Geographical destination controls sales-tax exemption; despatches to merged Cooch Behar were within West Bengal, and no reciprocal exemption arose.

For sales-tax exemption limited to goods despatched to an address outside West Bengal, the controlling test is the geographical location of the destination. Despatches to Cooch Behar after its merger into West Bengal were treated as within the State, even though the sales tax law there was extended later, so the sales were not deductible under section 5(2)(a)(v). Rule 3(19) was confined to preventing double taxation for Cooch Behar dealers and did not create a reciprocal substantive exemption for sellers elsewhere in West Bengal. The reference was answered in favour of the revenue.

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Issues: (i) Whether sales of goods despatched to Cooch Behar before the extension of the sales tax law to that territory were deductible as sales to an address outside West Bengal under section 5(2)(a)(v) of the Act; (ii) Whether rule 3(19) of the Bengal Sales Tax Rules, 1941 conferred any substantive right on the assessee to claim corresponding exemption.

Issue (i): Whether sales of goods despatched to Cooch Behar before the extension of the sales tax law to that territory were deductible as sales to an address outside West Bengal under section 5(2)(a)(v) of the Act.

Analysis: The exemption under section 5(2)(a)(v) depended on despatch to a place outside the geographical limits of West Bengal. Once Cooch Behar merged into West Bengal on 1 January 1950, it became part of the State for that purpose, even though the sales tax law was extended there later by legislation and notification. The court therefore treated despatches to Cooch Behar after merger as despatches within West Bengal and not as sales outside the State.

Conclusion: The sales were not deductible under section 5(2)(a)(v) and the answer was against the assessee.

Issue (ii): Whether rule 3(19) of the Bengal Sales Tax Rules, 1941 conferred any substantive right on the assessee to claim corresponding exemption.

Analysis: Rule 3(19) was introduced to prevent double taxation of Cooch Behar dealers who had purchased goods from West Bengal before the law was extended to Cooch Behar. It operated for the benefit of those dealers and did not create a reciprocal exemption in favour of sellers in other parts of West Bengal.

Conclusion: Rule 3(19) did not bestow any enforceable right on the assessee, and the answer was against the assessee.

Final Conclusion: The reference was answered in favour of the revenue, and the assessee's claim for exemption on the disputed sales failed.

Ratio Decidendi: For the purpose of a sales-tax exemption limited to goods despatched to an address outside the State, the relevant test is the geographical location of the destination, and a rule enacted to prevent double taxation for a specific class cannot be used to claim a reciprocal exemption by others unless the statute so provides.

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