TaxTMI 
TaxTMI 
1967 (8) TMI 100
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....a sum of Rs. 1,11,299 and odd on the ground that the said amount represented either second purchases or purchases made outside the State of Madras. Pending the appeal the Madras General Sales Tax Act, 1959, was passed and the earlier Act of 1939 was repealed and by force of the provisions in the 1959 Act the appeal was finally disposed of by the Appellate Assistant Commissioner of Commercial Taxes, Salem. By his order dated July 2, 1960, the Appellate Assistant Commissioner held that the excise duty paid by the respondent could not form part of his purchase turnover but in purported exercise of his powers under the new Act enhanced the assessment of the turnover by including a sum of Rs. 1,15,406-14-9 as inter-State purchases from April 1, 1955 to September 5, 1955. The respondent took the matter in further appeal to the Sales Tax Appellate Tribunal. The appellant also filed petitions before the Tribunal for enhancement of the assessment by Rs. 3,66,213-12-0 on the ground that the amount represented sales of manufactured beedies to non-resident buyers during the period May 12, 1955 to September 5, 1955, and that the goods in question were within the territory of the State at the ti....
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....nant in the subject or context- (h) 'sale' with all its grammatical variations and cognate expressions means every transfer of the property in goods by one person to another in the course of trade or business for cash or for deferred payment or other valuable consideration, and includes also a transfer of property in goods involved in the execution of a works contract, and in the supply or distribution of goods by a co-operative society, club, firm or any association to its members for cash or for deferred payment or other valuable consideration but does not include a mortgage, hypothecation, charge or pledge; ....................................................................................... Explanation (2).-The sale or purchase of any goods shall be deemed, for the purposes of this Act, to have taken place in this State, wherever the contract of sale or purchase might have been made- (a) if the goods were actually in the State at the time when the contract of sale or purchase in respect thereof was made, or (b) in case the contract was for the sale or purchase of future goods by description, then, if the goods are actually produced in this State at any time aft....
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.... or authorise the imposition of, a tax on the sale or purchase of any goods where such sale or purchase takes place in the course of inter-State trade or commerce: Provided that the President may by order direct that any tax on the sale or purchase of goods which was being lawfully levied by the Government of any State immediately before the commencement of this Constitution shall, notwithstanding that the imposition of such tax is contrary to the provisions of this clause, continue to be levied until the thirty-first day of March, 1951. (3) No law made by the Legislature of a State imposing, or authorising the imposition of, a tax on the sale or purchase of any such goods as have been declared by Parliament by law to be essential for the life of the community shall have effect unless it has been reserved for the consideration of the President and has received his assent." Article 286 thus imposed four bans upon the legislative power of the States. Clause (1) prohibited every State from imposing or authorising the imposition of, a tax on outside sales and on sales in the course of import into or export outside the territory of India. By clause (2) the State was prohibited ....
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....to have been invalid merely by reason of the fact that such sale or purchase took place in the course of inter-State trade of commerce; and all such taxes levied or collected or purporting to have been levied or collected during the aforesaid period shall be deemed always to have been validly levied or collected in accordance with law..........." By this Act therefore the Parliament removed the ban contained in Article 286(2) of the Constitution retrospectively but limited only to the period between April 1, 1951 and September 6, 1955. All transactions of sale, even though they were inter-State sales could for that period be lawfully charged to tax. On behalf of the appellant the argument was put forward that the Validation Act having lifted the ban on taxation of inter-State sales, the transactions of the respondent for the period from April 1, 1955 to September 5, 1955, were assessable to tax under the provisions of the Madras General Sales Tax Act, 1939, operating on its own terms. Counsel for the appellant particularly based his argument on the second Explanation to section 2(h) of that Act and the decision of this Court in Messrs Ashok Leyland Ltd. v. The State of Madras....
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....uch sale or purchase, passed in another State. The legal position was stated by this Court in The State of Bombay v. The United Motors (India) Ltd. [1953] S.C.R. 1069, 1082; 4 S.T.C. 133, 145. as follows: "It provides by means of a legal fiction that the State in which the goods sold or purchased are actually delivered for consumption therein is the State in which the sale or purchase is to be considered to have taken place, notwithstanding the property in such goods passed in another State. Why an 'outside' sale or purchase is explained by defining what is an inside sale, and why actual delivery and consumption in the State are made the determining factors in locating a sale or purchase will presently appear. The test of sufficient territorial nexus was thus replaced by a simpler and more easily workable test: Are the goods actually delivered in the taxing State, as a direct result of a sale or purchase, for the purpose of consumption therein? Then, such sale or purchase shall be deemed to have taken place in that State and outside all other States. The latter States are prohibited from taxing the sale or purchase; the former alone is left free to do so. Multiple taxation of th....
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.... was held by this Court that if the goods were delivered pursuant to the contracts of sale outside the State of Andhra for the purpose of consumption in the State into which the goods were delivered, the State of Andhra could have no right to tax those sales by virtue of the restriction imposed by Article 286(1)(a) read with the Explanation. To attract the Explanation, the goods had to be actually delivered as a direct result of the sale, for the purpose of consumption in the State in which they were delivered. The expression "actually delivered" in the context in which it occurs, can only mean physical delivery of the goods, or such action as puts the goods in the possession of the purchaser and it does not contemplate mere symbolical or notional delivery. It was accordingly held that the State of Andhra had no authority to levy tax in respect of these sale transactions in which the goods were sent under railway receipts to places outside the State of Andhra and actually delivered for the purpose of consumption in those States. The same view was reiterated by this Court in Singareni Collieries Co. Ltd. v. State of Andhra Pradesh [1966] 2 S.C.R. 190; 17 S.T.C. 197. In that case,....
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....ult of which goods were delivered in a State for consumption in such State, i.e., the sales falling within the Explanation to Article 286(1) were fictionally to be regarded as inside that State for the purpose of clause (1)(a) and so within the taxing power of the State in which such delivery took place and being outside all other States exempt from sales tax by those other States. As we have already said, the Validation Act has lifted the ban under Article 286(2) alone but did not remove the ban under Article 286(1) which continued to apply without being affected by the Validation Act. Therefore, even if a sale fell within the Explanation under section 2(h) of the Madras General Sales Tax Act, 1939, it was beyond the competence of the Madras State to tax if the assessee had delivered the goods outside the State for consumption therein. It follows therefore in the present case that the goods sold and delivered outside the State during the period from April, 1955 to September, 1955, were not liable to tax under the Madras General Sales Tax Act, 1939, and the taxing authorities had no jurisdiction to include Rs. 3,66,213-12-0 in the turnover of the respondent. We proceed to consid....
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....ry of new and important facts which after the exercise of due diligence were not within his knowledge or could not be produced by him when the order was made. (b) The application for review shall be preferred within such time, and in such manner as may be prescribed, and shall where it is preferred by any party other than the Deputy Commissioner be accompanied by a fee of one hundred rupees. ...................................................................." It was argued for the appellant that under section 38 the High Court was empowered to interfere with the order of the Appellate Tribunal only if it had either decided a question of law erroneously or had failed to decide any question of law. It was said that in any case the High Court should have remitted the matter to the Appellate Tribunal if it considered it necessary for the proper disposal of the case to take in evidence any additional facts under section 38(5) of the Act before passing an order under sub-section (4) remitting the matter to the Appellate Tribunal on any specific question or issue. In our opinion there is considerable force in the argument put forward on behalf of the appellant. But we do not wis....