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TMI Blog2014 (8) TMI 917X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. But that does not mean that there cannot be and would not be any other case covered by the expression “in the course of export”. The quoted passage relates to and deals with second part of Section 5(1) of the Central Sales Tax Act, 1956. A case may well be covered by the first part. Facts of each case have to be examined to ascertain whether the transactions in question were “in the course of export” or not. Further, actual export has to be established and shown. Latter aspect has been dealt with in the case of Sita Juneja (1998 (9) TMI 649 - DELHI HIGH COURT). Matter remanded back - Decided in favour of assessee. - ST. REF. 1/2013 - - - Dated:- 24-7-2014 - Sanjiv Khanna And V. Kameswar Rao,JJ. For the Petitioner : Mr. A.K. Babbar and Mr. Surendra Kumar For the Respondent : Mr. H. C. Bhatia, Advocate. JUDGMENT Sanjiv Khanna, J. (Oral) Appellate Tribunal, Value Added Tax (Tribunal, for short) vide order dated 25th April, 2008 in Appeal No. 49/STT/04-05 relating to assessment year 2000-01 (Local), has referred the following question of law to this Court under Section 45(1) of the Delhi Sales Tax Act, 1975 (for short, Act):- Whether in the facts and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foresaid finding was affirmed in the first appeal, compelling the assessee to file second appeal before the Tribunal. 5. Article 286 of the Constitution lays restrictions on imposition of tax on sales and purchase of good by the States and stipulates:- 286. Restrictions as to imposition of tax on the sale or purchase of goods (1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place (a) outside the State; or (b) in the course of the import of the goods into, or export of the goods out of, the territory of India (2) Parliament may by law formulate principles for determining when a sale or purchase of goods takes place in any of the ways mentioned in clause ( 1 ) (3) Any law of a State shall, in so far as it imposes, or authorises the imposition of, (a) a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter State trade or commerce; or (b) a tax on the sale or purchase of goods, being a tax of the nature referred to in sub clause (b), sub clause (c) or sub clause (d) of clause 29 A of Article 366, be subject to such restricti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any particular contract, the property in the goods passes to buyer on the Indian side of the customs frontier or beyond it. In either event the sale would have occasioned the export, for the sale and the export form one continuous series of transactions, the one leading to the other not merely in point of time but integrated by reason of a common intention which is given effect to. In such a case it would be seen that there is but one sale to the foreign buyer which occasions the export , and which is implemented in accordance with the terms of the contract by an actual export which is the sine qua non of a sale in the course of export XXXXXX 28. But the question is, do not these sales also occasion the export and in that sense sales in the course of export The test which has been laid down by this Court for determining the proximity of the connection between the sale and the export so as to bring the sale within the constitutional exemption in Article 286(1)(b) is the integrality of the two events the sale and the export. The question to be answered is therefore whether the sales now under consideration do not form part and parcel of a single integrated transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The expression in the course of export or import as referred to in Article 286 means any sale or purchase which itself occasions the export or import of the goods, as the case may be, out of or into the territory of India. A sale by way of export involves a series of integrated activities commencing from the agreement of sale with the foreign buyer, ending in the delivery of goods to any carrier for transport out of the country by land or sea and resulting in transfer of title in the goods beyond the borders. Such kind of sale cannot be disassociated from the export without which it cannot be effectuated and the sale and the resultant export from part of a single transaction. The liability to tax flows from the charging section of the taxing statute. The export sale of commodities to foreign buyer on CIF or FOB basis fall within the scope of the exemption. 9. Similarly, in Commissioner of Sales Tax Vs. Aero Traders (P) Ltd., (2007) 9 ILR 170 (Delhi), reference was made to Section 5(1) of the Central Sales Tax Act, 1956, which reads as under:- 5. When is a sale or purchase of goods said to take place in the course of import or export,--(1) A sale or purchase of goods sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applies to penultimate sale or purchase, which is deemed to be sale or purchase in the course of export and consequently falls under Section 5(1) of the 1956 Act. Therefore, in cases where a sale is not directly connected with exports and where between the seller and the ultimate buyer, intermediaries are involved, such a sale, if not covered under Section 5(3), cannot occasion any export and, therefore, such transaction would not fall under Section 5(1). There is a difference between sale for export and sale which occasions export. When the assessee buys paddy and converts it into rice which is sold to the exporter, although purchase of paddy is a transaction for export, such transaction does not occasion export and consequently it does not fall within Section 5(3). Under Section 5(3), a penultimate local sale is deemed to be an export sale under Section 5(1) only if such local sale occasions export. 11. Learned counsel for the Revenue has drawn our attention to the decision of the Supreme Court in B.K. Wadeyar, Sales Tax Officer, IV Division Vs. M/s. Daulatram Rameshwar Lal, (1960) 11 STC 757, wherein it has been held:- The only question for our decision in the appeal by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in these sales that the property will pass to the buyer even before shipment. The first circumstance on which he relies is that the bill of lading was taken in the name of the buyer. Along with this fact we have to consider however the fact that the bill of lading was retained by the sellers, the contract being that payment will be made on the presentation of the bill of lading. It is not disputed that the term in the contract for payment at Bombay against presentation of documents means this. It was the sellers who received the bills of lading and it was on the presentation of these bills of lading along with the invoices that the buyer paid the price. When the bills of lading though made out as if the goods were shipped by the buyer, were actually obtained and retained by the sellers, that fact itself would ordinarily indicate an intention of the parties that the property in the good would not pass till after payment. 12. The observations of the Supreme Court in B.K. Wadeyar (supra) do not support the findings of the Tribunal that the transactions in question should be subjected to tax and were not covered by Article 286 (1) (b) and Section 8 of the Act, for the reason th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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