1964 (6) TMI 46

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....except in the case of a turnover of Rs. 1,521-1-9, the invoices in the remaining cases showed that the claim for exemption was sustainable and granted exemption accordingly for a sum of Rs. 6,12,623-3-0. This order was passed on 29th September, 1958. The Board of Revenue, by an order passed on 1st September, 1962, set aside this claim for exemption. It relied upon a later decision of the Supreme Court in Ashok Leyland's case[1961] 12 S.T.C. 379. In the view of the Board of Revenue, the effect of the Sales Tax Laws Validation Act, 1956, as well as the amendment to section 22 of the Madras General Sales Tax Act, was to remove the fetter of Article 286(2) of the Constitution, and to preserve the power of the State of Madras to tax sales which ....

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....light of the interpretation of the decisions, it seems to us that the Ashok Leyland's case(1) cannot be relied upon for enabling the Madras State to tax these sales, which both under the Indian Sale of Goods Act as well as the constitutional Explanation became located as sales in States other than the Madras State. The Madras State is an outside State in so far as these sales are concerned, and the ban on the levy of a tax in respect of a sale, which is an outside sale, being inviolate, the Madras State cannot tax these sales." In the case which is now before us in appeal, the Board of Revenue has not at all adverted to the ban under Article 286(1)(a) of the Constitution in respect of sales found to be inter-State sales and for which exe....