TMI Blog1960 (10) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration the liability of the respondent-The Cochin Coal Company Ltd.-to sales tax under the United State of Travancore and Cochin General Sales Tax Act, 1125 (1950). The following are briefly the facts which it is necessary to state in order to appreciate the points in controversy in the appeal. The Cochin Coal Company Ltd., which will be referred to as the respondent-company, are, as their name indicates, dealers in coal. The commodity, the sales of which have given rise to the dispute in this appeal is what is known as "bunker coal". The company have their offices at a place called Fort Cochin which was formerly within the State of Madras. They import and keep stocks of "bunker coal" stacked at a place called Candle Island which at the date relevant to these proceedings was also within the State of Madras. Part of the activities of the respondent-company consist in the supply of "bunker coal" from their depots in Candle Island to steamers arriving in or calling at the port of Cochin (in the State of Travancore-Cochin) for the outward voyage of the steamers from the said port. The usual procedure by which "bunker coal" was thus supplied by the respondent-company was briefl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he tax. The point urged by the company, that the same sales had been assessed to tax in Madras State as sales actually taking place there, was also rejected as irrelevant. The respondent-company thereafter filed an appeal to the Appellate Assistant Commissioner who allowed the appeal of the company holding that the sales were "in the course of export" within Article 286(1)(b), and that even if they were not such but were "inside" sales falling within the Explanation to Article 286(1)(a) of the Constitution, still a notification by the State Government dated February 5, 1954, exempting such sales from tax, operated for the benefit of the assessee. Thereafter the Deputy Commissioner of Sales Tax who was the revisional authority took up the matter suo motu and called upon the assessee to show cause why the appellate order should not be set aside and the entire turnover assessed to sales tax as the sales had taken place inside the State only. After hearing the assessee-company the order of the Appellate Assistant Commissioner was set aside and that of the Sales Tax Officer restored. The respondent-company then moved the High Court of Travancore-Cochin under Articles 226 and 227 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 S.T.C. 298. If therefore the assessee-company could rely only on Article 286(2) for claiming relief, it must be held to be not available to them since the Sales Tax Validation Act, 1956, would have validated the levy. Before us, however, learned counsel for the respondent-company urged two grounds to sustain the decree of the High Court in its favour. The first was that as the coal trimmed into the steam-ships was meant to be carried outside the territory of India, the sale was "in the course of export" within Article 286(1)(b) of the Constitution and was therefore exempt from the levy of sales tax by the State. This contention however has to be rejected in view of the decision of this Court in Burmah Shell Oil Storage Distributing Co. of India, Ltd. v. Commercial Tax Officer and Others etc C.A. 751 of 1957 C.A. 10 of 1958: Since reported at [1960] 11 S.T.C. 764.., in which it was held that in the context and setting in which the expression "export out of the territory of India" occurs in Part XIII of the Constitution, it was not sufficient that goods were merely moved out of the territory of India but that it was further necessary that the goods should be intended to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e consumed either by destruction or by way of use depending on the nature of the goods. Thus edible articles are generally consumed in a literal sense while other articles like clothing or furniture etc. are consumed by being used, though they are not destroyed by such use. If edible articles are sold and delivered to an ultimate consumer within a State, it is delivered for the purpose of consumption within the State, notwithstanding that the buyer may not choose to consume the whole of his purchase within the State but takes part of it outside the State and consumes it there. If, for instance, a vehicle is sold to the actual user and the sale is not in the course of export or with a view to further commercial transactions in it by the purchaser by way of resale etc., the delivery to the user is for the purpose of his consumption within the State. The fact that such a purchaser might in the exercise of the enjoyment of his property- by way of use or "consumption"-drive the vehicle to other States does not detract from the original delivery to him falling within the Explanation to Article 286(1)(a). In the present case, the coal having been delivered into to the ship for being consu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Gazette, make an exemption.............in respect of any tax payable under this Act: (i) on the sale of any specified class of goods at all points or at any specified point or points in the series of sales by successive dealers; or (ii) by any specified class of persons in regard to the whole or any part of their turnover." It is not necessary to set out the rest of the section. In the Travancore-Cochin Gazette dated February 16, 1954, the following notification dated February 5, 1954, appeard: "According to the interpretation given by the Supreme Court to Article 286(1) of the Constitution in their judgment in the State of Bombay v. United Motors (India) Ltd. [1953] 4 S.T.C. 133; 1953 S.C.R. 1069., certain categories of inter-State transactions come within the taxing powers of the State Government. While the judgment enables the Government of Travancore-Cochin to levy sales tax on certain categories of non-resident dealers selling goods for delivery and consumption in Travancore-Cochin State from the 1st April 1951, the Government have, after due consideration, decided to levy sales tax on such transactions only from the 1st April 1953, the date immediately fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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