Sales tax charging provisions cannot be expanded by exemption clauses to tax sales outside the State.

Sales tax under section 3(2) and rule 6 applied only at the first taxable point within the State; where property in tobacco passed at Coimbatore on endorsement and posting of the railway receipts, the sale was outside Travancore-Cochin and fell outside the charging definition. Section 26, framed as a non obstante prohibitory and exempting provision, barred tax on outside-State, import, export and inter-State transactions but did not enlarge section 2(j) or create liability where the transaction was otherwise non-taxable.

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Issues: (i) whether the sales of tobacco by the Coimbatore supplier to the petitioner were sales outside the Travancore-Cochin State so as not to attract sales tax under the Act; (ii) whether section 26 of the Travancore-Cochin General Sales Tax Act, 1125 enlarged the concept of sale and brought such transactions within the tax net.

Issue (i): whether the sales of tobacco by the Coimbatore supplier to the petitioner were sales outside the Travancore-Cochin State so as not to attract sales tax under the Act.

Analysis: The tax under section 3(2) and rule 6 was chargeable at the first taxable point in the State. On the facts, the property in the goods passed at Coimbatore when the railway receipts were endorsed and posted to the petitioner, and the goods were therefore not sold within Travancore-Cochin. A transfer of property outside the State did not satisfy the statutory definition of sale for the purpose of liability under the Act.

Conclusion: The transactions were not taxable sales within the State and did not attract liability under section 3(2) of the Act.

Issue (ii): whether section 26 of the Travancore-Cochin General Sales Tax Act, 1125 enlarged the concept of sale and brought such transactions within the tax net.

Analysis: Section 26 was a prohibitory and exempting provision enacted with a non obstante clause. It barred imposition of tax on sales taking place outside the State, in the course of import or export, and in inter-State trade or commerce. It did not amend or expand the charging definition of sale in section 2(j), nor did it convert a transaction otherwise outside the Act into a taxable sale. Exempting language could not be construed as creating taxability where none existed before.

Conclusion: Section 26 did not enlarge the charging provision or render the transactions taxable.

Final Conclusion: The petitioner remained liable under the sales tax scheme as the first taxable dealer in the State, and the challenge to the levy failed.

Ratio Decidendi: An exemption or restriction clause in a sales tax statute does not enlarge the charging provision or create tax liability for transactions that are not otherwise taxable under the statutory definition of sale.

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