TMI Blog1952 (1) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... , to the construction of Article 286 which is incorporated as Sec- tion 26 of the Sales Tax Act. The case of the petitioners is that the transactions in respect of which the sales tax has been imposed by the second respondent are exempted under these provisions from the imposition of such a tax. 2.. It would be convenient in the circumstances to consider the scope of the provisions of Article 286 with the object of deciding whether its provisions would be attracted to save the transactions from the imposition of sales tax. Article 286 is worded as follows: "286 (1). No law of a State shall impose, or authorise the imposi- tion 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. Explanation: For the purposes of sub-clause (a), a sale or pur- chase 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, notwithstand- ing the fact that under the general law relating to the sale of goods the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... import into India or export from India. 5.. From the official report of the debates in the Constituent Assembly when Article 286 was passed, it is clear that the expression "in the course of" occurring in clause (1)(b) of Article 286 was chosen by the framers of the Constitution advisedly. After the discussion, the honourable member who was responsible for piloting the Constitu- tion gave an assurance that if better phraseology was found to be necessary, he would see that the wording was altered. But there was no alteration and, therefore, it may be assumed that in the opinion of the framers even after the discussion in the Constituent Assembly, the words that are to be found in the article would convey the meaning they wished to convey as clearly as possible. Some of the members of the Assembly stressed the fact that the expression "in the course of" occurring in clause (b) would furnish "a loophole to businessmen to escape taxation" and that it would lead to loss of income to various States. There was an attempt made to substitute the words "at the initial stage of import into India " and "at the ultimate stage of export out of India" but it did not find favour with the majorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lained as "a term used to describe goods sent out of a country by its traders. To the individual trader who sells it abroad, an export represents individual profit which he receives by the process of exchange. The individual act of exportation made for personal gain is, however, of the greatest national and public importance." The machinery for carry- ing out exports and imports is then described in the following words: "A very extensively organised machinery and methods employed in export trade have been evolved in the course of centuries to enable a trader in one country to sell to, or buy from, a trader in another country. The enabling process has consisted mainly in overcoming difficulties created by space and time in regard to selling, buying, dis- tribution and methods of payment and credit. There are two principals to an export transaction, though neither need have definite knowledge of the other. One is the manufacturer, producer or factor with goods to export; the other is the wholesale distributor in the importing country. Between them exists the export machine consisting of various intermediaries and services, by means of which buyers can maintain effective touch with al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icating factory in Quilon where the shells are removed and the kernels collected. Out of the shells cashewnut oil is squeezed out by machinery. The kernel is processed and converted into wholesome edible nuts and both the nuts processed in this manner and the oil are exported to foreign countries. The goods arrive by steamer in this State. The purchase is made by assignments of bills of lading while the goods are on the high seas. The merchant in the State pays money into the hands of his bankers who pass on the necessary amount for satisfying the claim on the endorsement of bills of lading. There is a contention raised on behalf of the petitioner that the fact that the money is paid into the branch of a bank in this State does not necessarily mean that the purchase is made inside the State. It is contended that the purchases are effected when the goods are on the high seas. But, as already pointed out, it is not necessary to go into this question since we are satisfied that the transactions took place while the goods were in the course of import. 11.. The intention of merchants like the petitioner is not to import goods into this country for local consumption but to treat the go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ost. 15.. We are, therefore, satisfied that a case has been made out for the issue of a writ of certiorari for quashing the proceedings of the original and appellate tribunals which have sanctioned the levy of the sales tax on sales which are exempted from the levy of such a tax. The petitioner shall get refund of any amounts which have been paid to or collected by the State. The petitioner shall also be entitled to the costs of this original petition and Advocate's fee which we fix at Rs. 250. 16.. In respect of the other petitions, it is enough to set forth the following statement to show what the goods are that were imported and exported: O.P. No. 4 of 1951 ... Coir. O.P. No. 19 of 1951 ... Cashewnuts. O.P. No. 23 of 1951 ... Lemon grass oil. O.P. No. 34 of 1951 ... Cashewnuts. O.P. No. 35 of 1951 ... " O.P. No. 71 of 1951 ... " O.P. No. 83 of 1951 ... " O.P. No. 88 of 1951 ... " O.P. No. 89 of 1951 ... " O.P. No. 90 of 1951 ... " O.P. No. 24 of 1951 ... Tea. There were two other original petitions of a similar nature (O.P. Nos. 79 of 1951 and 94 of 1951). Since the learned counsel appearing in those cases had taken time for arguing the petitions, we deferred delivering the ju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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