Actual delivery within the State governs sales tax immunity; carrier despatch and F.O.R. terms do not create inter-State sale.

Actual delivery to the purchaser within the State for consumption there is determinative for sales tax purposes under Article 286 and the corresponding State exemption. Delivery to a common carrier is only constructive delivery, so despatch from factories outside the State does not by itself create an inter-State sale. On the stated facts, cement sold to the public was accepted and paid for within Mysore and actually delivered there, making it taxable by the State. Supplies under an annual rate contract were treated the same way: an F.O.R. ex-works clause and transit-risk allocation did not alter the fact that the sale was concluded and delivery effected within the State, so the supplies remained taxable.

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Issues: (i) whether sales of cement to the public, though despatched from factories outside Mysore, were outside the State or in the course of inter-State trade so as to be immune from sales tax under Article 286(1)(a) of the Constitution and section 27 of the Mysore Sales Tax Act, 1948; (ii) whether supplies made under the annual rate contract to the Director-General of Supplies and Disposals, Government of India, were in the course of inter-State trade or otherwise beyond the State's taxing power under Article 286(2) of the Constitution and section 27 of the Mysore Sales Tax Act, 1948.

Issue (i): whether sales of cement to the public, though despatched from factories outside Mysore, were outside the State or in the course of inter-State trade so as to be immune from sales tax under Article 286(1)(a) of the Constitution and section 27 of the Mysore Sales Tax Act, 1948.

Analysis: The constitutional and statutory explanations make the place of actual delivery for consumption within the State determinative. Delivery to a common carrier is only constructive delivery and does not amount to actual delivery to the purchaser. On the admitted facts, the orders were accepted at Bangalore, the price was collected there, and the goods were actually delivered to the buyers within Mysore for consumption within the State. The mere circumstance that the cement was loaded at railway sidings outside Mysore and sent by rail did not convert the transactions into inter-State sales.

Conclusion: The sales to the public were taxable by the State of Mysore and were not protected by Article 286(1)(a) or section 27.

Issue (ii): whether supplies made under the annual rate contract to the Director-General of Supplies and Disposals, Government of India, were in the course of inter-State trade or otherwise beyond the State's taxing power under Article 286(2) of the Constitution and section 27 of the Mysore Sales Tax Act, 1948.

Analysis: Although the contract described the supply as F.O.R. ex-works, the decisive facts were that the orders were placed at Bangalore, the goods were directed to be supplied from factories outside Mysore, and they were actually delivered within Mysore and consumed there. Contractual allocation of transit risk did not alter the character of the transactions where the sale was concluded and delivery was effected within the State.

Conclusion: The supplies under the contract were not inter-State sales and were liable to tax in Mysore.

Final Conclusion: The writ petition failed in full, and the assessment and demand were upheld.

Ratio Decidendi: For the purpose of Article 286 and the corresponding statutory exemption, actual delivery means delivery to the purchaser or his agent within the State for consumption there, and despatch through a carrier or an F.O.R. ex-works clause does not by itself make the transaction an inter-State sale.

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