A sale occasions the movement of goods from one State to another within S. 3(a) of the Central Sales Tax Act, when the movement "is the result of a covenant or incident of the contract of sale".

Judgment

SARKAR, J. : These are two petitions under Art. 32 of the Constitution asking for writs to quash certain assessment orders imposing sales tax and for consequential reliefs preventing the levy and collection of that tax. The petitioners allege that the assessment orders are wholly void and therefore affect their fundamental rights under Art. 19(1) (f) and Art. 31.

2. There are two petitioners in each case, the first being the State Training Corporation of India Ltd. and the second, the Cement Marketing Company of India Ltd. There are also two respondents in each petition, the first of whom is the State of Mysore which through one of its officers, the second respondent, passed the assessment orders imposing the tax.

3. The impugned assessment orders were male on the Marketing Company in respect of certain sales of cement made by it in the year 1957-58. The petitioners say that the Marketing Company made those sales as agent of the Trading Corporation. Whether this is correct or not is not strictly relevant in this case for the Marketing Company does not deny its liability to be taxed as the agent of the Corporation. The only dispute is whether the sales in which the goods were moved from outside the State of Mysore into it were liable to be taxed. The petitioners contend that they were not so liable as they were sales made in the course of inter-State trade, which no law of a State legislature could tax.

4. Though the assessment year was. one, namely, 1957-58, there were two assessment orders. That was because in that year there were in force in Mysore two Sales Tax Acts, namely, the Mysore Sales Tax Act, 1948 the Mysore Sales Tax Act, 1957, the latter of which repealed earlier with effect from October 1, 1957. The disputed sales which took place between April 1, 1957 and September 30, 1957 were taxed under the 1948 Act and those that took place between October 1, 1957 and March 31,1958, under the 1957 Act. Both the assessment orders are challenged by the petitioners.

5. The tax was levied under State laws. Now Art. 286 (2) of the Constitution as originally framed laid down that except in so far as Parliament by law otherwise provided, a State could not pass a law taxing an inter- State sale or purchase. This provision was defected by the Constitution (Sixth Amendment) Act 1956 which came into force on September 11, 1956. The Constitution (Sixth Amendment) Act also amended Art. 269, the relevant portion of which after such amendment reads as follows:

Art. 269(1) "The following duties and taxes shall be levied and collected by the Government of India........

(g) taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter- State trade or commerce..........

(3) 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.

6. The Constitution Amendment Act. had also amended the Seventh Schedule by adding item 92A to List I and thereby giving the Union the power to tax sales or purchases of goods other than newspapers made in the course of inter-State trade or commerce and by substituting for old item 54 in List II a new item which gave the States the Dower to tax all sales or purchases of goods other than newspapers, subject to entry 92A of List 1. Since this amendment of the Constitution therefore the States cannot tax an inter-State sale or purchase.

7. On December 21, 1956, Parliament passed the Central Sales Tax Act, S.3 of which defined an Inter-State sale. This section came into force on January 5, 1957. The taxing provisions of this Act however came into force much later but with them we are not concerned in these cases.

8. The whole of the assessment year 1957-58 was after S.3 of the Central Sales Tax Act. 1956 had come into force. During that year, therefore, the State could not tax a sale which was an inter-State sale as defined in S.3 of the Central Sales Tax Act. That se