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TMI Blog1960 (10) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... es tax, even though the notification be mentioned in rule 4(2) under the Act. Thereafter, the enacting authorities have passed the General Sales Tax (Amendment) Ordinance, 1960 (No. 1 of 1960), which has repealed and was followed by the General Sales Tax (Amendment) Act (No. III of 1960). Thereunder, old section 5(vii) has been amended and section 3 provided for validation of earlier assessment proceedings. It is obvious that should we find the second ground raised against the provisional assessment orders to be of substance, the decision of the first ground stated above would be obiter. That apart, we are not impressed with the soundness of the objection and we have, in a different batch of writ petitions, which were heard with these petitions assigned more fully our reasons for not accepting the objection. We would, therefore, examine the arguments urged by the petitioners' learned Advocates in support of the second ground. The petitioners claim that the several sales provisionally assessed are inter-State and, therefore, exempt from levy under section 26(1)(b) of the General Sales Tax Act, 1125, which reads as follows: Section 26(1) "Notwithstanding anything contained in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the tax as Parliament may by law specify". Finally the new entry of the Union List reads thus "92A. Taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of interState trade or commerce". And the old entry 54 in the State List stands also substituted thus: "54. Taxes on the sale or purchase of goods other than newspapers, subject to the provisions of entry 92A of List I". It follows that the three classes of sale transactions of goods that stand beyond the taxing powers of the States are (1) Outside sales; (2) Import and export sales; and (3) Inter-State sales. We are not concerned with the first and the second of the above classes, but misunderstanding of when the third class occurs, has certainly caused some confusion in these cases before us. To clarify the position it is necessary to remember that Parliament was authorised to formulate when sales in any of the ways mentioned in Article 286(1) take place and in pursuance has enacted the Central Sales Tax Act, 1956 (No. 74 of 1956). Section 3 of this Act reads as follows: "A sale or purchase of goods shall be deemed to take place in the course of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6(1)(b) of the General Sales Tax Act. Whatever doubt there may have been concerning the position, it is clarified in Tata Iron and Steel Co. Ltd. v. S.R. Sarkar [1960] 11 S.T.C. 655 at p. 666. at p. 679. There Shah, J., delivering the majority judgment has observed as follows: "A sale being by the definition, transfer of property, becomes taxable under section 3(a) if the movement of goods from one State to another is under a covenant or incident of the contract of sale, and the property in the goods passes to the purchaser otherwise than by transfer of documents of title when the goods are in movement from one State to another. In respect of an inter-State sale, the tax is leviable only once and that indicates that the two clauses of section 3 are mutually exclusive. A sale taxable as falling within clause (a) of section 3, will be excluded from the purview of clause (b) of section 3; otherwise certain sales may be liable to tax tinder both the clauses and the two States may, in respect of a single sale, claim to levy the tax contrary to the plain intendment of sections 6 and 9 of the Act". The same learned Judge again observes at page 667 thus: "In our view, therefore, within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being made in the light of the pronouncement of the Supreme Court in the case mentioned above. We would, further, clarify the position by dealing with the arguments in support of the provisional assessments, which have been addressed to us on behalf of the taxing authority. The learned Government Pleader has pressed on us the argument that should the sale transactions be complete within the State and notwithstanding the outside movement of the goods under the covenants of sale, the bargain would still be taxable. In support of his argument he has relied on State of Travancore-Cochin v. S.V.C. Factory[1953] 4 S.T.C. 205; A.I.R. 1953 S.C. 333., where the learned Judges dealing with the exemption of import and export, have observed that the words "export out of" and "import into" mean the exportation out of and importation into the country respectively and that the last purchase of the goods made by the exporter for the purpose of exporting them would not be covered by the exemption. He has further relied on Kerala Arecanut Co. v. State of TravancoreCochin[1957] 8 S.T.C. 817 at p. 822., where a Division Bench of this Court has held that the purchase in the case could not reconsidered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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