Srinivasan, J.:— The assessee is a dealer in snuff. In the assessment for the year 1955-56, the Deputy Commercial Tax Officer accepted as exemptible a turnover of Rs. 4,38,068 on account of the inter-State sales and a further turnover of Rs. 1,17,107 as being sales of snuff at the Calcutta branches of the assessee's business. At that stage, a claim put forward by the assessee that the excise duty paid by it on the purchase value of the tobacco should be deducted, was disallowed. This disallowance was made the subject-matter of an appeal before the Commercial Tax Officer. The result of that appeal is not of any importance, as it does not bear upon the question in this tax revision case. On 10th March, 1962, the Board of Revenue, in the exercise of its powers under section 34 of the Act of 1959, issued a notice to the assessee. It took the view that the exemption in respect of inter-State sales granted for the period 1st April, 1955, to 6th September, 1955, was not correct and that though the sales were inter-State in character they were yet assessable by reason of the removal of the ban under Article 286(2) by the Sales Tax Laws Validation Act, 1956. It computed the turnover for the period 1st April, 1955, to 6th September, 1955, as Rs. 1,16,217 and in the notice issued to the assessee proposed to cancel the exemption granted on this part of the turnover. To this notice the assessee took objection. It claimed that the decision of the Supreme Court in Ashok Leyland v. State of Madras [1961] 12 S.T.C 379. did not apply. Another objection that was taken was that the order sought to be revised being that of the Deputy Commercial Tax Officer, which was passed on 31st August, 1957, the Board was incompetent to revise that order beyond the period of four years from that date. The Board however took the view that the order of the Deputy Commercial Tax Officer had merged in that of the Commercial Tax Officer, who passed an order in appeal on 18th March, 1958, and that it was therefore competent to exercise its powers under section 34 of the Act within the period of four years from that date. The Board accordingly made the order cancelling the exemption in respect of that part of the turnover.

2. In this appeal directed against the order of the Board of Revenue the same two points have been urged. It is claimed that the Board has misconstrued the scope of the decision in the Ashok Lelyand case, and that it has also exercised its jurisdiction beyond the period of limitation.

3. On a careful consideration of the questions, we are of opinion that these contentions are well founded. We shall take up the question of jurisdiction first.

4. Section 34 of the Madras General Sales Tax Act, 1959, by sub-section (2), states:

“The Board of Revenue shall not pass any order under sub-section (1) if………(c) more than four years have expired after the passing of the order.”

5. Turning to sub-section (1), it is seen that it enables the Board of Revenue to call for and examine an order passed or proceeding recorded by the appropriate authority and “subject to the provisions of this Act” may pass such order thereon as it thinks fit. Reading the two subsections together, it is clear that where the Board purports to revise the order of a particular authority, the period of limitation of four years has to be computed from the order of that authority. The order granting exemption on account of inter-State sales by the Deputy Commercial Tax Officer was made on 31st August, 1957. If that is the order that was revised by the Board, clearly its power of revision under section 34 would come to an end by the 30th August, 1961. The Board however took the view that there having been an appeal preferred to the Commercial Tax Officer, it is the date of the order made in appeal by the Commercial Tax Officer that is the relevant date for the purpose of computation of the period of limitation. The correctness of this is challenged before us.

6. The power of the Board and the commencement of the period of limitation for the exercise of that power came in for extensive examination before a Bench of this Court to which one of us was a party. In that case*, an appeal against the assessment was taken to the Commercial Tax Officer. Subsequently, the assessee preferred a revision to the Deputy Commissioner raising the question of assessability of another item of turnover which was not the subject-matter of appeal to the Commercial Tax Officer. Before the Deputy Commissioner, no part of the order as made by the assessing authority, the Deputy Commercial Tax Officer, or the appellate authority, the Commercial Tax Officer, was in dispute. The Deputy Commissioner dismissed the petition for revision on the 21st August, 1954. The Board of Revenue issued a notice on the 4th August, 1958, proposing to revise the assessment of the Deputy Commercial Tax Officer by including a turnover which had been wrongly omitted by that officer. The question arose whether the period of limitation should be computed from the date of the order of the Deputy Commercial Tax Officer, which was 28th November, 1952, or from the date of the order of the Deputy Commissioner, which was 21st August, 1954. This Court decided that the subject-matter of the revision proceedings by the Board was only the assessment by the Deputy Commercial Tax Officer and not any order of the Deputy Commissioner and that therefore the commencement of the period of limitation should be computed from the date bf the order of the Deputy Commercial Tax Officer. Dealing with the question of the merger of the order of the inferior authority in that of the appellate authority, it was observed that this rule is not of universal application. It may be stated that with regard to the period of limitation the relevant sections of law that were interpreted herein were those in the 1939 Act, but the principle is not different in so far as the application of the 1959 Act is concerned. This Court observed thus:

“The Board of Revenue was dissatisfied with the legality and propriety of the order of the Deputy Commercial Tax Officer dated 28th November, 1952. If the order of the Deputy Commercial Tax Officer became merged with the order of the Deputy Commissioner, the only order which the Board can seek to revise is the order of the Deputy Commissioner. Plainly, the Board was not dissatisfied with the legality or propriety of the order of the Deputy Commissioner. The Board cannot call in question the legality or propriety of the order of the Deputy Commercial Tax Officer after the four years period had elapsed, after the date of communication of that order to the assessee. In these circumstances, to rely upon the date of the order of the Deputy Commissioner as the commencement for the period of limitation to give jurisdiction to the Board to exercise its revisional functions in respect of the order of the Deputy Commercial Tax Officer will amount to circumvention of the provisions of the statute. The view of the Board that the order of the Deputy Commissioner is the final order of all the assessment orders which have become merged therein and that therefore the four years period should be computed from the date of communication of that order reveals that it is trying to ride the horse in opposite directions at the same time. If there is merger, the only order that can be revised is the order of the Deputy Commissioner and the Board has not attempted to do that. If there is no merger, the starting point of limitation under section 12(4) of the Act can only be the date of the revised assessment by the Deputy Commercial Tax Officer, viz, 28th November; 1952, in which case the bar of limitation operates. In our judgment, the proceedings before the Board of Revenue were beyond the period of limitation and were therefore wholly incompetent.”

7. We are satisfied that the principle of this decision wholly applies to the present case. As we have pointed out, the only order which the Board seeks to revise is that of the Deputy Commercial Tax Officer which was not in any way modified or interfered with by the Commercial Tax Officer, who, besides being the appellate authority, was also a revisional authority and could have revised the order of the Deputy Commercial Tax Officer if he had thought fit. The question of inter-State sales was not from any point of view the subject-matter of the appeal before the appellate authority. The principle of merger can hardly have any application in the circumstances of this case. Following that decision, it must result in the conclusion that the exercise of the powers of the Board under section 34 of the Act beyond the period of four years from the date of the Deputy Commercial Tax Officer's order is not supported by the relevant provision of the Act.

8. Though on this ground alone the appeal will have to be allowed, we may nevertheless deal with the other question that has been argued.

9. The manner in which the appellant conducted its business in relation to these inter-State sales is not in dispute. According to him, he despatched the snuff to various purchasers outside the State, principally by post, money being recovered from the postal department by V.P.P In other cases, goods were sent by rail, the railway receipt being delivered against payment. The assessee has furnished before us a complete list of all the transactions covering the disputed turnover. The consignments by post or by rail, as the case maybe, are for values ranging from a couple of rupees to as much as over a thousand rupees. But most of these transactions are through post, being for very small amounts. The department has verified this list and the learned Additional Government Pleader concedes that all the transactions covered by the disputed turnover were conducted in the above manner. The question is whether in those circumstances these sales are taxable under the Madras General Sales Tax Act.

10. In a decision of the Supreme Court in Commissioner of Income-tax v. P.M Rathod & Co., the question arose as to where the sale can be held to have taken place when the goods are sent by V.P.P or rail. The headnote will suffice:

“If a seller when sending the articles which he intends to deliver under the contract does so with the direction that the articles are not to be delivered to the purchaser till the payment of price, the appropriation is not absolute but conditional and until the price is paid, the property in the goods does not pass to the purchaser.

“In the case of delivery of goods by V.P.P, it is immaterial whether the buyer directs the goods to be sent by V.P.P or the seller does so on his own accord, because the goods handed over to the post office by the seller can only be delivered to the buyer against payment, and this payment is received for and on behalf of the seller. The buyer does not pay till the goods are received by him and once he has paid the price, it is the post office that is responsible for the payment of the money received by it to the seller. The principle governing the despatch of articles by V.P.P is that the appropriation is conditional and goods only pass when the condition is fulfilled, that is, the price is paid against delivery. The post office is an agent for the seller and receives the price from the buyer at the place of delivery for transmission to the seller.

“Where goods are sent by rail and railway receipts in favour of self are sent through a bank with the direction that the goods are to be handed over against ‘payment of the enclosed demand draft’, the appropriation to the contract is only conditional when the goods are entrusted to the common carrier and the performance of the contract is complete only at the place where the moneys are paid and relative railway receipts are delivered to the purchaser.”

11. This decision completely clears up the point and there is no doubt whatsover that the sale in all these cases where the goods were sent by V.P.P or by rail, the documents being delivered against payment, can only result in the sales taking place at the places of delivery, that is to say, outside the Madras State. Even under the Sale of Goods Act, the situs of the sale is accordingly located at places outside the State, and in so far as the Madras State is concerned, these sales must necessarily be “outside” sales. Looking at the transactions from the point of view of inter-State sales, during the period in question when the Explanation to Article 286(1) was in force, undoubtedly, the goods, the snuff in question, were delivered for consumption in States other than the Madras State. In the light of the constitutional Explanation also, these sales would thus become sited outside the Madras State. Whether on the general principles of the Sale of Goods Act or by virtue of the constitutional Explanation, there is no doubt that these sales are sales which must be held to have taken place outside the Madras State. The question then is whether by reason of the Sales Tax Validation Act, 1956, such sales could be taxed by the Madras State.

12. In holding that these sales are taxable during the period 1st April, 1955, to 6th September, 1955, the Board of Revenue relied upon the Ashok Leyland decision. This decision was considered by a Bench of this Court, to which one of us was a party, in Ramaswami Mudaliar v. State of Madras [1962] 13 S.T.C 785.. The Bench took the view that the extent to which the Validation Act lifted the ban under Article 286(2) was to enable the delivery-cum-consumption State to tax the inter-State sale and would not authorise the State from which the goods proceeded to tax that sale. The same Bench again reviewed all the cases, principally decisions of the Supreme Court bearing upon the question, in T.C No. 155 of 1961, etc. After an exhaustive analysis of all the decisions commencing with the United Motors case [1953] 4 ST.C 133. followed by the Bengal Immunity case [1955] 6 S.T.C 446., India Copper Corporation Limited v. State of Bihar [1961] 12 S.T.C 56, A.V Thomas and Company v. Deputy Commissioner [1963] 14 S.T.C 363. and William Jacks and Company v. Stale of Bihar [1963] 14 S.T.C 375., the Bench explained that there were several distinct and independent bans imposed on the power of a State to levy tax and that the removal of the ban imposed by Article 286(2) of the Constitution did not amount to the removal of the ban imposed by Article 286(1)(a), which prohibited a State from taxing a sale which took place outside the State. To the extent to which the Explanation to Article 286(1) made provisions for determining, the situs of a sale and sited a particular transaction inside a particular State, that is, the delivery-cum-consumption State, and outside all other States, there was a clearly expressed ban by the Constitution that no State other than the delivery-cum-consumption State could tax that sale when the ban under Article 286(2) was lifted. It will be noticed that in the catena of cases cited above, A.V Thomas and Company v. Deputy Commissioner and William Jacks and Company v. State of Bihar were decisions rendered by the Supreme Court subsequent to the decision in the Ashok Leyland case, and the Bench pointed out that if the principle that was laid down in the Ashok Leyland case was that even the State, which was an “outside” State within the constitutional Explanation, was competent to tax a sale transaction, the decision in those two cases would well have been different. The ratio of the Bengal Immunity case was expressed in the following words by the Supreme Court in William Jacks and Company v. State of Bihar:

“Until Parliament by law made under Article 286(2) provided otherwise, a State could not impose or authorise imposition of any tax on sales or purchases of goods when such sales or purchases took place in the course of inter-State trade or commerce, notwithstanding that the goods under such sales were actually delivered in that State for consumption there.”

13. The Supreme Court clearly went to the length of stating that even where a sale being an inter-State sale is located inside a particular State, that State being the delivery-cum-consumption State, that State would not be competent to tax the inter-State sale transaction, unless the ban under Article 286(2) was lifted, and if the ban was lifted, then consistently with the other ban under Article 286(1)(a), only the delivery-cum-consumption State could tax that sale and not any other State with reference to which that sale would be an outside sale.

14. In the light of the interpretation of the decisions, it seems to us that the Ashok Leyland case cannot be relied upon for enabling the Madras State to tax these sales, which both under the Indian Sale of Goods Act as well as the constitutional Explanation became located as sales in States other than the Madras State. The Madras State is an outside State in so far as these sales are concerned, and the ban on the levy of a tax in respect of a sale, which is an outside sale, being inviolate, the Madras State cannot tax these sales.

15. It follows that the order of the Board of Revenue is made upon an incorrect appreciation of the legal position and has to be set aside. The appeal is allowed. In the circumstances, there will be no order as to costs.

16. Appeal allowed.