9911796707
TMI Blog1975 (4) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... ------------------------------------------- The judgment of RAY, C.J., MATHEW, BEG and CHANDRACHUD, JJ., was delivered by RAY, C.J. KHANNA, J., delivered a separate judgment. RAY, C.J.-These appeals by special leave raise the question whether the agreements between the appellants and the State Trading Corporation (hereinafter referred to as the Corporation) were in the course of export, and, therefore, immune from liability to the Central Sales Tax Act. The appellant entered into four contracts for sale of mineral ore. Two of these contracts were with the foreign buyer M/s. Associated Metals and Minerals Corporation, New York. The other two contracts were with the State Trading Corporation. It is common ground that the Corporation entered into contracts with foreign buyers for sale of the identical goods purchased by the Corporation from the appellant. The present appeal relates to the two contracts between the appellant and the Corporation. The High Court came to the conclusion that the appellant's two contracts with the Corporation are exigible to tax under the Central Sales Tax Act, 1956. Section 5(1) of the Central Sales Tax Act, 1956, hereinafter referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er as Leneverett or substitute scheduled to load during December, 1960. The clause as to sampling and analysis is final sampling and moisture determination will be made at the time of unloading at the port of discharge by Far East Superintendence Company or U.S. consultants and their certificate will be final and binding on both buyer and seller. The clause as to weighing says that the final weights as ascertained by Far East Superintendence Co. Ltd. or U.S. consultants at the port of discharge is final and binding on both parties. The terms as to payment are these. 90 per cent against shipping documents as described in buyers' corresponding sale contract. Buyers will assign the relevant foreign letter of credit, which is to be opened in their name by their foreign buyer, Messrs. Associated Metals and Minerals Corporation, on receipt from the sellers of a bank draft for difference between buyers' f.o.b. purchase value and f.o.b. sale value, i.e., $ 1.00 (Rs. 4.75) per dry long ton for a bank guarantee from a scheduled bank guaranteeing that sellers will pay buyers' f.o.b. purchase value as shown in the contract and buyers' f.o.b. sale value as shown in the foreign letter of credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uyer and ending with the delivery of the goods to a common carrier for transport out of the country by land or sea. Such a sale cannot be dissociated from the export without which it cannot be effectuated, and the sale and the resultant export form parts of a single transaction. Of these two integrated activities which together constitute an export sale whichever first occurs can well be regarded as taking place in the course of the other. Even in cases where the property in the goods passed to the foreign buyers and the sales were thus completed within the State before the goods commenced their journey from the State, the sales must be regarded as having taken place in the course of the export and, therefore, exempt under article 286(1)(b). Second, the word "course" denotes movement from one point to another, and the expression "in the course of' not only implies a period of time during which the movement is in progress but also postulates a connected relation. A sale in the course of export out of the country should be understood as meaning a sale taking place not only during the activities directed to the end of exportation of the goods out of the country but also as part of, or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (S.C.); [1952] S.C.R. 1112., that assuming that the sales to the foreign buyers were complete within the State before the goods commenced their journey, the sales must nevertheless be regarded as having taken place in the course of the export. It is noticeable in the first Travancore-Cochin case [1952] 3 S.T.C. 434 (S.C.); [1952] S.C.R. 1112., that the contracts were directly between the respondents and their foreign buyers. There was no intermediary between the Indian seller and the foreign buyer. The sale and the export became integrated in one transaction. In the second Travancore-Cochin case [1953] 4 S.T.C. 205 (S.C.) [1954] S.C.R. 53., the respondents imported raw cashew-nuts from abroad and neighbouring districts in the State of Madras. The respondents converted the same by certain processes into edible kernels and exported the kernels to foreign countries. The respondents claimed exemption under article 286(1)(b) in respect of purchase of cashew-nuts. The three propositions laid down in the second Travancore-Cochin case [1953] 4 S.T.C. 205 (S.C.) [1954] S.C.R. 53., are these. First, sales by export and purchases by import fall within the exemption under article 286(1)(b). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt from Africa fell into two categories. The first consisted of purchases made through intermediaries called the Bombay party, who acted as agents for the respondents charging commission. The Bombay party arranged for purchases on behalf of the respondents and obtained delivery of the shipping documents on payment at Bombay. In the second category the Bombay party indented the goods on their own account and sold the goods as principals to the respondents and other customers. The shipping documents were made out in the name of the Bombay party as consignees. This court held that in respect of the purchases under-the first category the Bombay party acted merely as agents of the respondents and, therefore, there was privity between the respondents and the African sellers. With regard to the second category the Bombay party were the purchasers and they sold the goods as principals to the respondents and there was no privity between the respondents and the African sellers. The principal decisions of this court on the interpretation of section 5(1) of the Act are Ben Gorm Nilgiri Plantations Company, Coonoor v. Sales Tax Officer, Special Circle, Ernakulam [1964] 15 S.T.C. 753 (S.C.); [1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le is in the course of export. In the Nilgiri Plantations case [1964] 15 S.T.C. 753 (S.C.) [1964] 7 S.C.R. 706., this court found that the sales by the appellants were intended to be complete without the export and as such it could not be said that the sales occasioned export. The sales were for export and not in the course of export. In the Coffee Board case [1970] 25 S.T.C. 528 (S.C.) [1970] 3 S.C.R. 147., the Coffee Board framed rules for sale of coffee to registered exporters. Only dealers who registered themselves as exporters of coffee with the Coffee Board and who held permits from the Chief Coffee Marketing Officer in that behalf were permitted to participate at the auction. After the bid the price would be paid in accordance with the conditions. One of the conditions called "export guarantee " provided that it was an essential condition of the auction that the coffee sold thereat "shall be exported to the destination stipulated in the catalogue of lots, or to any other foreign country outside India as may be approved by the Chief Coffee Marketing Officer and that it shall not under any circumstances be diverted to another destination, sold, or be disposed or otherwise rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that if the registered exporter who was the bidder at the auction did not export he would commit a default of conditions Nos. 30 and 31 and be liable to penalty and seizure of the coffee. In the Coffee Board case [1970] 25 S.T.C. 528 at 540 (S.C.); [1970] 3 S.C.R. 147 at 161., the phrase "sale in the course of export" was held to comprise of three essentials. First, there must be a sale. Second, goods must actually be exported. Third, the sale must be a part and parcel of the export. The propositions laid down in the Coffee Board case [1970] 25 S.T.C. 528 at 540 (S.C.); [1970] 3 S.C.R. 147 at 161., are these: The sale which is to be regarded as exempt is a sale which causes the export to take place or is the immediate cause of the export. To establish export a person exporting and a person importing are necessary elements and the course of export is between them. Introduction of a third party dealing independently with the seller on the one hand and with the importer on the other breaks the link between the two, for then there are two sales, one to the intermediary and the other to the importer. The first sale is not in the course of export because the export commences with the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed in respect of supply of stores which have been imported against import licences for supplies under contracts placed by the Director-General of Supplies and Disposals. On the basis of that direction the Government deducted in respect of sales tax certain sums of money which were pending payment and also threatened to recover a large sum of money which had been paid as sales tax in respect of supplies already made. This court discussed the Travancore-Cochin cases [1952] 3 S.T.C. 434 (S.C.); [1952] S.C.R. 1112, and [1953] 4 S.T.C. 205 (S.C.) [1954] S.C.R. 53., and the Nilgiri Plantations Company case [1964] 15 S.T.C. 753 (S.C.); [1964] 7 S.C.R. 706., and the Coffee Board case [1970] 25 S.T.C. 528 (S.C.); [1970] 3 S.C.R. 147. Mathew, J., speaking for the court said that there was no obligation under the contract on the part of the Director-General of Supplies and Disposals to procure import licences for the petitioner. It was the obligation of the petitioner to obtain import licence. Even if the contracts envisaged the import of goods and their supply to the Director-General of Supplies and Disposals from out of the goods imported, it did not follow that the movement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is between the Corporation and the foreign buyer. The immediate cause of the movement of goods and export was the contract between the foreign buyer who was the importer and the Corporation who was the exporter and shipper of the goods. All relevant documents were in the name of the Corporation whose contract of sale was the occasion of the export. The expression "occasions" in section 5 of the Act means the immediate and direct cause. But for the contract between the Corporation and the foreign buyer, there was no occasion for export. Therefore, the export was occasioned by the contract of sale between the Corporation and the foreign buyer and not by the contract of sale between the Corporation and the appellant. The appellant sold the goods directly to the Corporation. The circumstance that the appellant did so to facilitate the performance of the contract between the Corporation and the foreign buyer on terms which were similar did not make the contract between the appellant and the Corporation the immediate cause of the export. The Corporation in regard to its contract with the foreign buyer entered into a contract with the appellant to procure the goods. Such contracts for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt or principal's ratification of contract entered into by the agent on his behalf but without his authority. Agency arises by an ostensible authority conferred by the principal on the agent or by an implication of law in cases of necessity. On behalf of the appellant it was said that the Corporation is an agent of necessity because the Corporation is a special agency to carry out certain public policies. The appellant contends that it is the exporter and the foreign buyer is the importer and the contract is said to be processed through the agency of the Corporation. Agency of necessity arises where the persons authorised to act as an agent for another without any regard to the consent of the principal act in certain circumstances and the law creates an agency of necessity. A wife becomes an agent of necessity. In other cases, agency of necessity is often applied where after the parties have created a contractual relationship, the law, in view of some emergency, confers upon one party authority to act for another, or allows an agent to exceed the authority which has been conferred upon him. In the present case, there is no principal and agent relationship between the appellant an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esentation of the bills of lading. The retention of the bills of lading by the seller would indicate an intention of the parties that the property in the goods would not pass till after payment. With regard to the export licence, it was said that the presumption in f.o.b. contract is that it is the duty of the buyer to obtain export licence, though in the circumstances of a particular case this duty may fall on the sellers. The clause in the Export Control Order was construed to mean that the words "at the time of the export" do not mean the time when the goods crossed the customs barrier. Finally, it was said that export as defined in the Import and Export Control Act, 1947, means taking out of India by land, sea or air and, therefore, export cannot be held to have commenced till at least the ship carrying the goods has left the port. Further, Wadeyar's case [1960] 11 S.T.C. 757 (S.C.); [1961] 1 S.C.R. 924., is before the Act. In the National Tractors case [1971] 27 S.T.C. 271 (S.C.); [1971] 3 S.C.C. 143., the assessee purchased iron ore from mine-owners and sold them to the State Trading Corporation for export to foreign countries. Ore was transported by rail from the mines fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract, to remove the goods from the State in which he purchased the goods to another State and when the goods are so removed, the sale must be considered as a sale in the course of inter-State trade or commerce. In the Tata Engineering & Locomotive Co. case [1971] 27 S.T.C. 127 (S.C.); [1971] 2 S.C.R. 849., the ratio was that under the contracts of sale the purchasers were required to remove the goods from the State of Bihar to other States. In the present case, the movement of goods in the course of export began when the Corporation shipped the goods under the export contract between the Corporation and the foreign buyer. In the present case, the mention of f.o.b. price in the contracts between the appellant and the Corporation does not render the contracts f.o.b. contracts with the foreign buyer. The Corporation entered into independent contracts with the foreign buyers on f.o.b. basis. The appellants were required under the contracts between the appellants and the Corporation to bring the goods to the ship named by the Corporation. The shipment of the goods by the Corporation to the foreign buyer is the f.o.b. contract to which the appellants are not the parties. The course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar contracts with the foreign buyers. The appellants were assessed to tax under the Act. The appellants made an application to the Tribunal to refer the question to the High Court as to whether the sales by the appellants to the Corporation were in the course of export. The Tribunal dismissed the application of the appellants. The appellants applied to the High Court for orders that the Tribunal be called upon to file a statement of case. The High Court dismissed the applications. The High Court relied on the decision, which is the subject-matter of Civil Appeals Nos. 697-706 of 1973. In view of our conclusion in Civil Appeals Nos. 697-706 of 1973 that the appellants are not entitled to claim exemption, Civil Appeals Nos. 2063-2682 of 1974 are dismissed. In view of the fact that the High Court directed the parties to pay and bear their own costs, similar order is made in all these appeals. KHANNA, J.-This judgment would dispose of Civil Appeals Nos. 697 to 706 of 1973 which have been filed by special leave by Md. Serajuddin against the judgment of the Orissa High Court whereby the High Court answered the following question in respect of two of the sales in favour of the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te approached the High Court. The High Court then called upon the Tribunal to state a case and refer the question reproduced above to it. The High Court in the judgment under appeal has held that the two contracts dated May 29, 1959, and December 7, 1959, with the foreign buyers occasioned export of the minerals out of the territory of India and, as such, those sales were not exigible to tax under the Central Sales Tax Act. As mentioned earlier, we are no longer concerned with those two sales. As regards the other two sales effected under the contracts dated October 26, 1960, and April 14, 1961, with S.T.C., the High Court answered the question against the assessee-appellant and held that those two sales were not exempt from sales tax under article 286(1)(b) of the Constitution read with section 5(2) of the Central Sales Tax Act. In appeal before us, Mr. Govind Das on behalf of the appellant has assailed the judgment of the High Court and has contended that the sales in question were effected in the course of export and as such were exempt from the payment of sales tax. As against that, Mr. Desai has canvassed for the correctness of the view taken by the High Court. In order to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of credit, that is, dollar one (Rs. 4.75 nP.) per dry long ton by bank draft for each shipment and the buyers will endorse the bills of lading and deliver the same to seller to negotiate against the above-mentioned letter of credit. Balance after destinational weight and analysis on the basis of documents mentioned in S.T.C.'s corresponding sale contract with buyers. If the balance 10% is insufficient to cover shortfall in weight and analysis at destination or any penalty imposed by S.T.C.'s foreign buyers, the additional amount shall be payable by sellers to buyers on demand. 11.. Special clause: (i) Unless otherwise agreed upon, the sellers agree that the contract shall be deemed as cancelled if for any reason whatsoever M/s. Associated Metals and Minerals Corporation, cancel their corresponding purchase contract with the buyers for supply of chrome ore. (ii) The terms and conditions of the buyers corresponding sale contract with M/s. Associated Metals and Minerals Corporation will apply to this contract also except to the extent specified in this purchase contract. (iii) A true copy of buyers sale contract with M/s. Associated Metals and Minerals Corporation is attached." O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of the import of the goods into, or export, of the goods out of, the territory of India." There was no definition of the expression "in the course of the import of the goods into, or export of the goods out of, the territory of India" before the Sixth Amendment of the Constitution. By that Amendment, Parliament was given power to formulate the principles for construing the expression. The Parliament accordingly provided in section 5 of the Central Sales Tax Act, 1956, as under: "5. (1) A sale or purchase of goods shall be deemed to take place in the course of the export of the goods out of the territory of India only if the sale or purchase either occasions such export or is effected by a transfer of documents of title to the goods after the goods have crossed the customs frontiers of India. (2) A sale or purchase of goods shall be deemed to take place in the course of the import of the goods into the territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goods have crossed the customs frontiers of India." In State of Travancore-Cochin v. Bombay Co. Ltd. [1952] 3 S.T.C. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of export it may be said that there must be an intention on the part of both the buyer and the seller to export, there must be an obligation to export, and there must be an actual export. The obligation may arise by reason of statute, contract between the parties, or from mutual understanding or agreement between them, or even from the nature of the transaction which links the sale to export. A transaction of sale which is a preliminary to export of the commodity sold may be regarded as a sale for export, but is not necessarily to be regarded as one in the course of export, unless the sale occasions export. And to occasion export there must exist such a bond between the contract of sale and the actual exportation, that each link is inextricably connected with the one immediately preceding it. Without such a bond, a transaction of sale cannot be called a sale in the course of export of goods out of the territory of India (see Ben Gorm Nilgiri Plantations Co. v. Sales Tax Officer, Special Circle, Ernakulam [1964] 15 S.T.C. 753 (S.C.); [1964] 7 S.C.R. 706.). The appellants in that case were carrying on the business of growing and manufacturing tea in their estates. They sold tea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eral of Supplies and Disposals and that there was no possibility of those goods being diverted by the appellant for any other purpose. The sale was accordingly held to be in the course of import and, as such, exempt from taxation. In Coffee Board, Bangalore v. Joint Commercial Tax Officer, Madras [1970] 25 S.T.C. 528 (S.C.); [1970] 3 S.C.R. 147., this court dealt with a case relating to the export of coffee. Export of coffee outside India was controlled under the Coffee Act, 1942, by the Coffee Board. Coffee especially screened and selected was sold to registered exporters at "export auctions". Permits were given to such registered exporters to participate at the auction. The Coffee Board prepared a set of rules which incorporated the terms and conditions of sale of coffee in the course of export. Under condition 26 of the Rules a registered dealer was to give an "export guarantee" under which export would be made only to stipulated or approved destinations. The buyer at an export auction was free to export the coffee either by himself or through a forwarding agent, without selling the goods to the forwarding agent. Immediately after the export, evidence of the shipping had to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... importer." The decision in the case of Coffee Board [1970] 25 S.T.C. 528 (S.C.); [1970] 3 S.C.R. 147., was relied upon by this court in the case of Binani Bros. v. Union of India [1974] 33 S.T.C. 254 (S.C.); [1974] 1 S.C.C. 459. The petitioner in that case purchased goods from foreign sellers and supplied the same to the Directorate-General of Supplies and Disposals (DGS & D). Question arose whether the sale by the petitioner to DGS & D took place in the course of export. The question was answered in the negative and it was observed that there was no reason in principle to distinguish this case from the decision in the Coffee Board's case [1970] 25 S.T.C. 528 (S.C.); [1970] 3 S.C.R. 147.. Before dealing with the question as to whether the sales in question took place in the course of export, I may mention that the sale of mineral ores for export was canalised through S.T.C. in pursuance of an order made under the Imports and Exports (Control) Act, 1947 (Act 18 of 1947). Section 3 of that Act empowered the Central Government to prohibit, restrict or otherwise control imports or exports. Under the powers conferred by that section, the Central Government issued the Exports (Contro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of discharge in America and the certificates in that respect were to be binding on the parties. Although the letter of credit was to be opened by the foreign buyer in favour of S.T.C., S.T.C. was to assign the same in favour of the appellant. The appellant was to get 90 per cent against shipping documents and the remaining 10 per cent after destinational weight and analysis. Before doing that the appellant had to give a bank draft or a bank guarantee to S.T.C. at the rate of one dollar per ton of the concentrates to be supplied by the appellant. The facts of the case, in my opinion, go to show that the export of the chrome concentrates was occasioned by one transaction. The parties to that transaction were the appellant, S.T.C. and the foreign buyer. S.T.C. was brought into the picture as an intermediary because of the legal requirement, according to which the export of chrome concentrates was to be canalised through S.T.C. Although the above requirement necessitated the execution of two agreements, one between the appellant and S.T.C. and the other between S.T.C. and the foreign buyer, there can, in my opinion, be no doubt that the agreements were part of one integrated transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unnecessary and superfluous if it had been the intention of this court to lay down an absolute rule that once there are two contracts, one between the dealer and the intermediary and the other between the intermediary and the foreign buyer, the court need not look to other circumstances showing their inter-relationship and that only the latter contract would qualify for exemption from payment of tax. This court in a series of cases, all decided by the Constitution Bench, namely, State of Travancore-Cochin v. Bombay Co. Ltd. [1952] 3 S.T.C. 434 (S.C.); [1952] S.C.R. 1112., State of Travancore-Cochin v. Shanmugha Vilas Cashew- nut Factory [1953] 4 S.T.C. 205 (S.C.); [1954] S.C.R. 53., and Ben Gorm Nilgiri Plantations Co. v. Sales Tax Officer, Special Circle, Ernakulam [1964] 15 S.T.C. 753 (S.C.); [1964] 7 S.C.R. 706., had laid stress on the integrated nature of the activities and the close nexus between the contract of sale and the export of goods. Coffee Board case [1970] 25 S.T.C. 528 (S.C.); [1970] 3 S.C.R. 147., which too was decided by the Constitution Bench, could not set at naught the rule laid down in a series of earlier decisions and, in fact, it did not do so as is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Ben Gorm Nilgiri Plantations Co. [1964] 15 S.T.C. 753 (S.C.); [1964] 7 S.C.R. 706., Shah, J., speaking for the majority, observed: "There is no statutory obligation upon the purchaser to export the chests of tea purchased by him with the export rights. The export quota merely enables the purchaser to obtain export licence, which he may or may not obtain. There is nothing in law or in the contract between the parties, or even in the nature of the transaction which prohibits diversion of the goods for internal consumption." In the case of K.G. Khosla & Co. [1966] 17 S.T.C. 473 (S.C.); [1966] 3 S.C.R. 352., Sikri, J., speaking for this court, observed: "Movement of goods from Belgium to India was in pursuance of the conditions of the contract between the assessee and the Director-General of Supplies. There was no possibility of these goods being diverted by the assessee for any other purpose. Consequently we hold that the sales took place in the course of import of goods within section 5(2) of the Act, and are, therefore, exempt from taxation." In the case of Coffee Board [1970] 25 S.T.C. 528 (S.C.); [1970] 3 S.C.R. 147., Hidayatullah, C.J., observed: "The compulsion to ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... introduction of a statutory intermediary like S.T.C. with only entitlement of commission of one dollar per ton would not, in my opinion, affect the real nature of the transaction that it was the appellant who was to export the chrome concentrates to the foreign buyer. The matter can also be looked at from another angle. According to article 286, no law of a State shall impose, or authorise the imposition of, tax on the purchase or sale of goods where such purchase or sale takes place in the course of import of the goods into, or the export of the goods out of, the territory of India. There is nothing in this article which restricts the exemption from payment of tax to only one sale or purchase. Likewise, there is nothing in section 5 of the Central Sales Tax Act which restricts the sale or purchase occasioning export or import to only one sale or purchase. The fact that section 5 refers to sale or purchase in singular and not in plural would not make much material difference because according to section 13 of the General Clauses Act, unless there is anything repugnant in the subject or context, words in the singular shall include the plural, and vice versa. Although in a vast maj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Director-General of Supplies and Disposals was exempt from payment of tax as being in the course of import. It was observed: "The next question that arises is whether the movement of axle-box bodies from Belgium into Madras was the result of a covenant in the contract of sale or an incident of such contract. It seems to us that it is quite clear from the contract that it was incidental to the contract that the axle-box bodies would be manufactured in Belgium, inspected there and imported into India for the consignee. Movement of goods from Belgium to India was in pursuance of the conditions of the contract bet- ween the assessee and the Director-General of Supplies. There was no possibility of these goods being diverted by the assessee for any other purpose. Consequently, we hold that the sales took place in the course of import of goods within section 5(2) of the Act, and are, therefore, exempt from taxation." Although the facts of the present case are converse to those of Khosla & Co., the principle laid down therein fully applies to the present case. I have already mentioned above that the contract of sale between the appellant and S.T.C. was an f.o.b. contract. The questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected with the export that it was regarded as a sale in the course of export." The above observations clearly lend support to the view that even in the case of two sales the first sale would be immune against taxation if the property in the goods passed to the Indian purchaser when the goods were in the export stream. The reason for that was that the first sale was so inextricably connected with the export that it was regarded as a sale in the course of export. Another test, which was laid down in the case of Ben Gorm Nilgiri Plantations Co. [1964] 15 S.T.C. 753 (S.C.); [1964] 7 S.C.R. 706., was as under: "Where the export is the result of sale, the export being inextricably linked up with the sale so that the bond cannot be dissociated without a breach of the obligation arising by statute, contract or mutual understanding between the parties arising from the nature of the transaction, the sale is in the course of export." Applying the above test also, the sale by the appellant to S.T.C. would qualify for exemption from taxation. It is plain that a breach of the appellant's obligation arising under the above contract of sale would result in a situation that S.T.C. would not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applications before the High Court that the Tribunal be called upon to file a statement of the case in respect of the above-mentioned questions. The High Court dismissed those applications and in doing so relied upon the judgment in the case of Md. Serajuddin v. State of Orissa, which is the subject-matter of the other 10 appeals, namely, Civil Appeals Nos. 697 to 706 of 1973. The above-mentioned 20 appeals have been filed against the order of the High Court dismissing those applications. Mr. Bhandare on behalf of the State has urged in these 20 appeals that the facts of these cases are materially different from those in the cases of Md. Serajuddin and as such even if we accept the appeals in the cases of Md. Serajuddin, we should not interfere with the order of the High Court in these 20 appeals. So far as the above submission is concerned, I may observe that I do not express any opinion on the point as to whether the facts of these cases are similar to those in the cases of Md. Serajuddin. This is a matter which would have to be gone into after a reference and statement of case is submitted to the High Court. For our purpose it is sufficient to note that the High Court in dismi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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