Sale in the course of import requires the contract to occasion import; later domestic sale was taxable in Maharashtra.

A sale is in the course of import only if the contract occasions the import or is effected by transfer of documents of title before the goods cross the customs frontiers of India. Here, the import of the machine was arranged independently of the later buyer's contract, so the sale did not occasion the import. A clause on transfer of property on packing did not prove earlier ownership or appropriation outside India. The goods were cleared, transported from Bombay to the buyer, and the sale, delivery, and payment all occurred in Maharashtra. The transaction was therefore an intra-State sale liable to tax under the Bombay Sales Tax Act, 1959.

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Issues: Whether the transaction was a sale in the course of import so as to escape sales tax, and whether the sale was a sale within the State of Maharashtra liable to tax under the Bombay Sales Tax Act, 1959.

Analysis: A sale is in the course of import only if the sale occasions the import or is effected by transfer of documents of title before the goods cross the customs frontiers of India. The import of the machine had been arranged independently of the subsequent contract with the buyer, and the sale to the buyer did not occasion the import. The stipulated clause regarding transfer of property on packing in crates did not establish that the sellers had become owners in Czechoslovakia or that the goods had been appropriated there to the contract. The goods were cleared by the sellers, sent by rail from Bombay to the buyer, and the material events of sale, delivery, and payment all occurred in Maharashtra. Even on the tests governing intra-State sales, appropriation and passing of property took place in Maharashtra.

Conclusion: The transaction was not a sale in the course of import and was a sale within the State of Maharashtra liable to tax under the Bombay Sales Tax Act, 1959.

Ratio Decidendi: A subsequent domestic contract for disposal of goods does not become a sale in the course of import unless the contract itself occasions the import or the goods are appropriated to the contract outside India with a completed passing of property supported by evidence.

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