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TMI Blog1986 (7) TMI 387X X X X Extracts X X X X X X X X Extracts X X X X ..... deemed to be an application for revision under section 15 of the Rajasthan Sales Tax Act and disposed of accordingly. In view of the aforesaid provision this application is being disposed of as a revision petition. M/s. Beecham Ores and Minerals (non-petitioner No. 1) (hereinafter referred to as the assessee) is a partnership firm having its head office at Bombay and a branch office at Udaipur in Rajasthan. It is registered as a dealer under the Rajasthan Sales Tax Act as well as under the Central Sales Tax Act, 1956 (hereinafter referred to as the Central Sales Tax Act). The assessee obtained an export order for supply of soap stone lumps from Japan and in order to supply soap stone lumps to the foreign buyers, the assessee purchased soap stone lumps from various registered dealers of Udaipur in Rajasthan. The said purchases made by the assessee during the period 1st January, 1969 to 31st December, 1969 (assessment year 1970-71) were to the tune of Rs. 4,47,235.25. The said purchases by the assessee were made from the local dealers under agreements which provided for the supply of soap stone lumps by the local suppliers f.o.r. loading station and the prices were fixed exclusive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... export and, therefore, the goods were liable to purchase tax under section 5A of the Rajasthan Sales Tax Act. The Commercial Taxes Officer also held that after the transfer of the goods by the assessee to its head office the goods entered into the export stream and were sold to the purchaser in Japan and those sales were not liable to any sales tax. The Commercial Taxes Officer was further of the view that from the documents (purchase bills and invoices) produced by the assessee, it was clear that the goods purchased by it have not suffered tax at any other point and even if the question of issuance of declarations in form S.T. 17 was altogether ignored, these purchases form part of the taxable turnover as defined under section 2(s) of the Rajasthan Sales Tax Act, and were liable to purchase tax under section 5A of the Rajasthan Sales Tax Act. The Commercial Taxes Officer, therefore, levied purchase tax at the rate of 7 per cent under section 5A of the Rajasthan Sales Tax Act on the turnover of Rs. 4,47,235.25. The appeal filed by the assessee against the said assessment order passed by the Commercial Taxes Officer was dismissed by the Deputy Commissioner (Appeals), Commercial Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said provision contained in section 13(10) of the Amendment Act of 1984 this application has to be treated as an application for revision under section 15 of the Rajasthan Sales Tax Act and has to be disposed of as a revision application. Sub-section (3) of section 15 of the Rajasthan Sales Tax Act as substituted by the Amendment Act of 1984 provides that the application for revision shall precisely state the question of law involved in the case and it shall be competent for the High Court to formulate the question of law or to allow any other question of law to be raised. Sub-section (4) of section 15 as substituted provides that the High Court shall after hearing the parties to the revision decide the question of law involved therein and shall thereupon pass such orders as are necessary to dispose of the case. In the present case the applicant in this application has stated the question of law involved in this case and we will proceed to deal with the said question of law, namely, whether, under the facts and circumstances of the case, the Board of Revenue was justified in holding that no purchase tax is leviable on Rs. 4,47,235.25 being a sale in the course of export altho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said that 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............ In general where the sale is effected by the seller, and he is not connected with the export which actually takes place, it is a sale for export. Where the export is the result of sale, the export being inextricably linked up with the sale so that the bond cannot be dissoci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, either the sale must take place when the goods are already in the process of being exported which is established by their having already crossed the customs frontiers, or the sale must occasion the export. The word 'occasion' is used as a verb and means 'to cause' or 'to be the immediate cause of'. Read in this way the sale which is to be regarded as exempt is a sale which cause the export to take place or is the immediate cause of the export. The export results from the sale and is bound up with it. The word 'course' in the expression 'in the course of' means 'progress or process of', or shortly 'during'. The phrase expanded with this meaning reads 'in the progress or process of export' or 'during export'. Therefore, the export from India to, a foreign destination must be established and the sale must be a link in the same export for which the sale is held. To establish export a person exporting and a person importing are necessary elements and the course of export is between them. Introduction of a third party dealing independently with the seller on the one hand and with the importer on the other breaks the link between the two, for them there are two sales one to the int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be deemed to take place in the course of export of the goods only if the sale or purchase occasions such export. The various decisions to which reference has been made illustrate the ascertainment of the pre-eminent question as to which is the sale or purchase which occasions the export. The Coffee Board case [1970] 25 STC 528 (SC); [1970] 3 SCR 147 as well as the case of Binani Bros. [1974] 33 STC 254 (SC); [1974] 1 SCC 459 clearly indicates that the distinction between sales for export and sales in the course of export is never to be lost sight of. The features which point with unerring accuracy to the contract between the appellant and the Corporation on the one hand and the contract between the Corporation and the foreign buyer on the other as two separate and independent contracts of sale within the ruling in the Coffee Board case [1970] 25 STC 528 (SC); [1970] 3 SCR 147 and the Binani Bros. case [1974] 33 STC 254 (SC); (1974) 1 SCC 459 are these. The Corporation entered on the scene and entered into a direct contract with the foreign buyer to export the goods. The Corporation alone agreed to sell the goods to the foreign buyer. The Corporation was the exporter of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Supreme Court referred to above and has submitted that if the tests laid down in the aforesaid decisions are applied to the facts of the present case it must be held that the purchases of soap stone lumps by the assessee from the local dealers could not be regarded as purchase in the course of export but were only purchases for export and the assessee was, therefore, liable to pay purchase tax on the said purchases under section 5A of the Rajasthan Sales Tax Act. In this connection Shri Bhandari has also urged that under the agreement between the assessee and the local dealers the delivery of the goods was f.o.r. loading station Rajasthan and the property of the goods passed when the goods were loaded on the railway wagons in Rajasthan and the sale was complete in Rajasthan. According to Shri Bhandari there were two separate transactions, one between the local dealers and the assessee and the other between the assessee and the foreign buyers and that the transaction of sale by the local dealers to the assessee could not be said to be integrally connected with the export of the goods and the said sale by the local dealers to the assessee could not therefore, be said to be a sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said sale by the assessee and the purchase by the foreign buyer was a sale of action in the course of export because the said sale occasioned the export of the goods sold from India to Japan. The question is whether the sale by the local dealer to the assessee and the said purchase by the assessee could be regarded as sale and purchase in the course of export. If the decisions laid down by the Supreme Court in Ben Gorm Nilgiri Plantation's case [1964] 15 STC 753 (SC), Coffee Board's case [1970] 25 STC 528 (SC) and Mod. Serajuddin's case [1975] 36 STC 136 (SC) are applied then it must be held that the sale by the local dealers to the assessee and the consequent purchase by the assessee from the local dealers being a transaction independent of the transaction of sale by the assessee to the foreign buyer cannot be regarded as a sale or purchase in the course of export but can only be regarded as a sale and purchase for export. In so far as transaction of sale and purchase between local dealers and assessee are concerned, the said transaction came to an end when the goods were delivered to the railway at the loading station as per the terms of the contract and the property in the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Supreme Court in Ben Gorm Nilgiri Plantation's case [1964] 15 STC 753 (SC), Coffee Board's case [1970] 25 STC 528 (SC) and Mod. Serajuddin's case [1975] 36 STC 136 (SC) held that the said purchases were not in the course of export but were for the purpose of export and no exemption could be claimed in respect of the said purchases. The Court held that the said purchases did not by themselves occasion the export as they could have been diverted by the purchasers to other places inside the territory of India and the transaction of purchase/sale was not inextricably linked with the export of the cotton to the foreign country so as to attract article 286 of the Constitution. In this connection this Court pointed out that neither there was any contract nor statutory provision binding the petitioner-company to export the cotton bales purchased from the local dealers, nor there was any binding agreement between the local dealers and the petitioners to export the cotton purchased by them outside the territory of India. The present case is very similar to the aforesaid case and here also it can be said that neither there was any contract nor statutory provision binding the assessee to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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