TMI Blog1957 (2) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... xemption clause not applying to it and if the exemption applies, then the tax has been levied without jurisdiction. The disputed levy of sales tax for the year 1953-54 is not according to law and to that extent the levy of tax is hereby quashed. Appeal dismissed. - W.P. No. 94 of 1956 - - - Dated:- 22-2-1957 - BHAGWATI N.H. AND JAGANNADHADAS B. AND SYED JAFER IMAM AND GOVINDA MENON P. AND KAPUR J.L. JJ. Purshottam Tricumdas, Senior Advocate (S.N. Andley, J.B. Dadachanji, Rameshwar Nath, P.L. Vohra, Advocates of Messrs Rajinder Narain and Co., with him), for the petitioners. G.C. Mathur and C.P. Lal, Advocates, for the respondents. The Judgment of the Court was delivered by GOVINDA MENON, J.- This petition under Article 32 of the Constitution raises the question as to whether the 1st respondent, the State of Uttar Pradesh, illegally and unauthorisedly levied sales tax on the 2nd petitioner-firm, under the Uttar Pradesh Sales Tax Act (U.P. Act XV of 1948) with regard to the cloth manufactured by the 2nd petitioner, with a view to exporting such cloth outside the territories of India, by customers of the 2nd petitioner called "indentors". The 1st peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Chief Controller of Export and Import, Ministry of Commerce, Government of India, for the grant of an export licence which, when grated, permits him to export cotton piece-goods to be manufactured by a textile mill, specified in such a licence. The licence also names the mills where the cotton cloth is to be manufactured and further descriptions of the cloth are also given. A copy of the licence is given to the indentor and another copy is sent to the textile mill named in the licence which is to manufacture the cloth. Thereafter the mill receives the order from the indentor to manufacture the cloth intended for export under the licence and the required quantity is delivered to the indentor after manufacture in the mills. On delivery the indentor pays the excise duty to the Central Government and removes the goods to his actual place of business. The cloth is then printed by hand-printing and exported. It is to this kind of cloth manufactured with a view to export overseas for which a licence has already been granted by the Central Government, that the exemption from sales tax referred to in the notification above-mentioned applies. According to the petitioners, during the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the exemption; but the fact of the actual export of the processed cloth was not gone into and even if it is held that the exemption is permissible in respect of such sales, then it will have to be established as a fact that the cloth sold by the petitioner was actually exported out of India." This contention cannot be accepted in toto because the order of the Appellate Sales Tax Judge for the year 1953-54 proceeds on the footing that there had actually been export of cloth for that particular year. In these circumstances, we propose to discuss the validity of the assessment for the year 1953-54 only, for the reason that with regard to the other two years the fact of export itself is disputed. It has to be mentioned that it is only on facts admitted or taken as proved that the question of the violation of a fundamental right can be decided by this Court under Article 32, because when facts are in dispute, the matter has to be enquired into and decided by proper legal proceedings. Confining ourselves, therefore, to the legality of the levy of tax for the year 1953-54, the question is whether the State had any authority to impose the tax in the circumstances. If a tax is levi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same view was also expressed in The State of Bombay v. The United Motors (India) Ltd. [1953] 4 S.C.R. 1069, 1077; 4 S.T.C. 133., and again only recently in Himmatlal Harilal Mehta v. The State of Madhya Pradesh [1954] 5 S.C.R. 1122, 1127; 5 S.T.C. 115." In addition to the cases cited above, there is a more recent authority dealing with the subject, viz., Bidi Supply Co. v. The Union of India and Others[1956] S.C.R. 267, 277. What we have, therefore, to ascertain is whether the interpretation put upon the exemption clause by the Sales Tax Authorities with regard to the quantity of cloth sold during the year 1953-54, to the indentors is sound in law. One of the arguments advanced on behalf of the State is that the quantity of cloth sold was not specifically manufactured for that purpose because there is an observation by the Sales Tax Officer that it was ad- mitted before him that from the existing manufactured cloth available with the manufacturers the quantity intended for export was sold and that there was no manufacture in accordance with the directions given in the licence. It is urged that in such a case the exemption cannot be availed of. In our opinion, it is not ne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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