Judgment DAS, JJ ( 1 ) THIS appeal, filed under a certificate of fitness granted by the High Court of Patna, is directed against the judgment of that High Court pronounced on 4-12-1952 whereby it dismissed the application made by the appellant company under Art. 226 of the Constitution praying for an appropriate writ or order quashing "the proceedings issued by the opposite parties for the purpose of levying and realising a tax which is not lawfully leviable on the petitioners" and for another ancillary reliefs. ( 2 ) THE relevant facts appearing from the petition filed in support of the appellant company s aforesaid application are as follows : The appellant company is an incorporated company carrying on the business of manufacturing and selling various sera, vaccines, biological products and medicines. Its registered head office is at Calcutta and its laboratory and factory are at Baranagar in rite district of 24-Perganas in West Bengal. IT is registered as a dealer under the Bengal Finance (Sales Tax) Act and its registered number is S. L.a. Its. products have extensive sales throughout the Union of India and abroad, The goods are despatched from Calcutta by rail, steamer or air against orders accepted by the appellant company in Calcutta. THE appellant company has neither any agent or manager in Bihar nor any office, godown or laboratory in that State. On 24-10- 1951 the Assistant Superintendent of Commercial Taxes, Bihar wrote a letter to the appellant company which concluded as follows: "necessary action may therefore be taken to get your firm registered under the Bihar Sales Tax Act. Steps may kindly he taken to deposit Bihar Sales Tax dues in any Bihar Treasury at an early date under intimation to this Department. " ON 18. 12. 1951 a notice was issued by the Superintendent, Commercial Taxes, Central Circle Bihar, Patna calling upon the appellant company (i) to apply for registration and (ii) to submit returns showing its turnover for the period commencing from 26-1-1950 and ending with 30-9-1951. This notice was issued under S. 13 (5) Bihar Sales Tax Act, 1947 (hereinafter called the Act) read with R. 28. It was drawn up according to Form No. 8 prescribed by the rules and was headed "notice of hearing under S. 13 (5)". This notice was issued under S. 13 (5) Bihar Sales Tax Act, 1947 (hereinafter called the Act) read with R. 28. It was drawn up according to Form No. 8 prescribed by the rules and was headed "notice of hearing under S. 13 (5)". THE reason for issuing this notice, as recited therein, was that on information which had come to his possession the Superintendent was satisfied that the appellant company was liable to pay lax but had nevertheless willfully failed to apply for registration under the Act. Thereafter there was some correspondence between the appellant company and the Bihar sales Tax authorities to which it is not necessary to refer in detail. Suffice it to say that while the appellant company denied its liability on the ground inter alia , that it was not resident in Bihar, it carried on no business there, none of its sales took place in Bihar and that it did not collect any sales lax from any person of that State, the Bihar Sales Tax authorities maintained that under S. 33, which was substantially based on Art 286 of the Constitution and was inserted in the Act by the President s Adaptation Order promulgated on 4-4-1951, all sales in West Bengal or any other State under which the goods had been delivered in the State of Bihar as a direct result of the sale for the purpose of consumption in that State were liable to Bihar Sales Tax. EVENTUALLY on 29-5-1952 the Assistant Superintendent of Sales Tax, Bihar called upon the appellant company to comply with the notice by 14-6-1952 and threatened that, in default of compliance, he would proceed to take steps for assessment to the best of his judgment. THE appellant company by its letter dated 7-6. 1932 characterised the notice under S. 13 (5)as ultra vires and entirely illegal and called upon the Superintendent to forthwith rescind and cancel the same. On 10-6-1952 the appellant company presented before the High Court at Patna a petition under An. 226 claiming the relies hereinbefore mentioned. THE respondents did not file any affidavit in opposition controverting any of the allegations of facts made in the petition and it must, accordingly, be taken that those facts are admitted as correct by the respondents. The High Court dismissed the petition on 4-12. 226 claiming the relies hereinbefore mentioned. THE respondents did not file any affidavit in opposition controverting any of the allegations of facts made in the petition and it must, accordingly, be taken that those facts are admitted as correct by the respondents. The High Court dismissed the petition on 4-12. 1952 but on the next day issued a certificate, under Art. 132 (1) of the Constitution, that the case involved a substantial question of law as to the interpretation of the Constitution. Hence the present appeal. . ( 3 ) IN view of the importance of the issues involved in this appeal the states of Madras Uttar Pradesh, Madhya Pradesh. West Bengal Orissa, Punjab, Pepsu, Mysore, Travancore Cochin and Rajasthan applied for and obtained leave to intervene in this appeal. Similar leave was applied for by and was granted to Tata Iron and steel Company Ltd. , and one M. K. Kuriakose. The State of West Bengal, Tata Iron and steel Company Ltd. , and M. K. Kuriakose have supported the appellant company while the rest of the interveners have opposed the appeal. ( 4 ) BEFORE the High Court the question of maintainability of the petition was raised by the respondents as a preliminary objection and it was answered in their favour by the High Court. In its judgment the High Court noticed that facts had not been investigated nor had the liability of the appellant company been determined and that in fact no order of assessment had been made. It pointed out that it was not a case for the Sales Tax Officer usurping a jurisdiction not vested in him by law or acting in excess of his jurisdiction or acting mala fide . THE High Court took the view that the Act undoubtedly conferred jurisdiction on the Sales Tax Officer to investigate the question of liability of a dealer to Sales Tax under the Act and accordingly he was acting well within his jurisdiction in issuing the impugned notice. If on assessment the Sales Tax Officer erroneously holds the appellant liable to any tax, the Act provides for rectifying that error by appeal or revision under Ss. 24 and 25 of the Act. If on assessment the Sales Tax Officer erroneously holds the appellant liable to any tax, the Act provides for rectifying that error by appeal or revision under Ss. 24 and 25 of the Act. ACCORDING to the High Court such a decision, however erroneous, will nevertheless, be a decision within the ambit of his jurisdiction and the High Court cannot interfere with it by a writ of prohibition or certiorari to quash. The High Court accordingly held that the petition was not maintainable and was liable to be dismissed. ( 5 ) WE are unable to agree with the above conclusion. In reaching that conclusion, the High Court appears to have overlooked the fact that the main contention of the appellant company, as set forth in its petition, is that the Act, in so far as it purports to tax a non-resident dealer in respect of an inter-State sale or purchase of goods, is ultra virus the Constitution and wholly illegal. IN the impugned Act them are various provisions laying down conditions which dealers must comply with or submit to, namely, to give only a few instances, compulsory registration of dealers (S. 10), filing of retrun (S. 12), attendance and production of evidence in support of the return (S. 13), production, inspection and seizure of books of account or documents and search of premises (S. 17 ). SECTION 26 prescribes penalties for contravention of the provisions of the Act. These and other like provisions in the Act undoubtedly constitute restrictions on the fundamental right to carry on business which is guaranteed to every citizen of India by Art. 19 (1) (g) of the Constitution. If, as contended, the Act is ultra vires the Constitution and consequently void these onerous conditions can never be justified as reasonable restrictions within the meaning of Cl. (6) of that Article as this Court held in the case of - mohammad Yasin v. Town Area Committee, Jalalabad ,. The same view was also expressed in the - state of Bombay v. United Motors (India) Ltd , and again only recently in - himmatlal Harilal v. State of Madhya Pradesh , ( 6 ) IT is urged that the appellant being a company is not a citizen and cannot, therefore, claim any fundamental right under Art. 19 which is available only to citizens and, therefore, the decisions of this Court referred to above have no application. While it is noteworthy that the second case mentioned above was concerned with the rights of a company, it is, nevertheless, unnecessary, for the purposes of this appeal, to decide whether a juristic person like a company is a citizen as defined in Part II of the Constitution and as such entitled to the benefits of Art. 19. NOR is it necessary to consider whether there has been any infraction of the right to equal protection of the laws guaranteed by Art. 14 in that being a juristic person it cannot claim any of the rights under Art. 19 which only citizens can do. It is also true that Art. 31- which protects citizens and non-citizens alike cannot be availed of as it deals with deprivation of property otherwise than by way of levying or collecting taxes as held by this Court in - ramjilal v. Income-tax Officer, Mohindargarh , and that, therefore, the Act does not constitute an infringement of the fundamental right to property under that Article. It is, however, clear from Art. 265 that no tax can be levied or collected except by authority of law which must mean a good and valid law. THE contention of the appellant company is that the Act which authorises the assessment, levying and collection of sales tax on interstate trade contravenes and constitutes an infringement of Art. 286 and is, therefore, ultra vires , void and unenforceable. If, therefore, this contention be well founded, the remedy by way of a writ must, on principle and authority, be available to the party aggrieved. ( 7 ) IT has been argued that the application was premature, for there has, so far, been no investigation or finding on facts and no assessment under S. 13 of the Act. The appellant company, contending, as it does, that the Act is ultra vires and void, should have ignored the notice served on it and should not have rushed into Court at this stage. THIS line of argument appears to us to be utterly untenable. The appellant company, contending, as it does, that the Act is ultra vires and void, should have ignored the notice served on it and should not have rushed into Court at this stage. THIS line of argument appears to us to be utterly untenable. In the first place, it ignores the plain fact that this notice, calling upon the appellant company to forthwith get itself registered as a dealer, and to submit a return and to deposit the tax in a treasury in Bihar, places upon it considerable hardship, harassment and liability which, if the Act is void under Art. 265 read with Art. 286 constitute, in presenti , an encroachment on and an infringement of its right which entitles it to immediately appeal to the appropriate Court for redress. IN the next place, as was said by this Court in - commissioner of Police, Bombay v. Gordhandas Bhanji , when an order or notice emanates from the state Government or any of its responsible officers directing a person to do something, then, although the order or notice may eventually transpire to be ultra vires and bad in law, it is obviously one which prima facie compels obedience as a matter of prudence and precaution. IT is, therefore, not reasonable to expect the person served with such an order or notice to ignore it on the ground that it is illegal, for he can only do so at his own risk and peril. This Court has said in the last mentioned case that a person placed in such a situation has the right to be told definitely by the proper legal authority exactly where he stands and what he may or may not do. ( 8 ) ANOTHER plea advanced by the respondent State is that the appellant company is not entitled to take proceedings praying for the issue of prerogative writs under Art. 226 as it has adequate alternative remedy under the impugned Act by way of appeal or revision. The answer to this plea is short and simple. ( 8 ) ANOTHER plea advanced by the respondent State is that the appellant company is not entitled to take proceedings praying for the issue of prerogative writs under Art. 226 as it has adequate alternative remedy under the impugned Act by way of appeal or revision. The answer to this plea is short and simple. THE remedy under the Act cannot be said to be adequate and is, indeed, nugatory or useless if the Act which provides for such remedy is itself ultra vires and void and the principle relied upon can, therefore, have no application where a party comes to Court with an allegation that his right has been or is being threatened to be infringed by a law which is ultra vires the powers of the legislature which enacted it and as such void and prays for appropriate relief under Art. 226. AS said by this Court in - himmatlal Harilal Mehta v. State of Madhya Pradesh this plea of the State stands negatived by the decision of this Court in - state of Bombay v. United Motors (India) Ltd. . We are, therefore, of the opinion, for reasons stated above, that the High Court was not right in holding that the petition under Art. 226 was misconceived or was not maintainable. It will, therefore, have to be examined and decided on merits. ( 9 ) COMING, then, to the merits of the petition, the principal question is whether the tax threatened to be lavied on the sales made by the appellant company and implemented by delivery in the circumstances and manner mentioned in its petition is leviable by the State of Bihar. ( 9 ) COMING, then, to the merits of the petition, the principal question is whether the tax threatened to be lavied on the sales made by the appellant company and implemented by delivery in the circumstances and manner mentioned in its petition is leviable by the State of Bihar. The legal capacity of the State of Bihar to tax these sales is questioned on the following grounds, namely : (A) that the sales sought to be taxed having taken place in the course of inter-State trade or commerce and Parliament not having by law provided otherwise, all State are debarred from imposing tax on such sales by reason of Art. 286 (2); (B) that even if the ban under Art. 286 (2) did not apply, the State of Bihar is not competent to impose tax on such sales on a correct reading Art. 246 (3) read with Entry 54 of List II in the Seventh Schedule and Art. 286 (1); (C) that the Bihar Sales Tax Act, 1947 can have no extra-territorial operation and cannot, therefore, impose tax on such sales by a nonresident seller; (D) that on a true construction of the Act itself, it does not apply to the sales sought to be taxed. ( 10 ) THE main contraversy in this appeal has centered round this ground. It raises a question of construction of Art. 286 of the Constitution. In the judgment under appeal, the High Court took the view that sales or purchases in the course of inter-State trade or commerce referred to in Art. 286 (2) must be construed so as to exclude the particular class of sales or purchases described in the Explanation to Cl. (a) of Art. 286 (1) and that, therefore, the provisions of the Bihar Sales Tax Act, 1947, in so far as, they purported to impose tax on such sales, were not in conflict which Art. 286 (2) as so construed. AFTER this decision of the Patna High Court, the question came up for consideration before a Constitution Bench of this Court in - state of Bombay v. United Motors (India) Ltd. ,. The majority of that Bench held that Art. 286 (1) (a), read with the Explanation thereto and construed in the light of Arts. AFTER this decision of the Patna High Court, the question came up for consideration before a Constitution Bench of this Court in - state of Bombay v. United Motors (India) Ltd. ,. The majority of that Bench held that Art. 286 (1) (a), read with the Explanation thereto and construed in the light of Arts. 301 and 304, prohibited the taxation of sales or purchases involving inter-states elements by all States except the State in which the goods were actually delivered for the purpose of consumption therein and that Cl. (2) of Art. 286 did not affect the power of the State in which delivery of the goods was so made to tax the sales or purchases of the kind mentioned in the Explanation, the effect of which was to convert such inter-State transactions into intra-State transactions and to take them out of the operation of Cl. (2) of that Article. IT is quite clear that if this majority view is to prevail, this ground urged by learned counsel for the appellant company and strongly supported by the learned Attorney-General appearing for the interveners, the State of West Bengal and Tata Iron and Steel Company Ltd. , and by learned counsel for M. K. Kuriakose must fail. IT has, accordingly, been pressed upon us that we arc not bound by the majority decision in that appeal from Bombay and that it is still open to us to examine and ascertain for ourselves the true meaning, import and scope of the Article in question. Learned counsel for some of the interveners question our authority to go behind the majority decision. It is, therefore, necessary at this Stage to determine this preliminary question before entering upon a detailed discussion on the question of construction of Art. 286. ( 11 ) IN England, the Court of Appeal has imposed upon its power of review of earlier precedents a limitation, subject to certain exceptions. The limitation thus accepted is that it is bound to follow its own decisions and those of courts of Co-ordinate jurisdiction, and the "full" Court is in the same position in this respect as a division Court consisting of three members. The limitation thus accepted is that it is bound to follow its own decisions and those of courts of Co-ordinate jurisdiction, and the "full" Court is in the same position in this respect as a division Court consisting of three members. THE only exceptions to this rule are : (1) the Court is entitled and bound to decide which of the two conflicting decisions of its own it will follow: (2) the Court is bound to refuse to follow a decision of its own which, though not expressly overruled, cannot, in its opinion stand with a decision of the House of Lords: and (3) the Court is not bound to follow a decision of its own, if it is satisfied that the decision was given per incuriam , e. g. , where a Statute or a rule having statutory effect which would have affected the decision was not brought to the attention of the earlier Court. WHICH, on appeal to the House of Lords, was approved by Viscount Simon in - young v. Bristol Aeroplane Co. . Ltd , 1946 AC 163. A decision of the House of Lords upon a question of law is conclusive and binds the House in subsequent case. An erroneous decision of the House of Lords can be set right only by an Act of Parliament. This limitation was repeated by Lord Wright in - radcliffe v. Ribble Motor Services Ltd , 1939 AC 215. ( 12 ) THE High Court in Australia, which is the highest Court in that Common-wealth has not adopted such a rigid rule. In the tramways case , 1914-18 CLR 54 , the rule was thus laid down by Griffith C. J. : "in my opinion, it is impossible to maintain an abstract proposition that Court is either legally or technically bound by previous decisions. Indeed, it may, in a proper case, be its duty to disregard them. In the tramways case , 1914-18 CLR 54 , the rule was thus laid down by Griffith C. J. : "in my opinion, it is impossible to maintain an abstract proposition that Court is either legally or technically bound by previous decisions. Indeed, it may, in a proper case, be its duty to disregard them. But the rule should be applied with great caution, and only when the previous decision is manifestly wrong, as, for instance, if it proceeded upon the mistaken assumption of the continuance of a repealed or expired Statute, or is contrary to a decision of another Court which this Court is bound to follow; not, I think, upon a mere suggestion that some or all of the members of the later Court might arrive at a different conclusion if the matter was res integra . Otherwise there would be grave danger of want of continuity in the interpretation of law. " In the same case Barton, J. in the concluding paragraph of his judgment expressed himself thus: "in conclusion, I would say that I never thought that it was not open to this Court to review its previous decision upon good cause. The question is not whether the Court can do so, but whether it will, having due regard to the need for continuity and consistency in the judicial decision. CHANGES in the number of appointed Justices can, I take, it never of themselves furnish a reason for review. That the prior decision was that of little more than half their number might be urged with greater fairness, but it cannot be urged against - whybrow s case , 11 CLR I, which was decided by the whole Court then in existence save the Justice who as President of the Arbitration Court, was a party respondent to the order nisi . BUT the Court can always listen to argument as to whether it ought to review a particular decision, and the strongest reason for an overruling is that a decision is manifestly wrong and its continuance is injurious to the public interest. BUT the Court can always listen to argument as to whether it ought to review a particular decision, and the strongest reason for an overruling is that a decision is manifestly wrong and its continuance is injurious to the public interest. " IT is interesting to note that in that case all the Judges agreed that the decision in - whybrow s case , (J 1) was to be treated as open to review although in the end after reviewing the position afresh in the light of new arguments advanced before it the Court came to the same conclusion. amalgamated Society of Engineers v. Adelale Steamship Co. , 1920-28 CLR 129 , may also be referred to as an instance where the High Court of Australia departed from its previous decision. ( 13 ) IN the United States at America there have been a considerable number of cases in which the Supreme Court has explicitly and avowedly overruled its prior decisions but there have been more instances in which the doctrines declared in prior cases have been in part evaded or modified without explicit repudiation. (Willoughby- Constitution the United States, 2nd Edn ). In - state of Washington v. Dawson and C. . (1924) 264 US 219 , Brandies J. , in his dissenting judgment said: "the doctrine of stare decisis should not deter us from overruling that case and those which follow it. The decisions are recent ones. They have not been acqiliesced in. They have not created a rule, of property around which vested interests have clustered. They affect solely matters of a transitory nature. On the other hand, they affect seriously the lives of men, women and children, and the general welfare. stare decisis is ordinarily a wise rule of action. But it is not a universal, inexorable command. The instances in which the courts have disregarded its admonition are many . IN a foot-note to this judgment the learned Judge set out a large number of instances where the earlier decisions had been overruled. In another dissenting judgment in - david Burnet v. Coronado Oil and Gas Co. But it is not a universal, inexorable command. The instances in which the courts have disregarded its admonition are many . IN a foot-note to this judgment the learned Judge set out a large number of instances where the earlier decisions had been overruled. In another dissenting judgment in - david Burnet v. Coronado Oil and Gas Co. , (1931) 285 US 393 , the same learned Judge, after quoting a passage from the judgment of Lurton J. , in - hertz v. Woodman , (1909) 218 US 205 , proceeded to say : stare decisis is usually the wise policy, because in most matters it is more important that the applicable rule of law be settled right. Compare- national Bank of Genesee v. Whitney , (1881) 103 US 99. This is commonly true even where the error is a matter of serious concern, provided correction can be had by legislation. But in cases involving the Federal Constitution. where correction through legislative action is practically impossible, this Court has often overruled its earlier decisions. The Court bows to the lessons of experience and the force of better reasoning recognising that the process of trial and error, so fruitful in the physical sciences, is appropriate also in the judicial function".- IN his separate but concurring judgment in 'mark Graves v. People of the State of New York', (1939) 306 US 466 , Frankfurter J. , observed : "judicial exegesis is unavoidable with reference to an Act like our Constitution, drawn in many particulars with purposed vagueness so as to leave room for the unfolding future. But the ultimate touchstone of constitutionality is the Constitution itself and not what we have said about it". In this case two previous decisions were expressly overruled and two more were impliedly overruled. ( 14 ) WE now come to the Privy Council which, prior to the commencement of our Constitution was the highest Court of Appeal to hear appeals from the Indian High Courts. In re Payment of Compensation to Civil Servants, , in repelling the contention that the Board was bound in law, and without examination, to follow an earlier decision whether they considered it right or wrong the Marquess of Reading said: "their Lordships are unable to hold that this proposition stated in such an extreme form is established. In re Payment of Compensation to Civil Servants, , in repelling the contention that the Board was bound in law, and without examination, to follow an earlier decision whether they considered it right or wrong the Marquess of Reading said: "their Lordships are unable to hold that this proposition stated in such an extreme form is established. It may well be said that the Board would hesitate long before disturbing a solemn decision by a previous Board, which raised an identical or even a similar issue for determination; but for the proposition that the Board is, in all circumstances, bound to follow a previous decision, as it were, blindfold, they are unable to discover any adequate authority. In other words, no inflexible rule, which falls in all circumstances to be applied, has been laid down. " IN the-'attorney-General of Ontario v. Canada Temperance Federation',. Viscount Simon stated the practice of the Board in the following terms: "their Lordships do not doubt that in tendering humble advice to His Majesty, they are not absolutely bound by previous decisions of the Board, as is the House of Lords by its own judgments. In ecclesiastical appeals, for instance, on more than one occasion the Board has rendered advice contrary to that given in a previous case, which further historical research has shown to have been wrong. BUT on constitutional questions it must be seldom indeed that the Board would depart from a previous decision which it may be assumed will have been acted upon both by Governments and subjects". FINALLY, in - 'phanindra Chandra Neogy v. The King', Lord Simonds said : "their Lordships then have before them a decision upon facts which in no material respect differ from those of the present case. Even so, it is, as they recognise, competent for them humbly to tender advice to His Majesty inconsistent with a previous decision, though it can only be in most exceptional circumstances that such a course should be taken. . . Recognising the possibility, they have heard full argument and, having done so, see no reason to doubt the validity of the reasoning or the correctness of the conclusion in - 'h. H. B. Gill v. The King', and they do not think it necessary to repeat what was said there". . . Recognising the possibility, they have heard full argument and, having done so, see no reason to doubt the validity of the reasoning or the correctness of the conclusion in - 'h. H. B. Gill v. The King', and they do not think it necessary to repeat what was said there". ( 15 ) IN considering the applicability of the principles laid down in the decisions herein before mentioned, it should be borne in mind that the English decisions may well have been influenced by considerations which can no longer apply to the circumstances prevailing in India. The error, if any, of the Court of Appeal in England, may be corrected by the House of Lords or eventually by Parliament by a simple majority. THE mistakes, if any, made by the High Court of Australia, if not corrected'' by itself in a subsequent case, could be set right by the Privy Council when appeals were taken there or by the appropriate legislative authority. An error made by the House of Lords or the Privy Council can easily be rectified by Parliament by a simple majority by an amending statute. But in a country governed by a federal Constitution, such as the United States of America and the Union of India are it is by no means easy to amend the Constitution if an erroneous interpretation is put upon by this Court. AN erroneous, interpretation of the Constitution may quite conceivably be perpetuated or may at any rate remain uncertified for a considerable time to the great detriment to public well being. The considerations adverted to in the decisions of the Supreme Court of America quoted above are, therefore, apposite and apply in full force in determining whether a previous decision of this Court should or should not be disregarded or overruled. There is nothing in our Constitution which prevents us from departing from a previous decision if we are convinced of its error and its baneful effect on the general interests of the public. ARTICLE 141 which lays down that the law declared by this Court shall be binding on all Courts within the territory of India quite obviously refers to Courts other than this Court. The corresponding provision of the Government of India Act, 1935 also makes it clear that the Courts contemplated are the Subordinate Courts. ARTICLE 141 which lays down that the law declared by this Court shall be binding on all Courts within the territory of India quite obviously refers to Courts other than this Court. The corresponding provision of the Government of India Act, 1935 also makes it clear that the Courts contemplated are the Subordinate Courts. ( 16 ) THERE are several circumstances relating to the majority decision of the Court in - 'state of Bombay v. United Motors. (India) Ltd. ', to which reference must be made. That appeal was heard immediately before the hearing of the appeal reported as -'state of Travancore-Cochin v. Shanmugha Vilas Cashew Nut Factory', commenced. The two appeals were, as a matter of fact, heard one after the other and judgments were reserved in both of them. The Constitution of the Benches was, however, different. In the first appeal one of the Judges of that Bench expressly differed from the majority decision and another learned Judge did not accept the majority decision on many points. In the second appeal one Judge of the Bench who was not a party to the first appeal, differed from the majority decision in the first appeal. The result, therefore, was that the majority decision was definitely differed from by two Judges. BHAGWATI J. , has now in the judgment he has written in the present appeal which we have had the advantage of reading reconsidered the matter and on further reflection he thinks that the majority decision on the prevent issue was erroneous and he now agrees substantially with the view of Art. 286 (1) (a) road with the Explanation and Art. 286 (2) which was expressed in the two minority judgments referred to above and which is adopted in the judgment now being delivered in the present appeal. IF Bhagwati J. , had then expressed the views he is now doing then the majority in the Bombay appeal would have been 3 to 2 and it we add the opinion of the dissenting Judge in the Travancore-Cochin appeal then judicial opinion would have been divided 3 to 3. In this juxtaposition it is difficult to give the majority decision in the Bombay appeal that amount of sanctity and reverence which is usually attributed to an unretracted majority decision of this Court. In this juxtaposition it is difficult to give the majority decision in the Bombay appeal that amount of sanctity and reverence which is usually attributed to an unretracted majority decision of this Court. ( 17 ) THE majority decision does not merely determine the rights at the two contending parties to the Bombay appeal. Its effect is far reaching as it affects the rights of all consuming pubic. It authorises the imposition and levying of a tax by the State on an interpretation of a constitutional provision which appears to us to be unsupportable. To follow that interpretation will result in perpetuating what, with humility we say, is an error and in perpetuating a tax burden imposed on the people which, according to our considered opinion, is manifestly and wholly unauthorised. IT is not an ordinary pronouncement declaring the rights of two private individuals 'inter se'. It involves an adjudication on the taxing Power of the States as against the consuming public generally. If the decision is erroneous, as indeed we conceive it to be, we owe it to that public to protect them against the illegal tax burdens which the States are seeking to impose on the strength of that erroneons recent decision. ( 18 ) THE third circumstance is that there appears to be some vagueness, if not inconsistency, in the majority judgment itself. of the authorised report the majority judgment says: "the expression 'for the purpose of consumption in that State' must, in our opinion, be understood as having reference not merely to the individual importer or purchaser but as contemplating distribution eventually to consumers in general within the State. Thus all buyers within the state of delivery from out of State sellers, except those buying for re-export out of the State, would be within the scope of the Explanation and liable to be taxed by the State on their inter-State transactions. " This passage seems to suggest that it is only the buyers falling within the Explanation who are liable to be taxed by what has been called in the discussion before us as the delivery State. According to this passage, read by itself, the out-of-State sellers are not considered liable to be taxed on the sales. " This passage seems to suggest that it is only the buyers falling within the Explanation who are liable to be taxed by what has been called in the discussion before us as the delivery State. According to this passage, read by itself, the out-of-State sellers are not considered liable to be taxed on the sales. The whole trend of the rest of the majority judgment and the actual decision therein run counter to this conclusion, for the out-of-State sellers were, by reason of the Explanation, subjected to the taxing power of the delivery State. INDEED, Bihar is claiming to tax the appellant company, an out-of-the State seller, by virtue of the majority decision and all other States intervening and supporting Bihar read the judgment in that way and none of them accepts the quoted passage as containing the actual 'ratio decidendi' of the majority judgment. This confusion, we consider, is also a cogent reason for re-examining that decision. ( 19 ) REFERENCE is made to the doctrine of finality of judicial decisions and it is pressed upon us that we should not reverse our previous decision except in cases where a material provision of law has been overlooked or where the decision has proceeded upon the mistaken assumption of the continuance of a repealed or expired statute and that we should not differ from a previous decision merely because a contrary view appears to us to be preferable. IT is needless for us to say that we should not lightly dissent from a previous pronouncement of this Court. Our power of review. which undoubtedly exists, must be exercised with due care and caution and only for advancing the public well-being. in the light of the surrounding circumstances of each case brought to our notice but we do not consider it right to confine our power within rigidly fixed limits as suggested before us. IF on a re-examination of the question we come to the conclusion, as indeed we have, that the previous majority decision was plainly erroneous then it will be our duty to say so and not to perpetuate our mistake even when one learned Judge who was party to the previous decision considers it incorrect on further reflection. IF on a re-examination of the question we come to the conclusion, as indeed we have, that the previous majority decision was plainly erroneous then it will be our duty to say so and not to perpetuate our mistake even when one learned Judge who was party to the previous decision considers it incorrect on further reflection. We should do so all the more readily as our decision is on a constitutional question and our erroneous decision has imposed illegal tax burden on the counsuming public and has otherwise given rise to public inconvenience or hardship, for it is by no means easy to amend the Constitution. SOMETIMES frivolous attempts may be made to question our previous decisions but if the reasons on which, our decisions are founded are sound they will by themselves be sufficient safeguard against such frivolous attempts. Further the doctrine of 'stare decisis' has hardly any application to an isolated and stray decision, of the Court very recently made and not followed by a series of decisions based thereon. THE problem before us does not involve overruling a series of decisions but only involves the question as to whether we should approve or disapprove, follow or overrule, a very recent previous decision as a precedent. In any case, the doctrine of 'stare decisis' is not in inflexible rule of law and cannot be permitted to perpetuate our errors to the detriment to the general welfare of the public or a considerable section thereof. ( 20 ) IT is pointed out that all the States are realising sales tax in respect of sales or purchasers of goods where the goods are actually delivered or consumption within their respective boundaries on the faith of our previous decision and a revesal of that decision will upset the economy of the States and will indeed render them liable to refund moneys already collected by them as taxes. This circumstance, it is pressed upon us, should alone deter us from; differing from the previous decision. WE are not impressed by this argument. It is not yet been decided by this Court that moneys paid under a mutual mistake of law induced by a wrong judicial interpretation of a statute or the Constitution must necessarily be refundable us money had and received. WE are not impressed by this argument. It is not yet been decided by this Court that moneys paid under a mutual mistake of law induced by a wrong judicial interpretation of a statute or the Constitution must necessarily be refundable us money had and received. If, as contended, moneys so paid are in law refundable the States cannot complain any more than a private individual in similar circumstances could do. Finally, it the State economy is upset the appeal must be to Parliament which under Article 286 (2) itself has ample power to make suitable legislation. IT has given rise to considerable inconvenience and hardship to business people who have not acquiesced in it by any means. To rectify the error by the legislative process is difficult, for a constitutional amendment requires a specified majority which may not always be available and if it involves an amendment of the legislative lists it will require the consent of a requisite number of the States which, in this instance, cannot reasonably be expected. IN the premises, we think that it is precisely a case where, in the public interests, the meaning, scope and effect of Art. 286 should be re-examined afresh in the light of the fresh arguments now advanced before us and the experience we have since acquired. In our judgment the majority decision in - 'state of Bombay v. United Motors (India) Ltd. is, in the circumstances alluded to, open to review and we are entitled to re-examine Art. 286 in order to ascertain its true meaning, scope and effect so far as it is necessary for the purposes of this appeal and we proceed on this basis. ( 22 ) IT is a sound rule of construction of a statute firmly established in England as far back as 1584 when - 'heydon's case'. (1584) 3 Co Rep 7a was decided that- ". . . for the sure and true interpretation at all Statutes in general (be they penal or beneficial, restrictive or enlarging of the common law) four things are to be discerned and considered : 1st. What was the common law before the making of the Act. 2nd. What was the mischief and defect for which the common law did not provide, 3rd. What remedy the Parliament hath resolved and appointed to cure the disease of the Commonwealth, and 4th. What was the common law before the making of the Act. 2nd. What was the mischief and defect for which the common law did not provide, 3rd. What remedy the Parliament hath resolved and appointed to cure the disease of the Commonwealth, and 4th. The true reason of the remedy ; and then the office of all the judges is always to make such construction as shall suppress the mischief, and advance the remedy, and to suppress subtle inventions and evasions for continuance of the mischief, and 'pro privato commodo', and to add force and life to the cure and remedy, according to the true intent of the makers of the Act, 'pro bono publico' ". IN - 'in re, Mayfair Property Co', (1898) 2 Ch 28 Lindley M. R. in 1898 found the rule "as necessary now as it was when Lord Coke reported 'heydon's case. In - 'eastman Photographic Material Co. v. Comptroller General of Patents. Designs and Trade Marks', 1898 AC 571 Earl of Halsbury re-affirmed the rule as follows : "my Lords, it appears to me that to construe the Statute in question, it is not only legitimate but highly convenient to refer both to the former Act and to the ascertained evils to which the former Act had given rise, and to the later Act which provided the remedy. These three being compared I cannot doubt the conclusion " IT appears to us that this rule is equally applicable to the construction of Art. 286 of our Constitution. In order to properly interpret the provisions of that Article it is, therefore, necessary to consider how the matter stood immediately before the Constitution came into force, what the mischief was for which the old law did not provide and the remedy which has been provided by the Constitution to cure that mischief. ( 23 ) THE position with respect to taxation on sales or purchases of goods that prevailed in the country had better be stated in the language of Patanjali Sastri C. J. who delivered the majority judgment in the - 'state of Bombay v. United Motors (India) Ltd. . After expressing the view, based on the authority of the -'wallace Brothers Co. Ltd. v. Commr. After expressing the view, based on the authority of the -'wallace Brothers Co. Ltd. v. Commr. of Income tax, Bombay', that in the case of sales tax, it was not necessary that the sale should take place within the territorial limits of the State in the sense that all the ingredients of a sale, like the agreement to sell, the passing of title, delivery of the goods, etc. , should have a territorial connection with the State and that, broadly, speaking, local activities of buying and selling carried on in the State in relation to local goods would be a sufficient basis to sustain the taxing power of the State, provided of course that such activities ultimately resulted in a concluded sale to be taxed, the learned Chief Justice proceeded to say: "in exercise of the legislative power conferred upon them in substantially similar terms by the Government of India Act, 1933, the Provincial Legislatures enacted Sales Tax laws for their respective Provinces, acting on the principle of territorial nexus referred to above; that is to say, they picked out one or more of the ingredients constituting a sale and made them the basis of their sales tax legislation. Assam and Bengal made, among other things, the actual existence of the goods in the Province at the time of the contract of sale the test of taxability. In Bihar the production or manufacture of the goods in the Province was made an additional ground. A net of the widest range perhaps was laid in the Central Provinces and Berar where it was sufficient if the goods were actually 'found" in the Province at any time after the Contract of Sale or Purchase in respect thereof was made, Whether the territorial nexus put forward as the basis of the taxing power in each case would be sustained as sufficient was a matter of doubt not having been tested in a Court of law. And such claims to taxing power led to multiple taxation of the same transaction by Provinces and cumulation of the burden falling ultimately on the consuming public. This situation posed to the Constitution makers the problem of restricting the taxing power on sales or purchases involving inter-State elements, and alleviating the tax burden on the consumer. And such claims to taxing power led to multiple taxation of the same transaction by Provinces and cumulation of the burden falling ultimately on the consuming public. This situation posed to the Constitution makers the problem of restricting the taxing power on sales or purchases involving inter-State elements, and alleviating the tax burden on the consumer. At the same time they were evidently anxious to maintain the State power of imposing non-discriminatory taxes on goods imported from other States, while upholding the economic unity of India by providing for the freedom of inter-State trade and commerce. In their attempt to harmonise and achieve these somewhat conflicting objectives, they enacted Arts. 286, 301 and 304. " LEAVING out, for the moment, the question as to whether Arts. 301 and 304 have any bearing on the question of construction of Article 286, as to which we entertain a contrary opinion, the above passage quite adequately depicts the picture of chaos and confusion that was brought about in inter-State trade or commerce by indiscriminate exercise of taxing power by the different Provincial Legislatures founded on the theory of territorial nexus between the respective Provinces and the Sales or purchases sought to be taxed. It was to cure this mischief of multiple taxation and to preserve the free flow of inter-State trade or commerce in the Union of India regarded as one economic unit without any provincial barrier that the constitution makers adopted Art. 286 in the constitution which runs as follows : "286. (1) No law of a State shall impose, or authorise the imposition of a tax on the sale or purchase of goods when such sale or purchase takes place (A) outside the State; or (B) in the course of the import of the goods into, or export of the goods out of, the territory of India. EXPLANATION.- For the purposes of sub-clause (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. (2) Except in so far as Parliament may by law otherwise provide, no law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of any goods where such sale or purchase take place in the course of inter-State trade or commerce: PROVIDED that the President may by order direct that any tax on the sale or purchase of goods which has being lawfully levied by the Government of any State immediately before the commencement of this Constitution shall, notwithstanding that the imposition of such tax is contrary to the provisions of this clause, continue to be levied until the thirty-first day of March, 1951. (3) No law made by the Legislature of a State imposing, or authorising the imposition of, a tax on the sale or purchase of any such foods as have been declared by Parliament by law to be essential for the life of the community shall have effect unless it has been reserved for the consideration of the President and has received his assent. " ( 24 ) ARTICLE 286 is in Part XII of the Constitution which deals with "finance, Property, Contracts and Suits. " It is one of the several Articles which are ground under the heading "miscellaneous Financial Provisions" in Chapter I of that Part. It is to be noted that it has not found a place in Part XI, Chapter I whereof deals with "legislative Relations" including "distribution of Legislative Powers" between Praliament and the Legislature of States. The marginal note to Art. 286 is "restrictions as to impostition of tax on the sale or purchase of goods", which, unlike the marginal notes in Acts of the British Parliament, is part of the Constitution as passed by the Constitutuent Assembly, 'prima facie', furnishes some clue as to the meaning and purpose of the Article. Apart from the marginal note, the very language of that Article makes it abundantly clear that its object is to place restrictions on the legislative power of the States with respect to the imposition of taxes on the sales or purchases of goods. IT will be recalled that S. 100 (3), Government of India Act, 1935 read with Entry 48 of List II of the Seventh Schedule to that Act gave power to the Provincial Legislatures to make laws with respect to "taxes on sale of goods and on advertisements. IT will be recalled that S. 100 (3), Government of India Act, 1935 read with Entry 48 of List II of the Seventh Schedule to that Act gave power to the Provincial Legislatures to make laws with respect to "taxes on sale of goods and on advertisements. " Pursuant to the legislative power thus conferred on them, the Provincial Legislatures enacted Sales Tax Acts for their respective Provinces. Although in most of those Acts "sale" was first defined as meaning transfer of the property in the goods, so as to make the passing of the property within the Province the principal basis for the imposition of the tax, yet by means of Explanations to that definition, those Acts gave extended meanings to that word and thereby enlarged the scope of their operation. THE imposition of tax on the sales or purchases of goods on the basis of a very sight territorial connection or nexus resulted in what has been graphically described by Patanjali Sastri C. J. in the passage quoted above from the majority judgment in the Bombay appeal. This imposition of taxes on one and the same transaction of sale or purchase was certainly calculated to hamper and discourage free flow of trade within India regarded as one economic unit. This undesirable state of affairs had to be put right. THEREFORE, while the Constitution makers by Art. 246 (3) road with Entry 54 in List II of the Seventh Schedule to the Constitution conferred power on the Legislatures of Part A and Part B States to make law with respect to "taxes on the sale or purchase of good other than newspapers" they at the same time by Art. 286 clamped on that legislative power several fetters. Broadly a speaking, the letters thus placed on the taxing power of the States are that 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) in the course of import or export or (c) except in so far as Parliament otherwise provides the course of inter-State trade or (c) except and lastly (d) that no law made by the Legislature of a State imposing or authorising the imposition of a tax on the sale or purchase of any such goods as have been declared by Parliament by law to be essential for the of the community shall have effect unless it has been reserved for the consideration of the President and has received his assent. IT should be noted that those are four separate and independent restrictions placed upon the legislative competency of the States to make a law with respect to matters enumerated in Entry 54 of List II. In order to make the ban effective and to leave no loophole the Constitution makers have considered the different aspects of sales or purchases of goods and placed checks on the legislative power of the States at different angles. Thus in cl. (1) (a) of Art. 286 the question of the situs of a sale or purchase engaged their attention and they forged a fetter on the basis of such situs to cure the mischief of multiple taxation by the States on the basis of the nexus theory. IN cl. (1) (b) they considered idea or purchases from the point of view of our foreign trade and placed a ban on the States' taxing power in order to make our foreign trade free from any interference by the States by way of a tax impost. In cl. (2) they looked at sales or purchases in their inter-State character and imposed another ban in the interest of the freedom of internal trade. Finally, in cl. (3) the Constitution makers' attention was rivetted on the character and quality of the goods themselves and they placed a fourth restriction on the States' power of imposing tax on sales or purchases of goods declared to be essential or the life of the community. Finally, in cl. (3) the Constitution makers' attention was rivetted on the character and quality of the goods themselves and they placed a fourth restriction on the States' power of imposing tax on sales or purchases of goods declared to be essential or the life of the community. THESE several bans may overlap in some cases but in their respective scope and operation they are separate and Independent. They deal with different phases of a sale or purchase but nevertheless, they are distinct and one has nothing to do with and is not dependent on the other or others. The States legislative power with respect to a sale or purchase may be hit by one or more of these bans. Thus, take the case of a sale of goods declared by Parliament as essential by a seller in West Bengal to a purchaser in Bihar in which goods are actually delivered as a direct result of such sale for consumption in the State of Bihar. A law made by West Bengal without the assent of the President taxing this sale will be unconstitutional because (1) it will offend Art. 286 (l) (a) as the sale has taken place outside the territory by virtue of the Explanation to cl. (l) (a), (2) it will also offend Art. 286 (2) as the Sale has taken place in the course of inter-State trade or commerce and (3) such law will also be contrary to Art. 286 (3) as the goods are essential commodities and the President's assent to the law was not obtained as required by Cl. (3) of Art. 286. This appears to us to be the general scheme of that Article. ( 25 ) WE come now to the particular bans. Although the Legislatures of the States were empowered by Art. 246 (3) read with Entry 54 of List II to make a law with respect to taxes on Sales or purchases of goods, the different State Legislatures, as already mentioned, considered themselves free to make a law imposing tax on sales or purchases of goods provided they had some territorial nexus with such sales or purchases, e. g. , that one or other of the ingredients or events which go to make up a sale or purchase was found to exist or had happened within their respective territories. Whether they were right or wrong in so acting is a question which has not been finally decided by the courts but the fact is that they did so. THIS resulted in multiple taxation which manifestly prejudiced the interests of the ultimate consumers and also hampered the free flow of inter-State trade or commerce. So the Constitution makers had to cure that mischief. The first thing that they did was to take away the States' taxing power with respect to sales or Purchases which took place outside their respective territories. This they did by cl. (1) (a ). If the matter had been left there, the solution would have been imperfect, for then the question as to which sale or purchase takes place outside a State would yet have remained open. So the constitution makers had to explain what an outside sale was and this they did by the Explanation set forth in cl. (1 ). THE language employed in framing the Explanation, however, has given scope for argument to counsel and presented considerable difficulties to the Court in ascertaining its purpose and intendment. If the Explanation simply said "for the purposes of sub-clause (a), a sale or purchase shall be deemed to have taken place outside a State when the goods have actually been delivered for the purpose of consumption in another State, notwithstanding the fact, etc. , etc. ", then none of the difficulties would have arisen at all. But why, it is asked, did the Constitution makers seek to explain what was an outside sale or purchase by saying that a sale or purchase was to be deemed to take place inside the particular State mentioned in the Explanation? WAS the purpose of the Explanation only to explain what was an outside sale or purchase or was it also its purpose to allot or assign a particular class of sales or purchases of the kind mentioned therein to a particular State so as to put the question of situs of the sales or purchases of that description beyond the pale of controversy? These are questions which arise and are raised because of the somewhat involved language of the Explanation. Four different views as to the true meaning and effect of the Explanation have been suggested for our consideration and arguments have been advanced for and against the correctness of each of them. These are questions which arise and are raised because of the somewhat involved language of the Explanation. Four different views as to the true meaning and effect of the Explanation have been suggested for our consideration and arguments have been advanced for and against the correctness of each of them. In the view we have taken, it is not necessary for us to express any final opinion in the matter. We propose accordingly to note the possible views and record very briefly the criticisms relating to each of those views and the suggested answers to such criticisms. ( 26 ) ONE view which has been called the strict view is this. In cl. (1 ) (a) the Constitution makers have placed a ban on the taxing power of the States with respect to sales or purchases which take place outside the State. If the matter had been left there the ban would have been imperfect, for the argument would have still remained as to where a particular sale or purchase took place. Does a sale or purchase take place at the place where the contract of sale is made, or where the property in the goods passes or where the goods are delivered? These questions are answered by the Explanation. THAT Explanation is "for the purposes of sub-clause (a)" i. e. , for the purpose of explaining which sale or purchase is to be regarded as having taken place outside a State. By saying that a particular sale or purchase is to be deemed to take place in a particular State the Explanation only indicates that such sale or purchase has taken place outside all other States. The Explanation is neither an Exception nor a Proviso but only explains what is an outside sale referred to in sub-cl. (a ). This it does by creating a fiction. That fiction is only for the purposes of sub-cl. (a) and cannot be extended to any other purpose. IT should be limited to its avowed purpose. To say that this Explanation confers legislative power on what for the sake of brevity has been called the delivery State is to use it for a collateral purpose which is not permissible. That fiction is only for the purposes of sub-cl. (a) and cannot be extended to any other purpose. IT should be limited to its avowed purpose. To say that this Explanation confers legislative power on what for the sake of brevity has been called the delivery State is to use it for a collateral purpose which is not permissible. Further, it is utterly illogical and untenable to say that Article 286 which was introduced in the Constitution to place 'restrictions' on the legislative powers of the States, by a side wind, as it were, gave enlarged legislative powers to the State of delivery by an explanation sandwiched between two 'restrictions'. THIS construction runs counter to the entire scheme of the Article and the Explanation and one may see no justification for imputing such indirect and oblique purpose to this Article. Had the Constitution makers so desired they could have done so in a more direct and straightforward way. To hold that the Explanation has, besides its declared purpose, another hidden purpose of conferring or enlarging legislative power is to build up a fanciful argument merely on the unfelicitous and involved language used in the Explanation although it is distinctly not the purpose of the Explanation and although it does not purport substantively and 'proprio vigore', to confer any legislative power on any State. ITS only purpose is to explain what an outside sale is, so that, by one stroke, as it were, it takes away the taxing power, in respect of sales or purchases of the kind referred to in the Explanation, of all States other than the State where such sales or purchases are, by the Explanation, to be deemed to have taken place. This view of the Explanation was taken in the dissenting judgment in the case of the -- 'state of Travancore-Cochin v. Shanmugha Vilas Cashew Nut Factory. The view that the Explanation is only for the purposes of sub-cl. (a) of cl. (1) and cannot be carried over to cl. (2) was also taken in the dissenting judgment in the 'state of Bombay v. United Motors (India) Ltd. ( 27 ) THE criticism that has been levelled against this strict view of the Explanation is that it will not entirely eliminate the claims of the States to tax sales or purchases on the basis of the nexus theory. (2) was also taken in the dissenting judgment in the 'state of Bombay v. United Motors (India) Ltd. ( 27 ) THE criticism that has been levelled against this strict view of the Explanation is that it will not entirely eliminate the claims of the States to tax sales or purchases on the basis of the nexus theory. Suppose it is said, Parliament lifts the ban placed on inter-State trade or commerce by cl. (2), all States will in that stituation, claim, the right to tax sales or purchases if any one at the ingredients or events making up the sale is to be found to exist or to have happened in that State. It has been suggested in reply to this criticism that this apprehension is not at all. well-founded. When Parliament will lift the ban imposed by cl. (2) the Explanation will continue to operate, so that inter-State sales or purchases falling with it will still be deemed to have taken place in the delivery State and, therefore, outside all other States none of which latter States will, by reason of the ban imposed by cl. (1) (a), be entitled to tax such sale. THE ban under cl. (2) being lifted, the delivery State will become free to tax such sales or purchases in exercise of the taxing power conferred on it by Art. 246 (3) read with Entry 54, in List II. Then, it is asked, what will happen to those sales or purchases which do not fall within the Explanation? After Parliament lifts the ban under cl. (2) which State will tax sales or purchases in which goods are actually delivered in a particular State, not for consumption in that State but say, for re-export, to another State for consumption? One of the suggested answers was that those sales or purchases were not likely to be numerous, for ordinarily a dealer would not actually get the goods imported into a State only for re-exporting the same to another State for consumption in the last mentioned State but would find it more convenient and economical to arrange for the delivery of the goods straight to the last mentioned State. A further suggestion was that it might well be that when Parliament would by law lift the ban of cl. A further suggestion was that it might well be that when Parliament would by law lift the ban of cl. (2) it would, by the same law, provide which of the States would tax such inter-State sales or purchases which were not covered by the Explanation and on what basis. This suggested answer, in its turn, raises a question as to the scope and ambit of the legislative power conferred on parliament by cl. (2 ). The opening words of cl. (2) namely, "except 'in so far as; parliament may by law otherwise provide" clearly indicate that the lifting of the ban may be total or partial, that is to say, parliament may lift the banan wholly and unconditionally or it may lift it to such extent as it may think fit to do and on such terms as it pleases. IT is to be remembered that under Entry 42 of List I Parliament alone may make law with respect to inter-State trade or commerce. It is, therefore, conceded that in exercise of its legislative powers under that entry read with Art. 286 (2) Parliament may make a law permitting the States to tax inter-State sales or purchases of certain commodities only. It is also not questioned that Parliament may, by way of regulating inter-State trade or commerce fix a ceiling rate of tax on sales or purchases of goods which the law made by the States under Entry 54 of List II, may not exceed. Can Parliament also override the Explanation ? If not, cannot Parliament at least provide which of the States may tax inter-State sales or purchases of goods which do not fall within the Explanation? THESE are some of the questions which may arise as and whnd when Parliament will choose to make a law in exercise of the powers conferred on it and it will then be time enough to discuss and decide those questions. It is not for the Courts to advise Parliament in advance as to the scope of its legislative competency under cl. (2) and, therefore, we only note those questions and leave them here. It is not for the Courts to advise Parliament in advance as to the scope of its legislative competency under cl. (2) and, therefore, we only note those questions and leave them here. ( 28 ) THE second view as to the meaning and effect of the Explanation is that it once for all fixes the situs of a sale or purchase so, that one knows when such a sale or purchase is outside a State and when it, is inside a State. To put it differently, States are told when a sale or purchase is inside a particular State and, therefore the States are also told when a sale or purchase is outside a State. In short the Explanation not only explains what is an outside sale or purchase but also actually fixes the situs of a sale or purchase in a particular State. THIS view of the Explanation was taken in the majority decision in 'state of Bombay v. United Motors (India) Ltd. . The majority decision quite clearly concedes that the Explanation does not, by itself, confer any legislative power on any State, not even the delivery State, with respect to sales or purchases of the kind mentioned therein but as it fixes the situs of such sales or purchases in the delivery State that State is left free to tax them in exercise of its legislative powers under Art. 246 (3) read with Entry 54 of List II. THE criticism offered against this view is, first of all, that it uses the Explanation for a purpose which is beyond that of sub-cl. (a ). This view turn the fiction created expressly for sub-cl. (a) into a reality fixing the location of such sales and purchases for all purposes. In the next place this view ignores the existence of cl. (2) which imposes a different ban on the legislative power of all States including the delivery State also, so that as long as Parliament does not lift the ban no State, not even the delivery State, may tax sales or purchases which take place in the course of inter-State trade or commerce, even though they may fall within the Explanation. "the further objection is that this view also does not completely eliminate the confusion arising from the nexus theory. Suppose Parliament lifts the ban under cl. "the further objection is that this view also does not completely eliminate the confusion arising from the nexus theory. Suppose Parliament lifts the ban under cl. (2), which State will tax sales or purchases which do not come within the Explanation? The same answer was suggested as was done in reply to similar objections to the first view. 'that, as we have said, will call for decision if and when Parliament exercises its legislative powers under cl. (2 ). ( 29 ) THE third view, which was adumbrated and discussed in the separate judgment of Bhagwati J. in the case of State of Bombay v. United Motors (India) Ltd. is that the Explanation concerns itself with notionally fixing the situs of sales or purchases in the delivery State only but in no way affects the taxing power of the State in which, under the general law relating to the sale of goods, the property in the goods has passed. The result of this view is said to be that the State in which the sales or purchases are to be deemed to have taken place may tax them but the State in which, under the general law relating to the sale of goods, the property in the goods has passed may also tax them if and when Parliament lifts the ban of cl. (2 ). THIS view, it is said, is open to all the criticisms to which the second view is subject and in addition to that a further objection has been suggested against this view, namely, that it will perpetuate double, if not multiple, taxation on one and the same transaction of sale or purchase at least after Parliament lifts the ban. ( 30 ) A fourth view has also been suggested before us as a possible view although it was not put forward on the previous occasion. It is founded on the 'non-obstante' clause in the Explanation. It is said that cl. (1) (a) and the Explanation concern themselves with only two States, namely the title State, i. e. , the State in which, under the general law, title to the goods passes to the purchaser and the delivery State, i. e. , the State in which goods are actually delivered as a direct result of the sale or purchase for consumption in that State. The purpose of the Explanation is said to be to demarcate the taxing power of only these two States by taking out the sales or purchases of the kind mentioned therein from the sphere of the taxing power of the title State and subjecting them to the taxing power of the delivery State. IN the juxtaposition of those two States clause (1) (a) read with the Explanation provides that the title State cannot tax because such sales or purchases are, by the fiction, made to take place outside its territory and that the delivery State can tax because the sales or purchases in question are, by the fiction, made to take place inside its territory. In short the result of clause (1) (a) read with the Explanation, according to this view, is that the State which cannot tax such sales or purchases on the ground that they have taken place outside its territory is only that State in which the property in the goods has passed. THE criticism is immediately put forward that if cl. (1) (a) and the Explanation are limited in their operation only to the two States mentioned above then the other States which also claimed to tax on the strength of the nexus theory, e. g. , the State where the contract was made, or the State where the goods were produced or manufactured or were found, will be outside the ban and the mischief of multiple taxation which the Constitution makers were out to curb will continue to be rampant and unabated. This view is also subjected to some of the other criticisms mentioned in connection with the other views of the Explanation. ( 31 ) AS we have already stated, we do not desire, on this occasion, to express any opinion on the validity claimed for or the infirmities imputed to any of these several views, for, in our opinion, it is not necessary to do so for disposing of this appeal. Whichever view is taken of the Explanation it should be limited to the purpose the Constitution makers had in view when they incorporated it in cl. (1 ). It is quite obvious that it created a legal fiction. Legal fictions are created only for some definite purpose. Here the avowed purpose of the Explanation is to explain what an outside sale referred to in sub-cl. (a) is. (1 ). It is quite obvious that it created a legal fiction. Legal fictions are created only for some definite purpose. Here the avowed purpose of the Explanation is to explain what an outside sale referred to in sub-cl. (a) is. THE judicial decisions referred to in the dissenting judgment in 'state of Travancore-Cochin v. Shanmugha Vilas Cashew Nut Factory and the case of - "east End Dwellings Co. Ltd. v. Finsbury Borough Council', 1952 AC 109 clearly indicate that a legal fiction is to be limited to the purpose for which it was created and should not be extended beyond that legitimate field. It should further be remembered that the dominant, if not the sole, purpose of Art. 286 is to place restrictions on the legislative powers of the States, subject to certain conditions in some cases and with that end in view Art. 286 imposes several bans on the taxing power of the States in relation to sales or purchases viewed from different angles and according to their different aspects. IN some cases the ban is absolute as, for example, with regard to outside sales covered by cl. (1 ) (a) read with the Explanation, or with regard to imports and exports covered by cl. (l) (b) and in some cases it is conditional, e. g. , in the cases of inter-State sales or purchases under cl. (2) which is. in terms, made subject to the proviso thereto and also to the power of Parliament to lift the ban. Again, in some cases the bans may overlap but nevertheless, they are distinct and independent of each other. The operative provisions of the several parts of Art. 286, namely, cl. (1) (a), cl. (1) (b), cl. (2) and cl. (3) are manifestly intended to deal with different topics and, therefore, one cannot be projected or read into another. ON a careful and anxious consideration of the matter in the light of the fresh arguments advanced and discussions held on the present occasion we are definitely of the opinion that the Explanation in cl. (l) (a) cannot be legitimately extended to cl. (2) either as an exception or as a proviso thereto or read as curtailing or limiting the ambit of cl. (2 ). (l) (a) cannot be legitimately extended to cl. (2) either as an exception or as a proviso thereto or read as curtailing or limiting the ambit of cl. (2 ). Indeed, in 'state of Bombay v. United Motors (India) Ltd. the majority judgment also accepted the position that the Explanation was not an exception or proviso either to Cl. (1) (a) or to Cl. (2 ). IF, therefore, the Explanation cannot be read into Cl. (2) because of the express language of the Explanation and also because of the different in the subject-matter of the operative provisions of the two clauses, then it must follow that, except in so far as Parliament may by law provide otherwise, no State law can impose or authorise the imposition of any tax on sales or purchases when such sales or purchases take place in the course of inter-State trade or commerce and irrespective of whether such sales or purchases do or not fall within the Explanation. IT is not necessary, for the purpose of this appeal, to enter upon a discussion as to what is exactly meant by inter-State trade or commerce or by the phrase "in the course of", for, it is common ground that the sales or purchases made by the appellant company Which are sought to be taxed by the State of Bihar actually took place in the course of inter-State trade or commerce. PARLIAMENT not having by law otherwise provided, no State law can, therefore, tax these sales or purchases, that is to say, Bihar cannot tax by reason of Cl. (2) although they fall within the Explanation and other States cannot tax by reason of both Cl. (1) (a) read with the Explanation and Cl. (2 ). This conclusion leads us now to consider the arguments by which the respondent State and the intervening states which support the respondent State seek to get over this position. ( 32 ) IN the forefront is placed the argument that found favour with the majority of the Bench which decided the case of -- 'state of Bombay v. United Motors (India) Ltd. ',. That argument is to be found in the majority judgment. Shortly put, the majority opinion was that the operation of Cl. (2) stood excluded as a result of the legal fiction enacted in the Explanation. That argument is to be found in the majority judgment. Shortly put, the majority opinion was that the operation of Cl. (2) stood excluded as a result of the legal fiction enacted in the Explanation. In their view, the effect of the Explanation in regard to inter-State dealings was to invest what, in truth, was an inter-State transaction with an intra-State character in relation to the State of delivery and Cl. (2) could, therefore, have no application. THEY recognised that the legal fiction was to operate "for the purposes of sub-clause (a) of Cl. (1) and that that meant merely that the explanation was designed to explain the meaning of the expression "outside the State" in Cl. (1) (a ). They, nevertheless, came to the conclusion that when once it -was determined with the aid of the fictional test that a Particular sale or purchase had taken place within the taxing State, it followed as a corollary, that the transaction lost its inter-State character and fell outside the purview of Cl. (2), not because the fiction created by the Explanation was used for the purpose of Cl. (2), but because such sale or purchase became, in the eye of the law, a purely local transaction. IN his own inimitable language the learned Chief Justice, who wrote and delivered the majority judgment, concluded the discussion on this point by saying that the statutory fiction completely masked the inter-State character of the sale or purchase which as a collateral result of such making, fell outside the scope of Cl. (2 ). In spite of the great respect we always entertain for the opinions of the then learned Chief Justice and the other learned Judges who constituted the majority we are unable to accept the aforesaid arguments or the conclusions as correct for the reasons we now proceed to state. ( 33 ) THE 'situs' of an intangible concept like a sale can only be fixed notionally by the application of artificial rules invented either by Judges as part of the judge-made law of the land, or by some legislative authority. But as far as we know, no fixed rule of universal application has yet been definitely and finally evolved for determining this for all purposes. But as far as we know, no fixed rule of universal application has yet been definitely and finally evolved for determining this for all purposes. There are many conflicting theories: ONE, which is more popular and frequently put forward and is referred to and may, indeed, be urged to have been adopted by the Constitution in the 'non-obstante' clause of the Explanation, favours the place where the property in the goods passes, another which is said to be the American view and which was adopted in - 'g. Govindarajulu Naidu and Co. v. State of Madras', fixes upon the place where the contract is, concluded, a third which prevails in the continental countries of Europe prefers the place where the goods sold are actually delivered, a fourth points to the place where the essential ingredients which go to make up a sale are most densely grouped. IN this situation if the Explanation were not there and the ban under Cl. (2) were to be raised unconditionally it would become necessary, for the Court to reach a conclusion and choose between these conflicting views. Art. 286 (1) (a), it should be noted, does not say that an inside sale may be taxed. It only says that no outside sale shall be taxed. Now if a State claims that the sale is inside because part of its ingredients lies without its boundaries, by the same logic it is also an outside sale because the remaining parts are outside its territories and if it is an outside sale it cannot be taxed whether or not it can be deemed to be inside for some particular purpose. THE prohibition of Art. 286 (1) (a) is against taxing an outside sale and is the said is outside even partially it may well be argued that no State legislature can override the Constitution by deeming it to be an inside sale Therefore, if the last of the aforesaid theories were to be adopted, the neither no State would be able to tax, or all having the requisite nexus would be able to do so. But this, in our opinion, is the very mischief which the Constitution makers wished to avoid and that, as we understand the majority judgment in the Bombay case, was their view also. SO that view can be placed on one side. But this, in our opinion, is the very mischief which the Constitution makers wished to avoid and that, as we understand the majority judgment in the Bombay case, was their view also. SO that view can be placed on one side. On any one of the other views the 'situs' would have to be fixed artificially in one place and then one would have to apply the logic of the majority decision and hold that as soon as the 'situs' is determined to' be in one place by judicial fiction, i. e. , a fiction enunciated by judicial decision, the inter-State character of the transaction must cease. The majority hold that this is the result when the 'situs' is placed in only one State, namely, the delivery State, because of the fiction which the Explanation creates. The same result would have to follow logically if the 'situs' were to be established by judicial fiction instead of by a constitutional one. THE reasoning of the majority, pushed to its logical conclusion, will inevitably lead us to hold that all inter-state transactions must eventually be converted into intra-State transactions and, therefore, become amenable to the taxing power of the State within whose territories they are, by the constitutional or judicial fiction, to be deemed to take place. In this view there will remain no inter-State-transaction on which Cl. (2) may possibly operate. THE argument which leads to this astounding conclusion has only to be stated to be rejected. The truth is that what is an inter-State sale or purchase continues to be so irrespective of the State where the sale is to be located either under the general law when it is finally determined what the general law is or by the fiction created by the Explanation. The 'situs' of a sale or purchase is wholly irrelevant as regards its inter-State character. WE find no cogent reason in support of the argument that a fiction created for certain definitely expressed purposes, namely, the purposes of Cl. (1) (a) can legitimately be used for the entirely foreign and collateral purpose of destroying the inter-State character of the transaction and converting it into an intra-State sale or purchase. Such metamorphosis appears to us to be beyond the purpose and purview of Cl. (1) (a) and the Explanation thereto. (1) (a) can legitimately be used for the entirely foreign and collateral purpose of destroying the inter-State character of the transaction and converting it into an intra-State sale or purchase. Such metamorphosis appears to us to be beyond the purpose and purview of Cl. (1) (a) and the Explanation thereto. When we apply a fiction all we do is to assume that the situation created by the fiction is true. Therefore, the same consequences must flow from the fiction as would have flown had the facts supposed to be true been the actual facts from the start. NOW, even when the 'situs' of a sale or purchase is in fact inside a-State, with no essential ingredient taking place outside, nevertheless, if it takes place in the course of inter-State trade or commerce, it will be hit by Cl. (2 ). If the sales or purchases are in the course of inter-State trade or commerce the stream of inter-State trade or commerce will catch up in its vortex all such sales or purchases which take place in its course wherever the 'situs' of the sales or purchases may be. All that the Explanation does is to shift the 'situs' from point A in the stream to point X also in the stream. It does not lift the sales or purchases out of the stream in those cases Where they form part of the stream. THE shifting of the 'situs' of a sale or purchase from its actual 'situs' under the general law to a fictional 'situs' under the Explanation takes the sale or purchase out of the taxing power of all States other than the State where the 'situs' is fictionally fixed. That is all that Cl. (1) (a) and the Explanation do. Whether the delivery State will be entitled to tax such a sale or purchase will depend on the other Provisions of the Constitution. The assignment of a fictional 'situs' to a sale or 'purchase has no bearing or effect on the other aspects of the sale or purchase, e. g. , its inter-state character or its export or import character which are entirely different topics. THIS fixing of a 'situs' for a sale or purchase in any particular State either under the general law or under the fiction does not conclude the matter. THIS fixing of a 'situs' for a sale or purchase in any particular State either under the general law or under the fiction does not conclude the matter. It has yet to be ascertained whether that sale or purchase which by virtue of the Explanation has taken place in the delivery State was made in the course of inter-State trade or commerce. For this purpose the explanation can have no relevancy" or application at all. ( 34 ) ANOTHER argument adumbrated in the majority judgment in - 'state of Bombay v. United Motors (India) Ltd. elaborated before us is that just as the freedom of trade referred to in Art. 301 has been made to give way to the States' power of imposing non-discriminatory taxes by Art. 304 so must Art. 286 (2) be regarded as subject to the States taxing power for the protection of Art. 286 (2) could not have been intended to be larger. THIS argument was refuted by the dissenting judgment in that - 'bombay case, and also by the dissenting judgment in -- 'state of Travancore-Cochin v. Shanmugha Vilas Cashew Nut Factory. Nothing that we have heard on the present occasion induces us to depart from the views expressed on this subject in those dissenting judgments. ( 35 ) IT is next urged that the Explanation in effect operates as an exception or a proviso to Cl. (2 ). This view runs directly counter to the express language of the Explanation itself. So the argument is formulated in a slightly different way. It is said that O. (2) contains the enunciation of the general rule and the Explanation embodies a particular or special rule. According to a cardinal rule of construction the particular or special rule must control or cut down the general rule. THIS view was adopted by the High Court in the judgment under appeal and also found favour with one of the Judges in the -'bombay case',. It appears to us that this argument overlooks the basic fact that Cl. (1) (a) to which is appended the Explanation and Cl. (2) deal with different topics altogether. The Explanation is concerned with explaining what is an outside sale or purchase by fixing a fictional 'situs'. It cannot be read as a provision independent of Cl. (1) (a ). IT does not, by itself and in terms, confer any legislative power on any State. (2) deal with different topics altogether. The Explanation is concerned with explaining what is an outside sale or purchase by fixing a fictional 'situs'. It cannot be read as a provision independent of Cl. (1) (a ). IT does not, by itself and in terms, confer any legislative power on any State. It is true that the Explanation may apply to fix the 'situs' of many inter-State transactions but trial is only for ascertaining, for the purposes of Cl. (1) (a), whether it has taken place inside or outside a particular State. The inter-State aspect of the sales or purchases is not within the purview of Cl. (1) (a) which looks at sales or purchases from the point of view of their location only. Cl. (2), on the other hand, takes note of the inter-State character of sales or purchase which is an entirely different topic. THE two provisions do not relate to the same subject and, therefore, it is not possible to hold that one is the enunciation of a general rule and the other the enunciation of a particular or special rule on one and the same subject. The principle of construction relied upon cannot, in our opinion, be called in aid in construing Cl. (2) and the Explanation of Cl. (1) (a ). If the Explanation cuts down Cl. (2), it must also, on a parity of reasoning, cut down Cl. (3) which, as will hereinafter be explained more fully, could not possibly have been intended by the Constitution makers. IT must also cut down Cl. (1) (b) dealing with import and export; but to hold that would run, counter to the decision in --'state of Travancore-Cochin v. Bombay Co. Ltd. ',. In our opinion to use the Explanation to cut down the operation of Cl. (2) or Cl. (3) will be to use it for a purpose other than its legitimate and avowed purpose. ( 36 ) THE same argument is put in a slightly different way and in a more attractive form. It is said that we must construe Art. 286 as a whole and give meaning to every part of it. Sales or purchases which fall within the Explanation to Cl. (1) (a) clearly partake of the character of inter-State transactions. Therefore, if we construe C. (2) of Art. 286 literally and strictly then the whole of Cl. It is said that we must construe Art. 286 as a whole and give meaning to every part of it. Sales or purchases which fall within the Explanation to Cl. (1) (a) clearly partake of the character of inter-State transactions. Therefore, if we construe C. (2) of Art. 286 literally and strictly then the whole of Cl. (1) (a) and the Explanation will be redundant and useless and will have no immediate operation and will remain a dead letter, at any rate, until Parliament, in exercise of its powers under Cl. (2), lifts the ban. WE must, it is urged, make an attempt to avoid such a result and adopt such a construction as will not only give effect to each part of the Article out also make each part applicable 'in presenti'. That, it is pointed out, can well be done if Cl. (2) is interpreted in a restricted manner. The argument runs - give full and immediate effect to the Explanation and then leave Cl. (2) to govern or operate on cases which do not fall within the Explanation. IN effect this argument means that we must treat all transactions of sales or purchases falling within the Explanation as outside Cl. (2 ). Shorn of its thin veneer of disguise this argument is nothing more than the argument that the Explanation, in effect, operates as an exception to Cl. (2) and all the criticisms applicable to that construction will apply 'mutatis mutandis' to the argument in the present form. Apart from that there are convious fallacies which render the argument utterly unacceptable. We now proceed to deal with these fallacies 'seriatim'. ( 37 ) (I) In the first place, the mere circumstance that a provision in the Constitution will, on a proper construction, take effort on the happening of a future event can, by itself, be no ground for not giving effect to the plain language of that provision. Take the very next provision in Art. 286 itself, namely, Cl, (3) It has no present application and its usefulness will ensue only when Parliament by law declares certain goods to be essential for the life of the community. THE fact that the Explanation, in so far as it, relates to inter-State sales, may not have an immediate operation until Parliament lifts the ban under Cl. THE fact that the Explanation, in so far as it, relates to inter-State sales, may not have an immediate operation until Parliament lifts the ban under Cl. (2) need not unnecessarily oppress us or lead us to adopt a forced construction only to give the whole of it an immediate and present operation. ( 38 ) (II) In the second place, it is not correct to say that the Explanation construed as suggested above, can have no immediate operation at all. It certainly has immediate operation to render sales and purchases which fall within the explanation to be outside sales and purchases so as immediately to take away the, taxing power of all States other than the delivery State with respect to them. Further cases may arise in which purchases or sales which are outside Cl. (2) may, nevertheless, fall within and be immediately governed by the Explanation. We do not wish to express any opinion on hypothetical cases but the following illustration will show that on a given view of the law the Explanation would be called into play despite the fact that Cl. (2) was not attracted. TAKE, for instance, a case where both the seller and the buyer reside and carry on business in Gurgaon in the State of Punjab. Let us say that the seller has a godown in the State of Delhi where his goods are stored and that the buyer has also a retail shop at Connaught Circus also in the State of Delhi. The buyer and the seller enter into a contract at Gurgaon for the sale of certain goods and a term of the contract is that the goods contracted to be sold will be actually delivered from the seller's godown to the buyer's retail shop, both in the State of Delhi, for consumption in the State of Delhi. Pursuant to this contract made in Gurgaon in the State of Punjab, the buyer pays the full price of the goods at Gurgaon and the seller hands over to the buyer also at Guargaon a delivery order addressed to the seller's godown-keeper in Delhi to deliver the goods to the buyer's retail shop. AS a direct result of this sale the Seller's godown-keeper, on the presentation of this delivery order, actually delivers the goods to the buyer's retail shop at Connaught Circus for consumption in the State of Delhi. AS a direct result of this sale the Seller's godown-keeper, on the presentation of this delivery order, actually delivers the goods to the buyer's retail shop at Connaught Circus for consumption in the State of Delhi. On one view of the law, the 'situs' of such a sale would be Gurgaon. We need not decide that it is, because that type of case is not before us and of there may be other views to consider, but it is certainly a possible view. IT is also possible to hold that this is not Inter-State trade or commerce, because there is no movement of goods across a State boundary Again, we need not decide that because that also may be controversial. But given there two postulates, the transaction would fall squarely within the Explanation and yet it would not come within Cl. (2), for there is no movement of the goods across the border of any State and both the seller and the buyer are in the same place. Surely, the Explanation will, 'in presenti', govern such cases irrespective of whether Parliament has lifted the ban under Cl. (2 ). IF these postulates are accepted then by the virtue of Cl. (1) (a) road with the Explanation the State of Delhi alone will be entitled to impose a tax on such a sale or purchase and the State of Punjab will be precluded from doing so by reason of the fictional 'situs' assigned to such a sale or purchase by the Explanation, although the contract was made price was paid and symbolical or constructive delivery of the goods by the handing over of the delivery order took place in Gurgaon in the State of Punjab. ( 39 ) (III) It is not correct to say that Cl. (1) (a) read with the Explanation is wholly useless. It may well be argued that there was scope for the operation of Cl. (1) (a) and the Explanation as and when the President exercised the powers vested in him by the Proviso to Cl. (2 ). It will be noticed that under that proviso the President's order was to take effect "notwithstanding that the imposition of such tax is contrary to the provisions of this clause". This 'non obstante' clause does not, in terms, supersede Cl. (1) at all and, therefore, 'prima facie', the President's order was subject to the prohibition of Cl. (2 ). It will be noticed that under that proviso the President's order was to take effect "notwithstanding that the imposition of such tax is contrary to the provisions of this clause". This 'non obstante' clause does not, in terms, supersede Cl. (1) at all and, therefore, 'prima facie', the President's order was subject to the prohibition of Cl. (1) (a) read with the Explanation. IT is, however, pointed out that the proviso says that any tax which was being lawfully levied by the States immediately before the commencement of the constitution will continue to be levied until the date therein specified. It is said that before the constitution, sales tax was levied by the different States on the basis of the 'nexus' theory irrespective of the 'situs' of the sales or purchases and, therefore, this very proviso clearly indicates that the intention of the constitution makers was that all taxes imposed on the basis of the 'nexus' theory must continue irrespective of the provisions of the Explanation which fictionally fixes the 'situs' of the sales or purchases in the delivery State. THE argument is not without some force but cannot prevail. It is true that the different States used to levy sales tax on the basis of slight 'nexus' but the legality of them had not, at the date of the Constitution, been tested in a Court of law. Therefore, the proviso authorised the President by order to continue only such of them as were being "lawfully" levied and consequently there is no reason to think that the President's order was intended to continue all sales taxes previously levied irrespective of their legality. In the next place, there is nothing to be surprised at if the President's order was made to operate subject to the prohibition of Cl. (1) (a) read with the Explanation. FINALLY, to accede to this argument must mean that we must read into the proviso something which is not there. To give effect to this argument we shall have to alter the non obstante' clause towards the end of the proviso and substitute the words "of the foregoing clauses" for the words "of this clause". However, we need not rest our decision on this Point. It will certainly operate as soon as Parliament, in exercise of the power vested in it by Cl. (2), lifts the ban imposed on the States. However, we need not rest our decision on this Point. It will certainly operate as soon as Parliament, in exercise of the power vested in it by Cl. (2), lifts the ban imposed on the States. Upon the lifting of the ban by Parliament those inter-State sales or purchases which fall within the Explanation will, by virtue of it, be deemed to take place within the delivery State and such sales or purchase being, as a result of such fiction outside all other States none of them will be entitled to tax such sales or purchases. WHETHER the delivery State will be entitled to make a law imposing tax on such sales or purchases in exercise of the legislative powers vested in it by Art. 246 (3) read with Entry 54 in List II or whether Parliament, while lifting the ban, may also by the same law authorise the delivery State to do so or what is the extent of the authority vested in Parliament by the opening words of Cl. (2) are questions which will arise for consideration only after the ban under Cl. (2) is lifted and we need not in advance express any opinion on a future problem. ( 40 ) (IV) If we accept the argument that we are to give full effect to Cl. (l) (a) and the Explanation and let it operate immediately on all transactions which come within their terms and leave Cl. (2) to govern only those cases which are outside Cl. (1) (a) read with the Explanation then, on a parity of reasoning, we shall have to give effect to Cl. (1) (a) and the Explanation and leave Cl. (1) (b) and also Cl. (3) to govern only those cases which do not fall within Cl. (1) (a) read with the Explanation. To illustrate this point, take Cl, (3 ). SUPPOSE under Cl. (3) Parliament by law declares certain goods, say wheat to be essential for the life of the community. Suppose there is a sale of such essential goods by a seller in the State of Delhi to a buyer in Gurgaon in the State of Punjab in which as a direct result of such sale the goods are delivered in Gurgaon in Punjab for consumption in that State. According to the argument we have to give full effect first to Cl. According to the argument we have to give full effect first to Cl. (1) (a) and the Explanation and accordingly we must hold that the transaction is wholly covered by the Explanation and, therefore, Punjab will be entitled to tax it and Cl. (3) must be left to govern only cases other than those which fall within the Explanation. If the argument were sound it must follow that the State of Punjab will be perfectly justified in saying that for the purpose of making a law imposing a tax on such sales or purchases its law need not be reserved for the assent of the President at all. IT may well say that the restrictive requirements of reserving the bill for the President's assent and of obtaining such assent before the law may take effect apply only to a law which imposes tax on sales or purchases which are outside the Explanation. In other words, the State of Punjab, in our illustration, will be entitled to say that Cl. (3) governs only those cases of sales or purchases of essential goods which do not come within the description mentioned in the Explanation, namely, for instance, only those sales or purchases in which essential goods are delivered in a State not for consumption in that State but for re-export to another State. THIS will rob Cl. (3) of practically the best part of its content and therefore, of its usefulness and defeat the very purpose the constitution makers obviously had of safeguarding sales or purchases of essential commodities by imposing the restriction requiring the reservation of the bill for the President's assent and the obtaining of such assent. When a famine is raging in say Punjab, and sales and purchases arc made of wheat which is declared as essential to the life of the community and as a direct result of such sale wheat is delivered in the Punjab for consumption there the State of Punjab may, according to the reasoning underlying the argument, put up the price of these essential goods by imposing a sales tax by making a law to that effect and ignoring the safeguards prescribed by Cl. (3 ). An argument which leads us to a result so utterly absurd and untenable in reason cannot for a moment be countenanced. (3 ). An argument which leads us to a result so utterly absurd and untenable in reason cannot for a moment be countenanced. ( 41 ) NO less than five reasons have been suggested in support of the argument that a restricted construction should be placed on Cl. (2) of Art. 286. It will be convenient to deal with them at this stage one by one. ( 42 ) (A) In the first place, it is urged that Cl. (2) should be construed in a restricted way because the class of sales falling within Article 286 (1) (a) forms a special class of inter-State sales and they cannot be affected by the general provisions of Article 286 (2 ). This argument totally overlooks the real scheme of Article 286. It fails to note that by this Article the Constitution makers were imposing restrictions on the taxing power of the States with respect to sales or purchases in their different aspects viewed from entirely different angles which we have heretofore already explained. The subject-matters of the different parts of Article 286 are, therefore different and distinct and the principle of interpretation namely, the special provision cutting down the general provision cannot be properly invoked. ( 43 ) (B) The second reason urged is that if Article 286 (2) applies to the class of sales or purchases falling within Article 286 (1) (a) then it will result in discrimination against local trade and in favour of inter-State trade and this will be inconsistent with the provisions of Part XIII of the Constitution. It is said that when a Bihar dealer sells certain goods to a Bihar purchaser the former is obliged to pay sales tax which he passes on to the Bihar purchaser but when the Bihar purchaser directly imports into Bihar similar goods from say a West Bengal dealer for consumption in Bihar that transaction will not be liable to Bihar Sales Tax as it will be an inter-State transaction. THIS, it is said, will prejudice the Bihar seller for all Bihar purchasers will then be driven to purchasing goods from out-of-State sellers and local producers will suffer a set back. . The argument is that as a literal construction of cl. THIS, it is said, will prejudice the Bihar seller for all Bihar purchasers will then be driven to purchasing goods from out-of-State sellers and local producers will suffer a set back. . The argument is that as a literal construction of cl. (2) will result in such discrimination against local trade, the cardinal rule of interpretation, namely, reading the written provision literally and giving to the words their ordinary natural meaning should give way to a restricted construction. This argument overlooks several basic things. IF there is any real hardship of the kind referred to, there is Parliament which is expressly invested with the power of lifting the ban under cl. (2) either wholly or to the extent it thinks fit to do. Why should the Court be called upon to discard the cardinal rule of interpretation for mitigating a hardship, which after all may be entirely fanciful, when the Constitution itself has expressly provided for another authority more competent to evaluate the correct position to do the needful? THIS argument also fails to take into account the benefit which the consuming public derives from the free flow of goods from one State to another resulting in lower prices. Further, the argument overlooks the fact that the so-called hardship, if any, is brought about, not really by reason of the liberal construction of cl. (2) but by reason of the State of Bihar imposing a Sales tax on an intra-State transaction. The State of Bihar is not obliged to levy a sales tax on sales or purchases of goods in respect of which there is competition between out-of-State producers, manufacturers and dealers and the Bihar producers, manufacturers and dealers and, indeed, if it intends to encourage its local manufacturers or producers it should not do so. IT will not do for the State of Bihar to say that it must levy a Sales tax on intra-State sales or purchases which it is not obliged to do and at the same time that it must protect the Bihar dealers or producers and enable them to compete with outside dealers or producers and, therefore, ask us to construe the Constitution in an unnatural way so as to enable it- to have the best of both worlds. It is immediately retorted that the welfare State must have sufficient revenue to run itself, that if it is to forego Sales tax its economy will be totally upset. This harrowing picture of economic collapse of the States has been pressed upon this Court on this as on the previous occasion and it evidently oppressed the minds of the Judges who were parties to the majority decision. IT is, therefore, necessary to examine the matter a little more closely. Ordinarily, inter-State trade or commerce is done between a dealer in one State and a dealer in another State. The dealer in the consuming State in his turn sells the goods in retail to actual consumers. There can be no objection to insisting upon all inside dealers getting themselves registered and submitting returns showing goods imported and sold by them and bringing their annual turnovers to tax which they will pass on to the actual consumers. Call it a purchase tax vis-a-vis the earlier transaction under which the goods were delivered in Bihar for consumption in that State or call it a Sales tax 'vis-a-vis' the subsequent local sales by the Bihar dealer to actual consumers in Bihar, the State will get the full revenue on these local sales or purchases from the local sellers. THERE can be no doubt that sales or purchases of this kind to or from one dealer to another dealer actually form the bulk of inter-State trade or commerce. To take them out of cl. (2) will be to make the protection of inter-State trade or commerce wholly, illusory and to rob cl. (2) of the best part of its content and utility. Ordinarily individual local consumers buy goods in the local market and do not generally bring goods for their personal consumption from outside dealers. It is only in exceptional cases that a local consumer will be energetic enough to bring goods from outside the State for his consumption and their number will be small. It is only those stray individual consumers who are energetic enough to get goods direct from a dealer in another State and may be willing to pay freight etc. , and undertake the risk of loss or damage who may evade the tax. THE difficulty in tracing such stray actual local consumers cannot be any cogent reason for adopting the unnatural construction sought to be put upon Cl. , and undertake the risk of loss or damage who may evade the tax. THE difficulty in tracing such stray actual local consumers cannot be any cogent reason for adopting the unnatural construction sought to be put upon Cl. (2) of Article 286. If big Bihar purchasers, e. g. , Tata Iron and Steel Co. Ltd. , who are very heavy consumers of coal, prefer to get their supply of coal from Ranigunge coal fields in West Bengal for consumption in their large factories at Tatanagar in Bihar to getting their supplies from the Jharia coal fields in Bihar and thereby evade sales tax to the detriment of the revenues of the State of Bihar, then again there is Parliament to mitigate such hardship by making suitable laws in exercise of its power under Art. 286 (2 ). Such supposed hardship is, in our view, no ground for putting a forced and unnatural interpretation upon Art. 286. ( 44 ) (C) The third reason in support of a restricted construction of Art. 286 (2) is thus formulated : The purpose of Article 286 being to eliminate multiple taxation and Art. 286 (l) (a) having already achieved that purpose with regard to the class falling within the Explanation, it was no longer necessary for that purpose to apply Art. 286 (2) to that class. This reasoning appears to us to be untenable. IT overlooks the patent fact that the different parts of the Article look upon Sales and purchases from different perspectives and place different bans on the taxing power of the State at different angles. The circumstance that the bans may in given cases overlap is no justification for concluding that the subject-matter of the different provisions is the same. The line of reasoning assumes that the only purpose of Art. 286 is to eliminate multiple taxation. The purposes of the different parts of the Article have to be ascertained from the language of the Article itself read in the light of the contemporary history of the legislative activities of the different States with respect to taxes on sales or purchases of goods and the chaos and confusion that arose and the havoc that ensued as a result of those activities. THERE was multiple taxation which imposed a heavy burden on the consumers and which was also calculated to impede and hinder the free flow of inter-State trade or commerce. THERE was multiple taxation which imposed a heavy burden on the consumers and which was also calculated to impede and hinder the free flow of inter-State trade or commerce. The Constitution makers, therefore imposed several bans on the taxing power of the States with respect to sales or purchases, namely, first on the basis of their 'situs', secondly and thirdly on the basis of the character of the transactions, e. g. , foreign trade for inter-State trade and fourthly on the basis of the nature or quality of the goods sold or purchased, i. e. , whether they have been declared to be essential to the life of the community. AS regards inter-State trade or commerce the clear intention of the Constitution makers was to place an absolute ban for the time being, subject to the proviso, and to give some time to Parliament to study the situation and to evaluate the result of the ban and to lift the ban to such extent as it thought fit in the interest of the general public and that of inter-State trade or commerce. If the matter is approached in this way it becomes abundantly clear that this part of the argument we are now considering proceeds on a wrong assumption of the purpose of the Constitution. ( 45 ) (D) A restricted construction of Art. 286 (2) is said to be necessary and called for because the Constitution itself has divided inter-State sales or purchases into two categories and in regard to one class it has itself provided both as to which State will tax them and under what condition and in regard to the other class the Constitution has imposed a ban in general terms and granted power to Parliament in general terms to relax such ban as Parliament thinks fit. This is clearly begging the question and does not require any elaborate refutation. ( 46 ) (E) Another string to the bow is that because of the legal fiction created by the Explanation the inter-State sales or purchases were converted into intra-State transactions. This, it will be recalled, was the reasoning adopted in the majority decision in - 'state of Bombay v. United Motors (India) Ltd. . We are unable to accept this argument for the reasons given above which need not be repeated here. This, it will be recalled, was the reasoning adopted in the majority decision in - 'state of Bombay v. United Motors (India) Ltd. . We are unable to accept this argument for the reasons given above which need not be repeated here. ( 47 ) IT is said that the picture of harassment and inconvenience to the traders referred to in the dissenting judgments is more imaginary than real. It is pointed out that it is only big traders who will have sales of their goods in all the States in the Union of India. Those big traders maintain a large staff of clerks and accountants and there can be no difficulty if they are obliged to file returns in each State where they sell their goods. This argument overlooks the practical effects of the different sales tax laws enacted by different States. All big traders will have to get themselves registered in each State, study the Sales Tax Acts of each State, conform to the requirements of all State laws which are by no means uniform and, finally, may he simultaneously called upon to produce their books of account in support of their returns before the officers of each State. ANYBODY who has any practical experience of the working of the Sales tax laws of the different States knows how long books are detained by the officers of each State during assessment proceedings. There are different stages of these proceedings, original, appellate and revisional and there will be as many proceedings under each heading as there are States where the goods are sold. The harassment to traders is quite obvious and needs no exaggeration. On the other hand if any risk to the economy of the States ensues from the construction of Art. 286 which commends itself to us the appeal must be to Parliament which can by the law made under the opening words of Cl. (2) mitigate that risk. The harassment to traders is quite obvious and needs no exaggeration. On the other hand if any risk to the economy of the States ensues from the construction of Art. 286 which commends itself to us the appeal must be to Parliament which can by the law made under the opening words of Cl. (2) mitigate that risk. ( 48 ) FOR all the foregoing reasons we are definitely of opinion that, until Parliament by law made in exercise of the powers vested in it by Clause (2) provides otherwise, no State can impose or authorise the imposition of any tax on sales or purchases of goods when such sales or purchases take place in the course of inter-State trade or commerce and the majority decision in -'state of Bombay v. United Motors (India) Ltd. in so far as it decides to the contrary cannot be accepted as well founded on principle or authority. ( 49 ) IN the view we have taken on question (A) it is not necessary for us, on this occasion, to discuss the other questions (B), (C) or (D ). All that remains to be soon is whether as a result of our finding on question (A) the Bihar Sales Tax Act, 1947 is 'ultra vires' and void in its entirety or it is only bad in so far as it seeks to impose a sales tax on out-of-State sellers in respect of inter-State sales or purchases. This will depend on whether the objectionable parts of the Act are severable from the rest of its provisions. It will be necessary here to refer to a few provisions of the Act ( 50 ) THE long title of the Act is "an Act to provide for the levy of a tax on sales of goods in Bihar". The preamble recites that "it is necessary to make an addition to the revenues of Bihar and for that purpose to impose a tax on the sale of goods in Bihar". The Act extends to the whole of the State of Bihar. "dealer" was originally defined in S. 2 (c) as meaning : "any person who sells or supplies any goods in Bihar whether for commission, remuneration or otherwise and includes any firm or a Hindu joint family and any society, club or association which sells or supplies goods to its members". "dealer" was originally defined in S. 2 (c) as meaning : "any person who sells or supplies any goods in Bihar whether for commission, remuneration or otherwise and includes any firm or a Hindu joint family and any society, club or association which sells or supplies goods to its members". BY the Bihar Finance Act, 1950 the words "in Bihar" were omitted from this definition. Clause (g) of the same section defines sale. That definition has undergone various changes from time to time. The period we are concerned with in this appeal is from 26-1-1950 to 30-9-1951. BY the Bihar Finance Act, 1950 the words "in Bihar" were omitted from this definition. Clause (g) of the same section defines sale. That definition has undergone various changes from time to time. The period we are concerned with in this appeal is from 26-1-1950 to 30-9-1951. Between 1-10-1948 and 31-3-1951 which covers the earlier part of the relevant period the clause stood as follows: - "sale" means, with all its grammatical variations and cognate expressions, any transfer of property in goods for cash or deferred payment or other valuable consideration, including a transfer of property in goods involved in the execution of contract but does not include a mortgage, hypothecation, charge of pledge : PROVIDED that a transfer of goods on hire-purchase or other instalment system of payment shall, notwithstanding the fact that the seller retains a title to any goods as security for payment of the price, be deemed to be a sale: PROVIDED further that notwithstanding anything to the contrary in the Indian Sale of Goods Act, 1930 (3 of 1930), the sale of any goods (I) which are actually in Bihar at the time when, in respect thereof, the contract of sale as defined in Sec. 4 of that Act is made, or (II) Which are produced or manufactured in Bihar by the producer or manufacturer, thereof, SHALL, wherever the delivery or contract of sale is made, be deemed for the purposes of this Act to have taken place in Bihar: PROVIDED further that the sale of goods in respect of a forward contract, whether goods under such contract are actually delivered, or not, shall be deemed to have taken place on the date originally agreed upon for delivery" THIS definition was amended and between 1-4-1951 and 31-3-1952 which covers the latter part of the relevant period it read as follows : "sale" means, with all its grammatical variations and cognate expressions, any transfer of property in goods for cash or deferred payment or other valuable consideration, including a transfer of property in goods involved in the execution of contract but does not include a mortgage, hypothecation, charge or pledge: PROVIDED that a transfer of goods on hire purchase or other instalment system of payment shall, notwithstanding the fact that the seller retains a title to any goods as security for payment of the price, be deemed to be a sale: PROVIDED further that the sale of goods in respect of a forward contract, whether goods under such contract are actually delivered or not, shall be deemed to have taken place on the date originally agreed upon for delivery. EXPLANATION.- The sale of any goods actually delivered in Bihar as a direct result of such sale for the purpose of consumption in Bihar shall be deemed for the purpose of this Act to have taken place in Bihar, notwithstanding the fact that under the general law relating to sale of goods, the property in the goods has, by reason of such sale, passed in another State". IT will be noted that the Explanation which is substantially a reproduction of the Explanation to Art. 286 (l) (a) was introduced for the first time by this amendment.