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Issues Involved:
1. Taxability of "Oriental Mixture" under the Central Provinces and Berar Sales Tax Act, 1947. 2. Applicability of Article 286 of the Constitution. 3. Validity of the amendment to Section 2(g) of the Act without the Governor-General's assent. 4. Interpretation of "sale" and "goods" under Explanation (II) to Section 2(g) of the Act. 5. Determination of whether "Oriental Mixture" constitutes a new commodity. 6. Factual findings regarding the existence of goods in Madhya Pradesh at the time of the contract. Issue-wise Detailed Analysis: 1. Taxability of "Oriental Mixture" under the Central Provinces and Berar Sales Tax Act, 1947: The core issue was whether the "Oriental Mixture" constituted a new commodity subject to sales tax. The assessee argued that the mixture came into existence only after unloading at the port, thus it could not be taxed in Madhya Pradesh. The court concluded that the mixture did not involve a process of "manufacture" as the term is ordinarily understood. The mere mixing of ores during transportation did not create a new commercial commodity. The court held that the term "Oriental Mixture" was a designation by the company and did not represent a new product. 2. Applicability of Article 286 of the Constitution: The periods in question were prior to the enforcement of the Constitution. The court agreed with the High Court that Article 286, which restricts the imposition of sales tax on transactions occurring outside the state, was not applicable retrospectively. Therefore, the assessments made for periods before the Constitution came into force were not affected by Article 286. 3. Validity of the amendment to Section 2(g) of the Act without the Governor-General's assent: The amendment to Section 2(g) of the Act, which sought to redefine "sale," was not assented to by the Governor-General, rendering it ineffective. The court held that the purported amendment did not take effect, and thus the unamended provision stood as it was. The argument that the repeal of the original provision was valid without substitution was rejected. The court emphasized that the legislative intent was to effect a substitution, which failed due to the lack of required assent, leaving the original provision intact. 4. Interpretation of "sale" and "goods" under Explanation (II) to Section 2(g) of the Act: The court analyzed whether the goods existed in Madhya Pradesh at the time of the contracts. It was found that the ingredients of the "Oriental Mixture" were present in Madhya Pradesh, and the contracts were referable to these goods. The court upheld the Tribunal's interpretation that the goods were taxable in Madhya Pradesh as they existed in the state when the contracts were made. 5. Determination of whether "Oriental Mixture" constitutes a new commodity: The court examined whether the mixing of ores during transportation resulted in a new commercial product. It concluded that no new commodity was produced; the ores remained the same and were merely given a new name by the company. The court distinguished this case from others where raw materials underwent significant processing to become new products. The mere mixing of ores did not amount to "manufacture" of a new product. 6. Factual findings regarding the existence of goods in Madhya Pradesh at the time of the contract: The High Court's findings that the ingredients of the "Oriental Mixture" were present in Madhya Pradesh at the time of the contracts were upheld. The court agreed that the goods were in the state and were taxable under the Act. Conclusion: The appeals of the assessee company against the Full Bench decisions were dismissed, and the appeals of the State of Maharashtra against the Division Bench judgment were allowed. The court affirmed that the "Oriental Mixture" did not constitute a new commodity and was taxable in Madhya Pradesh. The legislative amendment without the Governor-General's assent was ineffective, leaving the original provision intact. The provisions of Article 286 were not applicable retrospectively. Parties were directed to bear their own costs.
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