Sales tax jurisdiction fails where contract, payment, and acceptance occur outside the taxing State.

Sales tax jurisdiction depended on where the sale transaction was legally completed. Because the contracts were made in Bombay, payment was made there, and delivery, inspection, and acceptance of the goods occurred outside Madras, the sale was found not to have taken place within Madras territorial jurisdiction. The court followed the earlier decision on the same issue and rejected the revenue's attempt to distinguish it. The levy was therefore unsustainable, and the tax was recoverable with costs.

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Issues: Whether the State of Madras had jurisdiction to levy sales tax on the transaction in question, where the contracts were made at Bombay, payment was made at Bombay, and delivery, inspection, and acceptance of the goods took place outside Madras.

Analysis: The transaction was examined on the basis of the place where the contract was concluded, the place of payment, and the place where the goods were weighed, inspected, and accepted. On those facts, the sale was held not to have taken place in Madras. The prior decision on the same legal question was followed, and the attempted distinction drawn by the revenue was rejected.

Conclusion: The State of Madras had no jurisdiction to levy the sales tax, and the levy was unsustainable.

Final Conclusion: The appeal succeeded and the plaintiff was entitled to recovery of the tax with costs.

Ratio Decidendi: A sales tax cannot be levied by a State where the sale transaction, judged by the place of contract, payment, and acceptance of goods, is found not to have taken place within that State's territorial jurisdiction.

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