Article 286 bar on taxing outside sales applied, so the revenue order was set aside without remand.

The Board of Revenue could not set aside exemption on alleged inter-State sales by relying only on the charging provisions of the sales tax law and the Validation Act, because Article 286(1)(a) continued to bar taxation of sales that were outside sales. The assessment had granted exemption where goods were delivered outside Madras State, and the challenge failed to address that distinct constitutional restriction. As the transactions were numerous, old, and largely supported by invoices showing delivery outside the State, a fresh inquiry would have served no useful purpose. The Board's order was therefore unsustainable and was set aside, with no remand directed.

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Issues: Whether the Board of Revenue was justified in setting aside exemption on alleged inter-State sales without considering the bar under Article 286(1)(a) of the Constitution, and whether the matter should be remanded for fresh examination.

Analysis: The assessment order had granted exemption on sales where the goods were delivered outside Madras State, but the Board proceeded on the assumption that the State could tax such sales merely by reference to the charging provisions of the sales tax law and the effect of the Validation Act and amendments. The order under challenge did not address the distinct constitutional ban under Article 286(1)(a), which continued to prohibit taxation of sales that were outside sales. Since the transactions were numerous, old, and mostly supported by invoices showing delivery outside the State, the Court found that a remand for fresh investigation would serve no useful purpose.

Conclusion: The order of the Board of Revenue was unsustainable and was set aside, and no remand was directed.

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