Incorporation by reference under sales tax law allows constitutional limits and validating legislation to govern taxable sales.

Explanation 2 to section 2(k) of the Hyderabad General Sales Tax Act is treated as incorporating Article 286 of the Constitution by reference, so the constitutional sales-tax framework becomes part of the statutory definition of sale. On that basis, sales involving delivery in Hyderabad for consumption were taxable under the Act. The Sales Tax Laws Validation Act also validated inter-State sales levies for the specified period, removing the constitutional obstacle for that interval. In the remanded revision matters, the Tribunal still had to determine whether the respondents were merely non-resident agents and not dealers, while the connected writ petitions failed.

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Issues: (i) Whether Explanation 2 to section 2(k) of the Hyderabad General Sales Tax Act incorporated Article 286 of the Constitution so as to authorise taxation of sales covered by that Article. (ii) Whether sales of goods delivered in Hyderabad State for consumption, and sales falling within the Validation Act period, were liable to tax. (iii) Whether the assessments could stand in the remanded and writ petition matters.

Issue (i): Whether Explanation 2 to section 2(k) of the Hyderabad General Sales Tax Act incorporated Article 286 of the Constitution so as to authorise taxation of sales covered by that Article.

Analysis: The explanation was held to be a legislative incorporation of Article 286 into the definition of sale. The wording, the scheme of the Act, and the object of bringing State sales tax law into conformity with the Constitution showed that the whole of Article 286, including its Explanation, was written into the statute by reference. The omission of an express clause in the same form as other State enactments did not alter the legal effect of the reference. The rule of strict construction of taxing statutes did not prevent giving effect to the clear legislative intent where the language was sufficiently flexible.

Conclusion: The Explanation incorporated Article 286, and delivery-state sales falling within that constitutional framework were within the taxing power conferred by the Act.

Issue (ii): Whether sales of goods delivered in Hyderabad State for consumption, and sales falling within the Validation Act period, were liable to tax.

Analysis: Sales where goods were delivered in Hyderabad for consumption were governed by the incorporated constitutional scheme and were taxable. Further, the Sales Tax Laws Validation Act validated levies on inter-State sales made during the specified period, removing the constitutional impediment for that interval. The restriction in Article 286 ceased once Parliament had enacted validating legislation.

Conclusion: Those sales were held taxable, and the revenue's levy was sustained for the validated period.

Issue (iii): Whether the assessments could stand in the remanded and writ petition matters.

Analysis: In the remanded revision cases, the Tribunal had not examined the separate factual issue whether the respondents were merely non-resident agents and not dealers. Those matters required factual investigation by the Tribunal. The writ petitions were dismissed on the ground that the challenge pressed before the Court had failed.

Conclusion: Some revision cases were remanded for fresh factual inquiry, and the writ petitions were dismissed.

Final Conclusion: The decision upheld the revenue's power to tax the relevant sales under the incorporated constitutional scheme and the validating legislation, while sending limited factual issues back to the Tribunal in certain cases.

Ratio Decidendi: Where a taxing statute incorporates a constitutional provision by reference, the incorporated provision must be read as part of the statute and given the legal effect the legislative context requires, including authorising taxation where the statute's language and scheme so indicate.

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