Pre-Constitution sales tax, invalid amendment, and non-manufacture of ore mixing determined the taxability issues.

Article 286 did not invalidate sales tax assessments for completed pre-Constitution periods merely because the assessment orders were passed after 26 January 1950. A purported substitution of explanation (II) to section 2(g) of the Central Provinces and Berar Sales Tax Act failed for want of the required assent, and the attempted amendment was wholly ineffective; the unamended provision therefore continued in force and there was no question of revival. Mixing manganese ore during unloading and transport did not amount to manufacture of a new commercial commodity, as there was no transformation into a distinct marketable genus of goods. The goods were treated as present in the taxing State and identifiable with the contracts.

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Issues: (i) Whether article 286 of the Constitution of India barred the sales tax assessments for periods prior to 26 January 1950 though the orders were passed after the Constitution came into force; (ii) whether the attempted amendment substituting explanation (II) to section 2(g) of the Central Provinces and Berar Sales Tax Act, 1947 was ineffective for want of assent under section 107 of the Government of India Act, and if so whether the unamended provision stood revived or continued; (iii) whether the process by which manganese ore was mixed during unloading and transport amounted to manufacture of a new commercial commodity called "oriental mixture", and whether the goods were in the taxing State and referable to the contracts when the sales tax liability arose.

Issue (i): Whether article 286 of the Constitution of India barred the sales tax assessments for periods prior to 26 January 1950 though the orders were passed after the Constitution came into force.

Analysis: The relevant assessment periods were wholly prior to the commencement of the Constitution. The taxability had to be judged with reference to the law and the factual situation obtaining during those periods. Article 286 was not retrospective so as to invalidate assessments relating to completed pre-Constitution periods merely because the assessment orders were made later.

Conclusion: Article 286 did not assist the assessee; the assessments for the pre-Constitution periods were not vitiated.

Issue (ii): Whether the attempted amendment substituting explanation (II) to section 2(g) of the Central Provinces and Berar Sales Tax Act, 1947 was ineffective for want of assent under section 107 of the Government of India Act, and if so whether the unamended provision stood revived or continued.

Analysis: The amendment used a single legislative process of substitution. The Court held that the process was indivisible and could not be split into an operative repeal and a separate reenactment. Since the required assent of the Governor-General was not obtained, the whole attempted substitution failed. In such a case there was no valid repeal standing by itself, and the earlier provision was left untouched rather than being revived after extinction.

Conclusion: The amended explanation did not take effect, and the unamended explanation remained in force; there was no question of revival of a repealed provision.

Issue (iii): Whether the process by which manganese ore was mixed during unloading and transport amounted to manufacture of a new commercial commodity called "oriental mixture", and whether the goods were in the taxing State and referable to the contracts when the sales tax liability arose.

Analysis: The contracts related to goods whose ingredients were present in the taxing State when the contracts were made. The later mixing during unloading did not involve any mechanical or chemical process capable of producing a commercially distinct new commodity. Mere mixing of grades of ore, without transformation into a new marketable genus of goods, was not manufacture. The factual findings also supported the conclusion that the goods were present in the State and were identifiable with the contracts.

Conclusion: The process did not amount to manufacture of a new commodity, and the sales tax authorities were right in treating the goods as present in the State and covered by the contracts.

Final Conclusion: The assessee failed on the substantive taxability issues, while the State succeeded on the validity of the unamended taxing provision and on the characterization of the goods and process, resulting in dismissal of the assessee's appeals and allowance of the State's appeals.

Ratio Decidendi: Where a purported legislative substitution fails for want of the constitutionally required assent, the attempted amendment is wholly ineffective and the pre-existing provision continues in force; mere mixing of goods without transformation into a distinct commercial commodity does not constitute manufacture.

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