Judgement

MITTER, J. : These are three appeals by leave granted by this Court from orders of reference under S. 44(1) of the Madhya Pradesh General Sales Tax Act, 1958 at the in" stance of the Commissioner of Sales Tax, Madhya Pradesh to the High Court in that State. The question in each of the references was, whether, in the facts and circumstances of the case, the, sales of sleepers (for railways) made by the non-applicant (Bengal Timber Trading Co. Ltd.) under the agreement with the President of India came under Art. 286(1)(a) of the Constitution read with the Explanation thereto and therefore were exempt from the imposition of tax under the C. P. and Berar Sales Tax Act, 1947?

2. Except for the amounts which varied from year to year involved in the sales, the facts and circumstances were common in all the three cases. The periods for which tax was sought to be imposed were from 1st July 1950 to 30th June 1951, from 1st Ju1y 1951 to 30th June 1959 and from 1st July 1952 to 30th June 1953. It will be noted that ah the three periods are prior to the amendment of Art. 286 of the Constitution by the Constitution (Sixth Amendment) Act, 1956. The relevant portion of Art. 286 as it stood during the years in question read as follows :

"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.

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 notwithstanding the fact that under the general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State.

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The true meaning of the said Article and Explanation came up for consideration in a number of decisions of this Court. Its real purpose was to prevent "imposition of an unduly heavy burden upon the consumers by multiple taxation upon a single transaction of sale" Shree Bajarang Jute Mills Ltd. v. State of Andhra Pradesh, 1964-15 STC 130 at p. 433 (SC). In effect the Explanation to the Article created a fiction and fixed the State "in which the actual delivery of the goods took place for the purpose of consumption there" as the only place where sales tax could be levied as was pointed out in Bengal Immunity Co. Ltd. v. State of Bihar 1955-2 SCR 603 at p. 651. There it was said that the shifting of the situs of a sale or purchase from its actual situs under the general law to a fictional situs under the Explanation takes the sale or purchase out of the taxing power of all States other than the State where the situs is fictionally fixed". The earlier decisions of this Court were noted in Bajrang Jute Mills case 1964-15 STC 430 (SC) (supra) and it was there observed:

"It is now well settled that by Art. 286(1) [as it stood before it was amended by the Constitution (Sixth Amendment) Act 1956] sales as a direct result of which goods were delivered in a State for consumption in such State i.e., the sales falling within the Explanation to Art. 286 (1) were fictionally to be regarded as inside that State for the purpose of cl. (1)(a) and so within the taxing power of the State in which such delivery took place and being outside all other States exempt from sales tax by those other States."

3. The last mentioned case was considered by this Court in Singareni Collieries Co. Ltd. v. Commr. of Commercial Taxes Hyderabad 1966-2 SCR 190 at p. 200 and it was held:

". .... the expression "actually delivered" in the context in which it occurs can only mean physical delivery of the goods, or such other action as puts the goods in the possession of the purchaser. The expression "actually delivered" does not include mere symboli