Article 286 sales tax exemption and severable assessment principles apply where delivery for consumption outside the State is proved.

Delivery of goods outside the State for consumption in that State was treated as sufficient to attract the Article 286(1)(a) exemption; proof of actual consumption after delivery was not required, and the sales tax levy on the relevant post-Constitution sales was unlawful. Where a composite assessment covered both lawful and unlawful periods, the invalid part could be severed if the turnover for each period was ascertainable. The assessment was therefore set aside only to the extent of the wrongly included taxable period, while the lawful portion was preserved and the illegally collected tax for the exempt period was refundable with interest.

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Issues: (i) Whether sales of goods delivered outside the State for consumption in that State were exempt from sales tax under Article 286(1)(a) of the Constitution without proof of actual consumption there. (ii) Whether a single assessment covering both taxable and non-taxable periods was invalid in its entirety or could be severed to exclude the illegal part.

Issue (i): Whether sales of goods delivered outside the State for consumption in that State were exempt from sales tax under Article 286(1)(a) of the Constitution without proof of actual consumption there.

Analysis: The constitutional Explanation treated a sale as taking place in the State where the goods were actually delivered as a direct result of the sale for the purpose of consumption in that State. The Court applied the principle that the assessee need not prove actual consumption after delivery; proof of delivery for consumption in the destination State was sufficient. On the evidence, the relevant sales during the post-Constitution period fell within that exemption.

Conclusion: The appellant succeeded on this issue, and the sales tax levy on sales delivered for consumption outside the State for the relevant post-Constitution period was unlawful.

Issue (ii): Whether a single assessment covering both taxable and non-taxable periods was invalid in its entirety or could be severed to exclude the illegal part.

Analysis: The Court distinguished between an indivisible assessment that must fail as a whole and an assessment where the taxable and non-taxable components can be identified separately. Since the turnover for the pre-Constitution and post-Constitution periods was ascertainable from the record, the illegal portion could be separated without disturbing the lawful portion. The proper course was to strike down only the invalid part and preserve the rest.

Conclusion: The assessment was invalid only to the extent of the taxable portion wrongly included for the period January 26, 1950, to March 31, 1950, and was not void in toto.

Final Conclusion: The appellant obtained partial relief, including refund of the tax illegally collected for the exempt period with interest, while the assessment remained effective for the lawful part.

Ratio Decidendi: For sales covered by the constitutional explanation, delivery of goods for consumption in the destination State is sufficient to attract the exemption, and where the lawful and unlawful parts of a composite assessment are separable, only the invalid part need be set aside.

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