Actual delivery outside the State governs sales tax rebate where contract terms fix the place of delivery.

Under section 5 of the Uttar Pradesh Sales Tax Act, 1948, "delivery outside Uttar Pradesh" was construed in its ordinary commercial sense as actual physical delivery, not constructive delivery, because the rebate was designed to support genuine export sales and a broader reading would defeat that object. The despatch instructions in the contract were treated as contractual terms fixing the place of delivery, not as an extraneous arrangement, so the sales were regarded as sales for delivery outside Uttar Pradesh. On that basis, the assessee was entitled to the statutory rebate.

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Issues: (i) Whether the expression "delivery outside Uttar Pradesh" in section 5 of the Uttar Pradesh Sales Tax Act, 1948 means actual delivery or includes constructive delivery; (ii) Whether the despatch instructions contemplated by the contract formed part of the contract for deciding whether the sales were for delivery outside Uttar Pradesh and entitled to rebate under section 5.

Issue (i): Whether the expression "delivery outside Uttar Pradesh" in section 5 of the Uttar Pradesh Sales Tax Act, 1948 means actual delivery or includes constructive delivery.

Analysis: The statutory rebate was intended to encourage genuine export of notified goods manufactured in Uttar Pradesh. In that context, "delivery" was construed in its ordinary and commercial sense as physical delivery, not constructive delivery in law. If constructive delivery were accepted, the object of the rebate provision would be substantially defeated.

Conclusion: The expression "delivery outside Uttar Pradesh" means actual delivery, not constructive delivery.

Issue (ii): Whether the despatch instructions contemplated by the contract formed part of the contract for deciding whether the sales were for delivery outside Uttar Pradesh and entitled to rebate under section 5.

Analysis: The contract required actual delivery at a destination to be communicated later, and the despatch instructions identified the place of delivery rather than merely the mode of performance. Those instructions were therefore treated as contractual terms, not a later extraneous arrangement. On that basis, the sales were sales for actual delivery outside Uttar Pradesh.

Conclusion: The despatch instructions formed part of the contract, and the sales were for delivery outside Uttar Pradesh.

Final Conclusion: The assessee was entitled to the statutory rebate, and the answer returned to the reference went in its favour.

Ratio Decidendi: For a rebate provision aimed at export sales, "delivery outside the State" denotes actual physical delivery outside the State, and contractual despatch instructions fixing the place of delivery can be part of the sale contract for determining entitlement to the rebate.

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