Situs of sale by appropriation determines State taxability; ship stores delivered on vessel were not export sales.

Sales of ship stores supplied from bonded warehouses to foreign-going vessels were treated as sales within Tamil Nadu because the contract was completed by appropriation of the goods in the State. For ascertained goods, the sale was concluded when the contract was made within Tamil Nadu; for unascertained goods, appropriation in the bonded warehouse fixed the situs of the sale there. Delivery on board the vessel and compliance with customs formalities did not alter that situs. The supplies were not sales in the course of export or import, as there was no foreign destination or real export nexus for goods meant for consumption on board ship. They were therefore taxable under the State sales tax law.

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Issues: Whether sales of ship stores supplied from bonded warehouses to foreign-going vessels were sales within the State of Tamil Nadu and liable to sales tax, and whether such sales were in the course of export or import.

Analysis: The decisive factor was the place where the contract was completed by appropriation. For ascertained goods, the sale was made when the contract was concluded within Tamil Nadu; for unascertained goods, the seller appropriated the goods to the contract in the bonded warehouse, which was within the State. The fact that delivery was made on board the vessel, or that customs formalities were observed, did not alter the situs of the sale. A sale in the course of export requires a foreign destination and a real export nexus; goods supplied for consumption on board ship, without such destination, do not satisfy that test. The customs barrier does not itself fix the outer limit of the State for sales tax purposes.

Conclusion: The sales were within the State of Tamil Nadu and were taxable under the State sales tax law. They were not sales in the course of export or import.

Ratio Decidendi: Where the contract is completed by appropriation of goods within the State, the sale is inside the State for sales tax purposes, and mere movement beyond customs limits or delivery on board a vessel does not convert it into a sale in the course of export.

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