Severability in tax notifications preserved pre-Constitution liability, while outside-State sales remained immune from post-Constitution assessment.

A taxing notification under section 4(1) of the Orissa Sales Tax Act was upheld in part because the valid appointment of the commencement date was severable from the erroneous reference to the wrong turnover year. The invalid portion was treated as inoperative, leaving the charging provision effective for the pre-Constitution period, and the pre-Constitution assessments were sustained. For the post-Constitution quarters, sales delivered for consumption outside Orissa fell within the constitutional and statutory prohibition on State taxation, so the assessments were without jurisdiction and remained set aside.

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Issues: (i) Whether the notification issued under section 4(1) of the Orissa Sales Tax Act, 1947, was wholly invalid or whether the invalid portion could be severed so that the charging provision remained operative for the pre-Constitution period. (ii) Whether the assessments for the post-Constitution quarters were barred by Article 286 of the Constitution of India and section 30(1)(a)(i) of the Orissa Sales Tax Act, 1947.

Issue (i): Whether the notification issued under section 4(1) of the Orissa Sales Tax Act, 1947, was wholly invalid or whether the invalid portion could be severed so that the charging provision remained operative for the pre-Constitution period.

Analysis: Section 4(1) required the Government only to appoint the date from which liability would commence. The notification, however, not only fixed the date but also identified the class of dealers by reference to the wrong turnover year. That part was inconsistent with the section. The Court held that the erroneous part was severable from the valid appointment of the commencement date. Since the valid part brought the charging provision into force, and the respondents fell within section 4(2) in any event, the pre-Constitution assessments were sustainable.

Conclusion: The notification was valid to the extent that it appointed the commencement date, the inconsistent portion was inoperative, and the pre-Constitution assessments were valid and sustained.

Issue (ii): Whether the assessments for the post-Constitution quarters were barred by Article 286 of the Constitution of India and section 30(1)(a)(i) of the Orissa Sales Tax Act, 1947.

Analysis: The sales were delivered for consumption outside Orissa and therefore attracted the constitutional and statutory prohibition against taxation by the State of Orissa. The later position in the constitutional case law did not assist the Revenue because the sales remained outside the State within the meaning of the relevant prohibition. The assessments for the post-Constitution period were therefore without jurisdiction.

Conclusion: The post-Constitution assessments were invalid and were correctly set aside.

Final Conclusion: The decision upheld the tax assessments for the two pre-Constitution quarters and left undisturbed the cancellation of the post-Constitution assessments, resulting in a partial success for the Revenue.

Ratio Decidendi: Where a notification under a taxing provision contains a valid component and a separate invalid component, the valid component may be severed if it independently satisfies the statutory requirement and the tax liability can otherwise be sustained under the Act; constitutional restrictions on taxing outside-State sales continue to bar post-Constitution assessments within their scope.

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