Territorial nexus under sales tax law: despatches from former princely states outside the province were not taxable sales.

Goods despatched from the former States of Raigarh and Maihar to destinations outside the Province were not sales taxable under the Central Provinces and Berar Sales Tax Act because those States were outside the Province during the relevant assessment period. The territorial history showed that Maihar never formed part of the Province, while Raigarh became subject only after the relevant merger arrangements; the delegated jurisdiction commenced on 1 January 1948, the law applied to the Central Provinces States from 1 February 1949, and tax was leviable only on sales effected on or after 1 April 1949. As the goods moved directly outside the Province and were never situated within it, the Act did not apply.

---

---

Issues: Whether despatches of goods from the former States of Raigarh and Maihar to destinations outside the Province constituted sales liable to tax under the Central Provinces and Berar Sales Tax Act.

Analysis: The relevant territorial history showed that the former State of Maihar was never part of the Central Provinces and Berar. The former State of Raigarh also was not part of that Province during the assessment period, as the Central Provinces States were separate entities until the constitutional and merger arrangements took effect. The Provincial Government's delegated jurisdiction arose only from 1 January 1948, and the sales tax law was made applicable to the Central Provinces States only from 1 February 1949, with tax leviable only on sales effected on or after 1 April 1949. During the assessment period in question, the goods moved directly from the former States to places outside the Province and were never situated within the Province.

Conclusion: The despatches did not constitute sales liable to be taxed under the Act, and the revision application was allowed.

---