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TMI Blog1964 (10) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... private dealer is not competent to export any ore outside India. The method of exporting iron ore is stated as follows: The petitioner extracts ore, out of which, ore of certain quality has to be supplied to the State Trading Corporation. If the ore does not conform to the quality, it is liable to rejection at the port, or even by the buyers, who are foreign importers and the expenses incurred by the State Trading Corporation are to be recovered from the petitioner. Thus if the iron ore is rejected by the foreign buyers, the loss falls on the petitioner and not on the State Trading Corporation. The State Trading Corporation have appointed Messrs Shri Narayan and Co. as their nominee who charge Re. 1 per ton as brokerage from the petitioner-firm for the work connected with the export of ore. The agreements which the petitioner entered with Messrs Shri Narayan Co. in all these petitions are identical. For the sake of convenience I am only referring to documents in Civil Writ No. 915 of 1962. Annexure 'A' is a sample of that agreement. The agreement for the relevant period was not filed but I allowed an opportunity to the learned counsel to file the relevant agreement and that has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... traction of iron, before they pass the pay orders; (6) As such we get approximate Re. 1 (Rupee one) per ton, which is in fact our brokerage, otherwise in fact you are the sellers and Japanese firms are the buyers, through State Trading Corporation. The following details will clear your doubt. Selling price to S.T.C. Rs. 47-8-0 per ton f.o.b. Kandla Port. Our approximate price per ton: 1.. Cost of iron ore payable to you. Rs. 14-8-0 2. Railway freight, Nizampur to Kandla Port. Rs. 24-8-0 3. Port charges, unloading of wagons, plot rent, agent's commission, shipment. Rs. 1-0-0 4. Our brokerage and miscellaneous expenses. Rs. 1-0-0 Hope you are satisfied that the price fixed is in your interest. Please continue railment without any hesitation." On the basis of these two documents the petitioner raised two contentions before the Assessing Authority, Mohindergarh district. The first contention was that the entire ore was exported out of the State and therefore no sales tax was leviable upon them with regard to the goods sent out in the course of inter State-trade. The second contention was that they were also not liable under the Central Sales Tax Act to inter-State sales tax l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) Any law of a State shall, in so far as it imposes, or authorises the imposition of, a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in interState trade or commerce be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament may by law specify." Section 5 of the Central Sales Tax Act: "5. (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 of India." There are a large number of decisions by their Lordships of the Supreme Court interpreting the expression "in the course of export" under Article ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale in the course of export..... there must be an intention on the part of both the buyer and the seller to export, there must be an obligation to export and there must be an actual export. The obligation may arise by reason of statute, contract between the parties, or from mutual understanding or agreement between them, or even from the nature of the transaction which links the sale to export. A transaction of sale which is a preliminary to export of the commodity sold may be regarded as a sale for export, but is not necessarily to be regarded as one in the course of export, unless the sale occasions export. And to occasion export there must exist such a bond between the contract of sale and the actual exportation, that each link is inextricably connected with the one immediately preceding it. Without such a bond, a transaction of sale cannot be called a sale in the course of export of goods out of the territory of India." It may be mentioned that this decision also deals with the interpretation of section 5 of the Central Sales Tax Act. In this state of the law and its exposition the exact nature of the transaction in the instant case has to be examined. In other words, it has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rather not happily expressed but that will not in any manner disprove the facts which clearly emerge on the record. If Mr. Nehra's contention were to prevail certainly the sale would not be a sale in the course of export. This is not denied by Mr. Sibal who appears for the petitioner. In support of his contention Mr. Nehra placed reliance on State of Travancore-Cochin and Others v. The Shanmugha Vilas Cashew-nut Factory and Others[1953] 4 S.T.C. 205., The State of Madras v. Gurviah Naidu Co. Ltd. and Others[1955] 6 S.T.C. 717., Gordhandas Lalji v. B. Banerjee and Others[1958] 9 S.T.C. 581. and East India Tobacco Company v. The State of Andhra Pradesh and Another.[1962] 13 S.T.C. 529. None of these cases has any application to the facts of the present case. In all these cases the sale was completed in India and was an independent transaction and no part of the transaction of sale was in the course of export. As already said, and as has been rightly accepted by Mr. Sibal, if I had come to the conclusion that the sale was by the petitioner to Messrs Narayan Co. there would be an end of the matter so far as the petitioner is concerned. But I have not taken that view. Moreover that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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