Rajagopala Ayyangar, J.
1. This is an application for the issue of a writ of prohibition to direct the Deputy Commercial Tax Officer, Special Circle, Non-resident, Vepery, Madras, from taking proceedings for the recovery of sales tax from the petitioner under the Madras General Sales Tax Act.
2. The petitioner is a resident of the Hyderabad State, and he has been exporting goods into the Madras State. The Deputy Commercial Tax Officer, the respondent here, issued a notice to the petitioner on 5th October, 1954, requiring him to register himself as a dealer under the Madras General Sales Tax Act, and submit his turnover in the form prescribed. The assessment year in question is 1953-54. The petitioners, however, sent a reply stating that as they were non-residents, and had no agents to conduct their transactions within the State of Madras, their transactions were not within the purview of the Madras General Sales Tax Act, and their sales were exempted from tax by the provisions of Article 286 of the Constitution. The respondent rejected this claim and insisted on the petitioners getting themselves registered as dealers under the Sales Tax Act, and also provisionally assessed them on an estimated turnover. As the petitioners still persisted in their attitude, that they were not amenable to the jurisdiction of the Sales Tax Authorities in Madras, the respondent passed an order on 13th January, 1955, provisionally assessing them to a tax of Rs. 2,812-8-0, and demanding payment of the said sum. The petitioners thereupon filed this writ petition in this Court questioning the legality of this order.
3. Two grounds were put forward in support of the petitioner's contention that the Madras State Authorities had no jurisdiction to assess the petitioner. The first was that the petitioner was a non-resident, and the second that the transactions giving rise to the levy were of an inter-State character, and, therefore, protected from State taxation by reason of Article 286(2).
4. The first point does not merit serious consideration. The residence of a dealer has really no bearing on either the liability to taxation or on exemption from taxation, as it is the locus of the transactions that is relevant. If authority were needed, it would be sufficient to refer to the decision in Vakkan v. State of Madras  6 S.T.C. 647 of the Supreme Court.
5. The second point however raises a more serious question for consideration. By reason of the sale transactions sought to be taxed, goods which were outside the State of Madras were brought over into Madras as part of the sale. As goods were transported to this State and delivered for consumption here they were inside sales within Article 286(1)(a), Explanation. But, they were clearly transactions in the course of inter-State trade within Article 286(2) of the Constitution. The Supreme Court had held in the United Motors' case  4 S.T.C. 133 that transactions covered by the Explanation to Article 286(1)(a) were outside the exemption conferred by Article 286(2). But this view has since been held to be wrong by the Supreme Court itself in the Bengal Immunity case  6 S.T.C. 446. The result, therefore, is that though the transaction was not exempt as an 'outside' sale within Article 286(1)(a), it would be exempt from taxation as one 'in the course of inter-State trade and commerce' under Article 286(2). The petitioner therefore would have been entitled to claim exemption from sales tax. But by reason of Section 2 of Ordinance III of 1956, the levy of the tax has become valid, notwithstanding the inter-State character of the sale transaction. We have discussed the scope and effect of the Ordinance in our judgment in T.R.C. No. 129 of 1955 Since reported as Mettur Industries Limited v. The State of Madras  7 S.T.C. 69, and it is unnecessary to go over the ground again. The sale in the present case, which obviously falls within the Explanation to Article 286(1)(a), was taxable before the Ordinance under the Madras General Sales Tax Act, and therefore the tax is rendered valid as the transactions took place between the dates mentioned in the Ordinance.
6. The result is that the writ petition fails and is dismissed. There will be no order as to costs.