ENDUPURI NARASIMHAM AND SON versus THE STATE OF ORISSA AND OTHERS

Citation: [1962] 1 S.C.R. 314 · Decided: 14-03-1961 · Supreme Court of India · Bench: T.L. VENKATARAMA AIYYAR · Disposal: Dismissed

Cited by 1 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

I96I 
The Lokmanya 
Mills 
v. 
The Ba1si 
Borough 
Muni&ipality 
Shah ]. 
Mar&h x4. 
314 
SUPREME COURT REPORTS 
[1962] 
These appeals must be allowed and the decrees pas-
sed by the High Court set aside and the decrees pas-
sed by the District Court of Shola pur restored with 
costs in this court and the High Court. One hearing 
fee. 
Appeals allowed. 
ENDUPURI NARASIMHAM AND SON 
v. 
THE STATE OF ORISSA AND OTHERS 
(S. K. DAS, J. L. KAPUR, M. HIDAYATULLAH, 
J. C. SHAH and T. L. VENKATARAMA ArYAR, JJ.) 
Sales Tax-Transactions intra-State and inter-State-Test-
Constitution of India, Art. 286(2)-0rissa Sales Tax Act, r947 
(XIV of r947), s. 5(2)(a)(II). 
The petitioner who was a registered dealer under the Orissa 
Sales Tax Act, 1947, was carrying on the business of purchasing 
and reselling castor seeds, etc., in the State of Orissa. Under 
a declaration given by him for the purpose of obtaining his regis-
tration certificate the goods purchased by him in Orissa were to 
be resold in that State. He purchased certain commodities 
inside the State but in contravention of his declaration sold the 
goods to dealers outside the State. The Sales Tax Officer inclu-
ded in the taxable turnover of the petitioner the purchase made 
by him inside the State in accordance with s. 5(2)(a)(II) of the 
Act. The contention of the petitioner was that the purchase 
was in course of inter-State trade and was exempted under 
Art. 286(2) of the Constitution of India. 
Held, that the transaction of sale which has been taxed 
was wholly inside the State of Orissa and was distinct and sepa-
rate from the sale made by the purchaser to dealers outside the 
State. The former transaction was taxable nnder s. 5(2)(a)(II) 
of the Act while the latter was exempted under Art. 286(2) of 
the Constitution. 
Messrs. Mohanlal Hargovind Das v. The State of Madhya 
Pradesh, [1955] 2 S.C.R. 509, distinguished. 
In order that a sale or purchase might be inter-State, it is 
essential that there must be transport of goods from one State 
' 
• 
• 
. ' 
' 
1 S.C.R. SUPREME COURT REPORTS 
315 
to another under the contract of sale or purchase. A purchase 
made inside a State, for sale outside the State cannot itself be 
held to be in the course of inter-State trade and the imposition 
of tax thereon is not repugnant to Art. 286(2) of the Constitu-
tion. 
Bmgal Immunity Company Limited v. The State of Bihar, 
[1955] 2 S.C.R. 603 and State of Travaneor.-Cochin v. Shanmugha 
Vilas Cashew Nut Factory, [1954] S.C..R. 53, followed. 
ORIGINAL JURISDICTION: 
Petition No. 12 of 1959 . 
Petition under Art. 32 of the Constitution of India 
for enforcement of fundamental rights. 
R. Gopalakrishnan, S. N. Andley, J. B. Dadachanji, 
Rameshwar Nath and P. L. Vohra, for the petitioners. 
0. K. Daphtary, Solicitor-General of India, R. Gana-
pathy Iyer and T. 21!. Sen, for the respondents. 
1961. March 14. The Judgment of the Court was 
delivered by 
VENKATARAMA AIYAR, J.-The petitioner is a joint 
Hindu family firm carrying on business at Berhampur 
in the State of Orissa, and registered as a dealer 
under the provisions of the Orissa Sales Tax Act, 194 7, 
hereinafter referred to as the Act. Its business con-
sists in the purchase of castor seeds, turmeric, gingili 
and other commodities locally, and selling them to 
dealers outside the State. The Sales Tax Officer, 
Berhampur, included in the taxable turnover of the 
petitioner the purchase of goods made by it inside the 
State but sold, as aforesaid, to dealers outside the 
State and imposed a tax of Rs. 27,161-13-0 on account 
of such sales during the sixteen quarters commencing 
from April 1, 1952, and ending with March 31, 1956. 
In the present application filed under Art. 32, the 
petitioner challenges the validity of the tax on the 
ground that the purchases in question were made in 
the course of inter-State trade, and that a tax there. 
, on was in contravention of Art. 286(2) 
The impugned tax has been levied under s. 5 of the 
• 
Act, which, omitting what is not relevant, runs as 
follows:-
5. 
(1) The tax payable by a dealer under this 
Endupuri 
Narasitnham 
<£. Son 
v. 
The State of 
Orissa &- Ors. 
V enkatarama 
Aiyar ] . 
Enrlupuri 
N arasimhani 
& Son 
v. 
The State of 
Orissa & Ors. 
VenJ~atararna 
Aiyar ]. 
316 
SUPREME COURT REPORTS 
[1962] 
Act shall be levied at the rate of one quarter of an 
anna in the rupee on his taxable turnover: 
(2) In this Act the expression "taxable turnover" 
means that part of a

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