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TMI Blog1960 (1) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... tax on inter-State sales of tea in the aforesaid assessment years 1952-53, 1953-54 and 1954-55 has been held not to be legal; whereas the dealer petitioner seeks reversal of the remaining parts of the order that has upheld tax on other sales of tea in the four assessment years. In all the cases the dealer is Messrs Malayalam Plantations Ltd., and for the assessment year 1951-52 has been charged Rs. 13,155-3-1 as the tax under the Madras General Sales Tax Act. The amount has been levied on Rs. 25,367-4-0, which is the price of Wynad teas stored in and sold at Fort Cochin to T. Campbell & Co., Ltd., with a view to export to the Australian Tea Control Board; and on Rs. 22,85,177-12-6 which is the price of Travancore teas similarly sold at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les Tax Appellate Tribunal, Trivandrum. The aforesaid Tribunal, following the majority decision in Shanmugha Vilas Cashew-nut Factory case [1953] 4 S.T.C. 205. has held that purchases in the State by the exporter for the purpose of export are not within the exemption of Article 286(1)(b) of the Constitution, and has further refused to accept the argument of the counsel for the dealer that the Explanation in Article 286(1) defines what is inside sale, so that transactions resulting in delivery but not for consumption within the State are extra-State and would not be liable to taxation in exercise of powers under item 54 of List II of Schedule VII of the Constitution. The counsel has urged before us the latter part of the same argument in sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate in which goods are delivered for consumption and its operation cannot be cut down by reference to the non-obstinate clause. The learned Judge has therefore held that section 2(h) and section 22 of the Madras General Sales Tax Act must be read together as defining what sales were taxable and therefore the Explanation meant sales of goods delivered for consumption in the State of Madras to fall within the definition in section 2(h) and to be taxable. The Supreme Court authority may not directly cover the revision petitions by the Deputy Commissioner because the sales in favour of Brooke Bonds and Lipton Ltd., are not shown to be governed by section 22 of the Madras General Sales Tax Act, the delivery in pursuance of the contracts not havi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lidation Act. Section 2 of the Act provides that no law of a State imposing a tax on sales which took place in the course of interState trade or commerce between 1st April, 1951, and 6th September, 1955, shall be deemed to be invalid or ever to have been invalid merely by reason of the fact that such sales were in the course of inter-State trade. The section further provides that all taxes levied or collected under such a law during the specified period shall be deemed to have been validly levied or collected. It is therefore clear that the effect of the Act is to liberate the States from the fetter placed on them by Article 286(2) and to enable the Madras General Sales Tax Act to operate on its own terms. It is equally clear that because o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rama Aiyar, J., in Sundararamier & Co. v. State of Andhra Pradesh[1958] 9 S.T.C. 298. The learned Judge in the latter case while determining the scope of the Explanation to section 22 of the Madras Sales Tax Act has observed at page 316 that section 2(h) and section 22 of the Madras Act must be read together as defining what are sales that are taxable under the Act, and what are not, and so read, the Explanation really means that in sales in which goods are given for consumption in the State of Madras the property therein shall be deemed to have passed inside that State notwithstanding that it was under the Sale of Goods Act outside that State. In this connection the learned Judge further observed: "On this construction, those sales will fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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