TMI Blog1975 (5) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... n from tax in respect of the turnover of such transactions amounting to Rs. 1,13,524, on the ground that such sales were exempt from tax under article 286 of the Constitution. The Sales Tax Officer did not accept this contention. The contention, however, was accepted on appeal by the Assistant Commissioner (Judicial), Sales Tax. According to him, the gur purchased by the dealer had been consigned to places outside U.P. and the railway receipts were sold to local dealers by endorsement who took the delivery of the goods outside the State. In his opinion, such sales were covered by article 286 of the Constitution. The department went up in revision. The Judge (Revisions) has reversed this finding relying upon a decision of this court in Bansi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovide, no law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of any goods, where such sale or purchase takes place in the course of inter-State trade or commerce: Provided......................" In order to give effect to this mandate of the Constitution, section 27 was added in the U.P. Sales Tax Act. That section reads: "27. (1) Notwithstanding anything contained in this Act- (a) a tax on the sale or purchase of goods shall not be imposed under this Act- (i) where such sale or purchase takes place outside the State of U.P.; or (ii) where such sale or purchase takes place in the course of import of the goods into, or export of the goods out of, the territories of India; (b) a tax on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of goods from one State to another; or (b) is effected by a transfer of documents of title to the goods during their movement from one State to another. Explanation 1.-Where goods are delivered to a carrier or other bailee for transmission, the movement of the goods shall, for the purposes of clause (b), be deemed to commence at the time of such delivery and terminate at the time when delivery is taken from such carrier or bailee. Explanation 2............................." According to this section, a sale shall be deemed to have taken place in the course of inter-State trade if the movement of goods takes place from one State to another as a direct result of such sale or if the sale is effected by transfer of documents of title duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e various decisions of the Supreme Court for determining whether a sale was in the course of export or import or in the course of inter-State trade, this is what their Lordships observed: "In the case of sales in the course of export or import the test laid down was a series of integrated activities commencing from an agreement of sale and ending with the delivery of goods to a common carrier for export by land or by sea: Bombay Co. Ltd. case[1952] 3 S.T.C. 434 (S.C.); [1952] S.C.R. 1112. 'In the course of' was explained to mean a sale taking place not only during the activities directed to the end of the exportation of the goods out of the country but also as part of or connected with such activities and 'integrated activities' was expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hile the goods are in transit from one State to another are clearly covered by clause (b) of section 27(1) of the U.P. Sales Tax Act and are exempt from tax. The case of Bansi Lal Ram SwaroopS.T.R. No. 195 of 1957 decided on 20th November, 1962 (Allahabad High Court). relied upon by the Judge (Revisions) is clearly distinguishable. The facts of that case, no doubt, are similar to the facts of the present case. But there the contention raised by the assessee was that the sales took place outside U.P. This clearly was an untenable contention and this court very rightly repelled that contention. The assessee then tried to raise the question as to whether the sales were exempt under the provisions of article 286(1)(a) of the Constitution and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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