Export exemption fails where property passes before despatch and the seller's domestic sale is distinct from the buyer's later export.

Where goods are appropriated and property passes to the buyer before despatch, the seller cannot claim export-related exemption merely because the buyer later exports them. The Court held that the assessee was not a mere agent for the Bombay principals: he had filed the return as a dealer, the tea transactions were included in his turnover, and the assessment treated him as having dealt with the goods in his own capacity. The sales were therefore taxable, and neither the Bengal Finance (Sales Tax) Act exemption for despatch outside West Bengal nor protection under Article 286(1)(b) applied, because the taxable sales were the assessee's domestic sales, not the later export sales.

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Issues: (i) Whether the assessee could escape inclusion of the tea transactions in his taxable turnover on the footing that he acted only as an agent for Bombay principals and not as a dealer; (ii) Whether the sales were exempt under section 5(2)(a)(v) of the Bengal Finance (Sales Tax) Act, 1941 or protected by Article 286(1)(b) of the Constitution as sales in the course of export.

Issue (i): Whether the assessee could escape inclusion of the tea transactions in his taxable turnover on the footing that he acted only as an agent for Bombay principals and not as a dealer.

Analysis: The return was filed by the assessee as a dealer and the transactions were included in his turnover. On that basis, and having regard to the statutory definitions of turnover and dealer, the Court treated the assessee as having purchased and dealt with the teas in his own capacity for the purposes of assessment. The later attempt to characterise the dealings as agency transactions was inconsistent with the return and with the manner in which the assessment was made.

Conclusion: The assessee was not accepted as a mere agent for these transactions and the inclusion of the transactions in taxable turnover was upheld.

Issue (ii): Whether the sales were exempt under section 5(2)(a)(v) of the Bengal Finance (Sales Tax) Act, 1941 or protected by Article 286(1)(b) of the Constitution as sales in the course of export.

Analysis: The exemption under section 5(2)(a)(v) applies only where the dealer despatches the goods, or causes them to be despatched, to an address outside West Bengal. The Court found that the goods had been appropriated to the contracts and property had passed to the Bombay buyers before despatch. The later shipment was therefore by or on behalf of the Bombay buyers, not by or on behalf of the assessee. For the same reason, Article 286(1)(b) did not apply, because the taxable sales were the sales by the assessee to the Bombay parties, not the later export sales by those buyers. The Court applied the settled rule that only sales which themselves occasion the export fall within the constitutional exemption.

Conclusion: The assessee was not entitled to exemption under section 5(2)(a)(v) or protection under Article 286(1)(b).

Final Conclusion: The assessment of sales tax was sustained and both appeals failed.

Ratio Decidendi: Where property in goods has passed to the buyer before despatch, the despatch is by or on behalf of the buyer and not the seller, and a prior domestic sale does not become a sale in the course of export merely because the buyer later exports the goods.

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