TMI Blog1964 (2) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... d, Senior Advocate (K. Srinivasamurthy and Naunil Lal, Advocates, with him), for the appellant. A. Ranganadham Chetty, Senior Advocate (B.R.G.K. Achar, Advocate, with him), for the respondent. -------------------------------------------------- The Judgment of the Court was delivered by SHAH, J.- With certificate of fitness granted by the High Court of Andhra Pradesh this appeal is preferred by Shree Bajarang Jute Mills Ltd. The appellant is engaged in the manufacture of jute goods, and is a registered dealer under the Madras General Sales Tax Act. For the assessment year 1954-55 the appellant submitted its return for sales tax claiming a deduction of Rs. 21,80,118-1-3 from the turnover in respect of the jute goods supplied by rail to the Associated Cement Company Ltd.--hereinafter for the sake of brevity called "the A.C.C."- under despatch instructions from that company. The Commercial Tax Officer rejected the claim of the appellant for deduction and that order was confirmed in appeal to the Deputy Commissioner of Commercial Taxes. In appeal to the Sales Tax Appellate Tribunal, the order was reversed, the Tribunal holding that the appellant was entitled to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price, delivered the receipts to the Krishna Cement Works, Tadepalli, which, it is common ground, was for the purpose of receiving the railway receipts and making payment, the agent of the A.C.C. It is also common ground that the jute bags were sold to the A.C.C. for the purpose of packing cement by the factories of the A.C.C. to which they were sent and not for any other purpose. The assessing authority and the Deputy Commissioner held that as the railway receipts were delivered to the agent of the buyer within the State of Andhra, and price was also realized from the agent of the buyer within the State, the goods must be deemed to have been delivered to the buyer in the State of Andhra, and the appellant was liable to pay sales tax on the price of the goods sold. With that view the High Court agreed. Under the Government of India Act, 1935, the Legislatures of every Province could legislate for levying tax on sales of goods in respect of all transactions, whether the property in the goods passed within or without the Province, provided the Province had a territorial nexus with one or more elements constituting the transaction of sale: Poppatlal Shah v. The State of Madras [19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has received his assent." After the enactment of the Constitution, by a Presidential Order the Provincial Sales Tax Acts were made to accord with the restrictions imposed by Article 286 of the Constitution. It is manifest that by Article 286 the legislative authority of the States to impose taxes on sales and purchases was restricted by four limitations in respect of sales or purchases outside the State, in respect of sales or purchases in the course of imports into or exports out of India, in respect of sales or purchases which take place in the course of inter-State trade or commerce and in respect of sales and purchases of goods declared by Parliament to be essential for the life of the community. These limitations may overlap, but the power of the State to tax sale or purchase transactions may be exercised only if it is not hit by any of the limitations. The restrictions are cumulative. The sales in the present case are not sales, which have taken place in the course of inter-State trade or commerce. The only point of contest is whether they are "outside the State" of Andhra. It is now well-settled that by Article 286(1) [as it stood before it was amended by the Constitu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst payment of price. The question still remains: Were the transactions "non-Explanation sales" i.e., sales falling outside the Explanation to Article 286(1)? 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. It is not disputed that the goods were supplied for the purpose of consumption outside the State of Andhra, and in the States in which they were supplied. It is submitted that the goods were actually delivered within the State, when the railway receipts were handed over to the agent of the buyer. But 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; it does not contemplate mere symbolical or notional delivery, e.g., by entrusting the goods to a common carrier, or even delivery of documents of title like railway receipts. In C. Govindarajulu Naidu and Company v. State of Madras A.I.R. 1953 Mad. 116; 3 S.T.C. 405., Venkatarama Ayyar, J., dealing with the concept of actual delivery of goods, so as to attract the applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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