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TMI Blog1988 (6) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... o as "the dealers"). The gunny bags purchased were used by the dealers for purposes of packing the barytes powder being exported to a foreign buyer. As per the policy of the Central Government the barytes packed in the hessain gunny bags were sold to and channelised through the Minerals and Metals Trading Corporation for purposes of exporting the same to the foreign buyer. The claim of the respondent is that the sales effected by it were in the course of export being the last sale preceding the sale occasioning the export of barytes packed in the goods sold out of the territory of India. The assessing authority rejected the claim and subjected the sales to tax. The respondent thereupon made an unsuccessful appeal before the Appellate Deputy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom exigibility of tax. Mr. Venkataramana, the learned Government Pleader, contended that the sales of gunny bags by the respondent were neither ultimate nor penultimate occasioning the export of the same and therefore the said sales are not in the course of export for being covered by section 5 of the Central Sales Tax Act. On the other hand, Mr. Dasaratharama Reddi, the learned counsel for the respondent, submitted that the MMTC (Minerals and Metals Trading Corporation) is a mere agent of the dealers to whom the respondent sold the gunny bags, that the dealers alone are the exporters to the foreign buyer and therefore the sales by the respondent to the dealers are penultimate ones and accordingly fall under the coverage of section 5(3). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stem of canalisation of exports through certain corporate bodies is held to be constitutionally valid in Daruka Co. v. Union of India (1973) 2 SCC 617, and that agency arises by an ostensible authority conferred by the principal on the agent or by an implication of law in cases of necessity. In the present case, admittedly, there is no authority conferred by the dealers on the MMTC in regard to the transaction with the foreign buyer. Even to hold that there is an agency of necessity, there should have been a contractual relationship created by the parties and on account of some emergency the law should have conferred upon one party authority to act for another or allowed an agent to exceed the authority conferred by the contract. This is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ahib Co. [1978] 42 STC 335, Deputy Commissioner of Commercial Taxes v. Thirumeninatha Nadar Firm [1968] 21 STC 184 and Haji Abdul Gaffoor Sahib Co. v. State of Madras [1958] 9 STC 208. There is absolutely no dispute with the proposition that in cases of sales effected by transfer of documents of title to the goods, the mere shipping of the goods, after the goods had gone through the "customs barriers", would not constitute the goods having crossed the "customs frontiers" and that it is only after the goods have crossed the frontiers the title to the property passes on. These decisions are of no help to the respondent for the reason that admittedly the dealers had sold the barytes powder packed in the gunnies sold by the respondent to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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