INDIAN COPPER CORPORATION LTD. versus THE STATE OF BIHAB, AND OTHERS.

Citation: [1961] 2 S.C.R. 276 · Decided: 07-11-1960 · Supreme Court of India · Bench: S.K. DAS · Disposal: Dismissed

Cited by 3 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

November 7. 
276 
SUPREME COURT REPORTS 
[1961) 
INDIAN COPPER CORPORATION LTD. 
v. 
THE STATE OF BIHAB, AND OTHERS. 
(S. K. DAB, 
M. HIDAYATULLAH, K. c. DAS GUPTA, 
J. C. SHAH and N. RAJAGOPALA AYYANGAR, JJ.) 
Sales Tax-" Explanation Sales "-Sale in one State but deli-
very outside-Consumption not in State of first destination-Whe-
ther "outside" sale-Constitution of India, Art. 286(I)(a)-Bihar 
Sales Tax Act, r947 (Bihar XIX of z947), ss. 2(g) and 33. 
The appellant effected sales during the period 26-1-1950 to 
31-3-1950, whereunder the property in the goods passed in the 
State of Bihar but delivery was effected outside Bihar for con-
sumption outside Bihar. In some of these sales the goods were 
delivered in the State of first destination for consumption there-
in whilst in other cases the goods were not for consumption in 
the State of first delivery of destination. The appellant conten-
ded that both these categories of sale were exempt from tax 
under Art. 286(r)(a) as they were outside sales. 
Held (per Hidayatullah, Das Gupta and Rajagopala Ayyan-
gar, JJ.) that the sales where delivery in the State of first des-
tination was for consumption therein, were outside the State of 
Bihar within the Explanation to Art. 286(1)(a) and Bihar could 
not tax them, but the sales where delivery in the State of first 
destination was not for consumption therein were not " Explana-
,tion Sales " and were not " outside " sales and Bihar could tax 
them. Where the property in the goods passed within the State 
as a direct result of the sale the sale was not an "outside " sale 
for the purpose of Art. 286(r)(a) unless it fell within the Expla-
nation. In the first category of sales the appellant was entitled 
to the exemption and it was not necessary for it to prove that 
the goods delivered for consumption in the State of first destina-
tion were actually consumed therein. 
. 
The State of Bombay v. United Motors (India) Ltd., [1953] 
S.C.R. 1069 and Bengal Immunity Company Ltd. v. The State of 
Bihar, [1955] 2 S.C.R. 603, referred to. 
Burmah Shell Oil Storage & Distributing Co. of India Ltd. v. 
The Commercial Tax Officer, C. A. No. 751 of 57 and C. A. No. ro 
of 1958 (Unreported), relied on. 
Per S. K. Das and Shah, JJ.-Section 33 introduced in the 
Bihar Sales Tax Act by the Adaptation of Laws Order, 1951, en-
grafted the same restrictions on the taxing power of the State on 
the pre-Constitution statutes as were imposed by Art. 286 upon 
post-Constitution statutes. Section 33(1)(a)(i) of the Act took 
awav only the power to tax " Explanation Sales" but not the 
pow'er to tax" non-Explanation Sales". A sale in which goods 
had been delivered outside Bihar, but not as a direct result of 
2 S.C.R. SUPREME COURT REPORTS 
277 
the sale or not for the purpose of consumption in the State of 
first delivery was not covered by the Explanation, and the 
right to tax the sale, if it arose otherwise under the Act, was 
Indian Copper 
not impaired by s. 33(1)(a)(i). 
Corporation Ltd. 
v. 
CIVIL APPELLATE JURISDICTION: 
Civil Appeal 
The State of 
No. 210 of 1959. 
Bihar & Others 
Appeal by special leave from the judgment a.nd 
order dated J anua.ry 16, 1958, of the Patna. High Court 
in Mis. Judicial case No. 156of1957. 
B. O. Ghose a.nd P. K. Chatterjee, for the Appel-
lant. 
S. P. Varma, for Respondents Nos. 1 to 5. 
R. O. Dutta, for Respondents Nos. 6 to 20. 
1960. November 7. The Judgment of Hida.ya.-
tulla.h, Das Gupta. a.nd Ayya.nga.r, JJ., was delivered 
by Ayya.nga.r, J., a.nd that of S. K. na.s and Shah, JJ., 
was delivered by Shah, J. 
AYYANGAR J.-The sole question which a.rises in 
Ayyangar J. 
this a.ppea.l, which comes by way of special leave is a.s 
to whether sales under which goods were delivered 
outside the State of Biha.r for the purpose of consump· 
tion but not within the State of first delivery or first 
destination, a.re exempt from the levy of sa.les-ta.x by 
the Biha.r State by virtue of Art. 286(l)(a.) of the Con-
stitution a.s it stood before the recent amendment. 
The India. Copper Corporation Ltd. (referred to here-
after a.s the a.ssessee-compa.ny) carries on business in 
copper a.nd various other materials a.nd mineral pro-
ducts a.nd the office of its Genera.I Ma.na.ger is in the 
district of Singhbhum in Biha.r. The period covered 
by the assessment now in dispute is Ja.nua.ry 26, 1950 
to Ma.rob 31, 1950. The normal practice of the a.sses-
see-compa.ny wa.s to deposit sums of money from time 
to ti

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