Constitutional fiction on sale situs allows delivery State taxation, while alternative remedies do not bar writ jurisdiction.

The article explains that a writ petition may still be maintainable where assessment proceedings rest on a challenged assumption of jurisdiction, so alternative statutory remedies do not bar constitutional review. It states that the Explanation to Article 286(1)(a) was read as a constitutional fiction localising certain sales in the State of delivery for consumption, enabling that State to tax them under its legislative power. It further notes the majority view that Article 286(2) did not exclude such sales, and that the Bihar Sales Tax Act could validly apply to non-resident dealers because the taxable event was treated as occurring within Bihar. The dissent viewed Article 286(2) as an absolute bar until parliamentary intervention.

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Issues: (i) Whether the writ petition was maintainable despite the availability of appeal and revision under the Sales Tax Act; (ii) whether the Explanation to Article 286(1)(a) authorised taxation by the delivery State; (iii) whether sales covered by the Explanation were nevertheless barred by Article 286(2); and (iv) whether the Bihar Sales Tax Act could validly be applied to non-resident dealers in respect of such sales.

Issue (i): Whether the writ petition was maintainable despite the availability of appeal and revision under the Sales Tax Act.

Analysis: The availability of statutory appeal or revision did not conclude the question where the impugned proceedings were founded on a challenged assumption of jurisdiction. If the taxing provision itself was unconstitutional or inapplicable, the assessing authority would lack jurisdiction to proceed against the assessee, and the statutory remedies would not bar recourse to constitutional writ jurisdiction.

Conclusion: The petition was maintainable and the objection based on alternative remedy failed.

Issue (ii): Whether the Explanation to Article 286(1)(a) authorised taxation by the delivery State.

Analysis: The Explanation was treated as creating a legal fiction to fix the situs of certain sales in the State where the goods were actually delivered for consumption. On the majority view, that fiction did not merely negate the power of other States; it also located the sale within the delivery State so that the State's taxing power under Article 246(3) and Entry 54 of List II could operate.

Conclusion: The Explanation was construed as authorising the delivery State to tax sales falling within it.

Issue (iii): Whether sales covered by the Explanation were nevertheless barred by Article 286(2).

Analysis: Article 286(2) was held to govern sales in the course of inter-State trade or commerce, while the Explanation to Article 286(1)(a) was read as localising the relevant sales in the delivery State for taxation purposes. The majority concluded that the two provisions occupied different fields and that the sales brought within the Explanation were not excluded by Article 286(2).

Conclusion: Article 286(2) did not bar taxation of sales covered by the Explanation.

Issue (iv): Whether the Bihar Sales Tax Act could validly be applied to non-resident dealers in respect of such sales.

Analysis: The Act was upheld against the attack based on extra-territoriality because the taxing event was treated as occurring within Bihar by virtue of the constitutional fiction. The authority to require registration and to initiate assessment followed from the validity of the taxing power over the relevant sales. The majority also held that the goods were actually delivered in Bihar for consumption within the State.

Conclusion: The Act was validly applicable to the assessee and the impugned proceedings were within jurisdiction.

Final Conclusion: The constitutional bar was not accepted as excluding Bihar's power to tax the disputed sales, and the assessment proceedings against the assessee were sustained.

Ratio Decidendi: A constitutional fiction that deems a sale to take place in the State of delivery for consumption localises the taxable event in that State and, on the majority view, such sales are not excluded by the prohibition against taxation of sales in the course of inter-State trade.

Dissenting Opinion: The dissenting judges held that Article 286(2) imposed an absolute bar on State taxation of inter-State sales until Parliament otherwise provided, and that the prior decision should have been overruled.

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