State sales tax deduction turns on statutory despatch conditions, while registered-dealer status depends on the relevant place of business.

Deduction under the Bihar sales tax provision for goods despatched outside the State depended on compliance with the statutory despatch conditions, not merely on when title passed. The majority view was that sales completed in Bihar could still qualify if the goods were despatched to an address outside Bihar by or on behalf of the dealer, and the deduction was therefore available on that issue. Separately, sales routed through a Calcutta office did not qualify as sales to a registered dealer because the relevant registration was linked to the Muzaffarpur place of business, so the deduction under the registered-dealer provision was denied.

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Issues: (i) whether sales of goods despatched outside Bihar were deductible under Section 5(2)(a)(v) although property in the goods had passed before despatch; and (ii) whether sales made through the company's Calcutta office qualified for deduction as sales to a registered dealer under Section 5(2)(a)(ii).

Issue (i): Whether sales of goods despatched outside Bihar were deductible under Section 5(2)(a)(v) although property in the goods had passed before despatch.

Analysis: The majority held that the deduction under Section 5(2)(a)(v) turned on whether the goods were despatched to an address outside Bihar by or on behalf of the dealer, and not on whether title had passed before despatch. On that construction, the fact that the sale was completed in Bihar did not by itself defeat the deduction if the statutory conditions as to despatch were satisfied. The dissenting view treated the words requiring despatch by or on behalf of the dealer as indicating that the provision applied only where the dealer's own liability continued up to despatch, and therefore not where the purchaser had already taken delivery in Bihar.

Conclusion: By majority, the deduction under Section 5(2)(a)(v) was allowable and this issue was decided in favour of the assessee.

Issue (ii): Whether sales made through the company's Calcutta office qualified for deduction as sales to a registered dealer under Section 5(2)(a)(ii).

Analysis: The Court held that the statutory concept of a registered dealer was tied to the place of business and the registration certificate issued under the Act and rules. The sales in question were made through the Calcutta office, while the registration relied on related only to the Muzaffarpur place of business. On that footing, the purchaser in the relevant transactions was not the registered dealer contemplated by the provision.

Conclusion: The deduction under Section 5(2)(a)(ii) was not available, and this issue was decided against the assessee.

Final Conclusion: The reference was answered partly in favour of the assessee on the first issue and against the assessee on the remaining issue relating to registered dealer status, so that only the first deduction succeeded.

Ratio Decidendi: A deduction provision in a taxing statute must be applied according to its exact words, and where exemption depends on despatch by or on behalf of the dealer to an address outside the State, the decisive enquiry is compliance with those statutory conditions rather than the mere passage of title; separately, a registered dealer is the dealer or branch holding the relevant statutory registration for the transaction in question.

Concurring Opinion: Sarjoo Prasad, J. and Sinha, J. agreed that the claims under Section 5(2)(a)(ii) failed. On the first issue, Sarjoo Prasad, J. and Sinha, J. held that the proviso was not satisfied because the despatch was not by or on behalf of the dealer in the statutory sense, and accordingly the deduction under Section 5(2)(a)(v) was not allowable.

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