POPPATLAL SHAH vs THE STATE OF MADRAS.UNION OF INDIA AND OTHERS-Interveners.

The Supreme Court ruled that under the Madras Sales Tax Act, 1939, as it existed before the 1947 amendment, a sale completed outside the province where the contract was made does not qualify as a sale within the province of Madras, thus no tax can be levied on such transactions. The Court emphasized that a provincial legislature can impose taxes on transactions with a sufficient territorial nexus to the province, but cannot enforce taxation on transactions concluded outside its jurisdiction. The judgment of the Madras High Court was reversed.