Taxing notifications must match the statute, and inter-State sales remain outside State tax power under Article 286.

A taxing notification under section 4(1) of the Orissa Sales Tax Act had to conform strictly to the statutory turnover year tied to commencement of the Act, and a notification fixing an inconsistent year was invalid, leaving no basis for pre-Constitution sales tax liability. Sales made after the Constitution's commencement, on facts showing inter-State elements and delivery for consumption outside Orissa, were protected by Article 286 and could not be taxed by the State. The later amendment to the sales tax law could not expand taxing power beyond the constitutional restriction, so the assessment failed for the entire period.

---

---

Issues: (i) Whether the notification issued under section 4(1) of the Orissa Sales Tax Act, 1947 fixing the relevant turnover year for Pallahara State was valid, and whether the petitioner was liable to sales tax for the pre-Constitution period. (ii) Whether the petitioner's sales after the commencement of the Constitution were taxable in view of Article 286 of the Constitution of India.

Issue (i): Whether the notification issued under section 4(1) of the Orissa Sales Tax Act, 1947 fixing the relevant turnover year for Pallahara State was valid, and whether the petitioner was liable to sales tax for the pre-Constitution period.

Analysis: The Act became operative in Pallahara State only when the substantive charging and machinery provisions were brought into force, and the relevant turnover for liability under section 4(1) had to be the year immediately preceding that commencement. The notification, however, referred to the year ending 31st March, 1949, which did not answer the statutory requirement and therefore did not conform to section 4(1). Since liability under section 4(1) depended upon a valid notification and the notification was inconsistent with the section, the attempted assessment for that period could not stand.

Conclusion: The notification was invalid and the petitioner was not liable to sales tax for the pre-Constitution period.

Issue (ii): Whether the petitioner's sales after the commencement of the Constitution were taxable in view of Article 286 of the Constitution of India.

Analysis: The sales were on admitted facts transactions involving inter-State elements, with delivery for consumption outside Orissa. Under Article 286, a State could not tax a sale outside its competence, and the constitutional protection applied to such transactions. The later amendment of the Orissa Sales Tax Act could not enlarge the State's taxing power beyond Article 286, and the President's order under clause (2) did not assist where the sale fell within clause (1).

Conclusion: The post-Constitution sales were not taxable by the State of Orissa.

Final Conclusion: The assessment for the entire period failed in law, and the petitioner obtained complete relief against the tax demand.

Ratio Decidendi: A taxing notification must strictly conform to the enabling charging provision, and a State cannot levy sales tax on inter-State sales falling within Article 286 of the Constitution of India.

---