Inter-State sales immunity cannot be overridden by turnover machinery where intra-State sales are later resold outside the State.

Sales made wholly within Assam were treated as distinct from later resale in Calcutta, so they did not become sales in the course of inter-State trade or commerce merely because the goods were subsequently moved outside the State. Article 286(2) was therefore confined to transactions directly forming part of inter-State trade, and the challenged provision was not invalid on that basis. The machinery provision for computing net turnover could not enlarge the charging provision or override the constitutional ban; section 15 only provided an additional exemption against multiple-point taxation within the State. The text states that constitutionally immune sales could not be made taxable through turnover computation.

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Issues: (i) Whether section 15 of the Assam Sales Tax Act, 1947, as amended, and the connected rule were invalid for taxing sales in the course of inter-State trade or commerce in breach of Article 286(2) of the Constitution; (ii) Whether omission in the machinery provision to repeat the constitutional exemption made sales in the course of inter-State trade or commerce taxable through the computation of net turnover.

Issue (i): Whether section 15 of the Assam Sales Tax Act, 1947, as amended, and the connected rule were invalid for taxing sales in the course of inter-State trade or commerce in breach of Article 286(2) of the Constitution.

Analysis: Sales taxed under the Act were intra-State purchases made in Assam, while the subsequent sales in Calcutta were distinct transactions. Sales which are wholly within the State are not converted into inter-State sales merely because the goods are later resold outside the State. Article 286(2) protects only sales that directly form an integral part of inter-State trade or commerce, and the transactions here did not answer that description.

Conclusion: The challenge on this ground failed and the provision was not invalid on that basis.

Issue (ii): Whether omission in the machinery provision to repeat the constitutional exemption made sales in the course of inter-State trade or commerce taxable through the computation of net turnover.

Analysis: The charging provision itself excluded sales falling within the constitutional ban, and section 3(1A) expressly reiterated that exclusion. Section 15 merely granted an additional exemption to avoid multiple-point taxation within the State and did not enlarge the charge so as to include constitutionally immune sales in net turnover. The constitutional ban and the charging provision controlled taxability, and the machinery provision could not make exempt sales taxable.

Conclusion: The High Court was wrong in holding that the machinery provision rendered inter-State sales taxable.

Final Conclusion: The appeal succeeded, the High Court's decision was set aside, and the writ petition stood dismissed with costs.

Ratio Decidendi: Sales wholly effected within the State do not become sales in the course of inter-State trade or commerce merely because the purchaser later resells the goods outside the State, and a machinery provision for computing turnover cannot override a charging provision and constitutional immunity from tax.

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