Inter-State sales tax on match turnover upheld where actual delivery for consumption in another State was not proved.

Sales turnover of matches despatched outside Madras remained taxable because the assessee did not prove actual delivery in another State for consumption there, which was necessary to attract the Explanation to Article 286(1)(a). On that factual failure, the transactions continued to fall within Article 286(2) as inter-State sales, and the Presidential Order validly preserved the State's power to levy tax until 31 March 1951. Section 22 of the Madras General Sales Tax Act, as adapted, was consistent with that constitutional position, so the challenge to the levy failed.

---

---

Issues: Whether the sales turnover of matches despatched outside Madras was exempt from sales tax under Article 286(1)(a) of the Constitution, or remained taxable under Article 286(2) and the President's Order.

Analysis: The turnover was admittedly liable to tax under the Madras Act before the Constitution. The assessee failed to establish as a matter of fact that the goods had been actually delivered as a direct result of the sales for consumption in the State where delivered, which was necessary to attract the Explanation to Article 286(1)(a). In the absence of such proof, the transactions remained inter-State sales falling within Article 286(2). The President's Order issued under the proviso to Article 286(2) therefore preserved the State's power to levy tax until 31 March 1951. Section 22 of the Madras General Sales Tax Act, as adapted, was also consistent with that constitutional position.

Conclusion: The sales turnover was taxable in Madras and the challenge to the levy failed.

Ratio Decidendi: The Explanation to Article 286(1)(a) can exclude an inter-State sale from State taxation only when actual delivery for consumption in another State is proved; failing that, the sale remains governed by Article 286(2) and may be taxed pursuant to a valid Presidential order.

---