THE STATE OF ASSAM versus RAMESH CHANDRA DEY AND OTHERS

Citation: [1962] 1 S.C.R. 986 · Decided: 14-04-1961 · Supreme Court of India · Bench: T.L. VENKATARAMA AIYYAR · Disposal: Appeal(s) allowed

Judgment (excerpt)

986 
SUPREME COURT REPORTS 
[1962] \... 
THE STATE OF ASSAM 
v. 
RAMESH CHANDRA DEY AND OTHERS 
(S. K. DAS, J. L. KAPUR, M. HIDAYATULLAH, 
J.C. SHAH and T. L. VENKATARAMA ArYAR, JJ.) 
Sales Tax-Law providing for exclusion of sales of goods pur-
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chased for resale-Ammdment confining such sales to those in the 1
State-Whether amendment offends law prohibiting levy of tax on 
inter-State sales-Assam Sales Tax Act, r947 (Assam r7 of r947), 
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as amended by Assam Act 4 of r95r, ss. 3(r)A(iii), r5-Assam Sales 
Tax Rules, r. Bo-Constitution of India, Art. 286(2). 
Section 15 of the Assam Sales Tax Act, 1947, as originally 
enacted, provided that in calculating the net turnover of a 
registered dealer for tax purposes, all sales made to another 
registered dealer of goods specified in the latter's -certificate of 
registration were to be excluded from the gross turnover, if the 
goods were brought for resale. In 1951, the section was amend-
ed by the addition of the words "in the State" after the word 
"resale", as a result of which the exclusion was confined only to 
sales of goods for resale in the State. Rule So was framed to 
give effect to the amendment. The petitioner, a registered 
dealer in Assam, and whose business consisted mainly of buying 
tea in Assam and selling it either in Assam or in Calcutta, chal-
lenged the legality of the amendment on the ground that the 
result of the amendment was that tax could be levied on inter-
state sales and that, therefore, it contravened Ait. 2S6(2) of the 
Constitution of India. 
Held: (1) that a sale of goods to a dealer within the State 
who purchased them for the purpose of selling them to dealers 
outside the State, and who, in fact, so sold them, would not 
make it a sale in the course of ;inter-State trade as the two 
sales were distinct and separate. The first sale was an intra-State 
sale and a tax imposed thereon did not offend Art. 2S6(2) of the 
Constitution. 
Endupuri Narasimham v. State of Orissa, [1962] I S.C.R. 314, 
followed. 
(2) that s. 15 of the Assam Sales Tax Act, 1947, and 
Rule So framed under that Act were not ultra vires Art. 2S6(2) 
of the Constitution. The object of s. 15 of the Act was to avoid 
taxation at multiple points and the amendment to that section 
in 1951 or Rule So did not enable the levy of tax on sales in the 
course of inter-State trade twice. Such sales were expressly 
sav.ed from tax by the operation of Art. 2S6(2) ands. 3(r)(A)(iii) 
of the Act. Once those sales were outside the charging section 
there was no need to re-enact that prohibition ins. 15 which 
was a machinery section and would stand cut down by the limi-
tation placed by the charging section and the Constitution. 
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~ I S.C.R. SUPREME COURT REPORTS 
987 
CIVIL 
APPELLATE JURISDICTION: 
No. 167 of 1960. · 
Civil Appeal 
z96z 
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Appeal from the judgment and order dated July 16, 
1956 of. the Assam High Court at Gauhati in Civil 
Rule No. 128 of 1954. 
A. V. Viswanatha Sastri and Naunit Lal, for the 
appellant. 
The Respondents did not appear. 
1961. April 14. The Judgment of the Court was 
delivered by 
State of Ass_ani 
v. 
Ramesh 
Chandra D6y 
HIDAYATULLAH, J.-This appeal has been filed by Hidayatullah J. 
~ the State of Assam against a judgment of the High 
Court of Assam dated July 16, 1956. By the judgment· 
under appeal, the High Court held that s. 15 of the 
Assam Sales Tax Act, 1947, and Rule 80 framed under 
the Act were ultra vires, being a breach of Art. 286(2) 
of the Constitution. 
The High Court granted a 
certificate under Art. 132(1) of the Constitution. 
R. C. Dey, the answering respondent, is a wholesale 
dealer in tea, and has been in business since 1949. 
He registered himself as a dealer under the Assam 
Sales Tax Act on January 14, 1950. His business con-
) sists mainly of buying tea in Assam and selling it 
either in Assam or in Calcutta. In respect of tea sold 
in Calcutta, R. C. Dey consigns the tea to himself 
after purchasing it in Assam. This tea is then appro-
ved by prospective purchasers, to whom the docu-
ments of title are endorsed on receipt, of the price. 
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In 1951, the Assam Sales Tax Act was amended by 
the Assam Sales Tax (Amendment) Act, 1951 (4 of 
1951). Section 15 of the Act before the amendment 
provided that in calculating the net turnover of a 
registered dealer for tax purposes all sales made to 
another registered dealer of goods specified in the 
latter's certificate of registration were to be ex

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