V. Ramaswami, J.
1. This is a petition for the issue of a writ of certiorari calling for the records in TNGST No. 3201/72-73 dated 31st January, 1974, on the file of the respondent and quashing the order thereon in so far as it related to the levy of tax at the rate of 24 per cent on a turnover of Rs. 6,37,605. The petitioner is a firm of partnership. It is a dealer in medicines and liquor. For the assessment year 1972-73, it reported a total and taxable turnover of Rs. 11,76,952.65 and Rs. 9,07,108.31 respectively. Out of the taxable turnover a sum of Rs. 6,37,605.36 represented the sales turnover of liquor, which was brought from Sikkim. In the pre-assessment notice dated 12th January, 1974, the assessing officer, in the view that Sikkim is a foreign country and foreign liquor was imported into India, proposed to levy sales tax on this turnover at 24 per cent under item 70(a) of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as the Act), and called upon the petitioner to file his objections, if any. The petitioner represented that the liquor sold by it was manufactured in the Sikkim distilleries, that it is an Indian-made foreign liquor, that this fact was certified by the Excise Commissioner of Sikkim State and that the Board of Revenue instructed the Collector of Madras to issue import permit for the import of Indian-made foreign liquor from Sikkim to the petitioner. The excise authorities of the Tamil Nadu State have categorised the liquor imported by the petitioner as Indian-made foreign liquor. In these circumstances, the petitioner was not bound to pay tax at the rate of 24 per cent, but was liable to pay only at the rate of 12 per cent under item 70(b) of the First Schedule to the Act. The assessing officer did not accept these contentions and held that Sikkim is a foreign country, that the liquor imported was foreign liquor and that the petitioner had obtained export permit including transit permits for these goods from the authorities of Sikkim State. In those circumstances, the assessing officer held that the abovesaid turnover was liable to the levy of sales tax at the rate of 24 per cent. On the ground that the questions involved could be very justly and properly dealt with by this court under Article 226 of the Constitution rather than in an appeal against the order of assessment, the petitioner has filed this writ petition in this court.
2. The learned counsel for the petitioner contended that Sikkim was not a foreign country, that the liquor brought by the petitioner from Sikkim was not foreign liquor, but it was Indian-made foreign liquor, that the import was not dealt with either under the Indian Tariff Act, 1934, or under any other law for the time being in force relating to duties of customs on goods imported into India and that, therefore, item 70(a) of the First Schedule to the Act was not applicable. He also, in this connection, relied on the treaty entered into between the President of India and His Highness the Maharaja of Sikkim in the year 1950. Item 70 of the First Schedule to the Act reads as follows:
4. Description of goods Point of levy Rate of tax per cent '70(a) All kinds of foreign liquors, At the point of 24that is to say, wines, spirits first sale in theand beer imported into India State.from foreign countries anddealt with under the IndianTariff Act, 1934 (Central Act32 of 1934) or under any other law for the time being in forcerelating to the duties of customson goods imported into India (b) All kinds of alcoholic liquors do. 12for human consumption (otherthan foreign liquors fallingunder sub-item (a), toddy and arrack). (c) Arrack do. 6'
3. It is seen from item 70(a) that three conditions are to be satisfied in order to bring the import within that item. Firstly, it should be foreign liquor, that is to say, wines, spirits and beer, secondly, they must have been imported into India from foreign countries and, thirdly, the liquor imported must have been dealt with either under the Indian Tariff Act or under any other law for the time being in force relating to the duties of customs on goods imported into India. In our opinion, all these three conditions will have to be cumulatively satisfied. This is clear from the use of the conjunction 'and' after the words 'foreign countries' in that item. Therefore, the liquor should not only have been imported from a foreign country, but it should also have been dealt with either under the Indian Tariff Act or under any other law for the time being in force relating to the duties of customs on goods imported into India. Unless both these conditions are satisfied, item 70(a) will not be attracted. It is seen from the records that what was imported by the petitioner was liquor manufactured in Sikkim and the Sikkimese Government have categorised this as Indian-made foreign liquor. The petitioner was permitted by the Collector of Madras for the import of Indian-made foreign liquor from Sikkim. It is not the case of the respondent that the petitioner has contravened the permission granted by the Collector of Madras and that, therefore, the first condition relating to the applicability of item 70(a) is not satisfied in this case. Even if there is any doubt on this question, we are of the opinion that the third condition is not satisfied in this case. As we have already pointed out, the foreign liquor imported from a foreign country should have been dealt with either under the Indian Tariff Act or under any other law for the time being in force relating to the duties of customs on the goods imported into India. It is seen from the treaty entered into between the President of India and His Highness the Maharaja of Sikkim in the year 1950 that for the purpose of right of entry, free movement of the subjects of Sikkim and Indian nationals and bringing in or transporting or taking out or exporting of goods are free and are not governed by any law relating to the duties of customs or other laws. The relevant articles in the treaty may be usefully quoted here :
Article V: -- The Government of Sikkim agrees not to levy any import duty, transit duty or other import on goods brought into, or in transit through Sikkim ; and the Government of India agrees not to levy any import or other duty on goods of Sikkimese origin brought into India from Sikkim.
Article VII: -- (1) Subjects of Sikkim shall have the right of entry into, and free movement within, India, and Indian nationals shall have the right of entry into, and free movement within, Sikkim.
(2) Subject to such regulations as the Government of Sikkim may prescribe in consultation with the Government of India, Indian nationals shall have --
(a) the right to carry on trade and commerce in Sikkim; and
(b) when established in any trade in Sikkim, the right to acquire, hold and dispose of any property, movable or immovable, for the purposes of their trade or residence in Sikkim.
(3) Subjects of Sikkim shall have the same right --
(a) to carry on trade and commerce in India and to employment therein; and
(b) of acquiring, holding and disposing of property, movable and immovable, as Indian nationals.
4. It is seen from article V that goods of Sikkimese origin brought into India from Sikkim are not liable for any levy of import or other duty.
5. The learned Government Pleader contended that foreign liquor is dealt with under the Indian Tariff Act and under the Customs Act and that the import is subjected to levy of customs duty. Article V of the Treaty only exempts goods from such levy. But on that ground it cannot be said that the import of liquor from Sikkim is not dealt with either under the Indian Tariff Act or under the Customs Act. Normally, though the import or export of goods is governed by the Indian Tariff Act or the Customs Act, permit for import or export under those Acts would be necessary. Even if the duty payable is nil, the import or export of such goods would be governed by the provisions of those Acts. Therefore, in our view, the words 'dealt with' have a significant meaning. They mean that in respect of those goods a permit for import or export under those Acts is essential and without which the import or export would be illegal. But, as seen from article V of the Treaty, no licence or permit is required to be taken for import or export of goods from Sikkim under the Indian Tariff Act or the Customs Act. The permit given by the Collector of Madras under the direction of the Board of Revenue is under the Tamil Nadu Prohibition Act and not under the Indian Tariff Act or the Customs Act. As already stated, it was not the case of the respondent that the goods were imported into India contrary to the provisions of the Indian Tariff Act or the Customs Act or under any other law governing the import of goods from foreign countries. We are, therefore, of the opinion that the third condition necessary for the applicability of item 70(a) is not satisfied in this case. In this view, it is not necessary for us to go into the further question whether Sikkim is a foreign country within the meaning of that item. In the foregoing circumstances, that portion of the order of the assessing authority, which levied sales tax at the rate of 24 per cent, is liable to be set aside and it is accordingly set aside. The assessing officer is now at liberty to levy tax on the said turnover at the rate of 12 per cent under item 70(b) of the First Schedule to the Act.
6. The writ petition is allowed. There will be no order as to costs. W.P. Nos. 1646 to 1655, 1660 and 1661 of 1974.
7. These writ petitions are filed by the same petitioner. The relief asked for in each one of these writ petitions is a writ of certiorari questioning the provisional assessment made for the year 1973-74. Under the provisional assessment orders, the assessing authority had levied sales tax at the rate of 24 per cent on the turnover relating to liquor of Sikkim origin under item 70(a) of the First Schedule to the Act. We have held in W.P. No. 389 of 1974 that the levy in respect of liquor imported from Sikkim could only be under item 70(b) of the First Schedule to the Act and not under item 70(a). In view of this judgment, the levy at the rate of 24 per cent would be illegal. The writ petitions are directed only against the provisional assessment orders and the final assessments have not yet been completed. We have no doubt that the assessing authority will pass a final assessment order in accordance with our view expressed in W.P. No. 389 of 1974. As the final assessment has yet to be completed, we dismiss these writ petitions with costs. Counsel's fee Rs. 100 in each.