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TMI Blog1967 (1) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... State as a result of sale were covered under the Explanation to Article 286(1)(a) of the Constitution and, consequently, were exempt from sales tax?" 2.. The material facts are that in proceedings for assessment of sales tax under the Central Provinces and Berar Sales Tax Act, 1947, for the period from 22nd October, 1949 to 9th November, 1950, the assessee, a dealer in grains, oil-seeds, cotton etc., claimed that its turnover of Rs. 2,73,720-0-3 of oil-seeds sold to dealers outside Madhya Pradesh could not be taxed as those sales were "Explanation" sales under Article 286(1) of the Constitution. The Sales Tax Commissioner held that the assessee sold oil-seeds of the value of Rs. 1,23,333-13-6 to dealers outside the State to whom goods were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 286(1) of the Constitution. This position cannot be disputed in view of the decisions of the Supreme Court in Burmah Shell Oil Storage and Distributing Co. v. Commercial Tax Officer[1960] 11 S.T.C. 764; [1961] 1 S.C.R. 902., India Copper Corporation Ltd. v. State of Bihar [1961] 12 S.T.C. 56. and A.V. Thomas and Co., Ltd. v. Deputy Commissioner of Agricultural Income-tax and Sales Tax[1963] 14 S.T.C. 363. In all these cases, it has been laid down that for the purpose of determining whether under Article 286(1), as it stood before the Constitution (Sixth Amendment) Act, 1956, a sale is "inside" or "outside" the State, it is the passing of property within the State that is intended to be fastened on and, therefore, subject to the operation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat oilseeds were sent outside the State of Madhya Pradesh was in itself sufficient to indicate that they were delivered to purchasers outside the State for the purpose of consumption in their State. It was said that having regard to the fact that the goods which were sold were oil-seeds, it must be taken that they were purchased by the dealers of Surat, Navsari and Bombay for the purpose of consumption in their State and not for re-export to any other State; and that even if the purchasers sold the oil-seeds to other persons in the delivery State that would be "consumption in the State of delivery" within the meaning of the Explanation. Referring to Government of Andhra Pradesh v. Guntur Tobaccos[1965] 16 S.T.C. 240; A.I.R. 1965 S.C. 1396. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ours*). The words "prove further" used by the Supreme Court are very significant, and point to the fact that in order to claim exemption of sales tax the assessee has to prove that the goods were as a direct result of sale delivered outside the taxing State for the purpose of consumption in the State of first delivery, and that he will not have to prove further that the goods were actually consumed in the State of first destination. 7.. No doubt, the burden of showing that a sale transaction is taxable is on the revenue. But here the point raised is not whether the sale transactions in question effected by the assessee are taxable. But it is whether under the Explanation the assessee is entitled to exemption of sales tax on those transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of the goods and that purchasers outside the State to whom the goods are delivered can consume the goods themselves in the sense of using them up or can take the goods outside their State and consume them there or even sell the goods to the ultimate consumer within the State of delivery, and that the manner in which the purchaser outside the State consumes the goods is not a matter with which the seller is concerned. But what is necessary is that as between the seller and the purchaser outside the State, the delivery of the goods outside the State must be for the purpose of consumption in the State of delivery. If this is not the purpose of delivery as between the seller and the purchaser, then recourse to the Explanation cannot be had. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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