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TMI Blog1963 (5) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... not correct and that though the sales were interState in character they were yet assessable by reason of the removal of the ban under Article 286(2) by the Sales Tax Laws Validation Act, 1956. It computed the turnover for the period 1st April, 1955, to 6th September, 1955, as Rs. 1,16,217 and in the notice issued to the assessee proposed to cancel the exemption granted on this part of the turnover. To this notice the assessee took objection. It claimed that the decision of the Supreme Court in Ashok Leyland v. State of Madras[1961] 12 S.T.C. 379. did not apply. Another objection that was taken was that the order sought to be revised being that of the Deputy Commercial Tax Officer, which was passed on 31st August, 1957, the Board was incompetent to revise that order beyond the period of four years from that date. The Board however took the view that the order of the Deputy Commercial Tax Officer had merged in that of the Commercial Tax Officer, who passed an order in appeal on 18th March, 1958, and that it was therefore competent to exercise its powers under section 34 of the Act within the period of four years from that date. The Board accordingly made the order cancelling the exem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty Commercial Tax Officer, or the appellate authority, the Commercial Tax Officer, was in dispute. The Deputy Commissioner dismissed the petition for revision on the 21st August, 1954. The Board of Revenue issued a notice on the 4th August, 1958, proposing to revise the assessment of the Deputy Commercial Tax Officer by including a turnover which had been wrongly omitted by that officer. The question arose whether the period of limitation should be computed from the date of the order of the Deputy Commercial Tax Officer, which was 28th November, 1952, or from the date of the order of the Deputy Commissioner, which was 21st August, 1954. This Court decided that the subject-matter of the revision proceedings by the Board was only the assessment by the Deputy Commercial Tax Officer and not any order of the Deputy Commissioner and that therefore the commencement of the period of limitation should be computed from the date of the order of the Deputy Commercial Tax Officer. Dealing with the question of the merger of the order of the inferior authority in that of the appellate authority, it was observed that this rule is not of universal application. It may be stated that with regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay modified or interfered with by the Commercial Tax Officer, who, besides being the appellate authority, was also a revisional authority and could have revised the order of the Deputy Commercial Tax Officer if he had thought fit. The question of inter-State sales was not from any point of view the subject-matter of the appeal before the appellate authority. The principle of merger can hardly have any application in the circumstances of this case. Following that decision, it must result in the conclusion that the exercise of the powers of the Board under section 34 of the Act beyond the period of four years from the date of the Deputy Commercial Tax Officer's order is not supported by the relevant provision of the Act. Though on this ground alone the appeal will have to be allowed, we may nevertheless deal with the other question that has been argued. The manner in which the appellant conducted its business in relation to these inter-State sales is not in dispute. According to him, he despatched the snuff to various purchasers outside the State, principally by post, money being recovered from the postal department by V.P.P. In other cases, goods were sent by rail, the railway recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sted to the common carrier and the performance of the contract is complete only at the place where the moneys are paid and relative railway receipts are delivered to the purchaser." This decision completely clears up the point and there is no doubt whatsoever that the sale in all these cases where the goods were sent by V.P.P. or by rail, the documents being delivered against payment, can only result in the sales taking place at the places of delivery, that is to say, outside the Madras State. Even under the Sale of Goods Act, the situs of the sale is accordingly located at places outside the State, and in so far as the Madras State is concerned, these sales must necessarily be "outside" sales. Looking at the transactions from the point of view of inter-State sales, during the period in question when the Explanation to Article 286(1) was in force, undoubtedly, the goods, the snuff in question, were delivered for consumption in States other than the Madras State. In the light of the constitutional Explanation also, these sales would thus become sited outside the Madras State. Whether on the general principles of the Sale of Goods Act or by virtue of the constitutional Explanation, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State of Bihar[1963] 14 S.T.C. 375. were decisions rendered by the Supreme Court subsequent to the decision in the Ashok Leyland case[1961] 12 S.T.C. 379., and the Bench pointed out that if the principle that was laid down in the Ashok Leyland case[1961] 12 S.T.C. 379. was that even the State, which was an "outside" State within the constitutional Explanation, was competent to tax a sale transaction, the decision in those two cases would well have been different. The ratio of the Bengal Immunity case[1955] 6 S.T.C. 446. was expressed in the following words by the Supreme Court in William Jacks and Company v. State of Bihar(2): "Until Parliament by law made under Article 286(2) provided otherwise, a State could not impose or authorise imposition of any tax on sales or purchases of goods when such sales or purchases took place in the course of inter-State trade or commerce, notwithstanding that the goods under such sales were actually delivered in that State for consumption there." The Supreme Court clearly went to the length of stating that even where a sale being an inter-State sale is located inside a particular State, that State being the delivery-cum-consumption State, that St ..... X X X X Extracts X X X X X X X X Extracts X X X X
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