Chandra Reddy, C.J.
1. Two contentions are urged in support of this petition to quash the assessment, namely, (i) that under Rule 5(1) of the Hyderabad General Sales Tax Rules, it is only the sale of tobacco that could be taxed and the petitioner being a purchaser, the turnover in question is not exigible to tax; and (ii) that the transactions in dispute being in the course of inter-State trade or commerce, they are exempted under Article 286 of the Constitution.
2. We do not think that we can give effect to either of the two submissions. So far as the first one is concerned, this is a point taken for the first time in the course of arguments and was not raised before any of the tribunals. Nor is it urged in the petition for the issue of a writ of certiorari. Even on the merits, this point lacks substance. It is not under Rule 5(1) that the tax is levied but it is under Rule 5(2) by and under which the purchases are liable to be taxed. We have no doubt that tobacco falls within the scope of Rule 5(2)(f) which mentions 'linseed, turmeric, dhania and other agricultural produce including all kinds of dhals and paddy (husked or unhusked) not otherwise exempted under the said Act, but excluding cotton seed, sugarcane, tea and coffee seeds.' We do not think that tobacco is excluded from the purview of the expression 'agricultural produce'. We think that 'tobacco' falls within the ambit of the expression 'agricultural produce.' But for the specific mention in that rule, cotton seed, sugarcane, tea and coffee seeds would have been regarded as agricultural produce. If that were so, tobacco should be regarded as 'agricultural produce'. The first contention, therefore, must be negatived.
3. The second argument is equally unsubstantial. If one has regard to the facts of the case as found by the Tribunal, there can be little doubt that the petitioner cannot have the advantage of exemption granted by Article 286(1) of the Constitution. The order of the Deputy Commissioner affirmatively establishes that these transactions are inside sales and do not come within the connotation of inter-State trade or commerce. It is pointed out by the Deputy Commissioner that:
On interrogation on this point, it was admitted by the representatives that the goods purchased were transported in the conveyance arranged by them, that the sellers were not responsible for the transport of the goods and that the company have a place of storage in Valerpad....
4. The Deputy Commissioner remarks :
Thus, having regard to all the above facts, it would appear that the purchases effected by the company were completed in all respects in Hyderabad State and that the goods moved out of the State as the goods of the company.
5. On these facts, there is no scope for invoking Article 286 of the Constitution. No doubt, there was movement of the goods across the frontiers of the State but that was not the direct result of the sale. The mere fact that there is movement of goods is not sufficient to constitute inter-State trade. In addition, it should be under a contract of sale. In other words, the sale itself must occasion transport of the goods across the frontiers of the State. But, if after the sale is completed within one State the buyer transports the goods to another State, that does not fall within the definition of inter-State trade. Nor could it be said that the transactions were in the course of inter-State trade or commerce.
6. Without disputting this proposition, Sri Suryanarayana, learned counsel for the petitioner, wanted to rely on the following allegation in the affidavit filed in support of the petition :
The fact that the price of tobacco is paid after the managing director of the petitioner's company inspects the tobacco in Guntur and approves the same shows that the purchase is not complete before movement of the goods.
7. It is unnecessary for us to consider the effect of such a circumstance if that allegation were established. This allegation is denied in the counter-affidavit filed on behalf of the Government and it has not been established to be correct. That apart, this seems to be inconsistent with the course of conduct adopted by the petitioner, namely, taking delivery of the goods in the Hyderabad State, storing them in the warehouse at Valerpad and himself transporting the commodity as his own goods. On ,the facts as established, namely, that the whole sale was completed within the Slate of Hyderabad, it is difficult to believe that there would have been any stipulation as alleged in the affidavit. Having regard to the circumstances of this case, Mohanlal Hargovind v. State of Madhya Pradesh (1956) 1 M.L.J. (S.C.) 5 is of no avail. The petitioner in the cited case, a Bombay merchant, supplied finished tobacco to the petitioner in Madhya Pradesh. That was not a case of sale having been completed within the State of Bombay and delivery having taken place therein. That was obviously a case where deliveries were made in Madhya Pradesh. Therefore, that case can have no parallel to the case on hand. So, this argument also has to be repelled.
8. In the result, the petition fails and is dismissed with costs. Advocate's fee Rs. 150.