WEST BENGAL HOSIERY ASSOCIATION AND ORS. vs STATE OF BIHAR AND ANR.

The Supreme Court held that the Bihar Government's notification exempting hosiery goods manufactured in Bihar from sales tax while imposing a 5% tax on similar goods imported from other states violated Articles 301 and 304(b) of the Constitution of India. The Court found that this exemption constituted clear discrimination against out-of-state goods, hampering the free flow of trade and commerce. Consequently, the Court quashed the notification and directed the State to refrain from levying sales tax on imported hosiery goods.