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TMI Blog1974 (2) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... alling Rs. 1,22,510.24. The said claim included Rs. 72,061.69 comprising of sales of "bonded warehouse ship-stores". According to the petitioners, the ship-stores were imported from foreign countries, kept in bonded warehouses of the customs department and later sold and delivered to ships' masters for consumption aboard the ships. They claimed that such sales were not exigible to tax under the Andhra Pradesh General Sales Tax Act, 1957, hereinafter called the Act, being sales outside the State of Andhra Pradesh. In the reply, which the petitioners gave on 29th January, 1969, to the pre-assessment notice dated 16th January, 1969, they set up their claims as follows: "We procure the ship-store goods from foreign countries after obtaining t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hence not taxable by the Andhra Pradesh. These goods were allowed to be warehoused without the goods being assessed to duty on the declaration made by us that the goods are intended to be supplied as ship-stores to foreign going vessels. In these cases, the customs duty has never been paid and so these do not come under actual import for sale. As these goods were exempt from sections 17(2) and 85 of the Sea Customs Act of 1962, they cannot be considered as actual imports, on which customs duty is levied, and so these are exempted from Andhra Pradesh sales tax, and we are therefore entitled for the exemption on our ship-stores business of Rs. 72,061.69 claimed now." The Deputy Commercial Tax Officer, by his order dated 19th January, 1969, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order to appreciate these contentions, it is useful to keep in view the legislative history of article 286 of the Constitution. In Tata Iron and Steel Company Limited v. S.R. Sarkar[1960] 11 S.T.C. 655 (S.C.)., the Supreme Court referred in detail to such a history and we consider it unnecessary to repeat the same here. In the light of the amended article 286(2), section 4 of the Central Sales Tax Act laid down as to when a sale or purchase of goods can be said to take place outside a State. According to that section, a sale or purchase of goods shall be deemed to take place inside a State if the goods are within the State (a) in the case of specific or ascertained goods, at the time of the contract of sale is made; and (b) in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. We then turn to the second contention. As can be seen article 286(1)(b) provides that no law of a State shall impose or authorise the imposition of tax on the sale or purchase of goods where such sale or purchase takes place in the course of import of the goods into, or export of the goods out of, the territory of India. In pursuance of sub-article (2) of article 286, section 5 of the Central Sales Tax Act enacts as to when a sale or purchase of goods can be said to take place in the course of import or export. According to that section, a sale or purchase 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmercial Tax Officer[1960] 11 S.T.C. 764 (S.C.); A.I.R. 1961 S.C. 315. a similar argument was advanced. It was contended that the aviation spirit was delivered outside the customs barrier, that aviation spirit was taken out of the territories of India and that the sales occasioned the export. Repelling the contention, the Supreme Court said that every sale or purchase preceding the export is not necessarily of export. The sales or purchases for the purpose of export are not protected unless the sales or purchases themselves occasioned the export and are an integral part of it. It was observed that the test is that the goods must have a foreign destination where they can be said to be imported. It matters not that there is no valuable cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding that it was not sufficient that the goods should be intended to be transported to a destination beyond India, so that they were in the course of import into some other locality outside India and consequently the coal sold to the steamship for enabling its voyage on the sea out of the country was not export. It was said that a mere movement of the goods out of the country following a sale would not render the sale one in the course of export within article 286(1)(b) of the Constitution. The existence of two termini as those between which the goods are intended to move or between which they are intended to be transported is necessary. A mere movement of goods out of the country without any intention of their being unloaded in specie in s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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