RAJAGOPALAN, J.

The assessee is a spinning mill at Tirupur. It was assessed to sales tax in the assessment year 1951-52 on its purchases of cotton for spinning under rule 4-A(iv) of the (Turnover and Assessment) Rules, which prescribed the single point for the levy of sales tax on tractions in cotton required by section 5(ii) of the Sales Tax Act. The relevant portion of rule 4-A(iv) as it then stood ran :

"4-A. Subject to the provisions of section 5 -

(iv) in the case of cotton (including kapas) the tax under section 3(1) shall be levied in accordance with the following provisions :-

(a) in the case of all cotton (including kapas) sold to a spinning mill in the State, the tax shall be levied from the spinning mill on the amount for which it is bought by it." *

The Tribunal, agreeing with the Department, held that the assessee's purchases of cotton, which had been imported from abroad, which amounted to Rs. 34, 61, 213-1-9 were liable to be taxed. It was the correctness of that decision which the assessee challenged before us in its application preferred under section 12-B of the Act.

The nature of the transactions was thus summed up by the Tribunal :

"The import of cotton from Egypt is made by certain dealers in Bombay and the shipping documents are in their names. The assessee intimates the Bombay dealers about its requirements and then the Bombay dealers place orders with suppliers in Africa. The shipments are directed from African ports to Cochin. The ships may or may not touch at Bombay. In the meantime, the assessee obtains the necessary transport licence. The Bombay dealers send the shipping documents to (their) clearing agents at Port Cochin. These clearing agents present the shipping documents, clear the goods through the customs and then despatch the goods to Tirupur to the assessee and the railway receipts are sent through the Bank of Baroda or other banks and the assessee pays the price into the bank against delivery of railway receipts." *

The Tribunal re-stated the position;

"........... The available material shows that the purchases were made direct from the Bombay party, that no privity was established with the African seller, that the Bombay party arranged through the clearing agents to take delivery of the goods at Cochin harbour, that after the goods were cleared the clearing agents at Cochin harbour despatched the goods by railway to the assessee, and that the price was paid by the assessee through banks before taking charge of the railway receipts." *

On this basis the Tribunal came to the conclusion that the sales in question to the assessee should be viewed as intra-State sales to which none of the prohibitions imposed by Article 286 of the Constitution applied.

The assessee contended (1) that its purchases were in the course of import and that they were therefore protected from any levy of tax by Article 286(1)(b) of the Constitution; (2) alternatively, they were purchases in the course of inter-State commerce, which Madras could not tax as the delivery of the goods purchased was effected outside the State of Madras; and (3) rule 4-A(iv) of the Turnover and Assessment Rules was ultra vires, and, in the absence of a valid prescription of a single point for the levy of tax on sales and purchases of cotton required by section 5(ii) of the Act, an assessee could not be subjected to any tax liability. These contentions which were rejected by the Tribunal have been pressed again before us.

On the findings of the Tribunal it seems clear to us that the purchases of the cotton, imported from Egypt, effected by the assessee were made after the cotton had been imported into India by the sellers, who were dealers in Bombay, and after the cotton had crossed the customs frontier in this country. The Tribunal was right in holding that the purchases effected by the assessee were not purchases in the course of import trade within the scope of the ban imposed by Article 286(1)(b) of the Constitution. Learned counsel