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TMI Blog1976 (4) TMI 197X X X X Extracts X X X X X X X X Extracts X X X X ..... o upheld the view of the assessing authority. On a further appeal to the Sales Tax Appellate Tribunal, it was held that the said disputed turnover of Rs. 1,23,362.40 represented export sales and, as such, it should be excluded from the taxable turnover. The State Government had challenged the decision of the Tribunal in this tax case. Reliance was placed by the State on the decision of the Supreme Court in Mod. Serajuddin v. State of Orissa[1975] 36 S.T.C. 136 (S.C.). , in support of its stand that the transactions in question cannot be treated either as export sales or as sales in the course of export. The assessee, however, relied on the decision of a Division Bench of this Court in State of Tamil Nadu v. Cauvery Spinning and Weaving Mills Ltd.[1974] 33 S.T.C. 506., to which one of us was a party, wherein similar transactions of sale have been held to be sales in the course of export. V. Ramaswami and Sethuraman, JJ., who heard the tax case in the first instance felt that in view of the later decision of the Supreme Court in Mod. Serajuddin v. State of Orissa[1975] 36 S.T.C. 136 (S.C.). , the earlier Bench decision of this Court in State of Tamil Nadu v. Cauvery Spinning and We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or as sales in the course of export. In the case before the Supreme Court, the assessee had entered into two contracts with the State Trading Corporation for the sale of mineral ore. The corporation in its turn entered into contracts with foreign buyers for the sale of the identical goods purchased from the assessee. The terms of contract between the assessee and the corporation were as follows: The price expressed in U.S. dollars for long ton is to be f.o.b. Calcutta. The goods should be ready in Calcutta harbour for shipment by a particular steamer. The final sampling and moisture determination and the final ascertainment of weight and price should be done at the foreign port of discharge by certain named persons, and their certificate is to be final and binding on both the buyer and the seller. 90 per cent payment is to be made against shipping documents. The corporation will assign the relevant foreign letter of credit, which is to be opened in its name by the foreign buyer. The corporation is to endorse the bill of lading and deliver it to the assessee. The balance to be paid after the destinational weight and analysis on the basis of the terms mentioned in the correspondin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad entered into independent contracts with the foreign buyer on f.o.b. basis which alone occasioned the export of the goods. (3) The corporation having purchased the goods from the assessee in order to fulfil its contract with the foreign buyer, the assessee's contract with the corporation is not the direct cause for nor has it occasioned the export. (4) Though the assessee had been required under the contract entered into with the corporation to bring the goods to a named ship, his sale cannot be said to have caused the export and the export was actually the result of the sale by the corporation to the foreign buyer. (5) The mere carrying out the directions given by the corporation to the assessee to place the goods on board the ship as a term of the contract of sale, the assessee cannot be taken to be an exporter and (6) The fact that exports can be made only through the State Trading Corporation and that the State Trading Corporation is interested in getting only a commission does not have the effect of making the assessee an exporter when there is direct export contract only with the corporation and the foreign buyer. Khanna, J., had dissented and has taken the view that as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Tamil Nadu v. Cauvery Spinning and Weaving Mills Ltd.[1974] 33 S.T.C. 506. cannot be accepted as laying down the correct position, that it is no longer necessary to go into the question as to whether a sale between two local dealers is interconnected with the export, that even if there is an interconnection or an integration with the export, still under the definition of sale in the course of export, it cannot be taken to have been a cause or occasion for the export. It is also said that the decision in State of Tamil Nadu(1) is in accord only with the said minority view. In State of Tamil Nadu v. Cauvery Spinning and Weaving Mills Ltd.[1974] 33 S.T.C. 506., the assessee, a spinning and weaving mill entered into contracts of sale of cotton yarn with a buyer at Madras who had in turn contracted to sell the same to a buyer in Ceylon. The sales were on f.o.b. terms. Under the contract the assessee should put the goods free on board and payments should be made against delivery of documents. The bills of lading showed the assessee as consignor and the foreign buyer or his nominee in Ceylon as consignee. The goods were released under AR-4 forms without payment of Central excise dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rated transaction with the export would also come under the definition of sale in the course of export under section 5 of the Central Sales Tax Act. We are not inclined to agree with the counsel for the assessee that the said decision of the Supreme Court should be confined to the facts of that case. In fact, the Supreme Court had referred to the earlier decisions on the point and had explained the same. We have, therefore, to take the latest decision of the Supreme Court as laying down the law on the point. May be there is much to be said in favour of the dissenting view set out by Khanna, J., in the light of the precedents, but this court is bound by the decision as expounded by the majority view. On the principles laid down by the Supreme Court in the said case, there is no question of two sales coming within the scope of section 5(1) and it is only an export sale, i.e., a sale between an exporter and the foreign buyer that will come under the definition of sale in the course of export, and all other sales even if interconnected or integrated with the export cannot be treated as sales in the course of export. There being no room for two or more sales being in the course of exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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