TMI Blog1969 (8) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be granted a declaration that the order of assessment made by the Deputy Commercial Tax Officer for the year 1949-50 is invalid to the extent that the levy of sales tax is made on sales relating to goods which were delivered for the purpose of consumption outside the State for the period from January 26, 1950, to March 31, 1950. - Civil Appeal No. 1451 of 1968 - - - Dated:- 1-8-1969 - SHAH J.C. AG., RAMASWAMI V. AND GROVER A.N. JJ. D. Munikanniah, Senior Advocate (A.V.V. Nair, Advocate, with him), for the respondent. Rajeshwara Rao and B. Parthasarathi, Advocates, for the appellant. -------------------------------------------------- The judgment of the court was delivered by RAMASWAMI, J.- This appeal is brought by certificate from the judgment of the High Court of Andhra Pradesh dated March 11, 1965, in A.S. Nos. 93 and 169 of 1957. The appellant was a firm of dealers in pulses at Vijayawada. It was sending pulses like green gram and black gram to other States, viz., Bombay, Bengal, Madras and Kerala, by rail in the course of their business. The consignments were addressed to "self" and the railway receipts were endorsed in favour of bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State. As regards the period from January 26, 1950, to March 31, 1950, the Subordinate Judge took the view that the part of the turnover relating to outside sales was not liable to sales tax but as there was a single order of assessment for the entire period the entire assessment was illegal. Against the judgment of the Subordinate judge both the appellant and the respondent filed appeals, A.S. No. 93 of 1957 and A.S. No. 169 of 1957, to the High Court of Andhra Pradesh. But its order dated April 18, 1960, in Appeal No. 169 of 1957 the High Court called for a finding from the trial court as to whether the appellant was able to prove the facts entitling him to invoke the explanation to article 286(1)(a). By its order dated July 21, 1962, the trial court submitted a finding to the effect that in view of the decision of the Supreme Court in India Copper Corporation Ltd. v. State of Bihar [1961] 12 S.T.C. 56., the burden of proof was not on the appellant and that the finding will have to be given in its favour. But by its order dated March 5, 1963, the High Court directed the Subordinate judge to record a finding after considering the evidence adduced by the appellant as to whether the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35. [See Tata Iron Steel Co. Ltd. v. State of Bihar [1958] S.C.R. 1355; 9 S.T.C. 267., and Poppatlal Shah v. State of Madras [1953] S.C.R. 677; 4 S.T.C. 188.] By article 286 of the Constitution certain fetters were placed upon the legislative powers of the States as follows: "(1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place- (a) outside the State; or (b) in the course of the import of the goods into, or export of the goods out of, the territory of India. Explanation .-For the purposes of sub-clause (a), a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State, notwithstanding the fact that under the general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State. (2) Except in so far as Parliament may by law otherwise provide, no law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of any goods where such sale or purchase take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t issued on July 2, 1952, the Fourth Amendment inserting a new section, section 22 in that Act. It runs as follows: "Nothing contained in this Act shall be deemed to impose or authorise the imposition of a tax on the sale or purchase of any goods where such sale or purchase takes place- (a)(i) outside the State of Madras, or (ii) in the course of import of the goods into the territory of India or of the export of the goods out of such territory, or (b) except in so far as Parliament may by law otherwise provide, after the 31st March, 1951, in the course of inter-State trade or commerce, and the provisions of this Act shall be read and construed accordingly. Explanation .-For the purposes of clause (a)(i) a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State, notwithstanding the fact that under the general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State." By this amendment the same restrictions were engrafted on the pre- Constitution statute as were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's case [1961] 12 S.T.C. 56., has not been taken into account. Having regard to the evidence adduced by the appellant in this case we are satisfied that the part of the turnover which related to sales from January 26, 1950, to March 31, 1950, was not liable to sales tax and the levy of sales tax from the appellant to this extent is illegal. The next question arising in this appeal is whether the assessment order of the Deputy Commercial Tax Officer for the year 1949-50 is illegal in its entirety notwithstanding the fact that the State Government had a right to levy sales tax on outside sales which were effected prior to January 26, 1950. It was argued for the appellant that the assessment must be treated as one and indivisible and if a part of the assessment is illegal the entire assessment must be deemed to be infected and treated as invalid. In support of this argument reference was made to the decision of this court in Ram Narain Sons Ltd. v. Assistant Commissioner of Sales Tax [1955] 6 S.T.C. 627 at 637., in which this court observed as follows: "The necessity for doing so is, however, obviated by reason of the fact that the assessment is one composite whole relating to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the High Court held that the respondent was liable to pay sales tax only in respect of the sales which took place during the period January to September, 1955, and issued a writ restraining the appellants from levying tax for the period October, 1955, to May, 1959. On appeal a Division Bench of the High Court quashed the assessment for the entire period. On appeal to this court it was held that though there was one order of assessment for the period January 1, 1955, to May, 1959, the assessment could be split up and dissected and the items of sale could be separated and taxed for different periods. It was pointed out that the sales tax was imposed in the ultimate analysis on receipts from individual sales or purchases of goods effected during the entire period, and, therefore, a writ of mandamus could be issued directing the appellant not to realise sales tax with regard to transactions of sale during the period from September 7, 1955, to May, 1959. A similar question arose for determination in an American case (Frank Batterman v. Western Union Telegraph Co. 127 U.S. 411.). The question in that case was "whether a single tax, assessed under the Revised Statutes of Ohio, section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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