North Adjai Coal Co. (P) Ltd. vs Commercial Tax Officer And Ors. on 14 January, 1966
6. Reliance was also placed on a decision of the Punjab High Court Mohan Lal Moti Lal v. Assessing Authority, Bhatinda. In that case it was held that a sale in the course of export within the meaning of Article 286(1)(b) of the Constitution involved an inextricable connection or bond between the sale and the export leaving no option to the purchaser from not exporting without committing a breach of the contract. It was also held that in order to attract the exemption, the sale must itself occasion the export or the export must be made under the sale, and to occasion the export there must exist between the contract of sale and the actual exportation, a bond so that each link was inseparably connected with the one immediately preceding it and the two activities of sale and export must be so integrated as to leave no possibility of voluntary interruption without entailing a breach of the contract or an obligation arising from the nature of the transaction. Relying on this decision it was argued that in this case the export out of India was a part of the transaction itself as the coal was meant for the Government of East Pakistan, and the export therefore could not be regarded as an independent transaction but must be treated to be a part of the transaction of sale, whoever was the purchaser of the coal.