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TMI Blog1960 (7) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Exemption was claimed in regard to this turnover on the ground that they did not constitute sales within the meaning of section 2(h) of the Madras General Sales Tax Act (IX of 1939). It was contended by the appellants that as the sales took place outside India there was no scope for invoking the Madras General Sales Tax Act. This plea did not find favour with the department with the result that this turnover was brought to tax. This was confirmed on appeal by the Commissioner of Commercial Taxes. Questioning the validity of this assessment, the appellants filed a suit in the Subordinate Judge's Court, Kakinada (O.S. No. 111 of 1951) for a declaration that the assessment to sales tax for that period was ultra vires and for an injunction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a tax on the transaction of sale. It is in no sense a tax on goods exported outside the territory. The sphere of the two taxes are entirely different, and it is impossible to consider the sales tax in substance or in effect as a tax on goods by reason of the taxable event of export." We find it difficult to agree with the learned counsel for the appellants that the tax on these sales is in the nature of export duty which falls within the ambit of entry 44, List I, of the Seventh Schedule to the Government of India Act, 1935. It is strenuously contended by the learned counsel that such sales as these should be regarded as exports and, therefore, cannot be subjected to tax. As substantiating this theory, he called in aid the following pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argument induced the Federal Court to hold in Province of Madras v. Boddu Paidanna and Sons[1942] 1 S.T.C. 104; 1942 F.C.R. 90., that both central excise duty and provincial sales tax could be validly imposed on the first sale of groundnut oil and cake by the manufacturer or producer as 'the two taxes are economically two separate and distinct imposts.' Lest similar reasoning should lead to the imposition of such cumulative burden on the export-import trade of this country which is of great importance to the nation's economy, the Constituent Assembly may well have though it necessary to exempt in terms sales by export and purchases by import from sales tax by inserting Article 286(1)(b) in the Constitution." In the light of these observat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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