1987 (3) TMI 481

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.... of 1985 dated 19th November, 1985, runs as follows:   "ANSHUMAN SINGH, J.-The Commissioner of Sales Tax, U.P., has filed this revision under section 11(1) of the U.P. Sales Tax Act (hereinafter referred to as the Act) against the judgment dated April 2, 1985 passed by the Sales Tax Tribunal, Kanpur, arising out of proceedings under section 35 of the Act. The assessee carried on the business of export of dressed hides at Kanpur. It moved an application dated 16th October, 1981, under section 35 of the Act before the Commissioner of Sales Tax, U.P., alleging therein that it purchased dressed hides from registered dealers after securing export order from foreign buyers and makes purchases for purposes of export in relation to such ....

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.... Tax Act. I have heard the learned Chief Standing Counsel and the learned counsel appearing for the assessee. The learned Chief Standing Counsel has not been able to point out any error or illegality in the order of the Tribunal which may justify interference by this court. In the result the revision fails and is accordingly dismissed. However, there will be no order as to costs." The department appealed to the Supreme Court. S.C. Manchanda, Senior Advocate (Ashok K. Srivastava and Miss Rekha Joshi, Advocates, with him), for the appellant. Raja Ram Agarwal, Senior Advocate (Ajay Kumar Jain, Pramod Dayal and A.D. Sanger, Advocates, with him), for the respondent. JUDGMENT The judgment of the Court was delivered by ....

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.... Under the circumstances, if the last sale in favour of the respondent who is a dealer in hides and skins and exports the same out of the territory of India has taken place (1) after an agreement was entered into for such export or order for such export had been accepted by him, (2) last sale made in his favour was for the purpose of complying with the obligation undertaken under the said agreement or order, the transaction reflected in such last sale or purchase cannot be lawfully taxed under the Sales Tax Act. It cannot be taxed because of the constitutional bar embodied in article 286(1)(a) of the Constitution of India. The view taken by the High Court in the judgment under appeal that such transactions are not exigible to sales ta....

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.... the course of inter-State trade. But the mere fact that such a form has been given will not empower the State to collect or levy the sales tax/purchase tax in respect of a transaction in the course of export which satisfies the aforesaid tests prescribed by section 5(3) of the Central Sales Tax Act. It would be unconstitutional in view of the constitutional bar to levy tax on sales in the course of export regardless of the fact whether an appropriate form is used or not. The transactions entered into by him which are such on which sales tax/purchase tax cannot be levied on account of the constitutional bar read with sub-section (3) of section 5 of the Central Sales Tax Act cannot become exigible to tax merely because a wrong form is used (....