to article 304(b) of the Constitution.
The concept of freedom of trade, commerce and inter-course postulated by article 301 must be understood in the context of an orderly society and as a part of the Constitution which envisages a distribution of powers between the States and the Union, and if so understood, the concept must recognise the need and the legitimacy of some degree of regulatory control, whether by the Union or the States : This is irrespective of the restrictions imposed by the other articles in Part XIII of the Constitution.
That which in reality facilitates trade and commerce is not a restriction, and that which in reality hampers or burdens trade and commerce is a restriction. It is the reality or substance of the matter that has to be determined. It is not possible a priori to draw a dividing line between that which would really be a charge for a facility provided and that which would really be a deterrent to a trade ; but the distinction, if it has to be drawn, is real and clear; For the tax to become a prohibited tax it has to be a direct tax the effect of which is to hinder the movement part of trade. So long as tax remains compensatory or regulatory it cannot operate as a hindrance.
The operation of the relevant articles in Part XIII cannot be restricted to legislation in respect of the entries relating to trade and commerce in any of the Lists of Seventh Schedule. But there is one exception. Such regulatory measures as do not impede the freedom of trade, commerce and inter-course and compensatory taxes for the use of trading facilities are not hit by the freedom declared by article 301. They are excluded from the purview of the provisions of Part XIII of the Constitution for the simple reason that they do not hamper trade, commerce and inter-course but rather facilitate them." "After carefully considering the arguments advanced before us we have come to the conclusion that the narrow interpretation canvassed for on behalf of the majority of the States cannot be accepted, namely, that the relevant articles in Part XIII apply only to legislation in respect of the entries relating to trade and commerce in any of the Lists of the Seventh Schedule. But we must advert here to one exception which we have already indicated in an earlier part of this judgment. Such regulatory measures as do not impede the freedom of trade, commerce and inter-course and compensatory taxes for the use of trading facilities are not hit by the freedom declared by article 301. They are excluded from the purview of the provisions of Part XIII of the Constitution for the simple reason that they do not hamper trade, commerce and inter-course but rather facilitate them." "We have, therefore, come to the conclusion that neither the widest interpretation nor the narrow interpretations canvassed before us are acceptable. The interpretation which was accepted by the majority in Atiabari Tea Co. Ltd. case  1 SCR 809 ; AIR 1961 SC 232 is correct, but subject to this clarification. Regulatory measures or measures imposing compensatory taxes for the use of trading facilities do not come within the purview of the restrictions contemplated by article 301 and such measures need not comply with the requirements of the proviso to article 304(b) of the Constitution." These decisions are not rendered unanimously. The decision reported in AIR 1961 SC 232 (Atiabari Tea Co. Ltd. v. State of Assam) was rendered by four of their Lordships concurred by honourable Justice Shah and contra opinion was offered by the honourable Chief Justice of India.
The majority view was confirmed by the majority opinion in AIR 1962 SC 1406 [Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan].
However, in paragraph 17, their Lordships have offered their independent opinion apart from following the previous decisions reported in AIR 1961 SC 232 (Atiabari Tea Co. Ltd. v. State of Assam).
In Synthetics & Chemicals Ltd. v. State of U.P.  80 STC 270 (SC) ; AIR 1990 SC 1927, the Supreme Court held : "...........sovereign power which gives the States sufficient authority to enact any law subject to the limitations of the Constitution to discharge its functions. Hence, the Indian State as a sovereign State has power to legislate on all branches except to the limitation as to the division of powers between the Centre and the States and also subject to the fundamental rights guaranteed under the Constitution. The Indian State, between the Centre and the States, has sovereign power. The sovereign power is plenary and inherent in every sovereign State to do all things which promote the health, peace, morals, education and good order of the people.
Sovereignty is difficult to define. This power of sovereignty is, however, subject to Constitutional limitations. This power, according to some constitutional authorities, is to the public what necessity is to the individual. Right to tax or levy imposts must be in accordance with the provisions of the Constitution." "A Constitution is the mechanism under which laws are to be made and not merely an Act which declares what the law is to be. It is also well-settled that a Constitution must not be construed in any narrow or pedantic sense and that construction which is most beneficial to the widest possible amplitude of its power, must be adopted." "The Constitution of India, it has to be borne in mind, like most other Constitutions, is an organic document. It should be interpreted in the light of the experience. It has to be flexible and dynamic so that it adapts itself to the changing conditions and accommodates itself in a pragmatic way to the goals of national development and the industrialisation of the country. This Court should, therefore, endeavour to interpret the entries and the powers in the Constitution in such a way that it helps to the attainment of indisputed national goals, as permitted by the Constitution." 10. The above decisions deal with freedom of trade, commerce and inter-course enshrined in Part XIII of the Constitution of India. The petitioners have admitted that Ford Mondeo cars are imported into India from Belgium. Similarly, the other items concerning in the other original petitions are also goods admittedly imported from foreign countries. It is argued by the learned counsel for the petitioners that when all those goods are imported into India, they paid the taxes or customs duty levied against those items. As far as Ford Mondeo cars are concerned, from Belgium they arrive at JNPT Port at Navasheva, Mumbai.
Learned counsel for the petitioners argued that once those Mondeo cars are imported into India, thereafter, they become goods of inter-State trade and commerce in India. When the goods enter into the domestic stream, they form part of similar goods in India and used in inter-State trade. In such circumstances, learned counsel for the petitioners questioned the validity of entry tax levied on the said items in India. Learned counsel for the petitioners have relied on a decision of the Madras High Court in Indian Sugar & General Industry Export Import Corporation Ltd. v. Commercial Tax Officer "On principle also there is no reason for making a distinction between indigenous and imported goods, as long as the goods are considered to be important in inter-State trade and commerce. After importation, the goods enter into the domestic stream and the interest of the customer would be adversely affected, if the imported goods were to be taxed at a higher rate, exceeding the rate at which the goods of similar description manufactured in India is subject. The object of the declaration is to promote the interest of the consumer and to ensure the smooth flow of inter-State trade and commerce." 11. Basing reliance on this decision, learned counsel for the petitioners have argued that these Ford Mondeo cars or other items imported no longer be termed as imported goods. We do not think that sugar and Ford Mondeo cars and other items concerned in other original petitions can be compared with one another as they are dissimilar in the very character and their physical appearance. Items like Ford Mondeo cars are manufactured by a foreign company and they are being imported into India. Even after such importation, they retain their characteristic feature and maintain their technical excellence.
However, sugar is not such a substance which maintains its individual identity when compared with similar sugar manufactured in India or elsewhere.
12. It was again argued on the side of the petitioners that Ford Mondeo cars fall under the category of "D" segment cars which are priced between Rs. 10 lakhs and Rs, 25 lakhs. As Honda Accord cars and Hyundai Sonata cars also fall under the same category, it was pointed out that when similar cars having similar engines and other conveniences are taxed at 12 per cent why there is a discrimination in the case of Ford Mondeo cars for which entry tax itself is at 13 per cent. The petitioners themselves have explained the reasons in para 17 of Original Petition No. 813 of 2002 saying that other cars come into India only in semi-knocked down (SKD) condition and those manufacturers are fundamentally engaged only in assembling SKD kits in India. The difference between Ford Mondeo cars and other cars is that Ford Mondeo cars are imported as fully finished cars into India and other cars like Honda Accord and Hyundai Sonata are having their factories at Noida, U.P. and Tamil Nadu respectively. Those cars come into India in only semi-knocked down condition (SKD) whereas the Ford Mondeo cars are imported into India as a fully finished car. Therefore, the State is justified in imposing entry tax at 13 per cent.
Entry tax was considered by their Lordships of the Supreme Court in State of Bihar v. Bihar Chamber of Commerce  103 STC 1 wherein it was held : "Entry 52 of the Seventh Schedule to the Constitution empowers the State Legislature to levy the entry tax. The local, authorities cannot themselves levy this tax. The power is that of the State Legislature and of none else. So long as the tax is levied upon the entry of goods into a local area for the purpose of consumption, use or sale therein, the requirement of entry 52 is satisfied. The character of the tax so levied is that of entry tax--by whatever name it is called. Where the local areas span the entire State, it cannot be argued that money spent for welfare schemes for improvement of roads, rivers and other means of transports and communication is not spent on or for the purposes of local areas.
The purposes and needs of local areas are no different from the purposes and needs of the State--not at any rate to any appreciable degree." "So long as the tax is levied upon the entry of goods into a local area for the purpose of consumption, use or sale therein, the requirement of entry 52 is satisfied." "A very perusal of these objects and reasons would indicate that this legislation was brought in order to compensate loss of revenue by consumers who avoid payment of the sales tax or purchase tax on the vehicle payable in the State by purchasing it in another State where the rate was lesser than the State of Maharashtra and then to bring the vehicle inside the State. The Legislature, therefore, clearly intended to avoid any loss of legitimate sales tax revenue by the State. But the levy cannot be held to be bad because the legislature intended to avoid any loss of sales tax in the State so long it is not found to be invalid either because of any constitutional or statutory violation. It is not the intention or propriety of a legislation but it is legality or illegality which renders it valid or invalid." From the above decision, it is clear that the entry tax levied by the State Legislature is valid. Their Lordships of the Supreme Court have upheld the entry tax levied by the State of Bihar in the said decision.
Therefore, the contention raised by the petitioners herein questioning the levy of entry tax by the Tamil Nadu legislature cannot be accepted.
13. Learned counsel for the petitioners have continued their arguments saying that such taxation is nothing but a discrimination under article 14 of the Constitution of India and it bars such discrimination. Any goods being imported as finished ones will have better value than the goods brought into India in semi-knocked down condition (SKD). The goods imported in fully finished condition cannot be compared with the goods brought into India in semi-knocked down condition (SKD) and therefore, there is no ground to impute discrimination.
14. The petitioners have relied on a decision of this Special Tribunal reported in Siemens Ltd. v. State of Tamil Nadu  110 STC 313 wherein this Special Tribunal struck down the additional sales tax levied under Clause (a) of Sub-section (1) of Section 2 of the Additional Sales Tax Act which prescribed an exemption limit of Rs. 10 lakhs and slab rates for higher taxable turnover has been made applicable to casual traders or agents of non-resident dealers or local branches of firms or companies situated outside the State and the new Clause (aa) prescribes an exemption limit of Rs. 100 crores for dealers including the principals selling or buying goods in that State through agents [other than those mentioned in Clause (a)] was held as discriminatory and the said provision was struck down. The petitioners cannot take advantage of the said decision which is entirely on a different sets of fact which discriminate the casual traders or agents or non-resident dealers and similar persons with the dealers having registered office within the State. In the present case, the petitioners have imported goods from the foreign countries and as such, they cannot compare themselves with the dealers who deal in indigenous materials or those who have factories within India. Part XIII of the Constitution of India deals with trade, commerce and inter-course within the territory of India and not items imported into India from foreign countries. Section 5(3) of the Central Sales Tax Act, 1956 cannot be pressed into services in this context. The petitioners cannot compare imported goods with the indigenous or other goods manufactured or assembled in India and in fact, such a distinction brings a higher rate of tax on the imported items.Shree Mahavir Oil Mills v. State of Jammu and Kashmir [19971 104 STC 148 wherein it was held by their Lordships of the Supreme Court : "The States are free to encourage and promote the establishment and growth of industries within their States by all such means as they think proper, but they cannot, in the process, subject goods imported from other States to a discriminatory rate of taxation, i.e., a higher rate of tax vis-a-vis similar goods manufactured/produced within that State and sold within that State.
Prohibition under article 304(a) of the Constitution of India is against discriminatory taxation by the States. It matters not how the discrimination is brought about." This decision deals with discrimination in the taxation in respect of the goods manufactured/produced within the State and the goods brought by inter-State trade or commerce and not goods of foreign origin imported into India. The entire object of Part XIII of the Constitution of India is to rule out the discriminatory taxation between the goods manufactured or produced in one State and similar goods brought from the other States by way of inter-State trade or intra-State trade or commerce.
16. The petitioners have relied on a decision of the Supreme Court in State of Travancore-Cochin v. Shanmugha Vilas Cashew-nut Factory, Quilon  4 STC 205; AIR 1953 SC 333 wherein it was held by their Lordships of the Supreme Court : "The State Legislatures, under entry 54 of the State List, have power to make laws with respect to tax on the sale or purchase of goods. On this general power article 286 places four restrictions, namely, that no law of a State shall impose or authorise the imposition of tax on the sale or purchase of goods when such sale or purchase takes place (1) outside the State, (2) in the course of import or export, (3) in the course of inter-State trade and commerce and (4) in respect of essential commodities." The inter-State or intra-State commerce within the Indian territory is the object behind Part XIII of the Constitution of India. The decisions cited by the petitioners stated supra would prove that for proper taxation throughout India without discrimination between the goods from one State and other, the founding fathers of the Constitution in their wisdom have introduced such provisions and the petitioners who deal in imported goods cannot take advantage of those articles in the Constitution in order to achieve their object.
17. The petitioners have also relied on a decision of the Supreme Court in Bennett Coleman and Co. Ltd. v. Union of India AIR 1973 SC 106 to the effect that the effect of law is important and not the object of law and if the effect of law is to violate article 304(a) and consequently under article 304(1) of the Constitution, the law has to be struck down even its object is benevolent. The said decision cannot be applied to the present case as the petitioners deal with foreign goods imported into India.
18. Learned Additional Advocate-General for the Revenue has relied on a decision of the Karnataka High Court in the case of Varalakshmi Silk House v. State of Karnataka  112 STC 93 wherein it was held : "The Legislature is free with regard to the choice of articles which are to be taxed or the rate of tax or in granting the exemption to different categories of persons, transactions or objects. The wide discretion for classification for tax purposes is the prerogative of the Legislature. Raw silk and silk yarn which are imported from outside the country on which tax is levied constitute a different class than the locally manufactured such commodities. There is no hostile discrimination or a deliberate intention to create discrimination. Exemption to the locally indigenous manufactured items is with the object to protect the local industries of the country. The levy of tax cannot be considered arbitrary or suffering from the vice of violating of article 14 of the Constitution. The classification is reasonable, If the levy of tax does not affect the movement of the goods then it cannot be considered to be violative of article 301 of the Constitution. As far as raw silk and silk yarn imported from other States is concerned, or even movement in this State, i.e., in the course of inter-State trade or commerce or intra-State or by way of transfer from other State it is equally treated. Imported raw silk and silk yarn have been considered to be a separate category from indigenously manufactured raw silk and silk yarn. There is no notification prohibiting the movement of the goods. The tax which has been levied on the imported material cannot be considered as affecting the freeflow of trade or the guarantee which has been given in the Constitution of India for free movement from one place to other in the same State or in inter-State or commerce. It does not directly and immediately restrict or impede the free-flow or movement of trade. The levy, therefore, cannot be considered as violative of article 301 of the Constitution of India for even requiring the assent of the President of India for such legislation.
The word 'imported' in article 304 has to be interpreted as import from other States of the country and has no connection with the import from foreign countries." "The tax which has been levied on the imported material cannot be considered as affecting the free-flow of trade or the guarantee which has been given in the Constitution of India for free movement from one place to other in the same State or in inter-State trade or commerce ; it does not directly and immediately restrict or impede the free-flow or movement of trade. The levy, therefore, cannot be considered as violative of article 301 of the Constitution of India for even requiring the assent of the President of India for such legislation." "This restriction could be by moving the bill or amendment with the previous sanction of the President. This article 304 has placed restriction for creating the discrimination between the goods which are imported from other State and the goods locally manufactured.
The word 'imported' has to be interpreted as import from other State of the country and this import has no connection with the import from foreign countries." This decision deals with many of the decisions relied on by the petitioners herein and we feel that this decision is applicable to the instant case, as many of the questions raised in the present original petitions are answered in this decision.
19. From the foregoing discussion, we conclude that Part XIII of the Constitution of India deals with trade, commerce, inter-course within the territory of India and therefore, those provisions under the said Part cannot be applied to the goods imported from foreign countries.
The Parliament as well as the State Legislatures have sufficient power to impose restrictions on trade, commerce and intercourse. For these reasons, the levy of tax under Serial No. 8 of Part "G" of the First Schedule in Act 18 of 2002 and Serial No. 9 of the Eleventh Schedule in Act 22 of 2002 are valid and they are brought into force by the Legislature in its wisdom. The rate of tax levied under the Tamil Nadu General Sales Tax Act, 1959 and in particular, by Acts Nos. 18 of 2002 and 22 of 2002, being State Acts, received the assent of the Governor on May 26, 2.002 and published in Tamil Nadu Government Gazette Extraordinary No. 365--Part IV--Section 2, dated June 3, 2002, at pages 59 of 97 respectively. Therefore, the validity of those Acts cannot be questioned on the grounds raised by the petitioners herein. While considering the rate of tax, it is seen that the entries covered under Part E of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959 are liable to be taxed at 16 per cent ; Part F of the First Schedule to the Act are taxed at 18 per cent ; Part G of the First Schedule to the Act at 20 per cent ; Part H of the First Schedule to the Act at 24 per cent; Part I of the First Schedule to the Act at 20 per cent and Part JJ of the First Schedule to the Act at 50 per cent and Part K of the First Schedule at 70 per cent. Therefore, the Legislature, in its wisdom, has thought fit to levy tax at various rates and the petitioners herein cannot contend that the levy of tax at 20 per cent is exorbitant or not in accordance with law. From the abovesaid discussion, it is clear that Serial No. 8 of Part "G" of the First Schedule in Act 18 of 2002 and Serial No. 9 of the Eleventh Schedule in Act 22 of 2002 are validly introduced in the Tamil Nadu General Sales Tax Act, 1959.
In the result, Original Petitions Nos. 813, 814, 815, 816, 817, 818, 819, 820, 822, 902, 930, 931, 942, 958, 959, 969, 970, 996, 1006, 1007, 1080, 1081, 1103, 1115 of 2002 and 115 of 2003 are dismissed. As all the Original Petitions are dismissed, the Original Miscellaneous Petitions do not survive.
And this Tribunal doth further order that this order on being produced be punctually observed and carried into execution by all concerned.
Issued under my hand and the seal of this Tribunal on the 30th day of April, 2003.