Post-import first sale tax applies only to a resident dealer's sale within the State, not to import-linked transactions.

Under the amended first proviso to section 3(2) of the Madras General Sales Tax Act, tax was attracted only on the first sale within the State after import, made by a resident dealer and not exempt. On the facts described, the import formed part of the very sale transaction by non-resident mills to the petitioners, and delivery of railway receipts through banks or indenting agents did not amount to a separate post-import sale in Madras. No material showed any antecedent taxable sale within the State after import, and the retrospective amendment did not change that position. The petitions were therefore dismissed and the additional sales tax sustained.

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Issues: Whether, on the facts, the petitioners' sales of imported textile goods were the first sales effected in the State after import so as to attract tax under the amended first proviso to section 3(2) of the Madras General Sales Tax Act, 1939.

Analysis: The amended proviso to section 3(2) fastened tax on the first sale in the State after import of goods, provided the sale was effected by a dealer resident in the State and not exempt. The goods were sold by non-resident mills to the petitioners, and the import into Madras was part of that very sale transaction. The railway receipts delivered through banks or indenting agents did not amount to a separate sale by the bank or by the agents, and no material showed any antecedent sale within Madras after import by a resident dealer. The retrospective amendment by Madras Act 23 of 1957 did not alter that position.

Conclusion: The petitioners were not shown to have effected the first taxable sale after import within the State; the liability under section 3(2) was attracted against them, and the challenge failed.

Final Conclusion: The petitions were rightly dismissed, with the additional sales tax sustained on the footing that the petitioners were the first resident dealers after import.

Ratio Decidendi: For the purposes of the amended first proviso to section 3(2), tax is attracted only when there is a sale within the State after import, and a sale completed as part of the import transaction does not constitute such a post-import sale by a resident dealer.

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