LexTHE CEMENT MARKETING CO., OF INDIA LTD. AND ANOTHER versus THE STATE OF MYSORE AND ANOTHER
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... 3 s.c.:R. SUPREME dOUR'i' R~POR'l'S 777 under Art. 226, the High Court can exami~e the merits of the order passed by appellant No. Im such cases. Beard of 1!I iltfi SchtJOI &. /nlmntdi.te Etl111Jatitm U.P. v. The result is though we agree with the appell- ants that the orde; passed by the. H~gh ~ourt was not justified, we refrain from settmg it aside for the reasons just explained. There would be no o~der as to costs. Bt1gleshwar Prasai -~- THE CEMENT MARKETING CO., OF INDIA LTD. AND ANOTHER v. THE STATE OF MYSORE AND ANOTHER (S. K, DAS, J. L. KAPUR, A. K. SARKAR, M. HIDAYATULLAH and RAGHU:SAR DAYAL, JJ.) Sales Tax-Sale of goods-Transactions involving move· ment of goods across the border from one State to another- Liability to tax-Mysore Sales Tax Act, 1948 (Mysore 46 of 1948)-Constitution of India, Art.286(2); The second appellant was a manufacturer of cement and at the material time it had over a dozen factories in different parts of India none of which was in the State of Mysore. The first appellant was its sales manager and ~ad its head office in Bombay with a branch office at Bangalore in the State of Mysore. Cement was a controlled article· and every- one wishing to buy cement had to get an authorisation from the appropriate Government authorities in a standard form which authorised the first appellant to sell cement in quantities mentioned therein and the cement had to be supplied from the factory therein mentioned. The purchaser had to place an order with the first appellant stating the requirement, where the goods were to be sent and how they were to be sent. In the present ca~e, all the goods were sent against the authorisations from the various factories belonging , to the second appellant which were all outside the. State of Mysore and were received in the State of Mysore by the various - l9G2 Augtiil 28 • . 196B 01mtnt Market_ing C•., of f,.rlia Ltd • .•. ' ·st•te oj Jly.-or11 778 SUPREME OOURT REPORTS [1963j purchasers. The Sales Tax Officer by his order dated March 31, 1958, took the view that though the property in the goods passed to the dealers and consumers outside the State pf Mysore, since the goods had actually been delivered in the State of Mysore as a direct result of such sales for purposes of consumption in the· State, the sales must be deemed to have taken place in that State and, therefore, the s~les .effected by the first appellant as the sales manager of the second appellant,_ to customers in Mysore State amounted to intra-State sales and liable to tax under provisions of the Mysore Sales Tax Act, 1948. The High Court held that as the actual delivery to the purchasers was within the State of Mysore, the cement loaded outside the State and despatched to the purchaser did not convert the sales into inter~State sales but were intra-State sales. Held, that the sales which tookplace in the present case in which the mov~ment of goods was from one State to anoiher as a result of a convenant or incident of the contract of sale, were in the course of inter-State trade or commerce and felt within Art.286(2) of the Constitution of India. Consequently, the imposition of sales tax on such sales was unconstitutional. Mfs. Mohan Lal Hargobind v, Th• State of Madhya. Pradesh, [1955] 2 S.C.R. 509, followed. ·. • Endapuri Narasimhan & 80n v. The Stale of OriBaa, [1962].1 S.C.R. 314, Bengallmmunitg Go. Ltd. v. The State of Bihar, [1955] 2 S.C.R. 603 M/s. Reim Narain & Sons v. Assistant Commissioner of Sales Tax, [1955] 2 S.C.R. 483 and Tata Iron and Steel Go. Ltd. Bombay v. S. R. Sarkar, [1961] I S.C.R. 379, relied on. Rohtas IndustrieB Ltd. v. The State of Bihar, [1961] 12 . S.T.C. 615, distinguished. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 255 of 1961. Appeal from the judgment and order dated March 21, 1960, of the Mysore High Court in Writ Petition No. 14 7 of 1958. ,,, R: J. Kolah, J. B. Dadachanji, O. C. Mathur and Ravin.der Narain, for the appellants. ). . 3 S.d.:R. SUPREME COURT REPORTS 119 0, K. · Daphtary, Solioitor-General of India, J3. R. L. Iyengar and P. D. Menon, for respondents. 1962. August. 28. The Judgment of the Court was delivered by. KAPUR, J.-This is an appeal against the judgment and order of the HigQ. Court of Mysore in Writ Petition No.147of1958 dismissing the appell· ant's petition under Arts. 226 and 227 of the Con- stitution for quashing the order of assessment for
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