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TMI Blog1958 (2) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... y. The appellant sought to impose a sales tax on certain sales made by the two respondents between 31st March, 1950, and 31st March, 1951. The respondents con- tended, and still contend that these sales are not taxable because they were made in the course of export and so are exempt under Article 286(1)(b) of the Constitution. The Sales Tax Officer rejected this contention and imposed the tax. Appeals were filed and failed, and also review petitions to the Commissioner of Sales Tax. The matter then came up to the High Court in the following ways. The assessments were in respect of five quarters. The Commissioner made two references in respect of the first two quarters ending 31st March, 1950, and 30th June, 1950, respectively. These are Civil Petitions Nos. 110 of 1954 and 112 of 1954. The first related to the Minerva Mills and the second to the Mysore. Writ petitions were filed in the Mysore High Court in respect of the remaining quarters in dispute. Petitions Nos. 26 and 28 of 1954 are against the assessments for the quarter ending 30th September, 1950. The former is by the Mysore Mills and the latter by the Minerva. Similarly, Writ Petitions Nos. 27 and 29 were i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "for export only" and the prices fixed had to be higher than the inland prices. The specifications and details of the goods had also to be entered. The sixth step was for the exporter, armed with the Mills' contract and the provisional licence, to obtain a final licence from the Export Controller. This licence set out the names of the seller and the exporter and contained a description of the commodities. The seventh step was for the Mills to pack the goods in accordance with the regulations promulgated by the Textile Commissioner and despatch them to the exporter. Among other things, the goods had to be marked clearly "for export only". The eight step was for the mills to inform the exporter about the despatch of the goods, and the last step was for the exporter to take delivery and ship them overseas. It will be seen that from first to last the Mills had no direct contact with the overseas buyer and that the sales that occasioned the export were not the sales by the Mills to the exporter. But the Mills contend that, nevertheless, these sales were made in the course of export and so are protected by Article 286(1)(b). This question was debated at length in various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ep higher than the majority had done. We are unable to accept this contention for two reasons. The first is that even without the Government order the ordinary course of export would take the same procedure and therefore the compulsion of the Government order makes no difference. These sales cannot, under any view, be said to have "occasioned the export." The second reason is that the right to tax sales is given to the States under entry 54 in List II, therefore, the Centre cannot prevent them from taxing sales that are otherwise taxable either by a Central Act or by rules made under it. Had the States, or one of them, imposed a self-denying restraint on themselves, that would be another matter, for, though they have the power to tax in a certain field, they are not bound to do so and can restrict their rights by legislation as much as they please. But the Centre cannot compel them to do so. It was also urged that the ban that Government placed on export, save through a licensed exporter, left the Mills with no option but to act in the way they did. The answer to that is that the fact that A cannot export while B can (whatever the reason), cannot turn a tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t they ever acted as such. All the contracts with them were entered into by them as principals. The learned High Court Judges were therefore under a misapprehension about the facts. Before us the respondents' learned counsel contended that even if this is not a case of agency in the contractual sense of the term, it is an agency in its wider connotation and he referred to Webster's Dictionary where one of the meanings given to "agency" is "instrumentality." He contended that the Mills exported the goods through the instrumentality of the exporters. In our opinion, the only kind of agency that will serve the respondents is an agent as understood in the law of principal and agent. There were two sales here and both could not have occasioned the export, only the second of the two did that, and the respondents were not parties to it either directly or through the exporters as their agents. It follows that the first sale, with which alone the respondents were associated, did not do that. If it did not, then it hardly matters whether the goods were exported through the instrumentality of the exporters or not because, according to the decisions of this Court, all sales tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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