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TMI Blog1959 (9) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... he authorities below did not accept the contention of the applicants, and the point taken on behalf of the applicants in this application by the applicants' learned Advocate is that the authorities below were wrong in not allowing the applicants the refund as claimed by them. 2.. Now, it is not in dispute that what the applicants purchased was unshelled groundnuts. It is not again in dispute that a tax was recovered by the Sales Tax Authorities upon the purchases made by the applicants during that period. What happened was that on the 1st of April, 1954, the stock in the hands of the applicants was not in respect of the unshelled groundnuts but was in respect of the seeds, that is to say, after removal of the shells of STATEMENT OF CASE:- Case stated under section 25(3) of the Bihar Sales Tax Act, 1947, (hereinafter referred to as the "Act") at the instance of the High Court of Judicature at Patna, as required in the High Court's Orders Nos. 10 and 4 dated the 15th January, 1957, passed in M.J.C. Nos. 625 and 626 of 1956 in the matter of assessment of sales tax on Messrs Blackwood Hodge (India) Ltd., (hereinafter referred to as the "assessee") for the years 1950-51 and 1951-52 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o entries 1 to 18, both inclusive, of Schedule B and when one turns to Schedule B to the Act of 1953, entry No. 5 refers to oil seeds. Now, a reference to entries 1 to 18 shows that the only reference made is to oil seeds and no reference is made whatever to groundnuts. Mr. Rao has fairly conceded that what was recovered from the applicants for the period from 1st November, 1952, to 31st March, 1954, was a tax in respect of the oil seeds. It is, therefore, now futile to contend that the applicants are not entitled to a refund on the same article which prior to 1st April, 1954, was unshelled groundnuts and which on 1st April, 1954, was oil seeds. Apparently, the Legislature has made no distinction between unshelled groundnuts and oil seeds, as is clearly apparent from entry 5 in Schedule B to the Act. Apart from anything else, therefore, the applicants are, in equity, entitled to a refund of the amount as much as the Sales Tax Authorities have already recovered from the applicants as tax for the period between the 1st of November, 1952, and 31st of March, 1954. Moreover, the point which has now arisen for consideration in this application has been covered by a decision of this Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning of Article 286 of the Constitution? (2) Whether in the facts and circumstances of the case the sales of goods delivered for consumption in Bihar can be lawfully taxed in view of the provisions of Article 286(2) of the Constitution?" The assessment periods with which we are concerned are from the 1st of April, 1950, to the 31st of March, 1951, and from the 1st of April, 1951, to the 31st of March, 1952. It appears that the assessee supplied during this time a large quantity of heavy earth moving equipments, machineries and spare parts to the Damodar Valley Corporation at different places within the territory of Bihar. The assessee, Messrs Blackwood Hodge (India) Ltd. has its head office located at Calcutta and it is the admitted position that during the periods in question the assessee supplied machineries valued at Rs. 52,000,000 to the Damodar Valley Corporation. The main argument on behalf of the assessee was that the machineries had been directly supplied by the manufacturers overseas to the Damodar Valley Corporation and so these sales are exempt from taxation under Article 286(1) of the Constitution. It was also contended on behalf of the assessee that in any event th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the sale was a part of the activities of such import. That is also the test applied by the Supreme Court in State of Travancore-Cochin and Others v. Shanmugha Vilas Cashew-nut Factory, Quilon[1953] 4 S.T.C. 205; A.I.R. 1953 S.C. 333., and it was held by a majority of the learned Judges of 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 the purpose of refining them and exporting them to America. One of the questions which was debated in that case was whether the respondents were exempted from taxation under Article 286(1)(b) with regard to the purchases made in the local markets of the State. The question was answered in the negative and it was held by the Supreme Court that as regards the purchases made in the local markets of the State, the respondents were not exempted under Article 286(1)(b) of the Constitution. The matter has been put clearly by the learned Chief Justice at page 336 as follows: "T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een the Damodar Valley Corporation and the manufacturers, and the assessee was merely an agent for the manufacturers with regard to the sale of machineries. It is not possible for us to accept this argument as correct. The contract of agency between the assessee and the manufacturers has not been produced before the taxing authorities, and in the absence of the documents of the contract it is not possible for us to say whether there was privity of contract between the Damodar Valley Corporation and the manufacturers or not. It was also submitted on behalf of the assessee that the machineries were earmarked by the manufacturers for sale to the Damodar Valley Corporation. There is no finding of the Sales Tax Authorities on this question of face but even assuming that the submission of learned counsel for the assessee is factually correct, it does not necessarily follow that the sale of machineries to the Damodar Valley Corporation was made "in the course of import" within the meaning of Article 286(1)(b) of the Constitution. It has been pointed out by the Supreme Court in State (1) [1877] 4 Ch. D. 685 and Williams on Bankruptcy, 16th Edn., p. 307. Mysore and Another v. Mysore Spinnin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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