Sales tax on export-bound goods is not an export duty where the taxable event remains the sale.

A sales tax imposed on turnover from goods sold for export was not treated as an export duty under Entry 44 of List I of the Government of India Act, 1935. The Court reasoned that sales tax is levied on the transaction of sale, whereas an export duty is levied on goods by reference to export; the taxable event, therefore, remained the sale and not the export. On that basis, the levy was upheld as outside the scope of Entry 44, and the challenge failed.

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Issues: Whether sales tax levied on turnover arising from export of goods before 26 January 1950 could be treated as an export duty falling within Entry 44 of List I of the Government of India Act, 1935.

Analysis: The turnover related to sales of onions exported outside the territory before 26 January 1950. The levy was challenged on the footing that, in substance, it was an export duty within Entry 44 of List I of the Government of India Act, 1935. The Court held that sales tax is a tax on the transaction of sale and is distinct from a tax on goods exported. The taxable event in sales tax is the sale, not export, and the two fields of taxation are different. The levy could not, therefore, be characterised as an export duty.

Conclusion: The challenge failed and the levy was upheld as not falling within Entry 44 of List I of the Government of India Act, 1935.

Final Conclusion: The petition was dismissed with costs, leaving the sales tax assessment undisturbed.

Ratio Decidendi: A sales tax on the transaction of sale does not become an export duty merely because the sold goods are exported; the nature of the taxable event governs the character of the levy.

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