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PETITIONER: TATA IRON AND STEEL CO., LIMITED,BOMBAY

       Vs.

RESPONDENT: S.   R. SARKAR AND OTHERS.

DATE OF JUDGMENT: 29/08/1960

BENCH: SHAH, J.C. BENCH: SHAH, J.C. SINHA, BHUVNESHWAR P.(CJ) IMAM, SYED JAFFER SARKAR, A.K. GUPTA, K.C. DAS

CITATION:  1961 AIR   65            1961 SCR  (1) 379  CITATOR INFO :  R          1962 SC1621  (12,46,105,109,125)  F          1963 SC 548  (9)  R          1963 SC 980  (12)  E          1963 SC1811  (104)  R          1966 SC 563  (21)  R          1966 SC1216  (9,10)  F          1967 SC1131  (5)  R          1970 SC1281  (5)  R          1971 SC 477  (8)  MV         1971 SC 870  (45)  R          1973 SC2526  (9)  F          1975 SC 887  (6)  F          1975 SC1142  (7)  RF         1975 SC1208  (28)  R          1976 SC1016  (19,24)  R          1979 SC1160  (15)  RF         1981 SC 446  (6)  RF         1986 SC1760  (17,24)  R          1992 SC1952  (7,8)

ACT: Sales  Tax-Inter-State  sales-Sale effected by  transfer  of documents  of title to goods during their movement from  one State  to another-Appropriate State to tax  such  sale-Place where  sale  effected-Central  Sales Tax Act,  1956  (74  of 1956), ss. 2(a), 3, 4-Constitution of India, Art. 286.

HEADNOTE: The  petitioner, a limited company carrying on the  business of manufacturing and selling iron and steel goods, with  its factory at Jamshedpur in Bihar and its head Sales Office  in Calcutta in west Bengal, was served with a notice on  August 12,  1959,  by  the Commercial Tax Officer  of  West  Bengal directing it to submit a statement of sales from  Jamshedpur for  the  period of assessment July 1, 1957,  to  March  31, 1958, " the documents relating to which were transferred  in West Bengal or of any other sales that may have taken  place in  West Bengal under s. 3(b) of the Central Sales Tax  Act, 1956." For the same period, i.e., July 1, 1957 to March  31,

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1958, of assessment the petitioner had on December 15, 1958, filed  with the Sales Tax Officer, Jamshedpur, a  return  of inter-State  sales  made  from  Jamshedpur,  in  which  were included all sales in which movement of the goods had  taken place  from the State of Bihar to destinations  outside  the State, and had paid advance tax under the Central Sales  Tax Act,  1956.   The  petitioner contended  before  the  Taxing Officer  of West Bengal, inter alia, that in so far  as  its inter-State  sales from Jamshedpur were concerned the  situs of such sales, as determined under s. 4(2) of the Act, would always  be in the State of Bihar as the goods were in  Bihar and that the State of West Bengal could not tax a sale where goods  were under the contract of sale moved from  Bihar  to Bengal even though the documents of title to the goods  sold were transferred in Bengal, such sales being taxable only by the State of Bihar.  The Taxing Officer, however, taxed  all the sales effected by the company under S. 3(b) on the  view that  the sales in which the documents of title were  handed over  in Calcutta were taxable in the State of  West  Bengal because (1) all the sales effected in favour of West  Bengal parties satisfied the conditions prescribed by s. 3(b),  and (2)  the  place where the documents were  delivered  by  the company  to the purchaser was the place where the  sale  was effected. Held,  per Sinha, C. J., Imam and Shah, jj., Sarkar and  Das Gupta, JJ., dissenting) : (1) that within cl. (b) of s. 3 of the 49 380 Central  Sales  Tax Act, 1956, are included sales  in  which property  in  the goods passes during the  movement  of  the goods from one State to another by transfer of documents  of title  thereto clause (a) of S. 3 covers sales,  other  than those  included in cl. (b), in which the movement  of  goods from  one  State to another is the result of a  covenant  or incident of the contract of sale, and property in the  goods passes in either State. (2)  that  sub-s. (2) of s. 4 of the Act defines what  sales or  purchases shall be deemed to take place inside  a  State and,  thereby, locates the place where a sale  is  effected. The  terms  of the sub-section being quite  general  provide also  for  cases where sales are effected in the  course  of inter-State trade or commerce under s. 3 of the Act. (3)  that  the  Taxing  authorities in West  Bengal  had  to ascertain, before they could order payment of tax under  the Central  Sales Tax Act, whether on the materials  they  were satisfied  (a)  that the goods at the time  of  transfer  of documents of title were in movement from the State of  Bihar to  the State of West Bengal, and (b) that the  place  where the  sale was effected was, under S. 4, cl. (2), within  the State of West Bengal. Per  Sarkar  and Das Gupta, JJ.--A sale contemplated  by  s. 3(b)  of the Central Sales Tax Act, 1956, is one  where  the transfer  of property in the goods sold takes place  by  the transfer of documents of title to them during their movement from  one State to another and is effected within the  State in which the documents of title are transferred ; that State is  the " appropriate State " in respect of such  sale.  (2) The purpose of S. 4(2) of the Act is to formulate principles for determining when a sale takes place " outside a State ", and  not to fix the place where a sale under S. 3(b) can  be said to have taken effect.  The place of that sale is  fixed by cl. (ii) of the Explanation in S. 2(a).

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JUDGMENT: ORIGINAL JURISDICTION : Petition No. 199 of 1959. Petition  under Article 32 of the Constitution of India  for enforcement of Fundamental Rights. A.   V. Viswanatha Sastri, N. A. Palkhivala S. N. Andley, J. B.  Dadachanji,  Rameshwar  Nath and P. L.  Vohra,  for  the petitioner. B.   Sen,  K. C. Mukherjee and P. K. Bose,  for  respondents Nos. 1 and 2. Lal Narayan Sinha and S. P. Varma, for respondent No. 3. C.   K.  Daphtary, Solicitor-General of India, R.  Ganapathy Iyer, B. H. Dhebar and P. M. Sen for respondent No. 4.                             381 1960.   August 29.  The judgment of the Court was  delivered by SHAH  J.-By  this  petition  for  writs  of  certiorari  and mandamus,  the  Tata Iron and Steel Co.,  Ltd.,  hereinafter referred to as the-company, challenges the authority of  the Commercial  Tax  Officer, Lyons Range, Calcutta,  to  demand payment   of  Rs.  41,14,718.12  nP.  to  the  West   Bengal Government  as tax leviable under the Central Sales Tax  Act No. 74 of 1956 in respect of certain sales of steel goods. The  company has its registered office in Bombay,  its  Head Sales office in Calcutta in the State of West Bengal and its factories in Jamshedpur in the State of Bihar.  The  company is registered as a " dealer " under the Bihar Sales Tax Act, and is also registered as a " dealer " in the State of  West Bengal  under  the  Central Sales Tax Act,  1956.   For  the period  of assessment July 1, 1957, to March 31,  1958,  the company submitted its return of taxable sales to the Commer- cial Tax Officer, Lyons Range, Calcutta, disclosing a  gross taxable  turnover  of Rs. 9,561-71 nP. in respect  of  sales liable to Central sales tax in the State of West Bengal.  By his  memorandum  dated August 12, 1959, the  Commercial  Tax Officer directed the company to submit a statement of  sales from Jamshedpur for the period under assessment, " documents relating to which were transferred in West Bengal or of  any other  sales that may have taken place in West Bengal  under s.  3(b) of the Central Sales Tax Act, 1956 ". The  company, by  its  letter dated September 30, 1959, informed  the  Tax Officer that the requisition for production of statement  of sales  made  from Jamshedpur in the  course  of  inter-State trade  or  commerce was without jurisdiction.   The  company contended  that " all the sales from Jamshedpur were of  the type  mentioned in s. 3(a) of the Central Sales Tax Act  and at the same time, some of them also fell within the category mentioned  in s. 3(b) of the Act ", that even if  the  sales were  "  of the type mentioned in s. 3(b) of  the  Act,  the appropriate State of the place where the sales take place or are effected alone had jurisdiction 382 to  assess  such sales to Central sales tax ", and  that  in respect  of inter-State sales from Jamshedpur, the situs  of the sale was always the State of Bihar as the goods were  in Bihar  either at the time of the contract of sale or at  the time  of appropriation to the contract.  By his order  dated October  21, 1959, the Commercial Tax Officer made a "  best judgment   assessment   "  on  a  gross  turnover   of   Rs. 9,00,09,561.71  nP. of interState sales and called upon  the company to pay Rs. 41,14,718.12 nP. as tax under the Central Sales Tax Act. The company had, on December 15, 1958, filed with the  Sales Tax  Officer, Jamshedpur, a return of interState sales  made from  Jamshedpur for the period July 1, 1957, to  March  31,

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1958,  and a return for the same period for the  sales  made from Dhanbad with the Sales Tax Officer, Dhanbad.  In  these returns, the company included all sales in which movement of the  goods  had  taken  place from the  State  of  Bihar  to destinations  outside  that State.  The  total  turnover  in respect  of  such inter-State sales as shown in  the  return exceeded  Rs. 26 crores and the company paid as required  by the  Bihar  Sales Tax Act Rs. 71 lakhs odd  as  advance  tax under the Central Sales Tax Act, 1956. By  this  petition the company impugns the validity  of  the order  of  the Commercial Tax Officer and claims a  writ  of certiorari  quashing and setting aside the assessment  order dated October 21, 1959, and a writ of mandamus directing the Commercial  Tax  Officer  to refrain from  taking  steps  in enforcement or implementation of the order. Counsel for the respondents contends that the petition under Art.  32 of the Constitution is not maintainable because  no fundamental  right of the company is infringed by the  order passed  by the Commercial Tax Officer and the remedy of  the company,  if  it feels aggrieved by the order,  is  to  seek relief  by resorting to the machinery provided by  the  West Bengal  Sales  Tax Act.  Counsel relies in  support  of  his contention  upon the judgments of this court in Ramjilal  V. Income Tax Officer, Mohindargarh (1) and Laxmanappa (1)  [1951] S.C.R. 127.                             383 Hanumantappa  Jamkhandi  v. The Union of India  and  another (1).   In  Ramjilal’s  case (2), this Court  held  that  the protection against imposition and collection of tax save  by authority  of law directly arises from Art. 265 and  is  not secured by cl. 1 of Art. 31 ; and Art. 265 not being in  Ch. III of the Constitution, its protection is not a fundamental right which can be enforced by an application under Art.  32 of the Constitution.  It was observed in Ramjilal’s case (2) that  the  right  secured by Art. 265  may  be  enforced  by adopting  appropriate proceedings under the Act  authorising levy of tax but a petition founded on Art. 32 read with Art. 31(1)  was  misconceived  and  must  fail.   That  view  was reiterated  in Laxmanappa’s case(1).  But it has  been  held that  a threat by the State to realize without authority  of law  tax  from a citizen by using coercive machinery  of  an impugned  Act  is an infringement of the  fundamental  right guaranteed  to  him  under Art. 19(1)(g) and  gives  to  the aggrieved citizen a right to seek relief by a petition under the  Constitution (see Himmatlal Harilal Mehta v. The  State of  Madhya  Pradesh  and others  (3),  The  Bengal  Immunity Company  Ltd. v. The State of Bihar and others (4) and  The, State of Bombay v. The United Motors (India) Ltd. and others (5).   In these cases, in appeals from orders passed by  the High  Courts  in petitions under Art. 226, this  Court  held that an attempt to levy tax under a statute which was  ultra vires  infringed the fundamental right of the  citizens  and recourse to the High Court for protection of the fundamental right was not prohibited because of the provisions contained in  Art.  265.   In the case before us,  the  vires  of  the Central  Sales  Tax Act, 1956, are not  challenged;  but  in Kailash  Nath and another v. The State of Uttar Pradesh  and others  (6)  a petition challenging the levy of  a  tax  was entertained  by  this Court even though the  Act  under  the authority  of which the tax was sought to be  recovered  was not  challenged  as ultra vires.  It is  not  necessary  for purposes  of  this case to decide whether the  principle  of Kailash Nath’s case (6) is inconsistent (1)  [1955] 1 S.C.R. 769 (3)  [1954]   S.C.R. 1122.

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(5)  [1953]   S.C.R. 1069 (2)  [1951]   S.C.R. 127. (4)  [1955] 2 S.C.R. 603. (6)  A.I.R. 1957 S. C. 790. 384 with  the  view expressed by this Court in  Ramjilal’s  case (1).   Evidently,  the  company has paid to  the  Sales  Tax Officer,  Bihar, tax due under the Central Sales Tax Act  on its  turnover including sales on which the tax is sought  to be levied by the Commercial Tax Officer, West Bengal.  Under the  Central Sales Tax Act, there is a single  liability  to pay  tax on inter-State sales.  The company having paid  the tax  to  the Bihar State for and on behalf  of  the  Central Government, the threat to recover again sales tax on  behalf of  the Central Government in respect of the same sales,  i. e.,  sales which are included in the assessment  proceedings before the Bihar Sales Tax authorities prima facie infringes the  fundamental right of the company to hold  its  property and  the  company is entitled to approach this  Court  under Art.  32  of the Constitution.   The  preliminary  objection raised by counsel for the respondents must therefore fail. To  appreciate the arguments advanced on the merits  of  the claim  made by the company, it is necessary to set  out  the relevant  legislative  history and the  course  of  judicial decisions. Under the Government of India Act, 1935, power to make  laws in respect of " taxes on sale of goods and advertisements  " was conferred by s. 100(1) read with entry 48 of List II  in Schedule  VII upon the Provincial Legislatures.  This  power was exercised by all the Provinces and by picking out one or more  ingredients constituting a sale, as  determinative  of the place where the sale took place, they brought within the taxing   laws   transactions   substantially   outside   the territorial limits of their authority.  Statutes so  enacted led to multiple taxation of the same transaction by  several Provinces,   each  Province  seeking  to  rely   upon   some ingredient   of   the  sale  within  its   jurisdiction   as establishing a territorial nexus. This burden lay heavily upon the consumer.  The  Constituent Assembly  was  seriously exercised over this  situation  and tried  to meet the problem by placing restrictions upon  the taxing power of the States in respect of sales and purchases having   inter-State   elements.    Article   286   of   the Constitution was one of (1)  [1951] S.C.R. 127. 385 the Articles enacted for that purpose.  That Article  before it  was amended by the Constitution (Sixth  Amendment)  Act, 1956, stood 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 purposes of sub-clause (a), a sale  or purchase shall be deemed to 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, 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

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where  such  sale or purchase takes place in the  course  of inter-State trade or commerce-- Provided  that the President  may by 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. As  framed,  the Article attempted to  enunciate  restraints upon  the legislative power of the States: but the  somewhat inartistic  form in which the Article and  particularly  the Explanation was couched, obscured instead of clarifying  the meaning of the Constituent 386 Assembly The scope of Art. 286 fell to be determined in  the State,  of  Bombay v. United Motors (India) Ltd. (1)  in  an appeal to this court in which the validity of the provisions of  the Bombay Sales Tax Act, 1952 was challenged.   By  the Bombay  Act  liability to pay tax was imposed  on  sales  of goods  which  had been actually delivered in  the  State  of Bombay  as  a  direct result of sales  for  the  purpose  of consumption in that State even if property in the goods had, by reason of such sales, passed in another State.  The  High Court  of Bombay in a petition under Art. 226 held that  the definition  of sale in the Act included certain sales  which were  by Art. 286 of the Constitution exempt from  liability to  tax  by  the State and the tax  imposed,  was  therefore wholly  void.  A majority of Judges hearing an  appeal  from that  judgment  to  this  Court  held  that  Art.  286(1)(a) prohibited  taxation of sales or purchases involving  inter- State  elements by all States except the State in which  the goods were actually delivered for the purpose of consumption therein,  and the effect of the Explanation thereto  was  to convert    inter-State    transactions    into    intrastate transactions and to remove them from the operation of cl. 2. On  this  view,  the majority of the Judges  held  that  the Bombay  Sales  Tax Act did not contravene  Art.  286.   This interpretation of Art. 286 did not meet with the approval of a  larger  Bench of this Court which heard and  decided  the Bengal  Immunity Co.’s case (2).  In that case four  out  of the  seven  judges  constituting the  Bench  held  that  the operative  provisions  of  the several parts  of  Art.  286, namely cl. 1(a), cl. 1(b) and cls. 2 and 3 were intended  to deal with different topics and one " could not be  projected or read into another ". According to the minority view, Art. 286(1)(a)  located  the situs of the sales with  a  view  to avoid multiple taxation and for that purpose, it divided the sales  into two categories-’, inside sales " and  "  outside sales  ", and that Art. 286(2) applied to the sales  in  the course of inter-State trade and the sales which fell  within the Explanation were intrastate sales.  In M/s.  Ram  Narain Sons Ltd. v. Assistant Commissioner of Sales (1) [1953] S.C.R. 1069. (2) [1955] 2 S.C.R. 603. 387 Tax  and  others  (1) which was  decided  after  the  Bengal Immunity Co.’s case  (2)  this Court held:       "The  bans imposed by Art. 286 of the Constitution  on

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the taxing powers of the States are independent and separate and  each  one  of them has to be got over  before  a  State Legislature  can  impose  tax on  transactions  of  sale  or purchase  of  goods.   The  Explanation  to  Art.  286(1)(a) determines by the legal fiction created therein the situs of the  sale  in the case of transactions  coming  within  that category and once it is determined by the application of the Explanation  that  a transaction is outside  the  State,  it follows as a matter of course that the State, with reference to  which  the  transaction can thus  be  predicated  to  be outside it, can never tax the transaction." The  Constitution was thereafter amended, Explanation  1  of rt. 286 was deleted and cls. 2 and 3 thereto were altered by the amendment.  As amended, Art. 286 stands as follows: Art.  286:-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. 2.   Parliament   may  by  law  formulate   principles   for determining when a sale or purchase of goods takes place  in any of the ways mentioned in cl. 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  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. Simultaneously,   the  Parliament  was  authorised  by   the incorporation of item 92A in List I of the seventh schedule, to  legislate  for levying tax on the sale  or  purchase  of goods other than newspapers, where such (1)  [1955] 2 S.C.R. 483. (2) [1955] 2. S.C.R. 603 50 (2) [1955] 2 S.C.R. 603. 388 sale  or  purchase takes place in the course  of  interState trade  or commerce, and by the amendment of item 54 of  List II  excluded that field of taxation from the  competence  of the State Legislatures.  Art. 269, cl. 1(g), which was  also amended by cl. 3 to that Article read after the amendment as follows: "Parliament may by law formulate principles for  determining when  a sale or purchase of goods takes place in the  course of inter-State trade or commerce ". The   effect  of  these  diverse  amendments  made  by   the Constitution (Sixth Amendment) Act, 1956, was to invest  the Parliament  with exclusive authority to enact laws  imposing tax on sale or purchase of goods where such sale or purchase takes place in the course of inter-State trade or  commerce, and  the tax collected by the States was to be  assigned  in the  mariner  provided  by cl. 2 of Art. 269  to  the  State within which the tax was leviable. In  exercise of authority conferred upon the  Parliament  by Art.  286  and Art. 269, cl. 3, the Parliament  enacted  the Central Sales Tax Act (74 of 1956).  The Act was enacted  as the preamble recites: "  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, to provide for the  levy, collection  and distribution of taxes on sales of  goods  in

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the  course of inter-State trade or commerce and to  declare certain  goods  to be of special importance  in  inter-State trade   or  commerce  and  specify  the   restrictions   and conditions to which State laws imposing taxes on the sale or purchase  of  such  goods of  special  importance  shall  be subject ". By  chapter 2 of the Act, ss. 3, 4 and 5,  those  principles were  formulated and by chapter 3, detailed provisions  were made for imposing liability to pay tax on inter-State sales, for  registration  of dealers, fixing rates of tax  and  for levy  and collection of tax and for imposing  penalties  for breach  of  the provisions of the Act relating to  levy  and collection of inter-State sales tax.  By s. 6, every  dealer was  made liable to pay tax on all sales effected by him  in the course of inter-State                             389 trade or commerce.  By sub-s. 2 of s. 8, the rates of tax on sales  in the course of inter-State trade or  commerce  were directed  to  be calculated at the same rates s and  in  the same manner as would have been done if the sale had in  fact taken  place  inside the appropriate State.  By  s.  9,  the machinery  for  levy and collection of tax  was  prescribed. The tax payable by any dealer under the Act was to be levied and  collected  by  the  appropriate  State  in  the  manner provided by sub-s. 2 which enacts that the authority for the time being empowered to assess, collect and enforce  payment of  any  tax  under  the  General  Sales  Tax  Law  of   the appropriate State shall on behalf of the Government of India assess,  collect and enforce payment of any tax  payable  by any  dealer under the Act in the same manner as the  tax  on the  sale or purchase of goods under the General  Sales  Tax Law  of  the State is assessed, paid and collected.   It  is manifest  that  by  s.  6 which  is  the  charging  section, liability  to pay tax on inter-State sales is  imposed  upon all sales effected by any dealer in the course of interstate trade  or  commerce.   The liability to pay  tax  under  the Central  Sales Tax Act arises as an inter-State  sale.   The tax  though collected by the State in which the  sale  takes place is due to the Central Government and is payable at the rates prescribed in respect of intrastate sales by the State in which it is collected. Sale  is  defined  in s. 2(g) as  meaning  any  transfer  of property  in goods by one person to another for cash or  for deferred payment or for any other valuable consideration and includes  a transfer of goods on the hire purchase or  other system  of  payment by instalments, but does not  include  a mortgage or hypothecation of or a charge or pledge on goods. By s. 3, a sale or purchase of goods is deemed to take place in  the course of inter-State trade or commerce if the  sale or  purchase  (a) occasions the movement of goods  from  one State  to  another,  or  (b)  is  effected  by  transfer  of documents  of title to the goods during their movement  from one  State to another.  A transaction of sale is subject  to tax under the Central Sales Tax Act on the completion of the sale, and a mere contract of sale is 390 not a sale within the definition of sale in s. 2(g).  A sale being  by  the  definition, transfer  of  property,  becomes taxable  under  s. 3(a) if the movement of  goods  from  one State  to  another is under a covenant or  incident  of  the contract  of sale, and the property in the goods  passes  to the  purchaser  otherwise than by transfer of  documents  of title  when  the  goods are in movement from  one  State  to another.   In  respect of an inter-State sale,  the  tax  is leviable  only once and that indicates that the two  clauses

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of  s. 3 are mutually exclusive.  A sale taxable as  falling within cl. (a) of s. 3, will be excluded from the purview of cl. (b) of s. 3 ; otherwise certain sales may, be liable  to tax under both the clauses and two States may, in respect of a single sale, claim to levy the tax contrary to the plain intendment of ss. 6 and 9 of the Act. The sale contemplated by cl. (b) is one which is effected by transfer  of  documents of title to the goods  during  their movement  from One State to another.  Where the property  in the goods has passed before the movement has commenced,  the sale  will evidently not fall within cl. (b); nor  will  the sale  in  which the property in the goods passes  after  the movement from one State to another has ceased be covered  by the  clause.   Accordingly a ’sale effected by  transfer  of documents  of title after the commencement of  movement  and before its conclusion as defined by the two terminii set out in Explanation (1) and no other sale will be regarded as  an inter-State  sale  under  s. 3(b).  The  definition  of  the expression  " sale " undoubtedly includes transfer of  goods on hire-purchase or other systems of payment by instalments, but  thereby, a mere contract of sale which does not  result in  transfer of property occasioning movement of goods  from one  State to another does not fall within the terms  of  s. 3(a).   That transaction alone in which there is "  transfer of goods " on the hire-purchase or other systems of  payment by  instalments is included in the definition of "  sale  ". The  question  whether a mere contract in  which  goods  are delivered under a hire. purchase agreement is a sale  within the meaning of s.   2, cl. (g) and therefore, covered by cl. (a) of s. 3 does 391 not  fall to be determined in this case: nor are  we  called upon  to  express our opinion on the  question  whether  the clause  authorising imposition of sales tax on what  may  be merely  a contract of sale is unconstitutional.  We  are  in this  case concerned to decide the competing claims  of  the States  of West Bengal and Bihar to levy sales tax from  the company  in respect of transactions of completed  sales  and not in respect of any hire-purchase transactions. Cases  of this Court, viz., State of  Travancore-Cochin  and others  v. The Bombay Co., Ltd. (1) and State of  Travancore Cochin and others v. Shanmugha Vilas Cashew Nut Factory  and others  (2)  relied upon by counsel for the  State  of  West Bengal  have no bearing on the interpretation of s. 3,  cls. (a)   and  (b).   In  those  cases,  the  meaning   of   the expressions, " in the course of import and export " and ’,in the  course of interState trade or commerce " used  in  Art. 286 fell to be determined.  The Constitution does not define these expressions.  The Parliament has in the Central  Sales Tax  Act,  1956,  sought to define by s. 3 when  a  sale  or purchase  of  goods is said to take place in the  course  of inter-State trade or commerce and by s. 4(1) to define  when a sale or purchase of goods is said to take place outside  a State  and by s. 5, when a sale or purchase is said to  take place  in the course of import or export.   In  interpreting these  definition  clauses,  it would  be  inappropriate  to requisition in aid the observations made in ascertaining the true  nature  and incidents without the  assistance  of  any definition clause of " sales outside the State " and " sales in the course of import or export " and Bales in the  course of interState trade or commerce used in Art. 286. In our view, therefore, within cl. (b) of s. 3 are  included sales  in  which  property in the goods  passes  during  the movement of the goods from one State to another by  transfer of  documents  of  title thereto : cl. (a) of  s.  3  covers

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sales,  other than those included in cl. (b), in  which  the movement of goods from one State to another is the result of a covenant or incident of the contract of sale, and property in the goods passes in either State. (1) [1952] S.C.R. 1112. (2) [1954] S.C.R. 5.3. 392 The  question to which attention must then be  directed  is, which out of the two or more States concerned with the goods sold  under an inter- State sale is entitled to collect  the tax  under Act 74 of 1956.  By s. 9, the tax payable by  any dealer under the Act is to be levied and collected in the  " appropriate  State ". The expression " appropriate  State  " was at the material time defined by s. 2(a) as follows: "Appropriate State " means:- (i)  in  relation to a dealer who has one or more places  of business situate in the same State, that State ; (ii) in  relation to a dealer who has one or more places  of business situate in different States, every such State  with respect  to the place or places of business  situate  within its territory ; Explanation:-" Place of business " means, (i)  in the case of a sale of goods in the course of  inter- State trade or commerce falling within cl. (a) of s.   3, the place from which the goods have been moved by reason  of such sale ; (ii) in the case of any such sale falling within cl. (b)  of s. 3, the place where the sale is effected. This  definition  made  the  State in  which  the  place  of business  is  situate,  the appropriate State;  and  by  the Explanation,  the  expression  " place  of  business  "  was defined  in relation to the two classes of sales in s. 3  as sales  in the course of inter-State trade or  commerce.   By the  first part of the definition, in case of sale of  goods falling within cl. (a), the place from which the goods  have been  moved  is the place of business and by cl. 2,  in  the case  of  sales falling within cl. (b) of s.  3,  the  place where  the sale is effected is the place of business.   This evidently is a highly artificial definition.  By a  fiction, the place from which goods have been moved by reason of  the sale  falling  within cl. (a) of s. 3, that is,  that  place from  which the goods have been moved under the contract  of sale for the purpose of delivery to the purchaser in another State  was declared the place of business.  By another  fic- tion,  the place where the sale is effected  in  inter-State transactions falling within s. 3(b) was declared the 393 place of business.  In ascertaining the place of business as defined by the Explanation, for cases falling within cl. (a) of  s. 3, little practical difficulty arises.  But in  cases of  sales falling within cl. (b), the location of the  place where  "  the sale is effected " for  ascertainment  of  the place  of  business within the meaning  of  the  Explanation raises difficult problems.  As observed by Das, Acting Chief Justice, in Bengal Immunity Company’s case (1) at p. 649: " The situs of an intangible concept like a sale can only be fixed  notionally  by the application  of  artificial  rules invented  either by Judges as part of the judge-made law  of the land or by some legislative authority.  But so far as we know,  no fixed rule of universal application has  yet  been evolved for deter. mining this for all purposes.  There  are many  conflicting theories: One, which is more  popular  and frequently put forward and is referred to and may indeed  be urged  to have been adopted by the  Constitution............ favours  the place where the property in the  goods  passes,

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another which is said to be the American view......... fixes upon  the  place where the contract is  concluded,  a  third which  prevails  in  the  continental  countries  of  Europe prefers  the  place  where  the  goods  sold  are   actually delivered, a fourth points to the place where the  essential ingredients  which  go to make up a sale  are  most  densely grouped ". Ex facie, cl. 2 of the Explanation to s. 2(a) does not  seek to  locate  the place where the sale is  effected  in  cases falling  within  cl.  (b) of s. 3 at  the  place  where  the transfer  of documents of title to the goods  was  effected. Parliament  has  classified  the sales " in  the  course  of inter-State trade or commerce " in cls. (a) and (b) of s.  3 and  by the first clause of the Explanation to s.  2(a),  in cases of sales falling within s. 3(a) the place of  business is  the place from which movement has commenced and  in  the case of sales falling within s. 3(b), it is the place  where the  sale is effected.  But there is in the  Explanation  no material  for  ascertaining  the place  where  the  sale  is effected. (1)  [1955] 2 S.C.R. 603. 394 There was a sharp conflict of opinion as to the true meaning of  Art. 286, cls. 1(a) and (b) and the Explanation as  they stood  before  the  amendment  by  the  Constitution  (Sixth Amendment) Act, 1956.  In the United Motors’ case (1) it was opined  by a majority of the judges of this Court that  Art. 286(1)(a)   prohibited  taxation  of  sales   or   purchases involving interstate elements by all States except the State in  which  the  goods  were delivered  for  the  purpose  of consumption  therein, and the latter State was left free  to tax  such sales or purchases and that power was not  derived from  the Explanation to Art. 286(1) but under  Art.  246(3) read  with  entry  54  in List II.   Mr.  Justice  Bose  who disagreed  with  the  majority  held  that  the  basic  idea underlying  Art. 286 was to prohibit taxation in the  course of inter-State trade and commerce until the ban under cl.  2 of  the said Article was lifted by Parliament and always  in the  case  of  imports and exports, and  when  the  ban  was lifted, the Explanation to cl. 1 of Art. 286 came into  play to  determine  the situs of the sale,  the  explanation  not governing cl. 2 as it applied to transactions which in truth and  in fact took place in the course of  inter-State  trade and  commerce.   Mr. Justice Bhagwati who  agreed  with  the conclusion  of the majority as to the vires of the  impugned Act, opined that the Explanation to Art. 286(1) did not take away the right which the State in which the property in  the goods  passed  had  to tax the sale or  purchase,  but  only deemed  such  purchase or sale by a legal  fiction  to  have taken place in the State in which the delivery of the  goods had  been  made for consumption so as to enable  the  latter State also to tax the sale or purchase in question.  In  The Bengal  Immunity CO.’s case (2), Das, Acting Chief  Justice, in delivering the judgment of the majority observed that the several  parts of Art. 286, viz., cls. 1(a), 1(b),  (2)  and (3)  were intended to deal with different topics;  that  the Explanation to cl. 1(a) to Art. 286 should not  legitimately be  extended  to  cl. (b) either as an  exception  or  as  a proviso thereto or read as curtailing or limiting the  ambit of cl. 2; that Art. 286(1)(a) fixed (1) [1953] S.C.R. 1069. (2) [1955] 2 S.C.R. 603. 395 the  situs  of  the  sales with a  view  to  avoid  multiple taxation and for that purpose classified the sales into  two

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categories,  inside  sales and outside sales and  s  enacted that  the State cannot tax outside sales and the purpose  of the  Explanation  which  declared a sale in  the  course  of inter-State trade must be deemed to have taken place  inside the  State in which the goods are delivered for  consumption was  clearly  to take it out of the  inter-State  trade  and impress it with the character of an intra-State sale.   This view was followed in M/s.  Ram Narain Sons Ltd. v. Assistant Commissioner of Sales Tax & others (1). Evidently, by the interpretation placed by this Court on the scope  and  meaning  of  Art.  286  as  originally  enacted, Parliament   was  faced  with  a  difficult  problem.    The Parliament had to examine the problem of taxing  inter-State trade and commerce in the light of three principal  factors, namely,  (1) the constitutional freedom of  trade,  commerce and   intercourse   guaranteed   by  Art.   301,   (2)   the inadvisability  of allowing the States unrestricted  freedom to levy or impose taxes on sales or purchases of goods  with interState content, and (3) the necessity to impose restric- tions  on  multiple taxation of the same sale  by  different States.  The Parliament deleted the Explanation to cl. 1  of Art.  286 which had given rise to this serious  conflict  of views  and  recast cls. 2 and 3. By cl. 2  as  amended,  the 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 ; and by the addition  of item  92A  in List I of the seventh  schedule,  the  Central Government alone could tax sales or purchases of goods which take  place in the course of inter-State trade or  commerce. By  incorporating cl. 3 to Art. 269, the Parliament  assumed to itself the power to formulate principles for  determining when  a sale or purchase of goods takes place in the  course of  inter-State  trade  or  commerce.   It  is  after   this amendment was made that the Central Sales Tax Act, 1956, was enacted  with a view to provide for collection of a  tax  on sales or purchases in (1)  [1955] 2 S.C.R. 483. 51 396 the course of inter-State trade or commerce.  The Parliament had  to  define sales in the course of interState  trade  or commerce,  sales  in  the course of import  or  export,  and intrastate sales.  The Parliament set out by s. 3 to  define sales of goods which can be said to take place in the course of inter-State trade or commerce, by s. 4(1) to define  when a  sale is said to take place outside a State, and by  s.  5 when  a sale is said to take place in the course  of  import and in the course of export.  By s. 9, authority to tax  was conferred  upon the appropriate State, and  that  expression was  defined by s. 2 as the State where the dealer  had  his place of business, and in respect of sales which fall within cl.  (b)  of s. 3, the place of business of the  dealer  was declared to be the place where the sale is effected.  By  s. 3, it was intended to define the class of sales which  shall be deemed to be sales in the course of inter-State trade  or commerce,   but  the  conditions  which  go  to  make   such transactions,  sales in the course of inter-State  trade  or commerce as set out by cls. (a) and (b) were not intended to locate the place where the sale takes place. The  legal position as to taxability of sales in the  course of inter-State trade or commerce was unsatisfactory and  the Parliament  radically  amended  Art.  286  and  the   allied Articles.   It also enacted a special Act  authorising  levy and  collection of Central Sales Tax with a view to  prevent rivalry  and  competition between different States.   Is  it

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then to be assumed that the Parliament still left the law in so  far  as it related to a class of sales  covered  by  the description  of sales in the course of inter-State trade  or commerce  in  the  same  unsatisfactory  condition   without enacting where the sales in cases falling within cl. (b)  of s. 3 were effected? Before  proceeding  to answer that query, attention  may  be directed to s. 4 of Act 74 of 1956.  It is as follows: , "(1) Subject to the provisions contained in s.3 when a  sale or purchase of goods is determined in accordance with sub-s. (2)  to  take place inside a State, such  sale  or  purchase shall  be  deemed  to have taken  place  outside  all  other States.                             397 (2)  A  sale  or purchase of goods shall be deemed  to  take place inside a State if the goods are within the State- (a)  in  the case of specific or ascertained goods,  at  the time the contract of sale is made ; and (b)  in  the case of unascertained or future goods,  at  the time  of their appropriation to the contract of sale by  the seller or by the buyer, whether assent of the other party is prior or subsequent to such appropriation. Explanation:-Where  there  is a single contract of  sale  or purchase  of  goods situated at more places  than  one,  the provisions of this sub-section shall apply as if there  were separate  contracts in respect of the goods at each of  such places." Sub-section 2 defines what sales or purchases shall be deemed to take place inside a State.  The terms of sub-s.  2 are quite general, and the Parliament has thereby  attempted to  locate the place where a sale takes place.   The  clause does  not deal with the conditions which " effect " a  gale: nor is there any warrant for the view that sub-s. 2 of s.  4 only seeks to locate the place of sale which are not in  the course of interState trade or commerce.  By enacting ch. 11, the Parliament sought as evidenced by the title of the chap- ter to exercise its power under Art. 269(3) and 286(2).   By s.  3, the Parliament formulated principles for  determining when  a sale or purchase of goods takes place in the  course of  inter-State  trade  or  commerce and  in  so  doing,  it exercised  authority conferred upon it by Art.  269(3).   In enacting  s. 4, cl. (1), the Parliament sought to  formulate principles for determining when a sale takes place outside a State  and  in  enacting  that  section,  it  legislated  in exercise  of authority under Art. 286(2) read with cl.  1(a) of  that Article; and in enacting s. 5, sub-ss. 1 and 2,  it exercised authority under Art. 286(2) read with cl. 1(b)  of the Article to formulate principles for determining the sale which  takes place in the course of import or  export.   The Parliament  by sub-s. 2 of s. 4 attempted to define  when  a sale  shall be deemed to take place inside a State,  and  by sub-s.  1 of s. 4 provided that when a sale or 398 purchase of goods was determined in accordance with sub-s. 2 to take place inside a State, such sale or purchase shall be deemed  to have taken place outside all other  States.   But sub-s.  1  having  been  made  subject  to  the   provisions contained in s. 3, it is evident that only those sales which were  not  in  the course of interState  trade  or  commerce should be determined under sub-s. 1 of s. 4 as having  taken place  outside  a  State.  We are unable to  hold  that  any weight  can be attached to the argument that if it  was  the object of the Legislature by enacting sub-s. (2) of s. 4  to explain  the expression, " where the sale is effected  "  as used  in  cl.  (ii)  of the  Explanation  to  s.  2(a),  the

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Legislature would have expressly stated so.  Nor are we able to agree with the contention that s. 4 only seeks to  define "  outside sales " and is not intended to locate  the  place where  a  sale  is  effected.   The  argument  that  by  the application of s. 4, sub-s. 2, in cases where the goods sold are unascertained or future goods, there will be  difficulty in  ascertaining the place where the sale is  effected,  has also no force.  In any event, s. 4(2) may not be denied  its full operation, merely because difficulty may be encountered in some cases in ascertaining the place where it is effected by the application of the rules set out therein. The Commercial Tax Officer has observed in his order that: "  In this case, it should be remembered that  section  3(b) refers to transfer of documents and not only to transfer  of documents  by endorsement.  Thus, even if the documents  are in  the  name  of  the buyer  as  consignee  but  these  are physically transferred to the buyer in West Bengal then that sale is taxable in West Bengal.  In case of goods  consigned to  "  Self  " there is no question  that  delivery  to  the railways cannot be constituted as delivery to the buyer " But  under the Sale of Goods Act, if a document of title  to goods is used in the ordinary course of business as proof of the possession or control of goods, endorsement or  delivery thereof  according  to mercantile practice  will  amount  to delivery of the goods thereby represented.  The transfer  of documents contemplated                             399 by  s. 3(b) is therefore such transfer as in law amounts  to delivery  of  the goods.  Transfer of  documents  either  by endorsement or delivery does complete transfer of title, but in  the  absence  of an indication to  that  effect  in  the statute,  the place where the documents are  transferred  is not  the place of sale.  If the view which appealed  to  the Commercial  Tax Officer is accepted, there is a  possibility of large scale evasion of tax.  For instance, the  documents may be handed over outside India.  If documents of title  to goods  are  handed  over by the vendor  either  directly  or through  his  agent to the purchaser or  his  agent  outside India, on the view taken by the Commercial Tax Officer, even though  the sale has taken place in India and the goods  are in India, the sale would not be taxable.  This result  could not  have  been  contemplated by the  Legislature.   We  are therefore  unable  to  agree  with the  view  taken  by  the Commercial Tax Officer. It was urged by counsel for the State of Bihar that iron and steel  are  commodities  of  which  the  storage,  sale  and purchase  are  controlled by the Iron  and  Steel  (Control) Order, 1956, and all the sales which are made subject to tax under the impugned order are those covered by s. 3(a) of the Central  Sales  Tax Act.  In para. 3 of  the  petition,  the company  has  set  out the practice  which  is  followed  in supplying  steel  pursuant  to  the  orders  passed  by  the Controller.  It is stated that an intending purchaser has to obtain  a permit from the Iron and Steel Controller  of  the region  where he carries on business and the permit is  sent by the Provincial Controller to the Controller at  Calcutta. The latter Officer plans the indent on the company and Bends it to the Head Sales Office at Calcutta for compliance,  and the  planning of the indent in effect is a directive by  the Controller  to  supply  steel  to  the  intending  purchaser subject to the company’s terms and conditions.  In paras. 4, 5  and  6 of the petition, the specimen forms  of  quotation letters and the practice followed in supplying goods to  the Government and Railways, to the " engineering firms and  the bazaar parties " are set out.  In the light of cls. 4, 5, 10

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and 15 of the Iron and Steel (Control) Order, it was 400 urged  that all the sales effected by the company under  the direction of the Controller fall within s. 3, cl. (a).   But we do not think it necessary to express any opinion on  this argument  at this stage, without a more complete picture  of the modus operandi followed. The Commercial Tax Officer has taxed all the sales  effected by  the company under s. 3, cl. (b), on the view that  sales in which the documents of title were handed over in Calcutta were taxable in the State of West Bengal.  The assessment is made on two assumptions, (1) that all the sales effected  in favour  of  West  Bengal parties  satisfied  the  conditions prescribed  by  s. 3(b), and (2) that the  place  where  the documents  are  delivered, by the company through  its  Head Sales Office to the purchaser is the place where the sale is effected.   Neither  of these assumptions is  correct.   The Commercial  Tax Officer had, in our judgment,  to  ascertain before he could order payment of tax under the Central Sales Tax Act, whether on the materials he was satisfied, (a) that the goods at the time of transfer of documents of title were in  movement  from the State of Bihar to the State  of  West Bengal,  (b) that the place where the sale was effected  was under  s. 4, cl. (2), within the State of West Bengal.   The Commercial Tax Officer has, in our view, failed to apply the correct  tests  and  has  made  assumptions  which  are  not warranted and on a true interpretation of the provisions  of the Central Sales Tax Act, the order of assessment discloses an error apparent on its face and a writ of certiorari  must issue   quashing  the  assessment.   It  will  be  for   the Commercial Tax Officer of West Bengal to re-assess the  com- pany  in respect of transactions of sale which are  properly taxable  within the State of West Bengal by the  application of the test which we have already set out. On  this view, the rule is made absolute and it is  directed that  a writ of certiorari will issue quashing the order  of assessment made by the Commercial Tax Officer, Lyons  Range, Calcutta, West Bengal.  The company will be entitled to  its costs of this petition.                             401 SARKAR  J.-The petitioner was assessed to sales tax on  some of  its  sales by the Government of West  Bengal  under  the provisions of the Central Sales Tax Act, 1956.  It  contends that  the Government of West Bengal had no power  to  assess tax  on  those  sales, for, under the  Act,  they  could  be brought  to  tax only by the Government of  Bihar.   It  has filed this petition under Art. 32 of the Constitution for  a writ to quash the order of assessment made by the Government of  West  Bengal on the ground that it  violates  the  peti- tioner’s rights under sub-cls. (f) & (g) of cl. (1) of  Art. 19 to told property and carry on business. The  petitioner is a limited company carrying on a  business of  manufacturing and selling iron and steel goods.  It  has its factory at Jamshedpur in Bihar and its head sales office in Calcutta in West Bengal.. On August 12, 1959, the Taxing Officer of the Government  of West Bengal served a notice on the petitioner to produce  "a statement of sales from Jamshedpur.....................  the documents relating to which were transferred in West  Bengal or  of any other sales that have taken place under s. 3  (b) of the Central Sales Tax Act, 1956 ". The petitioner refused to submit the return for reasons which we shall state  later and took the stand that the tax on the sales was  assessable by the Government of Bihar and not by the Government of West Bengal.  The Taxing Officer of the Government of West Bengal

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did  not accept the contention of the petitioner and in  the absence  of a return by it, made a best judgment  assessment on  October 21, 1959, assessing the petitioner to a  tax  of Rs.  41,14,718-12  nP.  The petitioner seeks  to  have  this order quashed. The respondents to this petition are the Government of  West Bengal, its officer who made the assessment, the  Government of  Bihar  and  the Union of India.  No  relief  is  however claimed against the last two respondents. The  questions  raised  by  this  petition  depend  on   the construction of certain provisions of the Central Sales  Tax Act, 1956.  The Act was amended with effect from October  1, 1958.  This case however has to be decided 402 on  the  Act  as it stood prior to the  amendment,  for  the period covered by the impugned order of assessment was  from July 1, 1957 to March 31, 1958.  It may be stated here  that the  validity  of  the Act has not been  challenged  by  the petitioner. A preliminary objection to this petition is taken on  behalf of  the Government of West Bengal.  It is said that  as  the legality of the Act is not challenged, the imposition of the tax  does  not result in any violation  of  the  fundamental right guaranteed by Art. 31(1) of the Constitution and  this petition based on such alleged violation is, therefore,  not competent.   Such a view was indeed taken by this  Court  in Ramji  Lal  v. Income-tax Officer, Mohindargarh  (1).   This case  was followed in Laxmanappa Hanumantappa  Jamkhandi  v. Union  of  India(2).   The present  case  however  does  not complain of a violation of any fundamental right under  Art. 31.   The  fundamental right the infringement  of  which  is alleged  by  the  assessment order, is  the  right  to  hold property and carry on business under Art. 19 (1)(f) and (g). In  Kailash Nath v. The State of U. P. (3), this Court  held that  an illegal levy of sales tax on a trader under an  Act the  legality  of  which was  not  challenged  violates  his fundamental rights under Art. 19(1)(g) and a petition  under Art.  32 with respect to such violation lies.   The  earlier case  of Ramji Lal v. Income,-tax Officer, Mohindargarh  (1) does  not appear to have been considered.  It  is  contended that  the  decision  in Kailash  Nath’s  case  (3)  requires reconsideration.   We do not think however that the  present is a fit case to go into the question whether the two  cases are not reconcilable and to decide the preliminary  question raised.   The  point  was  taken at  a  late  stage  of  the proceedings  after  much  costs  had  been  incurred.    The question  arising  on this petition is  further  of  general importance, a decision of which is desirable in the interest of all concerned.  As there is at least one case  supporting the  competence of the petition, we think it fit  to  decide this  petition  on  its merits, on the footing  that  it  is competent. (1) [1951] S.C.R. 127.          (2) [1955] 1 S.C.R. 769. (3)  A.I.R. 1957 S.C. 790.                             403 Now, the Central Sales Tax Act, 1956, is an Act of the Union Legislature.  It authorises the levy of a tax on sales  made in  the course of inter-State trade.  It is only  with  such sales  that  the present case is concerned.   Sales  in  the course  of inter-State trade are defined in s. 3 of the  Act and  this section will be set out later.  Section 6  of  the Act  provides that every dealer shall be liable to  pay  tax under  the  Act on all sales made by him in  the  course  of inter-State  trade.  That the petitioner is a dealer is  not in  dispute.  Section 9(1) provides that the tax payable  by

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any  dealer under the Act shall be levied and  collected  in the  "  appropriate  State " by  the  Government  of  India. Section  9(2)  provides that the  authorities  empowered  to assess  and collect tax under the general sales tax  law  of the " appropriate State " shall on behalf of the  Government of  India, assess and collect the tax payable under the  Act and  for such purpose, exercise all       powers  under  its general  sales tax law.  Under the provisions of sub-s.  (3) of  s. 9, the State collecting the tax becomes  entitled  to retain it substantially.  It is therefore clear that the tax is payable to the Union and is collected by a State for  the Union. The  contention of the petitioner before the taxing  officer of  the Government of West Bengal may be reproduced  in  its own words: " We contend that all our sales from Jamshedpur are. of  the type mentioned in Section 3(a) of the Central Sales Tax  Act and  at  the  same time some of them also  fall  within  the category mentioned in Section 3(b) of the Act.  Even if  the sales are of the type mentioned in Section 3(b) of the  Act, the  Appropriate  State of the place where  the  sales  take place or are effected, has jurisdiction to assess such sales to Central Sales Tax.  Section 4(2) lays down the principles for  ascertaining  where the sale takes place, or  in  other words, the situs of the sale.  This section creates a legal fiction for ascertaining the situs of the sale. So  far  as  our  inter-State  sales  from  Jamshedpur   are concerned  the  situs of such sales will always  be  in  the State of Bihar as the goods will be in Bihar either 52 404 at  the time of contract of sale (ascertained goods)  or  at the   time   of   their  appropriation   to   the   contract (unascertained  goods).   We  have  accordingly  filed   our returns of sales made in the course of inter-State trade  or commerce   from   Jamshedpur  with  the  Bihar   Sales   tax Authorities under the Central Sales Tax Act, 1956, and  have paid to them the Tax on the basis of these returns ". The Taxing Officer of the Government of West Bengal did  not accept the petitioner’s contention.  He held : "  In  the case of sale u/s 3(b) no property  in  the  goods passes  unless  the documents of title to goods are  in  the hands of the buyer.  In such a case the " Appropriate  State " to levy the tax should be that State in which the sale has been  effected; or, in other words, that State in which  the documents  of  title to goods have been transferred  to  the buyer. In the above circumstances, it is clear that West Bengal  is the  " Appropriate State " to levy tax on inter-State  sales of the dealer effected by transfer of documents of title  to goods in West Bengal.  In this case, it should be remembered that  section 3(b) refers to transfer of documents  and  not only to transfer of documents by endorsement.  Thus, even if the documents are in the name of the buyer as consignee  but these are physically transferred to the buyer in West Bengal then  that  sale is taxable in  West Bengal.   In  case  of goods  consigned  to  " Self " there  is  no  question  that delivery  to the railways cannot be constituted as  delivery to the buyer". He also held that: "  The  dealer  has said that section  4(2)  lays  down  the principles for ascertaining where the sale in the course  of inter-State  trade  takes  place.  In  other  words,  the  " Appropriate State " (to levy the tax on the sales) u/s 9  of the Central Act (prior to its amendment with effect from  1-

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10-58) should be determined by section 4(2).  In my opinion, this is an incorrect reading of the law.  Each of section  3 and section 4                             405 deals   with   quite  independent   sphere   of   commercial transactions". Finally,  he  made  the best  judgment  assessment,  earlier mentioned, remarking that: " The dealer has himself admitted that he has some sales u/s 3(b).  From my experience of examining the books of accounts of  the  dealer for some earlier years I am of  the  opinion that  a  very  substantial portion of the  total  sales  are effected  by  transfer  of documents in  West  Bengal.   The dealer  has refused to comply with my direction to submit  a statement  of  such sales.  I have, therefore,  to  make  an estimate. On  examining the records of the dealer under the State  law and   keeping  in  view  the  fact  that  there   had   been considerable expansion of sales of iron and steel in  recent years   1  estimate  the  turnover  during  the  period   of assessment  to  be Rs. 9 crores; i.e., an average of  Rs.  1 crore per month ". Now  in  this case the petitioner’s complaint  is  not  that there  should not have been a best judgment assessment.   It does not say that  assessment is arbitrary or, for any other reason,  unfair.  Its point is that the Government  of  West Bengal  could  not  tax a sale where goods  were  under  the contract of sale moved from Bihar to Bengal even though  the documents  of  title to the goods sold were  transferred  in Bengal,  such sales being taxable only by the Government  of Bihar. It  is clear from what we have said that the  Government  of West  Bengal purported to tax sales under s. 3(b); it  taxed sales where during their movement from Bihar to Bengal,  the property  in  the goods sold passed, by a transfer  in  West Bengal  of  the documents of title to them.   Two  questions arise, namely, what is a sale under s. 3(b) and which is the " appropriate State " to tax such sales ? We  take up the first question now.  In order to decide  it, we have to consider s. 3 as a whole.  The section, so far as material, is in these terms: Section  3:-A sale or purchase of goods shall be  deemed  to take place in the course of inter-State trade or commerce if the sale or purchase- 406 (a)  occasions  the  movement of goods  from  one  State  to another ; or (b)  is effected by a transfer of documents of title to  the goods during their movement from one State to another. The  first thing that strikes us is that the section has  to be so construed that the two clauses in it are made mutually exclusive.  It seems clear that it was not contemplated that a  sale can fall within both the clauses.  If that were  not so, there might be two " appropriate States " in respect  of it,  one being the State from which the goods were moved  by reason of the sale and the other being another State  within which the sale was effected by the transfer of documents  of title  during the movement of the goods sold from one  State to  another.  In such a case, each of the two "  appropriate States  "  would  be entitled to collect the  tax  with  the result  that the same sale would be taxed twice  over.   The learned  counsel  for  the State of Bihar  was  inclined  to contend, no doubt as an alternative argument, that  could be done.  We do not think that the Act intended such a  result. We proceed now to state our reasons for this view.

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The  Act  imposes tax on sales in the course  of  interState trade.   It is an Act of the Union legislature.   Under  the Constitution  the  State legislatures have no power  to  tax such sales and only the Union Legislature can do so.  It  is well  recognised  that the power to tax sales  made  in  the course  of  inter-State trade has been denied to  the  State Legislatures with the object of preventing multiple taxation of  the same sale by different States resulting in  hardship to  the  ultimate consumer: see State of  Bombay  v.  United Motors  (India) Ltd.(1) and Bengal Immunity Co.  Ltd.  v.The State  of  Bihar (2).  Since these cases were  decided,  the Constitution has no doubt been amended, but the observations made in them still apply.  This being so, the Act could  not have intended to tax the same sale twice. But  apart  from this consideration of  a  somewhat  general nature, the provisions of the Act plainly make (1) [1953] S.C.R. 1069. (2) [1955] 2 S.C.R. 603. 407 it impossible to levy two taxes on the same sale.  Under  s. 8(1),  the  tax is a certain percentage of  the  dealer’s  " turnover ". Section 2(j) defines " turnover " as meaning the aggregate  of  the sale prices in respect  of  the  dealer’s sales.  So the tax is a percentage of the sale price and  as each  sale  produces one price, it follows that  it  can  be taxed  only  once.  Again, s. 9 by providing  that  the  tax shall  be  collected  in the " appropriate State  "  by  the Government of India, plainly indicates that there is one tax payable to the Government of India which is collected by one State only.  Section 3 by the use of the word " or " between cls.  (a) and (b) in it also suggests that the  clauses  are exclusive of each other. One  sale  then cannot be taxed twice.  A sale  cannot  fall under both cl. (a) and cl. (b) of s. 3, for then it would be liable to tax twice.  Clauses (a) and (b) are hence mutually exclusive.   Keeping  this basic consideration in  mind,  we proceed to construe s. 3. We  take cl. (a) of s. 3 first.  That clause contemplates  a sale which occasions the movement of goods from one State to another.   The words ’ sale occasions the  movement’  should create  no difficulty.  It is apparent from the  explanation in s. 2(a) which will be set out later, that they mean moved by reason of the sale’.  The question then arises, when does a sale occasion the movement of goods sold ? It seems  clear to  us  that a sale can occasion the movement of  the  goods sold only when the terms of the sale provide that the  goods would be moved; in other words, a sale occasions a  movement of goods when the contract of sale so provides. We turn now to the sale contemplated by el. (b) of s.  3. That is a sale effected by a transfer of documents of  title to  the goods  during their movement  from  one  State  to another.   What  then is a sale effected by  a  transfer  of documents  of  title ? In our view, it can only  be  a  sale where the property in the goods sold is passed by a transfer of documents of title.  It is well known that in many  cases of  sale,  property in the goods sold is  transferred  by  a transfer  of documents of title to them.  It has  been  said that a sale has several 408 elements, namely, agreement to sell, transfer of property in the goods sold, payment of price, delivery of the goods  and so  forth:  see State, of Bombay v.  United  Motors  (India) Ltd.(1).  It seems to us to be inappropriate to talk of  any of  these elements of sale being effected by a  transfer  of documents  of title, other than the element of  transfer  of

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property.  Thus, for example, the contract of sale cannot be effected by the transfer of documents of title, neither  the payment  of  price.  A transfer of documents  of  title  may perhaps  effect  a delivery of the goods if the  parties  so agree.   But it seems to us that in defining a sale  in  the course of inter-State trade in a statute purporting to tax a sale,  that is a transaction in which property in the  goods passed, the legislature was not thinking only of delivery of goods.   It  does  not  appear to  us  to  be  a  reasonable construction of the words " sale is effected ’ to hold  that they  mean delivery of the thing sold.  Therefore, we  think that cl. (b) refers only to sales where transfer of property in  the goods sold takes place by the transfer of  documents of  title  to them during their movement from one  State  to another. We have then come to this that cl. (a) of s. 3  contemplates a sale where the contract of sale occasions the movement  of the  goods  sold  and  cl. (b), a  sale  where  transfer  of property  in  the goods sold is effected by  a  transfer  of documents  of title to them.  Of course, in the first  case, the movement of the goods must be from one State to  another and   in  the  second,  the  documents  of  title  must   be transferred during such movement. Now  it  will  be  apparent  that  if  this  was  the   full construction  of  the  two clauses, then  they  would  often overlap.   This,  as earlier stated, was not  intended.   We have  to  narrow  down the construction so as  to  make  the clauses  mutually exclusive.  There may be sales  under  the terms of which the goods have to be moved from one State  to another.  All such sales would come within cl. (a).  But  it may  so happen that in some of these sales, the property  in the goods passes by a transfer of document of title to  them during their (1)  [1953] S.C.R. 1069.                             409 movement.   Such sales would fall within cl. (b)  also.   To avoid  this result we have to exclude from el. (a)  such  of the sales coming under it in which the property in the goods passes  by a transfer of documents of title to  them  during their  movement.  In other words, where a sale  comes  under both the clauses, it has to be hold to fall under el. (b). We,  therefore,  think  that  the  two  clauses  should   be construed  in the following way: Clause (a)  contemplates  a sale  where  under the contract of sale the goods  sold  are moved from one State to another, provided however that  such a  sale will not come under cl. (a) but fall under el.  (b) if the property in the goods sold is passed by a transfer of the  documents of title to them during their  movement  from one  State  to  another.  Clause (b),  on  the  other  hand, contemplates a sale where the property in the goods sold  is passed  by a transfer of documents of title to  them  during their movement from one State to another. The  next question is which State can collect the tax  on  a sale  falling under cl. (b) of s. 3, construing that  clause in the sense that we have done earlier. In other words, the question  in  this  case  is: Would West  Bengal  be  the  " appropriate State " to tax a sale where the property in  the goods sold passed from the seller to the buyer by a transfer in  West  Bengal of the documents of title  to  them  during their movement from Bihar to West Bengal ? Again, to put  it shortly,  in the case of sale under el. (b) of s. 3, is  the State where the transfer of documents of title takes  place, the  "appropriate State" to tax the sale?  The  West  Bengal Government  thought  it  was.  We think  that  this  is  the correct view to take.

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Now  the  " appropriate State " which alone can under  s.  9 levy  and collect the tax under the Act has been defined  in s. 2(a) which is in these terms: Section  2.-In  this  Act,  unless  the  context   otherwise requires,-- (a)  " appropriate State " means- (i)  in  relation to a dealer who has one or more places  of business situate in the same State, that State; 410 (ii) in  relation to a dealer who has one or more places  of business situate in different States, every such State  with respect  to the place or places of business  situate  within its territory ; Explanation.-" Place of business " means- (i)  in the case of a sale of goods in the course of  inter- State trade or commerce falling within clause (a) of section 3, the place from which the goods have been moved by  reason of such sale, (ii) in the case of any such sale falling within clause  (b) of s. 3, the place where the sale is effected ; So   the  "  appropriate  State  "  is  that  within   whose territories the dealer has his place of business.  The place of  business  has  however to be decided  in  each  case  by reference  to  the  kind of sale.  The  effect  of  s.  2(a) appears to be this: If the sale is of the kind mentioned  in cl.  (a)  of s. 3, the " appropriate State "  is  that  from which the goods have been moved by reason of the contract of sale, while if the sale is of the kind mentioned in cl.  (b) of s. 3, the " appropriate State " is that " where the  sale is effected ". We are in this case concerned only with sales under el.  (b) of s. 3, and the " appropriate State " in respect of such  a sale  has to be decided from cl. (ii) of the Explanation  in s.  2(a).   Under that clause the " appropriate State  "  in respect  of  such a sale is the State " where  the  sale  is effected ".  The question is, does this definition by itself give  sufficient  guidance to ascertain  the  "  appropriate State " ? The learned counsel for the State of Bihar contends that the words  "  where the sale is effected " do not  indicate  any place  of  sale  and  are not intended  to  indicate  the  " appropriate State ". The " appropriate State ", according to him,  has  to  be decided by resort to s.  4  2)  which  was intended  to be explanatory of Explanation (ii) in s.  2(a). We  will consider s. 4(2) a little later.  But before we  do that, let us examine the argument that the words " where the sale is effected " in cl. (ii) of the explanation in s. 2(a) do not indicate any place or the " appropriate State ". The  learned  counsel  gave several reasons  why  the  words "where the sale is effected" in cl. (ii) of the                             411 Explanation in s. 2(a) cannot indicate any place.  First, he referred  to  certain  observations in State  of  Bombay  v. United  Motors  (India)  Ltd. (1)  indicating  that  it  was difficult  to localise, that is, to fix the place  where,  a sale  in  the course of inter-State trade takes  place.   He also  said  that transfer of property is the creation  of  a jural  relation and it is not possible to say where a  jural relation   is   created.   Lastly,  he   referred   to   the observations of Lord Loreburn, L. C., in Badische Anilin Und Soda  Fabrik  v. Hickson (2) that, " if you must  decide  in what  country  an appropriation of goods  by  consent  takes place,  it takes place not where the consent is  given,  but where  the  goods are at the time situate  ".  Therefore  he contended  that the words " where the sale is effected "  do

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not point to any particular place of sale. In our opinion, these reasons have no application to a case, where a statute fixes the place of sale.  The difficulty  in the cases mentioned above was not that there was no place of sale  at all, sale being a jural concept, but which  of  the several  places in which a sale could be said to have  taken place,  was the correct one to select.  No  such  difficulty arises  where the statute fixes the place of sale.  That  is what  the  Act before us admittedly purports to do,  in  one view  by cl. (ii) of the Explanation in s. 2(a) and  in  the other view by s. 4(2). Clause  (ii) of that Explanation says in effect that in  the case  of  any  sale  falling within cl.  (b)  of  s.  3  the appropriate  State  shall  be the State where  the  sale  is effected.  Now, a sale under s. 3(b) is a sale effected " by a transfer of documents of title.  The effect " is the sale; the  mode  in which the " effect " is produced is by  the  " transfer  of documents of title".  As soon as this mode  has completed  itself the " effect " has been produced.   It  is simple syllogism that the place where the mode is completed, that is, the transfer of documents of title takes place,  is the place where the effect is produced, that is, the sale is effected.   The act constituting the mode of  effecting  the sale  being prescribed, the sale must be taken to have  been effected where (1) [1953] S.C.R. 1069.        (2) [1906] A.C. 419,421. 53 412 that act is performed.  Clause (ii) of the Explanation in s. 2(a),  therefore,  itself  fixes the place of  sale  and  no question  of  any difficulty in fixing it  arises.   In  our view, a sale contemplated by s. 3(b) is effected within  the State in which the documents of title to the goods sold  are transferred resulting in a transfer of the property in  them ;  that State is the " appropriate State in respect of  such sale. In  this view of the matter no question of resorting  to  s. 4(2)  for  fixing the place where a sale under  s.  3(b)  is effected,  arises.  The place of that sale is fixed  by  el. (ii) of the explanation in s. 2(a) itself. It  also  appears  to us to be  absolutely  clear  that  the purpose  of  s. 4(2) was not to fix the place where  a  sale under  s.  3(b)  can be said to  have  taken  effect.   That section is in these terms: Section 4. When is a sale or purchase of goods said to  take place outside a State.- (1)  Subject to the provisions contained in section 3,  when a sale or purchase of goods is determined in accordance with sub-section  (2) to take place inside a State, such sale  or purchase  shall  be deemed to have taken place  outside  all other States. (2)  A  sale  or purchase of goods shall be deemed  to  take place inside a State if the goods are within the State- (a)  in  the case of specific or ascertained goods,  at  the time the contract of sale is made; and (b)  in  the case of unascertained or future goods,  at  the time  of their appropriation to the contract of sale by  the seller or by the buyer, whether assent of the other party is prior or subsequent to such appropriation. First,  what the learned counsel for the petitioner and  the State of Bihar say is that s. 4(2) is really an  explanation to  cl. (ii) of the Explanation in s. 2(a); el. (ii) of  the Explanation in s. 2(a) does not say where a sale is effected and the " place " is explained by sub-sec. (2) of s. 4. Now, sub-sec.  (2) of s. 4 does not purport to be an  explanation

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to  clause (ii) of the explanation in s. 2(a); it  does  not refer  to  s. 2(a) at all.  It would be a  strange  mode  of enacting a statute to have                             413 an  explanation  to  another explanation  and  that  too  in another  part of the statute dealing, as we shall  presently show, with a different matter.  Further sub-cl. (ii) of  the Explanation  in s. 2(a) specifies the place of business  and s.  4(2)  specifies  a State; so the  latter  cannot  be  an explanation of the former. Secondly s. 4(2) states when a sale shall be deemed to  take place  " inside a State ". In order however to say  where  a sale  takes  place in the course of interState trade  it  is inappropriate to talk of it as taking place " inside a State ".  A sale in the course of interState trade from  its  very nature,  has  nothing to do with sales inside or  outside  a State.   It  contemplates commercial activities  which  take place in more than one State. Thirdly,  s. 4 is not really defining when a sale  shall  be deemed  to take place inside a State.  It is  only  defining when  a sale shall be deemed to take place outside a  State. It does so by saying that when a sale is to be deemed to  be inside  any State under sub-see. (2), it shall be deemed  to have taken place outside all other States.  Sub-section  (2) provides when a sale shall be deemed to take place inside  a State only for the purpose of showing that it shall then  be deemed  to have then taken place outside all  other  States, and  for no other purpose.  This is clear from  the  section itself and is made further clear by the heading to the  sec- tion.  It seems to us that the heading is really a  preamble to  the  section giving a key to its interpretation  as  was found to be the case in Martins v. Fowler (1). Fourthly,  s. 4 is expressly made subject to s. 3. This  can only mean that in case any conflict between the two sections appears, s. 3 would prevail.  Now these two sections  define two  kinds of sale, namely, a sale in the course  of  inter- State  trade and a sale taking place outside a State.  If  a sale  happens to come under both definitions, it would  have to be taken as a sale in the course of inter-State trade for s. 4 has been made subject to s. 3. That being so, it  would be  impossible to hold that s. 4(2) indicates where  a  sale failing under s. 3(b) is to be held to have been effected. Lastly it seems clear to us that s. 4 was enacted (1)  [1926] A. C. 746, 750. 414 under the power conferred on the Parliament by.  Art. 286(2) to  formulate principles for determining when a  sale  takes place  "  outside a State ", the State  legislatures  having been  prevented by el. (1) of that Article from passing  any law  imposing  tax  on such a sale.  This is  clear  from  a consideration  of ss. 3, 4 and 5 which  together  constitute Chapter II of the Act.  Section 5 states when a sale is said to take place in the course of export or import.  The  power to  enact  this section is also derived  from  Art.  286(2). Section  3 formulates the principles for determining when  a sale  is  said to take place in the  course  of  inter-State trade  and  it is enacted under the power for  that  purpose contained  in Art. 269(3).  The enactments in that  Chapter, as  its heading shows, were for " formulation of  principles for determining when a sale or purchase of goods takes place in the course of inter-State trade, or outside a State or in the  course of export or import" and were made  under  Arts. 269(3)  and 286(2), as already stated.  We think that it  is legitimate  to  refer  to  the heading  of  Chapter  11  for ascertaining  the  intention  of  the  legislature  on   the

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principles  stated  by  the Judicial  Committee  in  Toronto Corporation v. Toronto Railway(1) in these words: "  This  clause is the last of a fasciculus,  of  which  the heading  is " Track, & c., and Railways ", and, as was  held in  Hammersmith Ry.  Co. v. Brand, such a heading is  to  be regarded  as  giving the key to the  interpretation  of  the clauses ranged under it, unless the wording is  inconsistent with such interpretation ".  The interpretation that we  put on  s,  4  in  the light of  the  heading,  is  clearly  not inconsistent  with  the  wording of  that  section.   It  is admitted  that  s.  5  has  no  connection  with  the  other provisions  in  the  Act and is  clearly  only  laying  down principles  for determining when a sale can be said to  have taken place in the course of import of goods into or  export of goods out of, India.  It would be legitimate to hold that similarly s. 4 was enacted only for the purpose of  formula- ting principles for determining when a sale is said to  take place  outside a State and not for any other  purpose.   For all these reasons, we hold that sub-s. (2) of (1)  [1907] A. C. 315, 324                             415 s.   4  was  not  enacted  for determining  which  is  an  " appropriate State " to collect the tax in the case of a sale falling under cl. (b) of s. 3. It  was argued on behalf of the Government of Bihar that  in any case the sales of the petitioner from Jamshedpur do  not come under el. (b) of s. 3 because all such sales were  made pursuant to the permit granted under the provisions of  Iron &  Steel (Control) Order, 1956, issued under  the  Essential Supplies  Act,  1955,  the directions in  which  permit  the petitioner was bound to carry out.  It appears that iron and steel being controlled commodities, they could not under the provisions  of the Act and Order aforesaid, be sold  without the  permission  of  the Iron & Steel  Controller.   It  was contended  that  when on a contract made  pursuant  to  such permission, the petitioner loaded the goods into the railway wagons  at Jamshedpur, the property in them passed under  s. 23(1) of the Sale of Goods Act to the purchaser, because, in view  of the Iron & Steel (Control) Order, 1956,  the  goods became  unconditionally appropriated to the contract by  the seller  with  the  assent of the buyer.  The  case  of  Com- missioner  of Sales Tax, Bihar v. New India Sugar Mills  (1) was cited as authority for this view.  This case was decided under  a different Order.  We do not propose to go into  the question  whether  in  any  particular  sale  property   was transferred  from the seller to the buyer or how  and  when. That  point  can  be taken  before  the  appropriate  taxing authorities. It appears to us that the Taxing Officer of the West  Bengal Government  took the same view of s. 3(b) as we  have  done. He  said  that  in the case of a sale under  s.  3(b)  "  no property  in the goods passes unless the documents of  title to  the  goods  are in the hands of the  buyer".   This,  of course, means that in the case of a sale under cl. (b) of s. 3  the property in the goods sold passes by the transfer  of documents of title to them.  The Taxing Officer was  further clearly  contemplating  the transfer of documents  of  title taking   place  during  the  movement  of  the  goods   from Jamshedpur  to places in West Bengal.  So far, it  seems  to us, his view is correct and unexceptionable.  He (1)  10 Sales Tax Cases 74. 416 however proceeded to state that " even if the documents  are in  the  name  of  the buyer  as  consignee  but  these  are physically  transferred  to the buyer in West  Bengal,  then

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that  sale is taxable in West Bengal ". We think  that  this was  not a correct view to take.  The transfer of  documents of  title  to the goods sold can pass the property  in  them only  if  the parties agree that that would be  the  result. Therefore, the Taxing Officer of the West Bengal  Government had further to bear in mind the question whether the parties had agreed that physical delivery of the documents of  title to  the goods would pass the property in them.  He does  not seem  to have done this.  In the other case also  where  the documents  of  title  are transferred  to  the  buyer  after endorsement,  the same test has to be kept in mind,  namely, that such transfer would pass the property in the goods only if  the parties agreed that   would happen.   It,  therefore, seems  to  us  that  the  West  Bengal  Government’s  Taxing Officers  order may not have been completely  in  consonance with  s. 3(b).  In so far as it purported to levy a  tax  on sales  where the documents of title are already in the  name of  the buyer simply because such documents had been  trans- ferred  in West Bengal, it may have gone outside the  limits of  s.  3(b).  The order of assessment made  by  the  Taxing Officer  of  the Government of West Bengal in this  case  is hence liable to be set aside. We  accordingly  set  aside the order  made  by  the  Taxing Officer  of  the Government of West Bengal  on  October  21, 1959,  assessing the petitioner to a tax of  Rs.  41,14,718- 12nP.   The Government of West Bengal will be at liberty  to proceed   to  assess  the  tax  afresh  in  terms   of   the interpretation put on s. 3 by us in this judgment. We do not think it fit to make any order as to the costs  of this petition. BY COURT: In view of the majority judgment of the Court, the petition  is allowed with costs, and it is directed  that  a writ  of  certiorari  will  issue  quashing  the  order   of assessment made by the Commercial Tax Officer, Lyons  Range, Calcutta.                                Petition allowed. 417