Section 5 Of The Central Sales Tax Act,1956
69. The Supreme Court also referred to two more cases,
[State of Madras vs. Gurviah Naidzs & Co. Ltd. (A.I._R.
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State Of Madras vs Gurviah Naidu & Co. Ltd on 28 October, 1955
Public Prosecutor (Andhra) vs Bhavigadda Thimmaiah And Ors. on 11 November, 1958
13. In our opinion, this represents the correct law. We are unable to agree with the line of thought pursued in Guruviah Naidu, In re (1954 5 S.T.C. 129; I.L.R. 1955 Mad. 184). It may be mentioned here that the latter case was reversed by the Supreme Court in State of Madras v. Guruviah Naidu (1955 6 S.T.C. 717; A.I.R. 1956 S.C. 58).
Addison And Co. Ltd. vs The State Of Madras on 15 September, 1959
What was laid down by the majority of the Judges in the State of Travancore-Cochin v. Shanmugha Vilas Cashew-nut Factory [1953] 4 S.T.C. 205, that a sale and purchase within the State for the purposes of exporting those goods was not a sale in the course of export, was re-affirmed by the Supreme Court in State of Madras v. Gurviah Naidu [1955] 6 S.T.C. 717 and State of Mysore v. Mysore Spinning and Manufacturing Co., Ltd. [1958] 9 S.T.C. 188. We are still of the view that the expression "in the course of" should have the same significance when it related to export and import trade to which Article 286(1)(b) of the Constitution applied and also when it related to inter-State trade or commerce which was regulated in the relevant period by Article 286(2) as it stood before it was amended.
Ramesh Chandra Dey vs The State Of Assam And Ors. on 16 July, 1956
State of Travancore-Cochin v. Bombay Co. Ltd. A.I.R. 1952 S.C. 366 and State of Travancore-Cochin and Ors. v. Shanmugha Vilas Cashew-nut Factory A.I.R. 1953 S.C. 333 in State of Madras v. Gurviah Naidu and Co. Ltd. A.I.R. 1956 S.C. 158. In this case the assessee had secured orders for the supply of skins to London buyers and after securing the orders they went about purchasing the requisite kind and quantity of skins to implement such orders. The purchases were found to be for purposes of export but as such purchases did not themselves occasion the export, they were held not to fall within the exemption of Article 286(1)(b) of the Constitution. The purchases in the State by the exporter for the purposes of export were found liable to be included in the turnover and assessed to sales tax under the Madras General Sales Tax Act. The judgment was delivered by Das, Acting C.J., (as he then was).
Rai Sahib Ramdayal Ghasiram And Sons vs The Government Of Andhra Pradesh on 5 November, 1959
9. Now the last question for consideration is whether the transaction is within the protection of Article 286 (2) of the Constitution of India so that no tax can be levied by the State Legislature. It will be seen that while the State Legislature has exclusive powers to make laws for the State or any part thereof with respect to taxes on sales and purchases of goods other than newspapers as contemplated by Entry 54 in List II of Vllth Schedule, the Constitution has placed certain restrictions in Article 286 as to the imposition of tax on such sales or purchases of goods. According to this Article, the State Legislature has no authority to impose tax on sale or purchase which takes place either outside the State or in the course of import of goods into or export of goods outside the territory of India and except in so far as Parliament may by law otherwise provide it cannot levy tax on the sale or purchase of any goods if such sale or purchase takes place in the course of inter-State trade or commerce. It is the last mentioned provision embodied in Article 286(2) we are now concerned with. Before the Tribunal the argument seems to have been advanced on the assumption that the sale had taken place outside the State and hence such sales could not have been taxed to sales tax by the State and to reinforce this argument the fact that delivery orders were handed over to the company at Bombay long prior to the "vaida" had been relied on as a circumstance to establish that the sale had taken place outside the State. But the Tribunal had rightly held that this circumstance does not render the sale an outside sale when the balance of the money had been paid in the State and actual delivery of the goods took place in the State itself. The argument now proceeds on the basis that it is a sale having inter-State elements and is within the prohibition of Article 286(2). Such an argument was advanced before the Deputy Commissioner also who rejected the same relying on the case of State of Madras v. Gurviah Naidu & Co. A.I.R. 1956 S.C. 158 on the ground that the delivery of the goods and export of the same were distinctly different. It would appear from the language of Article 286 that only such sales as take place in the course of inter-State trade or commerce fall within the ban of Article 286(2). The question whether a particular sale has been made in the course of inter-State trade or not largely depends upon the particular facts and circumstances of each case.
New Rajasthan Mineral Syndicate vs The State Of Punjab And Ors. on 9 October, 1964
7. There are a large number of decisions by their Lordships of the Supreme Court interpreting the expression "in the course of export" under Article 286 of the Constitution and also the phrase "the sale which occasions export" in Section 5 of the Central Sales Tax Act. The authorities dealing with the interpretation of Article 286 of the Constitution are The State of Travancore-Cochin and Ors. v. The Bombay Company Ltd. Alleppey, and Ors. [1952] 3 S.T.C. 434, The State of Travancore-Cochin and Ors. v. The Shanmugha Vilas Cashew-Nut Factory and Ors. [1953] 4 S.T.C. 205, The State of Madras v. Gurviah Naidu & Co. Ltd. and Ors. [1955] 6 S.T.C. 717, Burmah-Shell Oil Storge & Distributing Co. of India Ltd. and Anr. v. Commercial Tax Officer and Ors. [1960] 11 S.T.C. 764, and Hafiz Din Mohammad Haji Abdulla v. The State of Maharashtra [1962] 13 S.T.C. 292.
Mohan Lal Moti Lal vs Assessing Authority, Bhatinda And Ors. on 14 January, 1965
"We accordingly hold that whatever else may or may not fall within Art, 286(1)(b), sales and purchases which themselves occasion the export of the import of the goods, as the case may be, out of or into the territory, of India come within the exemption........''
This, as rightly pointed out obey the respondents learned counsel, represents the view of law adopted bye the Bench. Our attention has also been drawn to State of Madras V. Gurviah Naidu and Court.
Gorantla Butchaiah Chowdary And Ors. vs State Of Andhra (Now Andhra Pradesh) on 25 September, 1957
In The State of Madras v. Guruviah Naidu & Co., Ltd., (1955 6 S.T.C. 717) Das, Officiating Chief Justice, delivering the judgment of the Supreme Court, held that dealers, who, after securing orders for supply of untanned hides and skins to London buyers went about purchasing untanned hides and skins of the requisite kinds and quantities in the State in order to implement such orders, were liable to pay sales tax on the amount of their purchases. The reason of the decision was stated by the learned Chief Justice in the following words :-
Shafeeq Shameem And Co. And Anr. vs The State Of Andhra Pradesh And Ors. on 10 January, 1964
28. The learned Judges relied on a decision of the Supreme Court in State of Madras v. Gurviah Naidu & Co., Ltd. [1955] 6 S.T.C. 717 The above passage clearly indicates that a purchase preceding an export sale is validly taxable under the provisions of the Madras General Sales Tax Act, i.e., Rule 4(2)(d) and Rule 16(2) which contained provision substantially similar to the provision in Section 6 read with item 6 of Schedule IV of the Andhra Pradesh General Sales Tax Act, so far as untanned hides and skins are concerned, when the hides and skins were bought by a dealer within the Andhra State and exported by him outside the Andhra State. In that case, the dealers were themselves purchasing within the Andhra State and were exporting them to their agents outside the Andhra State for being sold to others. In the present cases of writs of M. A. Khader, the articles were purchased by him through his branch within Andhra Pradesh State and sent to himself in Madras State for tanning and in W. P. No. 929 of 1961 the purchas ing agent purchased the untanned skins within the Andhra Pradesh State and sent them to his principal outside the Madras State.
Sriram Venkata Subbarao And Son vs The State Of Andhra Pradesh on 5 November, 1959
In State of Madras v. Guruviah Naidu & Co. [1955] 6 S.T.C. 717, their Lordships of the Supreme Court were called upon to decide whether the purchases made by the respondents after securing orders for supply of goods to the London buyers by going about for purchasing the requisite kind and quality of skins to implement such orders, were within the meaning of Article 286(1)(b) of the Constitution.