Customs frontiers under import sales law follow the statutory definition, and transfers after crossing them remain taxable.

Article 286 bars State taxation of sales in the course of import, and section 5(2) of the Central Sales Tax Act applies only where a transfer of documents of title occurs before the goods cross the customs frontiers of India. The expression "customs frontiers" is to be read with the statutory notification under the Sea Customs Act, 1878, which treats the boundaries of India, including territorial waters, as the relevant frontier. On that construction, a transfer made after the goods have crossed those frontiers does not qualify as an import sale and remains liable to State sales tax. The assessee's exemption claim therefore failed.

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Issues: Whether the disputed turnover represented sales in the course of import so as to fall outside State sales tax, and whether "customs frontiers of India" in section 5(2) of the Central Sales Tax Act, 1956 meant the same as the customs barrier or was governed by the statutory definition issued under the Sea Customs Act, 1878.

Analysis: Article 286 of the Constitution prohibits State taxation of sales taking place in the course of import, and Parliament has laid down the governing test in section 5(2) of the Central Sales Tax Act, 1956. A sale by transfer of documents of title qualifies as a sale in the course of import only if the transfer occurs before the goods have crossed the customs frontiers of India. The expression "customs frontiers" is not confined to the point at which a ship enters territorial waters; it must be read with the notification issued under section 3-A of the Sea Customs Act, 1878, which defines the customs frontiers as the boundaries of the territory, including territorial waters, of India. On that construction, the sales in question were effected after the goods had crossed the customs frontiers.

Conclusion: The sales were not sales in the course of import and were liable to sales tax under the Madras Act; the assessee's claim for exemption failed.

Final Conclusion: The High Court's view was set aside and the State's challenge succeeded, restoring the tax liability on the disputed turnover.

Ratio Decidendi: For section 5(2) of the Central Sales Tax Act, 1956, "customs frontiers of India" must be construed according to the statutory notification under the Sea Customs Act, 1878, and a transfer of documents of title after the goods have crossed those frontiers is not a sale in the course of import.

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