Intra-State sale of rice through commission agents excluded from Article 286 protection as transaction completed within the State.

Rice sold to commission agents for out-of-State buyers was treated as an intra-State sale where the assessee received the price, booked the goods in its own name, and then immediately endorsed the railway receipts to the agents. Once endorsement occurred, control passed and the risk shifted, so the later movement of goods was not the direct result of a sale by the seller. On these facts, the transaction was completed within the State and did not enjoy protection under Article 286(1)(a); the claimed exemption was therefore disallowed.

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Issues: Whether the sales in question were sales completed within the State and were therefore not protected by the Explanation to Article 286(1)(a) of the Constitution, so as to entitle the assessee to exemption.

Analysis: The rice was sold to commission agents acting for buyers outside the State, but the assessee received the price, booked the goods in its own name, and immediately endorsed the railway receipts to the commission agents. After endorsement, the assessee had no further control and the risk had passed. On these facts, the delivery outside the State was not the direct result of the sale by the assessee. The transaction was complete within the State, and the subsequent movement of goods was on behalf of the commission agents and not as an inter-State sale by the seller.

Conclusion: The sales were inside sales within the State and did not fall within the protection of Article 286(1)(a); the exemption was rightly disallowed.

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