Import and export exemption for sales tax ends at the customs frontier; revisional assessment power may survive an earlier appeal.

Sales of furnace oil and other petroleum products from a bonded warehouse to ocean-going vessels were not sales in the course of import or export, because the constitutional exemption applies only while goods remain in import or export transit and import ends once goods cross the customs frontier and enter India's territorial waters. The sales were made in India for the vessels' own consumption, not as part of an integrated export transaction, so sales tax applied. The text also states that the Deputy Commissioner's revisional power under the Madras General Sales Tax Act could be exercised after disposing of the appeal and confirming the assessment, because the appellate power was subject to revision and the statutory notice requirement had been met.

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Issues: (i) Whether sales of furnace oil and other petroleum products made from a bonded warehouse to ocean-going vessels were sales in the course of import or export so as to attract the constitutional exemption from sales tax; (ii) Whether the Deputy Commissioner of Commercial Taxes, after disposing of the assessee's appeal and confirming the assessment, could thereafter exercise revisional power to enhance the assessment under the Madras General Sales Tax Act, 1939.

Issue (i): Whether sales of furnace oil and other petroleum products made from a bonded warehouse to ocean-going vessels were sales in the course of import or export so as to attract the constitutional exemption from sales tax.

Analysis: The constitutional exemption under Article 286(1)(b) applies only while goods remain in the course of import or export. Import is complete when the goods cross the customs frontier. On the facts, the goods had crossed the territorial sea and entered the territorial waters of India, and the sales were made thereafter from a bonded warehouse within India. The transaction was also not an export sale, because the goods were sold in India to ocean-going vessels for their own consumption and not as part of an integrated export transaction involving delivery to a common carrier for transport abroad.

Conclusion: The sales were not in the course of import or export and were liable to sales tax.

Issue (ii): Whether the Deputy Commissioner of Commercial Taxes, after disposing of the assessee's appeal and confirming the assessment, could thereafter exercise revisional power to enhance the assessment under the Madras General Sales Tax Act, 1939.

Analysis: The appellate power under Section 11(3) is expressly subject to the revision provisions in Section 12. Section 12 confers revisional power on the Deputy Commissioner within the prescribed period, and enhancement is permitted if notice under Section 12(4) is given. The statutory scheme therefore allows revision even after an appellate order by the same authority, and the notice requirement having been complied with, no jurisdictional objection survived.

Conclusion: The Deputy Commissioner had jurisdiction to revise the assessment and enhance it.

Final Conclusion: Both challenges failed, and the assessment as revised was sustained.

Ratio Decidendi: A sale ceases to be in the course of import once the goods cross the customs frontier and enter the territorial waters of India, and the revisional power expressly preserved by statute may be exercised notwithstanding an earlier appellate order by the same authority, subject to compliance with the statutory notice requirement.

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