Resale outside the State did not trigger tax under the registration proviso; the sales were also constitutionally exempt.

Goods purchased by a registered dealer for resale were not treated as used contrary to the registration certificate merely because they were resold outside Orissa. On a strict reading of the taxing provision, the phrase "intended for resale" was not confined to resale within the State, and the later insertion of "in Orissa" could not be read back into the earlier text. The dealer had resold the goods rather than diverted them to another use, so the proviso to Section 5(2)(a)(ii) did not apply. The sales, being to a jute mill outside Orissa, were also treated as exempt under Article 286(1)(a) of the Constitution.

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Issues: Whether goods purchased by a registered dealer for resale, but actually resold outside Orissa, could be treated as used contrary to the certificate of registration so as to attract tax under the proviso to Section 5(2)(a)(ii) of the Orissa Sales Tax Act, and whether such turnover was exempt under Article 286(1)(a) of the Constitution of India.

Analysis: The turnover claimed as deductible arose from purchases made under a registration certificate describing the goods as intended for resale. The governing statutory language did not, at the material time, confine resale to resale within Orissa. On a strict construction of the taxing provision, the expression "intended for resale" could not be restricted by implication to intra-State resale merely because the State later inserted the words "in Orissa" by amendment. The definition of sale in Section 2(g) of the Orissa Sales Tax Act did not itself impose a territorial limitation, and the dealer had in fact resold the goods rather than diverted them to a different use. The proviso therefore did not apply, and the transaction, being a sale to a jute mill outside Orissa, was also covered by Article 286(1)(a).

Conclusion: The turnover was not liable to be included under the proviso to Section 5(2)(a)(ii) of the Orissa Sales Tax Act, and the disputed sales were exempt under Article 286(1)(a) of the Constitution of India.

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