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PETITIONER: STATE OF JAMMU & KASHMIR AND OTHERS

       Vs.

RESPONDENT: CALTEX INDIA (LTD.)

DATE OF JUDGMENT: 17/12/1965

BENCH: RAMASWAMI, V. BENCH: RAMASWAMI, V. GAJENDRAGADKAR, P.B. (CJ) WANCHOO, K.N. HIDAYATULLAH, M. SATYANARAYANARAJU, P.

CITATION:  1966 AIR 1350            1966 SCR  (3) 149  CITATOR INFO :  R          1969 SC 343  (13)  RF         1970 SC 306  (10)  F          1975 SC 887  (6)

ACT: Sales Tax-Petrol sent under contract from Punjab to Jammu  & Kashmir-Sales whether inter-State in character-Chargeability under  Jammu & Kashmir Motor Spirit (Taxation of Sales)  Act 2005,  s. 3 Sales Tax Laws Validation Act, 1956, effect  of- Constitution of India Art. 286(2).

HEADNOTE: Petrol  and allied products were supplied by the  respondent company  from  its depot in Punjab to the  State  Mechanized Farm  at Nandpur in Jammu & Kashmir State under  a  contract with  the  Director-General of Supplies, Delhi.   The  sales were taxed under the Jammu & Kashmir Motor Spirit  (Taxation of Sales) Act, 2005 for the period January 1955 to May  1959 by a single assessment order.  The assessment was challenged by  the  respondent  by a writ petition filed  in  the  High Court,  as being beyond the taxing power of the State  owing to  the  ban imposed by Art. 286(2) as interpreted  by  this Court in the Bengal Immunity case, as also the provisions of the  Central Sales Tax Act, 1956 passed by Parliament  after the  amendment  of  Art.  286  by  the  Constitution   Sixth Amendment Act, 1956.  The respondent’s plea was accepted  by a single judge of the High Court as regards the period after September  6,  1955; as regards the period before  and  upto that date the learned Judge held that the sales were taxable because  the ban on taxation of inter-State sales  in,  Art. 286(2) was lifted in respect of that period by the Sales Tax Laws  Validation Act,, 1956.  In Letters Patent  Appeal  the Division Bench held that. the assessment order for the whole period  from  January 1955 to, May 1959  was  one  composite whole and being bad in part was infected throughout and must be  treated as wholly invalid.  The State appealed, to  this Court by special leave. HELD  : (i) The sales in question were inter-State sales  as both  the conditions laid down in the Bengal  immunity  case

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for  a sale to be an inter-State sale that (1) there  should be  a  sale of goods and (2) the goods must  be  transported under  the contract of sale from one State to another,  were fully  satisfied  in the present case. The sales  could  not therefore  be taxed for the period not covered by the  Sales Tax Laws Validation Act, 1956. [156 C-D] Bengal Immunity Co. Ltd. v. State of Bihar, [1955] 2  S.C.R. 603, referred to. (ii) The  last  mentioned Act however validated  the  St-ate laws  which levied tax on inter-State sales for  the  period before September 6. 1955.  Hence the sales before that  date could be validly taxed as held by the single Judge. [159 F] 150 (iii)     The  fact  that  the respondent had  no  place  of business or storage in Jammu  &  Kashmir  was  not  material because it was not a condition for taxation  under the Jammu JUDGMENT: should be such a place of business or storage.  Section 3 of the  Act  purports to tax all "retail sales".   Nor  is  the holding of a licence under s. 6 which is a machinery section only,  a condition of liability to pay sales-tax  under  the Act. [158 C-D] (iv) The Division Bench was wrong when it held that  because there  was  one assessment order for the whole  period  from January  1955  to May 1959, the whole of  it  was  vitiated. Sales-tax  is in ultimate analysis imposed on receipts  from individual  sales or purchases of goods and it was  possible to  separate  the assessment of receipts  derived  from  the sales  for the period up to September 6, 1955 and  to  allow the  taxing authorities to enforce the statute with  respect to  the  sales  taking place during ’this  period  and  also prevent  them by grant of a writ from imposing the tax  with regard to sales for the exempted period, [159 G-160 E] State  of Bombay v. United Motors India Ltd.  [1953]  S.C.R. 1069, relied on. Bennett  &  White (Calgary) Ltd. v.  Municipal  District  of Sugar City No. 5, [1951] A.C. 786, distinguished.

& CIVIL APPELLATE JURISDICTION : Civil Appeal No. 864 of 1964. Appeal  from the judgment and order, dated July 10, 1962  of the  Jammu  & Kashmir High Court in L. P. Appeal  No.  4  of 1962. S.   V. Gupte, Solicitor-General, Raja Jaswant Singh,  Advo- cate-General  for  the  State of Jammu  and  Kashir,  N.  S. Bindra,R. H. Dhebar, and R. N. Sachthey, for the  appellants Nos.  1 and 2. M. C. Setalvad, and D. N. Gupta, for the respondent. The Judgment of the Court was delivered by Ramaswami,  J.  This  appeal is  brought  on  a  certificate against the judgment of the Division Bench of the High Court of Jammu & Kashmir at Srinagar, dated July 10, 1962  holding that  the respondent is not liable to pay Sales tax for  the period  from  January, 1955 to May, 1959 under the  Jammu  & Kashmir  Motor  Spirit (Taxation of Sales) Act,  2005  (1948 A.D.). The Director-General of Supplies, Delhi entered into a  con- tract  with General Manager, Caltex India (Ltd.)  at  Bombay (hereinafter  called  the  respondent)  for  the  supply  of petrol,  HSD and Power Kero to the State Mechanized Farm  at Nandpur  located  in  the  State of  Jammu  &  Kashmir.   In pursuance of this contract the respondent directed its depot

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at  Pathankot situated in the Punjab State to supply  petrol to the Nandpur Farm. 151 The procedure adopted was as follows.  The Officer in charge of the Nandpur farm placed indents with the Pathankot  depot for supply of specified quantities of petrol to the farm and on  receipt of the indents, the Pathankot depot  transported the petrol in its own tank-lorries to Nandpur and  delivered the petrol to the farm.  The petrol was measured by means of dipping  rods  and  approved by  the  indenting  officer  at Nandpur farm and thereafter the petrol was delivered to  the Nandpur farm through pumps which belonged to the respondent. The  price of petrol so supplied was paid to the  respondent at  Delhi by the Director-General of Supplies.   The  Petrol Taxation  Officer at Srinagar considered that the  sales  of petrol  to  Nandpur farm were liable to be taxed  under  the Jammu  & Kashmir Motor Spirit (Taxation of Sales) Act,  2005 and  called upon the respondent to furnish returns of  sales between  1952 to 1959.  The respondent,  however,  furnished returns only for the period January, 1955 to May, 1959.   On the  basis  of  the  returns  the  Petrol  Taxation  Officer assessed  the respondent to pay sales tax to the  extent  of Rs.  39,619.75 in respect of sales of petrol  from  January, 1955 to May, 1959.  The respondent thereafter moved the High Court under s. 103 of the Constitution of Jammu and  Kashmir for grant of a writ to quash the assessment of sales tax and to  restrain the State of Jammu and Kashmir and  the  Petrol Taxation  authorities  (hereinafter called  the  appellants) from  levying  the tax.  It was contended on behalf  of  the respondent  that the sales tax could not be imposed  as  the sales  took  place in the course of  inter-State  trade  and commerce.    Syed  Murtaza  Fazl  Ali,  J.  held  that   the respondent  was  liable to pay sales tax in respect  of  the sales  which took place during the period January,  1955  to September,  1955.   Regarding  the rest  of  the  period  of assessment, the learned Judge held that the appellants  were not  entitled  to  levy tax and accordingly  issued  a  writ restraining  the  appellants from levying the  tax  for  the period from October, 1955 to May, 1959.  The appellants took the matter in Letters Patent appeal and the respondent  also filed  Cross-objection with regard to the liability  to  tax for the period from January,, 1955 to September, 1955.   The Division  Bench dismissed the appeal in Letters  Patent  and allowed the cross-objection of the respondent, holding  that the  appellants were not entitled to levy sales tax for  the entire  period from January, 1955 to May, 1959  and  accord- ingly quashed the assessment of sales tax, dated October  3, 1960. It is necessary, at this stage, to indicate the  legislative development in the State of Jammu and Kashmir which provides the  setting  for the questions to be investigated  in  this case. 152 Article  286  of  the Constitution,  as  it  was  originally enacted, read  as follows :               "(1)  No  law  of a  State  shall  impose,  or               authorise the imposition of, a tax on the sale               or  purchase  of  goods  where  such  sale  or               purchase takes place--               (a) outside the State; or               (b)   in the course of the import of the goods               into,  or  export  of the goods  out  of,  the               territory of India.               Explanation.-For  the  purpose  of  sub-clause               (a),  a  sale or purchase shall be  deemed  to

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             have  taken  place in the State in  which  the               goods have actually been delivered as a direct               result  of  such  sale  or  purchase  for  the               purpose   of   consumption  in   that   State,               notwithstanding-  the  fact  that  under   the               general,law  relating  to sale  of  goods  the               property  in the goods has by reason  of  such               sale or purchase passed in another State.               (2)   Except  in so far as Parliament  may  by               law otherwise provide, no law of a State shall               impose, or authorise the imposition of, a  tax               on  the  sale or purchase of any  goods  where               such  sale  or  purchase takes  place  in  the               course of inter-State trade or commerce :               Provided  that  the  President  may  be  order               direct that any tax on the sale or purchase of               goods’ which was being lawfully levied by  the               Government of any State immediately before the               commencement   of  this  Constitution   shall,               notwithstanding  that the imposition  of  such               tax  is  contrary to the  provisions  of  this               clause,  continue  to  be  levied  until   the               thirty-first day of March, 1951.               (3)   No  law  made by the  Legislature  of  a               State imposing, or authorising the  imposition               of, a tax on the sale or purchase of any  such               goods  as have been declared by Parliament  by               law  to  be  essential for  the  life  of  the               community shall have effect unless it has been               reserved   for   the  consideration   of   the               President and has received his assent." Article 286 therefore imposes four bans upon the legislative power of the States.  Clause (1) prohibited every State from imposing or authorising the imposition of, a tax on  outside sales  and on sales in the course of import into  or  export outside the territory 153 of India.  By cl. (2) the State was prohibited from imposing tax  on the sale of goods where such sale took place in  the course of inter-State trade or commerce.  But the ban  could be  removed by legislation made by the Parliament.   By  cl. (3) the Legislature of a State was incompetent to impose  or authorise  imposition  of  a tax on the sale  of  any  goods declared  by the Parliament by law to be essential  for  the life  of the community, unless the legislation was  reserved for the consideration of the President and had received  his assent.   But Art. 286 of the Constitution did not apply  to the State of Jammu & Kashmir till May 14, 1954, because  the Constitution  (Application  to Jammu & Kashmir)  Order  1950 made by the President of India on January 26, 1950  excepted Art.  286  from its applicability to the State  of  Jammu  & Kashmir.  Reference, in this connection, may be made to  the Second Schedule to the Constitution (Application to Jammu  & Kashmir)   Order  1950,  relevant  excerpt  from  which   is reproduced below :                   "THE SECOND SCHEDULE                     (See paragraph 3) Provisions of the         Exceptions         Modifications constitution appli- cable. Part XII          Articles 264 and 265  1.Articles 266 shall                   use (2) of Art. 267,  apply only in so far                   Articles 268 to 281  as it  relates to the                   Clause (2) of Art.    Consolidated Fund of                   283, Articles 286 to  India and the public

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                 291, 293, 295, 296     account of India.                   and  297.                                      2. Articles 282 and 284                                       shall apply only in so                                       far as they relate to                                      the Union or the public                                         account of India.                                      3. Articles 298, 299                                       and 300 shall apply                                       only in so far as                                       they relate to the                                       Union or the Govt.                                           of India." But Art. 286 was applied to the State of Jammu & Kashmir  by the  Constitution  (Application to Jammu &  Kashmir)  Order, 1954 which came into force on 14th day of May, 1954.  In The Bengal Immunity Company Ltd. v. State of Bihar(f) this Court held  that the operative provisions of the several parts  of Art.  286, namely cl. (1) (a), cl. (1) (b), cl. (2) and  cl. (3),  were  intended to deal with different topics  and  one cannot be projected or read (1) [1955] 2 S.C.R. 603. L9 Sup.  CI/66-11 154 into  another, and therefore the Explanation in cl. (1)  (a) cannot  legitimately  be extended to cl. (2)  either  as  an exception  or as a proviso thereto or read as curtailing  or limiting the ambit of cl. (2).  This Court further held that until the Parliament by law, made in exercise of the  powers vested  in it by cl. (2) of Art. 286, provides otherwise  no State  may impose or authorise the imposition of any tax  on sales  or  purchases of goods when such sales  or  purchases take  place in the course of inter-State trade or  commerce, and therefore the State Legislature could not charge  inter- State sales or purchases until the Parliament had  otherwise provided.  The judgment of the Court in the Bengal  Immunity Company’s case(1), was delivered on September 6, 1955.   The President  issued the Sales Tax Laws  Validation  Ordinance, 1956,  on  January 30, 1956, the provisions  of  which  were later  embodied in the Sales Tax Laws Validation Act,  1956. By this Act notwithstanding any judgment, decree or order of any  Court, no law of a State imposing, or  authorising  the imposition  of, a tax on the sale or purchase of  any  goods where  such  sale or purchase took place in  the  course  of inter-State trade or commerce during the period between  the 1st  day of April, 1951 and the 6th day of September,  1955, shall  be deemed to be invalid merely by reason of the  fact that  such  sale  or purchase took place in  the  course  of inter-State trade or commerce; and all such taxes levied  or collected  or  purported to have been  levied  or  collected during  the aforesaid period shall be deemed always to  have been  validly  levied or collected in accordance  with  law. The Parliament thus removed the ban contained in Art. 286(2) of the Constitution retrospectively but limited only to  the period  between  April 1, 1951 and September 6,  1955.   All transactions  of  sale, even though  they  were  inter-State could for that period be lawfully charged to tax.  But  Art. 286(2)  remained operative after September 6, 1955 till  the Constitution   was  amended  by  the   Constitution   (Sixth Amendment) Act, i.e., September 11, 1956.  By the amendment, the  explanation to cl. (1) of Art. 286 was deleted and  for cls. (2) and (3) the following clauses were substituted :               "(2)   Parliament   may   by   law   formulate               principles  for  determining when  a  sale  or               purchase  of goods takes place in any  of  the

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             ways mentioned in clause (1).               (3)   Any  law of a State shall, in so far  as               it imposes, or authorises the imposition of, a               tax on the sale or purchase of goods, declared               by Parliament by law to be               (1)   [1955] 2 S.C.R. 603.               155               of special importance in inter-state trade  or               commerce  be subject to such restrictions  and               conditions  in regard to the system  of  levy,               rates  and  other  incidents  of  the  tax  as               Parliament may by law specify." By cl. (2) of Art. 286 as amended, Parliament was authorised to  formulate  principles  for determining when  a  sale  or purchase  of goods takes place in any of the ways  mentioned in  cl. (1), namely, outside the State or in the  course  of the  import into, or export out of the territory  of  India. By  the Constitution (Sixth Amendment) Act,  Parliament  was entrusted   with  power  under  Art.  269(3)  to   formulate principles for determining when a sale or purchase of  goods takes place in the course of inter-State trade or  commerce; and  to  effectuate  the conferment of that  power,  in  the Seventh Schedule, Entry 92A was added in the First List  and Entry  54  in the Second List was amended.   The  Parliament enacted,  in exercise of that power, the Central  Sales  Tax Act 74 of 1956 to formulate principles for determining  when a  sale  or purchase of goods takes place in the  course  of inter-State  trade or commerce or outside a State or in  the course  of import into or export from India, and to  provide for the levy, collection and distribution of taxes on  sales of goods in the course of inter-State trade or commerce  and to  declare  certain goods to be of  special  importance  in inter-State trade or commerce etc.  Article 286, as  amended by  the Constitution Sixth Amendment Act, 1956, was  applied to the State of Jammu & Kashmir on 16th January 1958 by  the Constitution  (Application  to Jammu  &  Kashmir)  Amendment Order 1958.  The Central Sales Tax Act (Act 74 of 1956)  was enacted  by  Parliament  on December 21,  1956  but  it  was applied to the State of Jammu & Kashmir on March 23, 1958 by Act 5 of 1958. The questions presented for determination in this appeal are (1)  whether  sales tax could be imposed on  the  respondent for  the period from October, 1955 to May, 1959 in  view  of the prohibition contained in Art. 286(2) of the Constitution as  it  stood before its amendment, (2)  whether  sales  tax could.  be  validly  levied on sales  taking  place  between January  1,  1955  to  September 6,  1955  in  view  of  the provisions  of  Sales  Tax Validation Act, 1956  (Act  7  of 1956). As regards the first question, it is admitted by the parties that  petrol was transported from Pathankot in the State  of Punjab to Nangpur in the State of Jammu & Kashmir under  the contract of sale.  The petrol was kept in storage at a depot of the respondent 156 at  Pathankot  and  it  was carried in  the  trucks  of  the respondent from Pathankot and delivered to the Nandpur  farm in  the State of Jammu & Kashmir.  The price of  the  petrol supplied  was  paid  to  the  respondent  at  Delhi  by  the Director-General  of  Supplies.   Upon  these  facts  it  is manifest that there was movement of goods from the State  of Punjab to the State of Jammu & Kashmir under the contract of sale  and  there was completion of sale by  the  passing  of property and the delivery of the goods to the purchaser.  As pointed out by Venkatarama Ayyar, J. in the Bengal  Immunity

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Company case(1) :               "A  sale could be said to begin the course  of               interState trade only if two conditions concur               : (1) A sale of goods, and (2) a transport  of               those  goods from one State to  another  under               the  contract  of  sale.   Unless  both  these               conditions are satisfied, there can be no sale               in the course of inter-State trade." In  the  present  case,  both  these  conditions  have  been satisfied  and  the transactions of sale  made  between  the parties  were  unquestionably in the course  of  inter-State trade.   Indeed,  the  Solicitor-General on  behalf  of  the appellants  did not seriously challenge the finding  of  the High Court on his point. We proceed to consider the next question, viz., whether  the respondent  was liable to pay sales tax for the period  from January 1, 1955 to September 6, 1955 in view of the  lifting of the finding of the High Court on this point. On  behalf  of the respondent Mr. Setalvad put  forward  the argument that the Sales Tax Validation Act by itself did not empower  any State to levy any tax on sales or purchases  in the  course  of inter-State trade but  it  merely  liberated Sales Tax Acts of several States from the fetter imposed  by cl.  (2) of Art. 286 of the Constitution and left the  State Act  to operate in its own terms.  It was submitted that  if there was no law in a State empowering the levy of a tax  on sales  or  purchases in the course of inter-State  trade  or commerce, the State could not derive any advantage from  the Sales  Tax  Validation  Act.   It  was  contended  that  the Explanation to Art. 286 (1) (a) of the Constitution did  not confer  any taxing power on any State Legislature.   On  the contrary, it was intended to place a limitation on the State taxing power and therefore the mere lifting of the ban under cl.  (2) of Art. 286 did not enable the State to impose  the tax  on  sales in the course of inter-State trade  and  such levy of tax could be made (1)  [1955] 2 S.C.R. 603. 157 only when the taxing statute of the State expressly provides for  it.  In our opinion, the argument of  Mr.  Setalvad  is well-founded.   The question, therefore, arises whether  the Jammu  & Kashmir Motor Spirit (Taxation of Sales) Act,  2005 (hereinafter  called the Act) applies to the sale of  petrol made by the respondent between January 1, 1955 to  September 6,  1955 and whether the appellants can validly  assess  the respondent to sales tax with regard to these transactions. The  preamble  of  the Act states that it  is  expedient  to provide for    the levy of a tax on the retail sale of motor spirit.  Section 2 (g)   of the Act defines "retail sale" to mean  a  sale by a retail dealer of any motor  spirit  to  a consumer  or to any other person for any purpose other  than resale.   Section 2(f) defines "retail dealer" to  mean  any person  who,  on commission or otherwise,  sells  any  motor spirit to a consumer or to any other person for any  purpose other  than  resale or keeps any motor spirit  for  sale  to consumers  or to any other persons for purposes  other  than resale.   Under  s.  2(h) of the Act the  words  "sale"  and "sell"  include exchange barter and also the consumption  of motor spirit by the retail dealer himself.  Section 3  deals with the imposition of tax and reads as follows :               "3.  There  shall be levied and  paid  to  the               Government on all retail sales of motor spirit               a  tax  at  the rate of four  annas  for  each               imperial  gallon  of motor spirit or  at  such               other  rate  as the Government  may  prescribe

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             from time to time."               Section 6 of the Act deals with the  licensing               of  the retail dealers and states  that  after               the expiry of a period of two months from  the               commencement of the Act no person shall  carry               on business as a retail dealer unless he is in               possession  of  a valid  license.   Section  7               relates to the procedure for grant of licence.               Section 7 (4) states as follows :               "No license under this Act shall be granted to               any person who does not hold a license for the               storage  of  dangerous  petroleum  under   the               Petroleum  Act, 1998, and if any such  license               granted under that Act is cancelled, suspended               or  is not renewed any license  granted  under               this Act to the holder thereof shall be deemed               to be cancelled, suspended or not renewed,  as               the case may be." It  was  contended on behalf of the respondent that  no  tax could  be levied under the Act unless the assessee  has  his place of business 158 or  storage  of  motor spirit within the State  of  Jammu  & Kashmir.   It  was  pointed out that no  retail  dealer  was permitted  to carry on business as a retail dealer of  motor spirit  unless he holds a license for storage  of  petroleum under  the  State Petroleum Act.  It is  admitted  that  the respondent had no storage depot or place of business  within the  State of Jammu & Kashmir at the material time.   It  is also  conceded that the respondent did not hold any  licence for  storage  of  petrol within  the  State.   Mr.  Setalvad therefore contended that the appellants were not  authorised to  levy sales-tax under the provisions of the Act.  We  are unable  to accept this contention as correct.  The  charging section  s. 3 authorises the Government to levy tax on  "all retail sales of motor spirit" at the rate of four annas  for each  imperial gallon of motor spirit or at such other  rate as  the  Government may prescribe from time  to  time.   The charging  section does not require that for the  purpose  of assessment  of  tax the assessee should have  his  place  of business  or his storage depot within the State of  Jammu  & Kashmir.   Nor is it a requirement of the section  that  the assessee should hold a licence of a retail dealer under  the Act.  The provisions in regard to licence contained in ss. 6 and  7 deal with the machinery of collection and it  is  not permissible, in our opinion. to construe the language of  s. 3  of the Act with reference to ss. 6 and 7 or to place  any restriction on the scope and effect of the charge of tax  in the  context  of these sections.  We may, in  this  context, refer to the provisions of S. 10 of the Act which states               "10.whoever contravene the provides of section               6  shall  be, punishable with fine  which  may               extend  to  one thousand rupees or  to  a  sum               double the amount of tax due in respect of the               sale  of any motor spirit conducted by  or  on                             behalf of such person, whichever is gr eater." It  is evident from the section that a person who trades  in petrol without taking out a licence under s. 6 of the Act is liable  to  pay double the amount of tax due from  him.   In other  words.  the requirement of s. 6 is only a  matter  of machinery  and does not affect the liability of  the  person who  trades  in  petrol to pay tax in  accordance  with  the charging section.  It follows therefore that the  respondent will  be liable to pay sales-tax if it is shown that it  has

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made retail sales of motor spirit within the meaning of s. 3 of  the  Act.   This takes us to the  question  whether  the transactions of sale between January 1, 1955 to September 6, 1955 were "retail sales of motor spirit" within the  meaning of S. 3 of the Act.  As observed earlier, the procedure  for supply  of  petrol  was that the officer  in-charge  of  the Nandpur 159 farm placed indents on the Pathankot depot of the respondent for supplies of specified quantities of petrol to the  farm. On receipt of the indent the Pathankot depot transported the petrol  in its own tank-lorries to Nandpur within the  State of   Jammu  and Kashmir and decanted the petrol in  its  own underground tanks where it was measured by means of  dipping rods  and  approved by the indenting officer  and  was  then delivered  to Nandpur farm.  In this state of facts  it  was contended by the Solicitor-General that the property in  the petrol  passed to Nandpur farm inside the State of  Jammu  & Kashmir.   It was submitted that the sales were,  therefore, liable to be taxed under s. 3 of the Act for the period from January  1,  1955  to September 6, 1955  when  the  ban  was removed.  On behalf of the respondent Mr. Setalvad said that there was appropriation of the goods to the contract at  the bulk depot of the, respondent at Pathankot and therefore the property  of  the  goods  passed  to  the  Nandpur  farm  at Pathankot  outside  the State of Jammu & Kashmir.   No  such argument  appears  to have been advanced on  behalf  of  the respondent  before the High Court which decided the case  on the assumption that there was appropriation of the goods  to the  contract  at Srinagar when the petrol  was  transferred from  the  tank-lorries of the respondent  for  delivery  to Nandpur  farm  and  measured by means of  dipping  rods  and approved  by  the  indenting officer.  The  question  as  to passing of title of goods is essentially a question of  fact and we must deal with the present case on the same basis  as the  High  Court has done, viz., that there was  passing  of title  inside the State of Jammu & Kashmir.  We  accordingly hold that s. 3 of the Act applies to transactions of sale of petrol made by the respondent for the period from January 1, 1955  to September 6, 1955 and assessment of sales-tax  made by the taxing authorities for this period is legally valid. It  was lastly contended by the Solicitor-General  that  the High  Court was in error in taking the view that the  taxing authorities  were  not entitled to levy  sales-tax  for  the period  from January 1, 1955 to September 6,  1955,  because the  assessment  was  one composite whole  relating  to  the entire  period  from January 1, 1955 to May, 1959,  and  the assessment which was bad in part was infected throughout and must  be treated as invalid.  In our opinion, the  criticism of  the Solicitor-General on this point is well-founded  and must be accepted as correct.  It is true that there was  one order  of assessment for the period from January 1, 1955  to May,  1959  but the assessment can be easily  split  up  and dissected  and the items of sale can be separated and  taxed for differ- 160 ent  periods.  In  reading the conclusion  that  the  entire assessment  was  invalid the High Court has  relied  on  the decision  of  the  Judicial Committee  in  Bennett  &  White (Calgary) Ltd. v. Municipal District of Sugar City No.  5(1) in  which Lord Reid observed as follows at page 816  of  the Report :               "When an assessment is not for an entire  sum,               but for separate sums, dissected and earmarked               each of them to a separate assessable item,  a

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             court  can sever the items and cut out one  or               more  along  with the sum  attributed  to  it,               while  affirming the residue.  But  where  the               assessment consists of a single undivided  sum               in respect of the totality of property treated               as  assessable,  and when one  component  (not               dismissible  as "de minimis") is on  any  view               not assessable and wrongly included, it  would               seem  clear that such a procedure  is  barred,               and the assessment is bad wholly." But  the  principle has no application in the  present  case because  the sales-tax is imposed, in ultimate analysis,  on receipts  from  individuals  sales  or  purchases  of  goods effected  during  the entire period and it  is  possible  to separate  the  assessment of the receipts derived  from  the sales  for the period from January 1, 1955 to  September  6, 1955  and  to allow the taxing authorities  to  enforce  the statute  with  respect  to the sales taking  place  in  this period  and  also  prevent  them by grant  of  a  writ  from imposing  the  tax  with regard to sales  for  the  exempted period.  In other words, the assessment for the period  from January  1, 1955 to September 6, 1955 can be  separated  and dissected from the assessment of the rest of the period  and the  High Court was in error in holding that the  assessment for the entire period was invalid in toto.  The view that we have expressed is borne out by the decision of this Court in The State of Bombay v. The United Motors (India) Ltd. (2). For  these  reasons we allow this appeal in part  and  order that  the respondent should be granted a writ in the  nature of  mandamus directing the appellants not to realise  sales- tax  with regard to transactions of sale between the  period from September 7, 19 55 to May, 1959 but the respondent will not  be entitled to any writ with regard to transactions  of sale  between  January 1, 1955 to September  6,  1955.   The appeal is accordingly allowed to this extent but the parties will bear their own costs. Appeal allowed in part. (1)  [1951] A.C. 786. (2)  [1953] S.C.R. 1069 at p. 1097. 161