Actual delivery under Article 286 means physical possession, not transfer of railway receipts, for State sales tax purposes.

Article 286(1) barred State tax on sales outside the State, and the Explanation applied only where goods were actually delivered for consumption in that State. The Supreme Court of India explained that "actual delivery" means physical or effective delivery placing the goods in the purchaser's possession, not constructive or symbolic delivery through transfer of railway receipts or other documents of title. Section 39 of the Sale of Goods Act could not control that constitutional expression. On that reasoning, handing over railway receipts within Andhra did not localise the jute sales in that State, and Andhra had no authority to levy sales tax on those transactions.

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Issues: Whether the sales of jute bags, against which railway receipts were handed over to the buyer's agent within the State of Andhra, were sales "outside the State" within Article 286(1)(a) of the Constitution of India, and whether such handing over constituted "actual delivery" so as to attract the Explanation to Article 286(1).

Analysis: Article 286(1), as it then stood, restricted the taxing power of a State in respect of sales outside the State, and the Explanation applied only where goods were actually delivered as a direct result of the sale for consumption in that State. The expression "actually delivered" was held to mean physical delivery, or delivery putting the goods in the purchaser's possession, and not mere symbolic or constructive delivery by transfer of documents of title such as railway receipts. Section 39 of the Indian Sale of Goods Act, 1930, which raises only a prima facie inference of delivery to a carrier, could not control the meaning of the constitutional expression used in Article 286.

Conclusion: The sales were not brought within the Explanation to Article 286(1) by the handing over of railway receipts within Andhra, and the State of Andhra had no authority to levy sales tax on those transactions. The decision was in favour of the assessee.

Ratio Decidendi: For the purposes of Article 286(1), "actual delivery" means physical or effective delivery of the goods to the purchaser, not constructive delivery by transfer of documents of title; therefore, such transfers do not localise the sale within the taxing State.

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