Severability of tax notification and Article 286 bar determined validity of pre- and post-Constitution sales assessments.

A statutory notification is not wholly invalid if its lawful part is clearly severable from the erroneous excess; the valid portion may be sustained, and pre-Constitution assessments remained enforceable under section 4(2) because the statutory conditions were met. Sales delivered for consumption outside the State could not be taxed by Orissa after the Constitution, as article 286(1)(a) read with the Explanation and the corresponding statutory bar withdrew taxing jurisdiction over such transactions. The appeal was therefore allowed only to the extent of restoring the pre-Constitution assessments, while the post-Constitution assessments were set aside.

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Issues: (i) Whether the notification issued under section 4(1) of the Orissa Sales Tax Act, 1947 was wholly invalid or severable, and whether the pre-Constitution assessments could be sustained under section 4(2); (ii) Whether the post-Constitution assessments were barred by article 286 of the Constitution and section 30 of the Act.

Issue (i): Whether the notification issued under section 4(1) of the Orissa Sales Tax Act, 1947 was wholly invalid or severable, and whether the pre-Constitution assessments could be sustained under section 4(2).

Analysis: Section 4(1) made the incidence of tax depend on a notified date, while the class of dealers liable was fixed by the statute itself by reference to turnover in the year immediately preceding commencement of the Act. The notification in question correctly appointed the date but wrongly referred to the turnover of the year ending 31 March 1949 instead of the relevant preceding year. The majority held that the erroneous part could be severed from the valid part, leaving a lawful notification as to date. On the facts, the respondents were held liable in any event under section 4(2) for the pre-Constitution period, as the statutory conditions of that sub-section were satisfied.

Conclusion: The pre-Constitution assessments were valid and were rightly restored.

Issue (ii): Whether the post-Constitution assessments were barred by article 286 of the Constitution and section 30 of the Act.

Analysis: The goods were delivered for consumption outside the State of Orissa. The majority held that, in view of article 286(1)(a) read with the Explanation and section 30(1)(a)(i) of the Act, the sales could not be taxed by Orissa. The later decision in Bengal Immunity did not assist the Revenue, because the constitutional prohibition under clause (1)(a) remained operative independently of the President's Continuance Order and also controlled the State's taxing power on these sales.

Conclusion: The post-Constitution assessments were without jurisdiction and were rightly set aside.

Final Conclusion: The appeal succeeded only to the extent of restoring the assessments for the two pre-Constitution quarters, while the assessments for the three post-Constitution quarters remained invalid.

Concurring Opinion: S. K. Das and Venkatarama Aiyar, JJ. agreed with the partial allowance of the appeal and with the restoration of the pre-Constitution assessments, but held independently that the post-Constitution assessments were barred by article 286 and section 30 of the Act. The Court's final order reflected this majority view.

Dissenting Opinion: Sarkar, J. held that the notification under section 4(1) was invalid in its entirety, that section 4(2) could not be invoked without a valid notification under section 4(1), and that the appeal should therefore have been dismissed in full.

Ratio Decidendi: Where a statutory notification contains an invalid excess but the valid part is clearly severable, the valid part may be sustained; and a State cannot tax sales delivered for consumption outside its territory in the face of article 286(1)(a) and the corresponding statutory prohibition.

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