High-seas sale by shipping documents qualifies as a sale in the course of import, attracting constitutional tax exemption.

A sale completed by transfer of bills of lading and other shipping documents against payment while the goods are still on the high seas is treated as a sale in the course of import. The course of import runs from the crossing of the foreign customs barrier until the goods cross the customs barrier of the importing country. Where the contracts and surrounding circumstances show no intention to defer passing of property until delivery at port, property passes and the sale is completed during the import journey, bringing the transaction within the constitutional exemption from sales tax under Article 286(1)(b).

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Issues: Whether the petitioner's sales, effected by delivery of bills of lading and other shipping documents against payment while the goods were on the high seas, were sales in the course of import and therefore exempt from sales tax under Article 286(1)(b) of the Constitution.

Analysis: The course of import begins when goods cross the customs barrier of the foreign country and ends when they cross the customs barrier of the importing country. A sale occasions import, and a sale by transfer of shipping documents while the goods are still on the high seas is also a sale in the course of import. The contracts and surrounding circumstances showed no intention to postpone passing of property until actual delivery at port. When the petitioner delivered the shipping documents to the Government against payment, property in the goods passed and the sales were completed while the goods were still on their import journey.

Conclusion: The sales were in the course of import and were exempt from sales tax under Article 286(1)(b) of the Constitution, in favour of the assessee.

Final Conclusion: The demand based on the reassessment could not stand, and the original assessment allowing the deduction was restored.

Ratio Decidendi: A sale of imported goods completed by transfer of shipping documents against payment while the goods are on the high seas is a sale in the course of import and falls within the constitutional exemption.

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