JUDGMENT

BHAGWATI, J. :— These appeals raise a short but interesting question of law relating to the interpretation of S. 5 (2) (a) (ii) of the Bengal Finance (Sales Tax) Act, 1941 as applied to the Union Territory of Delhi (hereinafter, for the sake of convenience referred to as Delhi). The Act was extended to Delhi subject to certain modifications by a Notification dated 28th April, 1951 issued by the Central Government in exercise of the powers conferred by S. 2 of the Part C States (Laws) Act, 1950 and it came into force in Delhi on 28th May, 1951 by virtue of a Notification issued under S. 1, sub-s. (3) of the Act. There have been several amendments made in the Act from time since the date of its application to Delhi but we are concerned in these appeals only with the assessment periods 1971-72 and 1972-73 and hence we shall confine ourselves to the relevant provisions of the Act as they stood during these assessment periods.

2. Section 2 enacted the definition provision and Clause (c) of that section defined a dealer to mean any person who carries on the business of selling goods in Delhi. Clause (g) of S. 2 contained the definition of sale. It was a definition in general terms and it made no reference to the situs of the sale. If did not limit the definition to a sale inside Delhi. There was an explanation to this Clause which laid down as to when a sale or purchase shall be deemed to take place inside Delhi. S. 4. sub-section (1) provided that every dealer whose gross turnover during the year immediately preceding the commencement of the Act exceeded the taxable quantum at any time within such year shall be liable to pay tax under the Act on all sales effected after the date notified by the Chief Commissioner and sub-section (2) of that Section said that every dealer to whom sub-section (1) does not apply, shall, if his gross turnover calculated from the commencement of any year exceeds the taxable quantum at any time within such year, be liable to any tax under the Act, on the expiry of two months from the date on which such gross turnover first exceeds the taxable quantum, on all sales effected after such expiry, Sub-section (5) of S. 4 defined taxable quantum to mean in relation to any dealer who imports for sale any goods into Delhi or manufactures or produces any goods for sale, regardless of the value of the goods imported, manufactured or produced, ten thousand rupees, and in relation to any other dealer, thirty thousand rupees. Sub-section (1) of S. 5 provided different rates of tax, according as the goods fell within one category or another, at which the tax payable by a dealer shall be levied on his taxable turnover. What is taxable turnover was defined in sub-s. (2) of S. 5 to mean:

"that part of a dealers gross turnover during any period which remains after deducting therefrom-

(a) his turnover during that period on;

(i) the sale of goods declared tax-free under S. 6;

(ii) sales to a registered dealer- of goods of the class or classes specified in the certificate or registration of such dealer, as being intended for re-sale by him, or for use by him as raw materials in the manufacture of goods for sale; and of containers or other materials for the packing of goods of the class or classes so specified for sale;

Provided that in the case of such sales a declaration duly filled up and signed by the registered dealer to whom the goods are sold and containing the prescribed particulars on a prescribed from obtainable from the prescribed authority is furnished in the prescribed manner by the dealer who sells the goods:

Provided further that where any goods specified in the certificate of registration are purchased by a registered dealer as being intended for re-sale by him or for use by him as raw materials in the manufacture of goods for sale, but are utilised by him for any other purpose, the price of the goods purchased shall be allowed to be deducted from the gross turnover of the selling dealer but shall be include