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TMI Blog1958 (1) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... dated the 1st January, 1933, is enclosed (Exhibit A). 3.. The assessee then filed an appeal petition (Exhibit B) before the Deputy Commissioner of Sales Tax, Bihar, Ranchi. For reasons explained in his order dated the 6th June, 1953 (Exhibit C) the Deputy Commissioner of Commercial Taxes, Bihar, dismissed the appeal with some modifications. 4.. The assessee then filed a revision petition (Exhibit D) before the Board of Revenue, Bihar. For the reasons explained in its order dated the 10th November, 1953 (Exhibit E) the Board rejected the petition. 5.. Being dissatisfied with the Board's order, the assessee filed a petition (Exhibit F) before the Board for making a reference to the High Court on the following questions said to be quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty. JUDGMENT RAMASWAMI, C.J., and CHOUDHARY, J.- In this case the Board of Revenue has submitted a statement of case under section 25(3) of the Bihar Sales Tax Act on the following question of law: "Whether in the facts and circumstances of the case, the sale of shellac can be taxed as sale or purchase in the course of inter-State trade or commerce?" After hearing learned counsel for the parties we are satisfied that the question should be re-framed in the following manner so as to bring out the real point in controversy between the parties: "Whether in the facts and circumstances of the case, the sale of shellac to the extent of Rs. 3,90,289-12-6 could be validly taxed in view of the provision of Article 286(1)(b) of the Consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) it is necessary for the assessee to show that the sale took place not only during the activities directed towards the export of the goods out of the country, but also that the sale was a part of the activities of such export. That was the test applied by the Supreme Court in State of Travancore-Cochin and Others v. Shanmugha Vilas Cashew-Nut Factory and Others[1953] 4 S.T.C. 205; [1954] S.C.R. 53. and it was held by the Supreme Court in that case that the purchase of goods for the purpose of export was only an act preparatory to their export and not an act done in the course of export of goods. It appears that the respondents in that case had purchased raw cashew-nuts within the State of Travancore-Cochin from the neighbouring States for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause (1)(b). What is exempted under the clause is the sale or purchase of goods taking place in the course of the import of the goods into or export of the goods out of the territory of India. It is obvious that the words 'import into' and 'export out of' in this context do not refer to the article or commodity imported or exported. The reference to 'the goods' and to 'the territory of India' make it clear that the words 'export out of' and 'import into' mean the exportation out of the country and importation into the country respectively. The word course' etymologically denotes movement from one point to another, and the expression 'in the course of' not only implies a period of time during which the movement is in progress but postulates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n made to the firms of West Bengal not for the consumption of the shellac in that State but for export outside India. It was not the case of the assessee, nor has it been found by the revenue authorities, that the shellac had been sold to the Calcutta firms for the purpose of delivery and consumption in the State of West Bengal. The factual foundation to support the alternative argument of the assessee is, therefore, wanting and we must, therefore, reject this argument. Lastly, counsel for the assessee contended that the sales of shellac were exempt from taxation because of Article 286(2) of the Constitution, and it is, therefore, not liable to be taxed by the Bihar Government. There is no merit in this argument, because the ban imposed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the explanation to Article 286(1)(a), and, therefore, sales falling under this category has only one hurdle to surmount, namely, the hurdle imposed by Article 286(2), and that hurdle is surmounted by the President's Order and by Central Act No. 7 of 1956, for the period from the 26th January, 1950, to the 6th September, 1955. In view of the principle laid down in this decision there is no force in the argument put forward by the learned counsel for the assessee. For the reasons we have expressed, we hold that in the facts and circumstances of this case the sale of shellac to the extent of Rs. 3,90,289-12-6 has been validly taxed, and the question of law referred by the Board of Revenue and as amended by us should be answered against the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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