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38. It is next urged by Mr. Seervai that the only article which we must look at for the purpose of determining what are the restrictions upon the legislative competence of the Legislature is Article 303 and that article merely prevents the State Legislature from passing any law of a discriminatory or preferential character. In our opinion, to accept that submission would be totally to ignore Article 301.

It would also be to ignore Article 304 because. Article 304 partly removes the restriction imposed upon the competence of the State Legislature by Article 301. It was rather faintly suggested that Article 304 was merely enacted 'ex majore cautela'. Undoubtedly there are articles in the Constitution which the Constituent Assembly may well have thought ot enacting for greater caution, but looking to the language of Article 304 it is impossible to accept that contention.

Article 304 in terms deals with Article 301 and consfitutes a non-obstantat provision to Article 301. It is also important to note that Article 304 is not a restriction upon the legislative competence of the Legislature stiictly understood. The language of Article 304, which empowers the Legislature of a State to make Jaws falling under Clause (a) or (b), clearly shows that power having been taken away by Article 301 a limited power is then conferred under Article 304.

Therefore we must really construe Article 304 in order to decide whether the present legislation comes within the provisions of Article 304, because in our opinion unless the legislation falls 'under Art 304 it would be prohibited under Article 301.

In other words, the principle underlying Article 304(a) is that goods imported from outside the State should not receive better treatment or preferential treatment to the goods in the State itself. And the power conferred upon the State Legislature under Clause (b) is to impose reasonable restrictions which may be required in the public interest. But these restrictions can only operate provided the previous sanction of the President has been obtained.

It was contended by Mr. Seervai that Article 304(a) is the only limitation upon the taxing power of the State and which only operates when goods are produced or manufactured in the State and similar goods are imported from another State, and says Mr. Seervai that the taxing power of the State is unaffected if similar goods are not manufactured or produced in the State and goods are imported from another State. To accept that contention would again involve our reading Article 304 as containing a restriction upon the legislative competence of the Legislature.

If that were the correct reading of Article 304, then Mr. Seervai would be right. But as we have already pointed out we look upon Article 301 as the main and principal restriction and Article 304(a) as an exception which expressly empowers the State Legislature to pass laws limited to the case coming under Article 304(a). Mr. Seervai, expressed some surprise that the Constitution makers should have prevented a State Legislature from imposing tax on goods imported from other States where no question of discrimination or preference arose and where similar goods were not manufactured or produced in the State itself.