1. The assessee was a dealer in automobiles among other articles. Two of the items finally included by the Tribunal to the assessable turnover of the assessee for the assessment year 1951-52 were, (i) Rs. 14,42,225-5-9 and (ii) the amounts collected by the assessee by way of tax under Section 8-B of the Madras General Sales Tax Act -the exact amount has yet to be ascertained, as the Tribunal held that the Government were held to assess tax only at 3 pies per rupee. The first of these items represented the purchase price paid to the assessee-firm for the sale of motor cars to its sub-dealers, who resided outside the State of Madras and who were bound under the terms of their contract with the assessee to sell those cars within their respective areas, all of which were outside the State of Madras. Those cars were however delivered to the sub-dealers or their agents at Madras and were subsequently taken by those sub-dealers outside the State for sale within their respective areas.
2. The assessee contended before us, in his application preferred under Section 12-B of the Act, that neither of these items should have been included in its assessable turnover.
3. Normally we should have held that the question, whether each of these items is assessable to sales tax, is concluded by the authority of prior decisions of this Court. It was held in Ashok Leyland Ltd v. State of Madras  8 S.T.C. 210, that such sales completed by delivery of the cars within the State of Madras, though the sales were for subsequent transport of those cars to areas outside the State for further sales there, were intra-State sales within the State of Madras and were not sales in the course of inter-State trade within the scope of Article 286(2) of the Constitution, as it stood in the relevant year before it was amended. The principle applied in Ashok Leyland case  8 S.T.C. 210 was the one laid down in the earlier decisions of this Court, Indian Coffee Board v. State of Madras  7 S.T.C. 135 and State of Madras v. Indian Coffee Board  7 S.T.C. 522. If the principle thus re-affirmed in Ashok Leyland case  8 S.T.C. 210 were to apply, the contention of the assessee will have to be negatived in this case also. Similarly, if the principle laid down in Sundararajan and Co., Ltd. v. State of Madras  7 S.T.C. 105 and re-affirmed in the unreported decision of this Court in T.R.C. No. 46 of 1955 etc. and again in State of Madras v. Bangalore Automobiles  7 S.T.C. 537, were to apply, the second of the contentions of the assessee, that the amounts collected by the assessee under Section 8-B by way of tax should not be included in its assessable turnover, will also have to be rejected.
5. The endeavour of Mr. Venkatasubramania Aiyar, learned counsel for the assessee-petitioner, was to convince us that those earlier decisions of this Court, to each of which one of us was a party, required reconsideration. We have heard him in full as if the questions at issue were res integra. We are, however, unable to accept his contention that those decisions require reconsideration. We should also mention that the decision of this Court in Ashok Leyland case  8 S.T.C. 210 is under appeal to the Supreme Court. In these circumstances we do not consider it necessary to discuss in full all the contentions the learned counsel urged before us.
6. As we said, Ashok Leyland case  8 S.T.C. 210 is a direct decision of this Court on one of the two questions at issue, whether the sales of the motor cars were intra-State sales or were sales in the course of inter-State trade or commerce within the meaning of Article 286(2) of the Constitution, as it stood before it was amended. The principle, that a sale completed by the delivery of the goods within State to the buyer or his agent was not a sale in the course of inter-State trade or commerce even if the buyer bought the goods solely for transporting them outside the State and did transport them, was based among other things to a large extent on the interpretation placed by the Supreme Court on the scope of the expression, 'in the course of the import of the goods into, or export of the goods out of, the territory of India' within the meaning of Article 286(1)(b) of the Constitution. It must be held that the scope of Article 286(1)(b) has been finally settled by the Supreme Court. What was laid down by the majority of the Judges in the State of Travancore-Cochin v. Shanmugha Vilas Cashew-nut Factory  4 S.T.C. 205, that a sale and purchase within the State for the purposes of exporting those goods was not a sale in the course of export, was re-affirmed by the Supreme Court in State of Madras v. Gurviah Naidu  6 S.T.C. 717 and State of Mysore v. Mysore Spinning and .  9 S.T.C. 188. We are still of the view that the expression 'in the course of' should have the same significance when it related to export and import trade to which Article 286(1)(b) of the Constitution applied and also when it related to inter-State trade or commerce which was regulated in the relevant period by Article 286(2) as it stood before it was amended.
7. Mr. Venkatasubramania Aiyar referred to Queen v. Wilkinson ex parte Brazell, Garlick and Co. 85 C.L.R. 467, the principles laid down in which were quoted with approval by Das, J., as he then was, in his separate and dissenting judgment in. State of Travancore-Cochin v. Shanmugha Vilas Cashew-nut Factory  4 S.T.C. 2O5. Mr. Venkatasubramania Aiyar urged that neither that decision nor the observations of Das, J., were considered in any of the three decisions of this Court including that in Ashok Leyland's case  8 S.T.C. 210. Even so, we are unable to accept his contention that those decisions require reconsideration.
8. No doubt in Queen v. Wilkinson; ex parte Brazell, Garlick and Co. 85 C.L.R. 467, despite the fact that the goods in question, potatoes, were delivered at Dorrigo to the buyer's agent within the State of New South Wales for being consigned to Queensland for sale, the High Court of Australia came to the conclusion, that it was a sale in the course of inter-State trade. The learned Judges of the Australian High Court observed, 'the delivery of the potatoes from the lorry into the railway truck can bear only the aspect of an essential and integral, even if initial, step in the transportation of the potatoes to Queensland.'
9. In that case the principle laid down by Dixon, J., in an earlier decision, Clements and Marshall Pty. Ltd. v. Field Peas Marketing Board 76 C.L.R. 401, was re-affirmed.
We should consider the commercial significance of transactions and whether they form an integral part of a continuous flow or course of trade, which, apart from theoretical legal possibilities, must commercially involve transfer from one State to another.
10. What arose for decision in State of Travancore-Cochin v. Shanmugha Vilas Cashew-nut Factory  4 S.T.C. 205 was what was a sale in the course of export within the meaning of Article 286(1)(b) of the Constitution. It was in considering that question that Das, J., as he then was, referred to Queen v. Wilkinson; ex parte Brazell, Garlick and Co. 85 C.L.R. 467, to explain the scope of the expression 'in the course of', though the Australian case itself dealt with a sale in the course of inter-State trade. It was apparently after considering this case also that the majority of the learned Judges held in State of Travancore-Cochin v. Shanmugha Vilas Cashew-nut Factory  4 S.T.C. 205, that a sale for export was not a sale in the course of export within the scope of Article 286(1)(b). That principle was re-affirmed by Das, J., himself as acting Chief Justice in State of Madras v. Gurviah Naidu  6 S.T.C. 717, in explaining the scope of the expression 'in the course of'. We feel bound by the principles laid down by the Supreme Court, though those decisions Were with reference to sales within the scope of Article 286(1)(b) of the Constitution. We do not feel justified at this stage in enlarging the scope of the expression 'in the course of' only in relation to inter-State trade and commerce on the lines explained in Queen v. Wilkinson; exparte Brazell, Garlick and Co. 85 C.L.R. 467. We are unable to apply at this stage the test of commercial significance of the transaction postulated by the Australian High Court in the earlier decision and re-affirmed in Queen v. Wilkinson; ex parte Brazell, Garlick and Co. 85 C.L.R. 467.
11. Learned counsel referred to the test laid down by the Supreme Court of America in Phillips Petroleum Co. v. State of Wisconsin 98 L. Ed. 1035, where the goods were destined for consumption in a State outside the one in which the goods were sold. In view of what we have said earlier, we feel unable to apply this test either in deciding the question at issue whether the sales of the motor cars were sales in the course of inter-State trade or commerce.
12. In State of Madras v. K.H. Chambers Ltd.  6 S.T.C. 157, the learned Chief Justice referred to State of Travancore-Cochin v. Shanmugha Vilas Cashew-nut Factory  4 S.T.C. 205 and observed :
I must confess that but for the authoritative pronouncement of the Supreme Court in the Second Travancore case  4 S.T.C. 205, I would have felt considerable difficulty in the construction of Article 286(1)(b) in its application to sales or purchases immediately preceding the actual export, which are related to the export factually. For instance, when a dealer in the State, to perform a contract of sale, entered into with a foreign buyer, purchases the goods which he subsequently exports, it may well be held that the purchase was in the course of the export. Indeed, one of the learned Judges of the Supreme Court, Das, J., took that view, though the majority took a contrary view. But the learned Chief Justice of India, who delivered the judgment on behalf of the majority, took up this very question and held that such a purchase would not be covered by the exemption. This is conclusive on this question.
13. It is on similar considerations we have to hold that it is not permissible at this stage to decide the question at issue, even with reference to Article 286(2) of the Constitution as it stood then, by applying either the Australian test or the American test to which we have referred earlier. We accept the law laid down in Ashok leyland's case  8 S.T.C. 210 as correct. It is authority binding on us. We hold that the Tribunal rightly included this item of Rs. 14,42,225-5-9 in the assessable turnover of the assessee.
14. The next question is whether Sundararajn and Co., Ltd. v. State of Madras  7 S.T.C. 105 requires reconsideration. In January, 1954, this Court held in Deputy Commissioner of Commercial Taxes v. Krishnaswami Mudaliar  5 S.T.C. 88 that under the scheme of the Act, including Section 8-B as it stood, the amounts collected by a registered dealer from the consumer by way of sales tax and paid over to the Government should not be included in the turnover of the registered dealer as part of the sale price of the goods sold and that those amounts were not liable to be taxed over again to sales tax. Subsequent to that, the Madras Legislature enacted the Madras General Sales Tax (Definition of Turnover and Validation of Assessments) Act, 1954, Section 2 of which directed that the amounts so collected under Section 8-B shall be deemed to have formed part of the turnover. The validity of that Act was challenged, but it was upheld by a Division Bench of this Court in Sundararajan and Co., Ltd. v. State of Madras  7 S.T.C. 105. If that decision prevails and the validity of the Act is to be upheld, then the Tribunal was right in including this item also in the assessable turnover of the assessee in the year of assessment in question.
15. The main contention of Mr. Venkatasubramania Aiyar was that Act XVII of 1954 was beyond the legislative competence of the Madras Legislature. That was the very contention negatived in Sundararajn and Co., Ltd. v. State of Madras  7 S.T.C. 105.
17. Learned counsel referred to the well-recognised principle re-affirmed by the Privy Council in Motor Transport Commissioner v. Antill Ranger and Co., Pty. Ltd.  A.C. 527, that a Legislature cannot give itself legislative power to tax something if in reality it did not have that legislative competence.
18. Learned counsel urged that what Section 8-B of the Act provided for was the collection of a tax and, if what was collected was a tax, it could not be brought within the scope of Entry 54 of List II of Schedule VII of the Constitution. In dealing with a similar contention what was recorded in Sundararajan's case  7 S.T.C. 105, was,
Even if the registered dealer collects the amount by way of tax under the authority of Section 8-B of the Act, the payment is by the purchaser on the occasion of the sale by the dealer. Vis-a-vis the dealer it is in reality part of the price the purchaser has to pay the seller for purchasing the goods. A tax on such a payment, in our opinion, is well within the ambit of Entry 54 of List II, Schedule VII, read with Article 246(3) of the Constitution.
19. It was pointed out there that it is not the label that the legislature gave at one stage that really concluded the question at issue. Therefore, when Section 8-B of the Act declared that the amounts were collected by way of tax, that did not conclude the question at issue. What was the real nature of the payment has to be taken into account in deciding whether it came within the ambit of Entry 54. Learned counsel referred to the observations of Venkatarama Aiyar, J., in Bengal Immunity Co., Ltd. v. State of Bihar  6 S.T.C. 446. After pointing out that the incidence of taxation ultimately fell on the consumer the learned Judge recorded,
As the seller is merely to pass on the tax to the consumer, he is, in fact, constituted collector of the tax on behalf of the State.
20. The learned Judge was only explaining the reality of the situation with reference to the economic incidence of the tax.
21. We are now concerned with the question whether what was so passed on could ever be part of the price the consumer has to pay and which could be correlated to the bargain or transaction of sale itself. That aspect we feel was considered in full in Sundararajan's case  7 S.T.C and we are unable to hold that the view taken was erroneous or that it requires reconsideration. We are bound to follow the authority of the earlier decision and we hold that the Tribunal rightly included this item also in the assessable turnover of the assessee.
22. The petition fails and is dismissed with costs. Counsel's fee Rs. 250.