URC 1992 SC CA NO.513-K/1990





Article 151 —

Per Ajmal Mian, J. –

11. We may observe that sub-clause (b) of clause 3 of Article 151 of the Constitution prohibits a Provincial Assembly and a Provincial Government from imposing a tax which, as untween goods manufactured or produced in the Province and similar goods not so manufactured or produced discriminates in favour of the former goods or which, in the case of goods manufactuered outside the Province discriminates between goods manufactuered or produced in any area in Pakistan and similar goods manufactuered or produced in any other area in Pakistan. In other words, a Provincial Legislature and Provincial Government may impose a tax if it is within its competence and if it does not discriminate between the above categories of goods which is expressly prohibited by above clause (3) of Article 151 of the Constitution. We may point out that there is a marked distinction between clause (3) of ARticle 151 of the Constitution and Article 304(b) of the Indian Constitution, inasmuch as former impliedly reserved the power of a Provincial Legislature to impose a tax within its competence on the goods intended to be exported outside the Province concerned, so long as it does not discriminate between goods in terms thereof, whereas the latter empowers the Legislature of a State to impose any tax on goods imported from other States or the Union territories if similar goods manufactured or produced in that State are subject to such tax. It also prohibits discrimination between the goods referred to therein.

12. However, it may be observed that the impugned export tax has not been imposed by the Provincial Legislature or by the Provincial Government, the same has been levied by the Local Councils, which stand entirely on a different footing. We are inclined to hold that impugned demand of export tax on the goods, which are exported outside the limits of the Province of Sindh, will be violative of above Article 151 of the Constitution, as it will be an impediment in the free inter-provincial trade and commerce as guaranteed by above Article. It cannot be denied that taxation is deterrent against free flow of inter-provincial trade ane commerce.

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