State sales tax barred on goods delivered outside the State for consumption, while valid pre-Constitution assessments remained enforceable.

Pre-Constitution sales tax assessments for the quarters ending on 31 December 1949 were treated as valid because the earlier challenge to the extension notification could not stand after the connected Supreme Court decision. Post-Constitution turnover was held outside Orissa's taxing power under Article 286(1)(a) because the goods were delivered outside the State for consumption in the delivery State, so sales tax was not payable for those quarters. The direction to refund fees realised under rule 59 of the Orissa Sales Tax Rules, 1947, was also set aside because the validity of those fees had already been affirmed.

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Issues: (i) Whether the assessee was liable to sales tax for the quarters prior to and ending on 31 December 1949; (ii) Whether the assessee was liable to sales tax for the post-Constitution quarters in view of Article 286(1)(a) of the Constitution of India; (iii) Whether the fees realised under rule 59 of the Orissa Sales Tax Rules, 1947, were liable to be refunded.

Issue (i): Whether the assessee was liable to sales tax for the quarters prior to and ending on 31 December 1949.

Analysis: The earlier view invalidating the extension notification could not stand after the Supreme Court's prior decision in the connected matter. On that basis, the pre-Constitution assessments were treated as valid.

Conclusion: The assessee was liable to sales tax for the quarters prior to and ending on 31 December 1949.

Issue (ii): Whether the assessee was liable to sales tax for the post-Constitution quarters in view of Article 286(1)(a) of the Constitution of India.

Analysis: The goods were delivered outside Orissa for consumption in the delivery State. On those facts, the post-Constitution turnover fell within the constitutional restriction against taxation by Orissa.

Conclusion: The assessee was not liable to sales tax for the post-Constitution quarters.

Issue (iii): Whether the fees realised under rule 59 of the Orissa Sales Tax Rules, 1947, were liable to be refunded.

Analysis: The validity of fees realised under rule 59 had already been affirmed in the connected decision, so the direction for refund could not be sustained.

Conclusion: The order directing refund of fees was set aside.

Final Conclusion: The assessment was upheld for the pre-Constitution quarters, quashed for the later quarters, and the refund direction was reversed, leaving the certificate proceedings confined to the valid assessments only.

Ratio Decidendi: Sales tax cannot be levied by the State on transactions where the goods are delivered outside the State for consumption in the delivery State, but assessments already valid for the relevant pre-Constitution period remain enforceable.

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