G.C. Das, J.
1. The sole question referred to this Court under Sub-section (1) of Section 24 of the Orissa Sales Tax Act. 1947. (Orissa Act XIV of 1947) is 'whether in the facts and circumstances of the case the order of the Tribunal holding that the inter-State sales in question cannot be taxed under the Orissa Sales-tax Act 1947, after the repeal of the Second proviso to Section 2(g) thereof with effect from 26-1-50 by the Adaptation of Laws (Third Amendment) Order 1951, is proper'.
2. The admitted facts are rather simple. The assessee is a registered dealer under the Orissa Sales-tax Act bearing Registration No. PU. 1 of 1952, carrying on business at Sakhigopal in coco-anuts. The assessee was assessed under Sub-section (2) of Section 12 of the Orissa Sales-tax Act for the quarters ending on 30-9-50 and 31-3-51. The assessee purchased cocoanuts from producers as well from other dealers in Orissa and sold them to dealers outside Orissa by transporting the said commodities by rail. The purchasers outside Orissa used to place orders with the assessee whereafter they collected necessary quantities of cocoanuts and booked them by rail endorsing the railway receipts to self. Afterwards the railway receipt is endorsed in favour of the outside purchasers and the same is sent through Bank to be delivered to the purchasers on payment of the full amount due. All the consignments related to the period prior to April 1, 1951.
The Sales-tax Officer held such sales to be in Orissa and taxed them. Before the Assistant Collector a point was raised that the assessee is exempted from taxation by virtue of Article 286(1)(a) of the Constitution of India. The Assistant Collector though found that the purpose was for consumption outside the State, yet he held that the assessee had failed to prove that it was actually consumed in States outside Orissa. Accordingly, he negatived that contention of the assessee and held that by virtue of the President's Sales-tax Continuance Order 1950, such sales would come within the provision of the second proviso to Section 2(g) of the Sales-tax Act and accordingly, he confirmed the assessment as made by the Sales-tax Officer. On appeal the Tribunal held disagreeing with the view taken by the Assistant Collector, that the President's Sales-tax Continuance Order did not and could not save the operation of Section 2(g) of the Sales Tax Act and the result was that since 26-1-50 there was no provision in the Act for taxing sales in course of inter-state trade or commerce.
3. Under these circumstances the question that has been referred to this Court appears rather to be academic. The Tribunal seems to have confused the whole issue. The question whether or not the assessee is liable to taxation under Article 286(1)(a) was not pointedly argued before the Tribunal. But that certainly arose out of the first appellate order. Mr. G.K. Misra, learned counsel on behalf of the Department argued that since the point was not raised before the appellate Tribunal, it has reached a finality. Be that as may be, this court cannot allow an illegality to be perpetuated. What the first appellate Court did was that he referred to the Explanation to Sub-clause (a) of Article 286(1)(a) which reads 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 import of the goods into or export of the goods out of the territory of India.
Explanation: For the purpose 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 the sale of goods the property in the goods, has by reason of such sale or purchase passed in another State'.
The Assistant Collector while discussing the explanation to Clause (a) indicated that in case of export of goods, the actual sale will foe construed to have taken place at the place or places of delivery provided the goods are intended for consumption. But during the discussion, he observed that there was no evidence of actual consumption in the States to which the goods are sent. It is not necessary that the actual consumption should be proved by the assessees. It is enough for the purpose of assessee to prove that the goods were intended for purpose of consumption outside the State. There is evidence to show that the goods were despatched to places of delivery for the intended consumption. The Supreme Court have recently in the case of India Copper Corporation Ltd. v. State of Bihar, 1961-12 STC 56: (AIR 1961 SC 347) clearly laid down that if the goods were as a direct result of a sale delivered outside the State of Bihar for the purpose of consumption in the State of first delivery, an assessee would be entitled to the exemption from Bihar Sales Tax by virtue of the explanation to Article 286(1)(a) of the Constitution and it would not be necessary for the assessee to prove further that the goods so delivered were actually consumed in the State of first destination. Having regard to this view of the law, it is abundantly clear from the record that the goods were delivered to the outside States for the purpose of consumption. It is, however, not necessary to prove that the goods were actually consumed in those States. Thus, the view taken by the First Appellate Court is clearly wrong in law. The Tribunal has not applied his mind to this aspect of the question. The result is that the consideration of the question referred to this Court seems to be merely academic in view of the above position of law.
4. Accordingly, we refuse to answer the question as stated to us. The Reference is discharged but there would be no order for costs.
R.K. Das, J.
5. I agree.