RAJAGOPALA AYYANGAR, J.

Messrs Mettur Industries Ltd., are the petitioners in this Tax Revision Case. These proceedings arose out of the assessment for the year 1951-52. The Deputy Commercial Tax Officer ascertained the net assessable turnover of this assessee at Rs. 2, 40, 87, 084-0-7. Objections were taken to this assessment by the assessee and an appeal was filed to the Commercial Tax Officer, but that appeal was dismissed. The objections were repeated in a further appeal by the assessee to the Tribunal.

The objections taken by the assessee fell under three heads : (1) a sum of Rs. 23, 66, 029 claimed to be the turnover arising from inter-State sales, the exemption claimed being under Article 286(2) of the Constitution; (2) Rs. 19, 41, 362 being the turnover on the purchase value of cotton purchased by the mills from Messrs Volkart Brothers; and (3) Rs. 2, 24, 517 being the sales tax collections made by the appellant, to the inclusion of which in the assessable turnover objection was taken. The first item of the claim under the head of exemption by reason of the sales being of an inter-State character was allowed by the Tribunal, and is no longer in dispute before us. The third of the items, viz., the inclusion in the turnover of the sales tax collected by the assessee, is now validated by Madras Act VII of 1954. This was disallowed by the Tribunal, and because of the validating enactment, this was not contested before us. The only matter now in controversy relates to item (2), viz., the turnover of Rs. 19, 41, 362, being the value of the cotton purchased during the year by the mills.

Section 3(1) of the Madras General Sales Tax Act enacts :-

"Every dealer shall pay for each year a tax on his total turnover for such year;"This is subject to the provisions of section 5, sub-section (ii) of which enacts :-

"As regards the sale of cotton, the tax is to be levied only at such single point in the series of sales by successive dealers as may be prescribed."

The relevant rule which prescribes and fixes the single point for taxation is rule 4(2)(b) of the Turnover and Assessment Rules, read with rule 4A of the same rules. The net result of these is that in the case of cotton bought by a spinning mill, the tax is levied from the spinning mill (that is, it is at the purchase point that the tax is levied, and from the purchaser) on the amount for which it is bought by it, so that, on the terms of the provisions of the Sales Tax Act, the liability to tax is undoubted. The contention that was however advanced before the Tribunal may be summarised in its own words :-

"These are inter-State sales which, though liable to tax by reason of the Explanation to Article 286(1)(a) on the ground that both delivery and consumption took place in this State, yet are liable to be excluded from taxation as the State of Madras have decided to levy tax on such transactions only from 1st April, 1953." *

This point in the form in which it was raised before the Tribunal was not repeated before us, but the objection before us was rested on Article 286 of the Constitution, based on the interpretation of that Article by the Supreme Court in The Bengal Immunity case

In view of the decision it will not be possible to sustain the validity of this levy, but for the Sales Tax Laws Validation Ordinance, III of 1956, which was promulgated by the President on 30th January, 1956. Its long title is "An Ordinance to validate laws of States imposing, or authorising the imposition of, taxes on the sale or purchase of goods in the course of inter-State trade or commerce." The question to be considered in the present case is whether this Ordinance does or does not validate the levy of the tax. The operative part of the Ordinance is in these terms :-

"Notwithstanding any judgment, decree or order of any Court, no law of a State, in so far as it imposes, or authorises the imposition of, a tax on the sale or purchase of any goods where such sale or purchase took place in th