Narayana Pai, J.
(1) The petitioner, who is an assessee under the Madras General Sales Tax Act, impugns in this writ petition the legality of tax imposed in respect of transactions covered by sales effected by him outside the District of South Kanara but within the areas of the old Mysore State, both of which were since integrated into the new Mysore State. This argument is pressed only in respect of the period 1-4-1957 to 30-9-1957 till which date different statutes levying sales tax were in force in different areas of the new Mysore State. Prior to the reorganisation of the States, territories of the old Mysore States as it then was and such turnover of the petitioner had been exempted or excluded from taxation under the Madras Act as constituting turnover in respect of transactions in the course of inter-State trade.
It is argued on behalf of the petitioner that the position was not different even after the reorganisation of States until on 1-10-1957 the Mysore Sales Tax Act was passed covering the entire area of the new Mysore State. The argument on behalf of the petitioner is that the continuance of the various laws are statutes by virtue of S. 119 of the States Reorganisation Act makes it possible to contend that for purposes of the several statutes the various territories of the new Mysore State continued to be or must be deemed to be parts of different States.
It is on this basis that the transactions are described as inter-State transactions. It is not possible to accept this contention for the simple reason that no fiction can be permitted to be availed of against undisputed or indisputable facts. The fact is that after the reorganisation of the States South Kanara District as well as the territories of the old Mysore State both belong to and are parts of the same State, the new Mysore state. The legal effect of S. 119 of the States Reorganisation Act is that the territorial operation of the various laws or statutes of different States, parts of which were integrated into the New Mysore State, remained unaffected i.e. they continue to be operative until they are modified or replaced by legislation of competent Legislature or authority.
(2) It is, however, concerned on behalf of the State that before the transactions in question could be subjected to sales tax under the Madras General Sales Tax Act of 1939 they must be of such nature as to be liable to tax under the relevant provisions of that statute. This, according to the learned Government Pleader, is the position in the present case. He relies upon the explanation (2) to clause (b) of S. 2 of the Madras General Sales Tax Act, which defines the term 'sale'. According to that explanation notwithstanding anything to the contrary in the Indian Sale of Goods Act, 1930, the sale or purchase of any goods shall be deemed, for the purposes of this Act, to have taken place inside the State of Madras, wherever the contract of sale or purchase might have been made--(a) if the goods were actually in the State Madras at the time when the contract of sale or purchase in respect thereof was made, or (b) in case the contract was for the sale or purchase of future goods by description, then, if the goods are actually produced in the State of Madras at any time after the contract of sale or purchase in respect thereof was made. The contention on behalf of the State is that in actual event the goods, which are the subject-matter of the transactions in question, were undoubtedly in the District of South Kanara at the time the contract of sale or purchase was entered into or, if subsequently produced, they were produced within the District of South Kanara.
If this is the position on facts, there can be no doubt that the turnover in respect of these sales would be liable to tax under the Madras Act. This fact, however, has not been investigated for the reason that the only contention pressed before the assessing authority was the contention regarding inter-State trade.
(3) The learned Counsel on behalf of the petitioner however requests us that he should now be given an opportunity to establish that even upon an application of Explanation (2) to S. 2(h) already referred to he will be able to show that the transactions were really not liable to tax. Although this point was not raised in its present shape, we think that the petitioner must be taken to have raised this point in the interests of justice for the reason that although he questioned the authority of the assessing authority to impose the tax on the ground that these are transactions in the course of inter state trade, the substance of the contention raised was that the transactions were between persons residing in different territories of the State governed by different laws relating to Sales Tax.
No question of limitation preventing the authorities from re-determining or revising the amount of tax can arise because such revision, if found necessary, will be made in the course of the assessment itself which, by virtue of the pendency of this writ petition impugning its correctness, must be deemed to be still pending and incomplete. The learned Counsel for the petitioner also concedes that no question of limitation barring the assessing authority from revising the tax in question can arise in the circumstances of this case and he undertaken that his client will not raise this question before the assessing authority.
(4) We, therefore, direct the assessing authority to re-examine the question whether the disputed turnover in the sum of Rs. 4254-35 is or is not liable to tax by virtue of the sale being one not liable to tax within the meaning of the Madras General Sales Tax Act and particularly Explanation (2) to S. 2(H) thereof. The petitioner will be permitted to lead the necessary evidence in support of his contention. The assessing authority, if it accepts the contention of the petitioner and finds the facts necessary for doing so, will revise the assessment in accordance with his finding.
(5) No order as to costs in this petition.
(6) Order accordingly.