Actual delivery outside the State governs sales tax exemption, and carrier delivery within the State defeats the rebate claim.

Actual delivery outside the State is the test for exemption under the Explanation to Article 286(1)(a); delivery to a carrier named by the buyer within the State is delivery to the buyer, and later movement outside the State does not create a second delivery. On that reasoning, sales of groundnut oil delivered at Pollachi junction were not exempt from State sales tax. The same factual and contractual position also defeated the claim to a half-tax rebate under section 7 of the Madras General Sales Tax Act, because that rebate applied only where the contract and actual delivery were both outside the State.

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Issues: (i) Whether the sales of groundnut oil were exempt from State sales tax under the Explanation to Article 286(1)(a) of the Constitution on the footing that the goods were actually delivered outside the State; (ii) whether the assessee was entitled to a rebate of one-half of the tax under section 7 of the Madras General Sales Tax Act.

Issue (i): Whether the sales of groundnut oil were exempt from State sales tax under the Explanation to Article 286(1)(a) of the Constitution on the footing that the goods were actually delivered outside the State.

Analysis: The constitutional exemption depended on actual delivery outside the State as a direct result of the sale. The contract itself provided for delivery at Pollachi junction within the State, and the seller's handing over of the goods to the carrier named by the buyer amounted in law to delivery to the buyer. The subsequent movement of the goods to Ernakulam by the buyer's agent did not create a second delivery outside the State. The passing of property was irrelevant, but the place of actual delivery was not.

Conclusion: The assessee was not entitled to exemption under the Explanation to Article 286(1)(a) of the Constitution.

Issue (ii): Whether the assessee was entitled to a rebate of one-half of the tax under section 7 of the Madras General Sales Tax Act.

Analysis: The statutory rebate applied only where the contract provided for delivery outside the State and the goods were actually delivered outside the State in pursuance of that contract. Since the contract in this case stipulated delivery within the State and the constitutional requirement of outside-State delivery was not satisfied, the statutory conditions for rebate were necessarily absent.

Conclusion: The assessee was not entitled to a rebate under section 7 of the Madras General Sales Tax Act.

Final Conclusion: The tax liability attached because delivery under the contract occurred within the State, and neither the constitutional exemption nor the statutory rebate could be claimed.

Ratio Decidendi: For sales-tax exemption based on goods being delivered outside the State, the decisive test is actual delivery by the seller to the buyer outside the State; delivery to a carrier as the buyer's agent within the State is delivery to the buyer and defeats the exemption.

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