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TMI Blog1997 (10) TMI 341X X X X Extracts X X X X X X X X Extracts X X X X ..... export order from its buyer in a foreign country. 3.. In respect to the assessment year 1st September, 1978 to 31st August, 1979, the respondent claimed exemption from payment of sales tax on sales made to Kalbhavi as the export sales of the goods referred to under section 5(3) of the Central Sales Tax Act, 1956. This claim was allowed by the assessing authority but he came to the conclusion that the transaction of respondent of purchasing the fish oil from unregistered dealers would attract the levy of purchase tax under section 6 of the said Act. Accordingly, the assessment was made, levying purchase tax on the purchase of fish oil, made by the respondent which in turn, had been sold to Kalbhavi. 4.. An appeal was filed before the Deputy Commissioner of Commercial Taxes, Mangalore, by the respondent but without success. Its second appeal to the Karnataka Appellate Tribunal, Bangalore, was also dismissed with the Tribunal confirming the order of the assessing authority in treating the transaction of purchase of fish oil as attracting the provisions of section 6 of the Act. 5.. The decision of the Tribunal was challenged by the respondent in a revision petition filed in the High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f cocoa pods and cocoa beans by a co-operative society registered under the Karnataka Co-operative Societies Act, 1959. Provided further that the tax payable under this section on the purchase of butter and ghee shall be calculated at the rate of two per cent. Explanation.-For the purpose of this section consumes such goods in the manufacture shall include goods consumed for ancillary purposes in or for such manufacture." Section 5 of the Central Sales Tax Act reads as follows: "When is a sale or purchase of goods said to take place in the course of import or export.-(1) A sale or purchase of goods shall be deemed to take place in the course of the export of the goods out of the territory of India only if the sale or purchase either occasions such export or is effected by a transfer of documents of title to the goods after the goods have crossed the customs frontiers of India. (2) A sale or purchase of goods shall be deemed to take place in the course of the import of the goods into the territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goods have crossed the customs frontiers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act and that by virtue of section 5(3) of the Central Sales Tax Act read with article 286 of the Constitution of India, the sale by the respondent to Kalbhavi was not taxable nevertheless came to the conclusion that the respondent had sold the fish oil to Kalbhavi within the State of Karnataka and, therefore, this would be regarded as a sale as "sale in the State" under section 6(i) of the Act and, therefore, exempt from levy of purchase tax. 11.. In our opinion, there is a fallacy in the aforesaid reasoning of the High Court. The words "sale in the State" occurring in section 6(i) of the Act would refer to "intra-State" sale in contradistinction to "sale in the course of inter-State trade or commerce" as referred to in clause (ii) of section 6. It has been accepted by the High Court and, it is not disputed, that the sale in the present case to Kalbhavi falls under section 5(3) of the Central Sales Tax Act. This, therefore, is a sale in the course of export and ipso facto cannot be regarded as intra-State sale. It is to be borne in mind that in the case of inter-State trade sale or sale in the course of export, the property in the goods may stand transferred within the State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of India within the meaning of section 5(1) of the Central Sales Tax Act. It may appear that this decision would support the dealer but the provisions of section 9 of the Haryana General Sales Tax Act and section 6 of the Act, with which we are concerned in the present case, are different with regard to one important and relevant circumstance. Section 9(1) of the Haryana General Sales Tax Act which was under consideration in Murli Manohar's case [1991] 80 STC 79 (SC), excluded from its purview the purchase of goods which were sold either out of State or in the course of inter-State trade or commerce or "in the course of export out of territory of India within the meaning of sub-section (1) of section 5 of the Central Sales Tax Act, 1956". After referring to the decision in Mod. Serajuddin v. State of Orissa [1975] 36 STC 136 (SC), it was noticed that sub- section (3) was inserted in section 5 of the Central Sales Tax Act so as to regard penultimate sale of purchases to the import or export of goods as being sales or purchase in the course of export. The purchases in question in Murli Manohar's case [1991] 80 STC 79 (SC), were not regarded as sales in the course of export within t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the course of export out of the territory of India' with effect from April 1, 1976. But the same Act narrowed down the scope of clause (a)(ii) by adding the restrictive words at the end of the clause. (2) If a reference is made to section 24, one finds that section 24(1)(iii) refers again to sub-section (1) of section 5 of the Central Sales Tax Act only. However, the language of the two provisos simultaneously introduced in section 24(1)(a) and (b) by Act 3 of 1983 makes interesting reading. The proviso to clause (a) refers only to 'sale by him in the course of export outside the territory of India within the meaning of section 5 of the Central Sales Tax Act, 1956', whereas the proviso to clause (b) refers to 'sale by him in the course of export outside the territory of India within the meaning of sub-section (3) of section 5 of the Central Sales Tax Act, 1956'. Thus the statute, within the same provision, has made a distinction between a sale in the course of export within the meaning of section 5 and such a sale within the meaning of section 5(3). (3) When we turn to section 27 next, we find two provisos introduced in section 27(1)(iv)(a) by Act 44 of 1976, the same amendin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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