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TMI Blog2003 (11) TMI 556X X X X Extracts X X X X X X X X Extracts X X X X ..... stered dealers which becomes the subject matter of such sales cannot be subjected to tax under Section 7-A of the Tamil Nadu General Sales Tax Act. 2. Mr. Natarajan, learned senior counsel invited our attention to the decision by the Constitution Bench in the case of State of Travancore -Cochin Ors. Vs. Bombay Co. Ltd.,(AIR 1952 S.C. 366). It was held at paragraph 10 of the judgment that, "Assuming without deciding that the property in the goods in the present cases passed to the foreign buyers and the sales were thus completed within the State before the goods commenced their journey as found by the Sales Tax Authorities, the sales must, nevertheless, be regarded as having taken place in the course of the export and are, therefore, e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axed by a State Legislature even if its situs is within the State, because the State Legislature has no legislative competence to impose tax on sale in the course of inter-State trade or commerce. That can be done only by Parliament. If therefore a question arises whether a sale is exigible to tax by the State Legislature, it may have to be considered whether it is a sale in the course of inter-State trade or commerce. The same sale in another context may have to be examined from a different point of view for determining where its situs lies and whether it is a sale inside the State or outside the State. There is therefore no incompatibility in the same sale being both a sale in the course of inter-State trade or commerce within the meaning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh the argument advanced is attractive, that argument cannot be accepted having regard to the subsequent decision of the two Judge Bench of the Supreme Court in the case of State of Karnataka Vs. B. M. Ashraf Co. (107 S.T.C.571), wherein, Section 6 of the Karnataka Sales Tax Act,1957 which is similar to Section 7-A of the Tamil Nadu General Sales Tax Act was considered. The Court, after referring to the relevant provision of the State Act and Section 5 of the Central Sales Tax Act held that, "The words "sale in the State" occurring in Section 6(i) of the Act would refer to "intra0State" sale in contradistinction to "sale in the course of inter-State trade or commerce" as referred to in clause (ii) of Section 6. It has been accepted by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -State trade or commerce. Therefore, wherever, there is a sale in the course of export or an inter-State sale, then, that would not be regarded as a "sale in the State" falling under Section 6(i) of the Act and, therefore, sale by the respondent to Kalbhavi, which was admittedly a sale in the course of export under Section 5(3) would not be regarded as "sale in the State". Having regard to the clear enunciation of the law, it cannot be held that the fact that the purchase is also a sale, and that the situs of the sale can be located within the State would suffice to enable an assessee to contend that the disposal of the goods purchased by it from unregistered dealers is not liable to tax under Section 7-A of the Act, even when the sale, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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