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Tata Iron And Steel Co., Limited,Bombay vs S. R. Sarkar And Others on 29 August, 1960

The Supreme Court followed its earlier view in Tata Iron and Steel Co. Ltd. v. S.R. Sarkar [1960] II S.T.C. 655, This meaning of the word "occasions" as used in Section 3(a) will apply also to the same Word in Section 5(2) of the Act. In the present case, it is an essential part of the contract of sale that the goods should be manufactured according to the specifications by a manufacturer outside India and that the goods had to be inspected by the nominee of the buyer at all stages of the manufacture to satisfy himself that even the manufacture was in accordance with the specifications. It will not suffice if the seller, to satisfy the contract, buys from the market in India goods of the specifications in the schedule. The goods had necessarily to be manufactured in U.K. Nor would it. satisfy the condition in the contract if the seller arranged for the manufacture of such goods in India. If that were to satisfy the requirements of the contract, there would not be any clause about inspection during the stage of manufacture by D.G.I., S.D., London, or for shipment after manufacture. It is, therefore, clear that the buyer proposed, and the seller accepted that for the, execution of the contract the goods should be manufactured in the United Kingdom, and shipped from the United Kingdom to the Madras Port. Such shipment was also an essential feature of the contract, because, in the event of nonshipment between June, 1957, and December, 1957, the buyer was free to place orders for similar goods elsewhere and claim from the seller damages for non-fulfilment of the contract. Therefore, this is a very clear case where the movement of the goods from the U.K. to the Madras Port was the result of a covenant as well as of an incident of the contract of sale; therefore the sale was in the course of import into the territory of India, and is not taxable by the Madras State.
Supreme Court of India Cites 47 - Cited by 148 - J C Shah - Full Document
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