Supreme Court affirms sales tax on out-of-state deliveries under Bihar Sales Tax Act.

The Supreme Court upheld the High Court's decision to dismiss the petitions regarding the levy of sales tax under the Bihar Sales Tax Act for the financial years 1949-50 and 1950-51. The Court ruled that sales resulting in delivery outside Bihar were subject to tax as they were completed within Bihar. The Court clarified that the United Motors case only exempted sales where goods were delivered for consumption in the State of first delivery, not for consumption in other States. Therefore, the Board of Revenue's orders did not exempt the latter type of sales from tax liability.

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Issues Involved:
1. Legality of the levy of sales tax under the Bihar Sales Tax Act for the financial years 1949-50 and 1950-51.
2. Interpretation of Article 286(1)(a) and (2) of the Constitution regarding sales tax exemption for goods delivered outside the State of Bihar.
3. Jurisdiction of the Board of Revenue to review or clarify its previous orders.
4. Duty of tax authorities to obey orders of the Board of Revenue.
5. Applicability of the Supreme Court decision in the United Motors case to the present case.

Detailed Analysis:

1. Legality of the Levy of Sales Tax:
The appellants, a tobacco manufacturing company, contested the sales tax levied by the Superintendent of Sales Tax, Monghyr, for the financial years 1949-50 and 1950-51, amounting to Rs. 6,44,940-2-6 and Rs. 7,46,876-1-3 respectively. The primary contention was that sales resulting in delivery outside Bihar were exempt under Article 286(1)(a) of the Constitution. However, the assessing officer ruled that the sales were completed in Bihar, thus subject to tax under the Bihar Sales Tax Act. This decision was upheld by the Deputy Commissioner of Sales Tax, Bihar.

2. Interpretation of Article 286(1)(a) and (2):
The appellants categorized their sales into two types for exemption claims:
(a) Sales where goods were delivered for consumption in the State of first delivery.
(b) Sales where goods were delivered for consumption in other States.
The appellants argued that both types should be exempt under Article 286(1) and (2). The Board of Revenue initially passed a laconic order, seemingly allowing exemption based on the Supreme Court's decision in the United Motors case, which was interpreted differently by the appellants and tax authorities.

3. Jurisdiction of the Board of Revenue:
The State of Bihar sought a review or clarification of the Board's order dated August 28, 1953. The Board, on April 25, 1955, acknowledged that there was no provision in the Act for such clarification and rejected the petitions. This order was ambiguous, leading to differing interpretations by the appellants and tax authorities.

4. Duty of Tax Authorities to Obey Orders of the Board of Revenue:
The appellants argued that the tax authorities were bound to follow the Board's order, citing the Supreme Court's decision in Bhopal Sugar Industries v. Commissioner of Income-tax. However, the Supreme Court noted that for this principle to apply, the order must be clear and unambiguous, which was not the case here. The Board's order left the interpretation of the United Motors case to the Sales Tax Officer, thus not providing a definitive directive.

5. Applicability of the United Motors Case:
The Supreme Court analyzed whether the United Motors case exempted both types of sales. It concluded that the case only addressed sales where goods were delivered for consumption in the State of first delivery (type a) and did not cover sales where goods were consumed in other States (type b). Therefore, the Board's decision did not exempt type b sales from tax liability.

Conclusion:
The Supreme Court upheld the High Court's dismissal of the petitions, agreeing that the Board of Revenue's orders did not clearly exempt type b sales from tax. The appeals were dismissed, with no order as to costs.

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