( 1 ) THIS is a petition under Article 226 of the Constitution.

( 2 ) THE petitioner is a private limited company which has its head office in Calcutta and branches at various places in India, including Kanpur. It carries on the business of importing and selling dyes, chemicals, plastics and other similar goods. During the assessment year ending the 31st march 1954 the petitioners products were sold to buyers in Uttar Pradesh both by its Kanpur branch and by its branches at Bombay and Madras and its head office in Calcutta.

( 3 ) THE Sales Tax Officer, Kanpur, by an assessment order dated the 28th July 1955 has assessed the petitioner to sales tax in the sum of Es. 2,426-11-6 on the turnover of sales effected outside the Uttar Pradesh of goods supplied to buyers in the Uttar Pradesh.

( 4 ) THE petitioner now challenges the validity of this assessment on the ground that as the sales took place outside this State they cannot, under Article 286 (1) of the Constitution, be subject to tax. For the State it is contended that as the goods sold were actually delivered in Uttar Pradesh as a direct result of such sales for the purpose of consumption therein the assessment is valid. Article 286 (1) as it stood in 1954 provided that:

"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 ). . . . . Explanation.-- For the purposes of Sub-section (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. "

( 5 ) THE material facts are not in dispute. The sales to buyers in Uttar Pradesh affected by the petitioner outside this State fall into three groups :

I. In which the contract of sale provides for delivery ex-godown Calcutta/madras/bombay; ii. In which the contract provides for delivery F. O. R. Calcutta/madras/bombay; iii. In which the contract provides for delivery F. O. R. Kanpur. No difficulty arises with regard to the third group. It is not seriously in dispute that "delivery f. O. R. Kanpur" means delivery by the petitioner to the buyer at Kanpur, and as it is common ground that the goods were intended for consumption in Uttar Pradesh, sales falling within this group are within the Explanation to Article 286 (1) and must be deemed to nave taken place in this State.

( 6 ) AS regards sales falling within group I or group II it is also common ground

(a) that each sale was for a specific and ascertained imported product in a deliverable state; (b) that the petitioner despatched the goods to the destination in Uttar Pradesh to which the buyers desired them to be sent; (c) that the goods were consumed in Uttar Pradesh; (d) that in the case of Sales F. O. R. Calcutta/ Madras/bombay-group II -- the petitioner debited the buyer with the railway freight charges; and in the case of sales ex-godown group I -- the petitioner debited the buyer with the railway freight charges and the cost of the carriage of the goods from the godown to the railway station; (e) that the sales were on a credit basis, payment being made by the buyer against the sales bills and railway receipts, either directly or through a bank or by V. P. P.

( 7 ) IT is convenient first to consider the position with regard to sales falling within group II. There is no doubt that the property in the goods passed to the buyer upon the goods being delivered to the railway authorities; and this is not in dispute. The petitioners argument is that the goods having been so delivered to the buyer outside Uttar Pradesh there could be no actual delivery within the Uttar Pradesh and the Explanation has no application; and he relies on mohamm