A.K. Sarkar, J
1. As in Writ Petitions Nos. 65 and 66 of 1960, : 3SCR792 , in which judgment has just now been delivered, the question in this petition under Article 32 of the Constitution also is whether certain sales were inter-Stale sales so that it was beyond the power of the State legislature to tax them. We are only concerned with the sales in which goods were moved from outside into Mysore.
2. The assessment year is 1956-57. We are, therefore, concerned with sales which took place between April 1, 1956 and March 31, 1957. The tax was imposed under the Mysore Sales Tax Act, 1948 which was in force during the whole of this period.
3. There are six petitioners, the first three being the State Trading Corporation Ltd., the Associated Cement Company Ltd. and the Cement Marketing Co. Ltd. The other three petitioners are shareholders or directors in one or other of these companies. The respondents are the State of Mysore and one of its Taxing Officers.
4. In this case also we are concerned with sales of cement. Here also as in the other case, the sales were made under permits issued by the Government and the procedure of the sales in both the cases was the same.
5. The Associated Cement Company Ltd. was the owner of various factories from which the supplies had to be made under the permits. From April 1, 1956 to June 30, 1956 the Marketing Company is said to have acted as the selling agent of the Associated Cement Company. Under the Cement Control Order, 1956 which came into force on July 1, 1956 the entire stock of cement produced in the country in any factory became vested in the State Trading Corporation. That Corporation appointed the Marketing Company its selling agent on July 1, 1956. The sales in this case are said to have been made by the Marketing Company as the agent of the Associated Cement Company during the period between April 1, 1956 to June 30, 1956 and as the Agent of the State Trading Corporation between July 1, 1956, and March 31, 1957. Nothing really turns on whether the Marketing Company had sold as agent or principal for the reason stated in the other judgment.
6. The procedure of sale in this case being exactly the same as in the previous case it has to be held that the goods were moved from a place outside Mysore into the State of Mysore as a result of the contracts of sale that is to say the contracts of sale contained a covenant that the goods would be so moved. We have stated in our judgment in Writ Petns. Nos. 65 and 66 of 1960 : 3SCR792 , that such sales are inter-State sales within Section 3 (a) of the Central Sales Tax Act. Now that Act came into force on January 5, 1957. Therefore so far as sales between that date and the end of the assessment year, that is to say, March 31, 1957, are concerned they have to be regarded as inter-State sales which the State legislature could not tax for the reasons mentioned in the aforesaid judgment.
7. The remaining part of the assessment year has to be considered in two periods. The first is between April 1, 1956 and September 10, 1956.During this period Article 286(2) of the Constitution before it was amended by the Constitution (Sixth Amendment) Act, 1956, was in force. That provision forbade a State legislature from taxing an inter-State sale. What an inter-State sale was within the meaning of Article 286(2) had been decided by judgments of this Court mentioned in the judgment delivered earlier today by Kapur, J. in Cement Marketing Co. Ltd. v. State of Mysore, Civil Appeal No. 255 of 1961 : 3SCR777 . As stated in that judgment it is well settled that inter-State sales contemplated by Article 286(2) were the same as those defined in Section 3(a) of the Central Sales fax Act. The sales between April 1, 1956and September 10, 1956 in which the goods moved from outside Mysore into Mysore must, therefore, be held to be inter-State sales which the respondents had no jurisdiction or power to tax.
8. It remains now to deal with the period between September 11, 1956 to January 4, 1957. During this period Article 286(2) did not exist in the Constitution and the Parliament had not formulated principles defining an inter-State sale which it was given power to do by Article 269(8) of the Constitution introduced into the Constitution by the Constitution (Sixth Amendment) Act. During this period, however, under Article 269(1)(g) and Item 92A of List I and Item 54 of List II of Schedule 7 to the Constitution the State legislature had no power to tax an inter-State sale. The question is how was an inter-State sale to be understood during this period. We think it has to be understood in its ordinary natural sense, that is to say, a sense which it conveys unaided by any other statutory provision. That is the sense in which this Court understood it in the cases mentioned in the judgment of Kapur, J. referred to in the preceding paragraph. Now applying the definition of inter-State sale mentioned in those cases, we have to hold that the sales in which goods moved from outside the State of Mysore into it under the procedure which prevailed in the present case were all inter-State sales. Therefore, the State of Mysore had no power to tax these sales either.
9. For these reasons this petition is allowed. The assessment order mentioned in the petition is quashed and we direct the issue of necessary writs restraining the respondents from levying any tax on the sales mentioned in the petition in which the goods moved from outside Mysore into Mysore. In this case also the petitioners had omitted to disclose the permits under which the sales had been made and to state expressly that the sales had been made under the permits and on the terms contained in them with the result that under the contract of sale goods had to be moved from outside Mysore into Mysore. Hence, as in the previous case, here also there will be no order for costs.