TMI Blog1979 (11) TMI 248X X X X Extracts X X X X X X X X Extracts X X X X ..... ds to foreign countries. He subjected this turnover to tax under section 7-A of the Act. On appeal, the Appellate Assistant Commissioner, Tirunelveli, relying on the decision of this Court in M.K. Kandaswami v. State of Tamil Nadu[1971] 28 S.T.C. 227., cancelled the assessment under section 7-A of the Act. This decision was reversed by the Supreme Court and the Supreme Court's judgment was reported as State of Tamil Nadu V.M.K. Kandaswami[1975] 36 S.T.C. 191 (S.C.). The Board took suo motu revision proceedings after the judgment of the Supreme Court was pronounced and after giving the assessees the necessary opportunity to show cause why the turnover should not be taxed, brought to tax the turnover under section 7-A(1)(c) of the Act. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchase of any goods in circumstances in which no tax is payable under section 3, 4 or 5 of the Act. In the present case, the purchases having been effected from agriculturists, there is no tax liability in respect of the sales by the said agriculturists. Therefore, the first condition was fulfilled and the second condition, namely, despatch of the goods to a place outside India (sic) except as a direct result of sale or purchase in the course of inter-State trade or commerce, has also been, in the Board's view, fulfilled. The point in dispute is whether this order of the Board is correct. The learned counsel for the assessees contended that clause (b) of subsection (1) of section 7-A of the Act deals with disposal of goods within the territ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Taxation Act, 1941. The appellant-assessees contended that such sales were made in the course of export of such aviation spirit out of the territory of India, that they took place outside the State of West Bengal, that inasmuch as aviation spirit was delivered for consumption outside West Bengal, the sales could not fall within the explanation to clause (1)(a) of article 286 (as it stood at the relevant point of time) and that unless they could be said to become "explanation sales", the power to tax did not exist. The Supreme Court held that in order to exclude the powers of taxation of the State of West Bengal, the assessees must be able to point out some other State where the goods could be said to have been delivered as a direct result ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n.-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 under the general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State." The Supreme Court held that the explanation was not applicable unless there were more States than one involved and that the explanation determined which State out of those connected with the transaction of sale can tax it. This decision has absolutely no relevance to the problem now before us. As seen from the explanation, it cont ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
