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TMI Blog1973 (7) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly, I quash exhibit P9 and restrain the first respondent from taking any action pursuant thereto against the petitioner. No costs." The State questions the correctness of this decision in this appeal. The facts are as follows: The respondent is an importer of cotton from foreign countries. The cotton so imported are generally sold to the spinning mills in Kerala and Madras. These transactions were sought to be assessed to sales tax by the sales tax authorities. A notice was issued to the respondent proposing assessment of these transactions. The assessee filed O.P. No. 186 of 1962 against the notice and got the action stayed for some time. That original petition was disposed of by this court on 15th January, 1966, with a direction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs are to accept the cotton at an allowance that may be agreed upon or fixed by arbitration. The various conditions in the contract further stipulate that the change of the insurance rate between the date of contract and shipment will be towards buyer's account. The exchange risk that may be caused by variation of the official exchange rate will be towards buyer's account, any difference in the import duty and other incidental charges between the date of the agreement and the date of delivery will be for buyer's account, the sales are subject to the safe arrival of the steamer, the sellers cannot be called upon to replace cotton and even broken bales in any form unloaded from the steamer must be accepted by the buyers. A letter of authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... export or import stream are sold; (2) When the contracts of sale or law under which goods are sold require those goods to be exported or imported to a foreign country or from a foreign country as the case may be or are required to be transported to a State other than the State in which the delivery of goods takes place; and (3) Where as a necessary incidence of the contract of sale goods sold are required to be exported or imported or transported out of the State in which the delivery of goods takes place." A reading of the various records produced clearly establish the following facts: (1) The mills had an actual user's import licence to import cotton from U.S.A. (2) They contracted with the respondent to purchase the said quali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the case out of a case of sale in the course of import and he relied on the decision in Coffee Board v. Joint Commercial Tax Officer[1970] 25 S.T.C. 528 (S.C.). That was a case of export where the dealings consisted of two independent sales and the inextricable link required between them was not present. That is not the case here. The contract of sale required the goods to be imported and the import began with an outside purchase by the seller and it is inextricably linked with the sale in question. So the facts in Coffee Board's case(1) are distinguishable. The decision referred to by the learned single judge in his judgment was the subject-matter of appeal before the Supreme Court. The Supreme Court decision, Deputy Commissioner of A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he proof. The facts of this case are practically similar to the facts in Kotak's case(1). Therefore, the finding of the Sales Tax Officer that these transactions do not constitute a sale in the course of import is incorrect. In the result, we hold that the transactions in this case are really transactions of sale in the course of import and are not taxable either under the General Sales Tax Act or under the Central Sales Tax Act. Therefore, we dismiss the appeal; but, in the circumstance, we make no order as to costs. GOPALAN NAMBIYAR, J.-I agree with the judgment delivered on behalf of the Bench by my learned brother Viswanatha Iyer, J. 2. There are certain regions in this case which give rise to some difficulty, and I am not altogethe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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