TMI Blog1962 (11) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... Cochin. The fiction created by the Explanation to Article 286(1)(a) is inapplicable because there was no delivery as a direct result of sale for the purpose of consumption in any particular State. Also in the case of those goods exported out of India from Willingdon Island it cannot be said that there was a sale inside the State of Travancore- Cochin because the same considerations will apply to those sales as to the sales already discussed, i.e., goods the title to which passed at Fort Cochin were delivered at Willingdon Island and were delivered for consumption in parts of India other than Travancore-Cochin. - Civil Appeal No. 628 of 1961, - - - Dated:- 30-11-1962 - DAS S.K., KAPUR J.L., SARKAR A.K., HIDAYATULLAH M. AND RAGHUBAR DAYA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that records are under print. In view of these circumstances we have allowed that company to intervene in the present appeal. The assessment was made on March 30, 1955. under rule 33(1) of the Act on the ground that the sales of tea had escaped assessment. The appeal against that order was unsuccessful and thereafter a further appeal was taken to the Sales Tax Appellate Tribunal which by its order dated August 12, 1957, held that the ban under Article 286(1)(a) of the Constitution on sales which are outside the State applied in regard to the sales of "full lots" and therefore remanded the case to the Sales Tax Officer. Against that order a revision was taken to the High Court which held that the decision of the Appellate Tribunal in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at Fort Cochin which was outside the territory of Travancore- Cochin and therefore were not liable to tax because of the ban imposed by Article 286(1)(a) of the Constitution. That Article with the Explanation at the relevant time was as follows: "Article 286. (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) ..... Explanation -For the purposes of sub-clause (a), a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State, notwithstanding the fact that u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n full lots and those which were sold in portions. In regard to the former it was held that the title passed as soon as the hammer fell but not so in regard to the latter and therefore the sale of "full lots" was held to have taken place outside the State of Travancore-Cochin and of portions of lots inside that State. The case was consequently remanded to the Sales Tax Officer for determining the amount of the tax. The High Court in revision held that the words in Article 286(1)(a) "outside the State" do not mean transfer of ownership according to the Sale of Goods Act, but it was lexsitus which determines the taxability of the transaction and the correct position is that the ownership in the goods is transferred according to the law of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that State and those where the title in the goods passes. In somewhat similar circumstances this Court in India Copper Corporation Ltd. v. State of Bihar [1961] 2 S.C.R. 276, 286; 12 S.T.C. 56, 64. held by a majority decision that the opening words of Article 286(1) which speak of a sale or purchase taking place and the non-obstante clause in the Explanation, which refers to the general law relating to the sale of goods, indicated that it was the "passing of property within the State" that was intended to be fastened on for the purpose of determining, whether the sale in question was "inside" or "outside" the State and therefore subject to the operation of the "Explanation", that State in which property passed would be the only State which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause there was no delivery as a direct result of sale for the purpose of consumption in any particular State. There then remains the question of goods which were exported out of India from Willingdon Island. In the case of those goods also it cannot be said that there was a sale inside the State of Travancore- Cochin because the same considerations will apply to those sales as to the sales already discussed, i.e., goods the title to which passed at Fort Cochin were delivered at Willingdon Island and were delivered for consumption in parts of India other than Travancore-Cochin. In our view therefore the High Court was in error and the appeal should therefore be allowed and the judgment and order of the High Court of Kerala set aside. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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