Exemptions under sales tax laws depend on the nature of the transactions; delivery outside the State must be a direct result of the sale.

1. This is an appeal against the order of the Commissioner of Commercial Taxes revising that of the Deputy Commissioner of Commercial Taxes, Guntur.

2. The appellant, Messrs. Ramakrishna Rice Working Company, Bhattiprole, returned a net turnover of Rs.1,12,029-10-0, claiming exemption on a turnover of Rs. 2,65,382-5-6 representing the sales of rice for consumption outside the State. The Commercial Tax Officer disallowed the claim of the appellant for exemption in regard to a turnover of Rs.2,11,363-8-9 holding that this amount was exigible to tax under R.13 of the Turnover and Assessment Rules.

3. Dissatisfied with this order of the Commercial Tax Officer, the appellant went up in appeal to the Deputy Commissioner of Commercial Taxes. This authority ruled that the transactions in question fell under Explanation to Art.286(1)(a) of the Constitution and as such the exemption claimed in regard thereto should be allowed. In this view of the matter, he directed the assessing authority to issue a revised demand notice in that regard.

4. The Commissioner of Commercial Taxes suo motu acting under S.20(2) of the Andhra Pradesh General Sales Tax Act , sought to revise the order of the Deputy Commissioner, as he felt that the Deputy Commissioner was not right in his opinion in regard to the turnover of Rs.1,38,229-8-0. Therefore, he issued a notice on 7-4-1961 to show cause against the proposed revision within seven days from the date of its receipt and informing the appellant that he would be heard on 24-4-1961, if he wished to be heard. This notice was served on the appellant on 13-4-1961. Thereupon, he sent a telegram requesting for fifteen days' time. He was granted time till 1-5-1961 and he was duly informed of the Board's reference on 29-4-1961. A further request was made for postponing the hearing for another fifteen days in his telegram dated 1-5-1961 and he was granted time till 15-5-61 and he was informed of it by memorandum dated 4-5-1961. On 15-5-1961, the appellant neither filed any objections nor appeared before the Board. The Board, therefore, considered that the assessee had no objections against the proposed revision and passed the orders now impugned. The appellant sent his objections ten days later, namely, on 27-5-1961. It is that order that is the subject - matter of the challenge in this appeal.

5. In support of this appeal, it is argued by Sri G. V. R. Mohana Rao, learned counsel for the appellant, that the Board erred in thinking that the sales in question were completed within the State and, they were not attracted by the Explanation to Art.286 (1) (a) of the Constitution. It is submitted that delivery was made outside the State as a direct result of the sale. The two essential conditions of the explanation sale, namely, (1) sale of goods and (2) delivery thereof outside the State as a term of the contract being satisfied in this case, the sales should be regarded as having taken place in the course of inter - state trade, proceeds the argument of the learned counsel for the appellant.

6. We do not think that we can give weight to this contention. It is true that there was a sale and that the actual delivery of the goods was taken outside the state for consumption. But the question for consideration is whether such a delivery was the direct result of the sale.

7. In the solution of this problem, the facts as emerge from the record should be borne in mind. The appellant sold the goods to certain commission agents, who were acting for the dealers outside the State and received the full price but booked the goods to places outside the State in his own name as consignor and consignee under the instructions of the Commission agents. Immediately, he endorsed the railway recei