1988 (6) TMI 315

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...., (ii) M/s. Vijayalakshmi Minerals Trading Company and (iii) A.P. Mining Corporation Limited (hereinafter referred to as "the dealers"). The gunny bags purchased were used by the dealers for purposes of packing the barytes powder being exported to a foreign buyer. As per the policy of the Central Government the barytes packed in the hessain gunny bags were sold to and channelised through the Minerals and Metals Trading Corporation for purposes of exporting the same to the foreign buyer. The claim of the respondent is that the sales effected by it were in the course of export being the last sale preceding the sale occasioning the export of barytes packed in the goods sold out of the territory of India. The assessing authority rejected the cl....

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....o a foreign buyer are sales in the course of export falling within the ambit of section 5 to invoke the benefit of exemption from exigibility of tax. Mr. Venkataramana, the learned Government Pleader, contended that the sales of gunny bags by the respondent were neither ultimate nor penultimate occasioning the export of the same and therefore the said sales are not in the course of export for being covered by section 5 of the Central Sales Tax Act. On the other hand, Mr. Dasaratharama Reddi, the learned counsel for the respondent, submitted that the MMTC (Minerals and Metals Trading Corporation) is a mere agent of the dealers to whom the respondent sold the gunny bags, that the dealers alone are the exporters to the foreign buyer and the....

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....les in the course of export contemplated by section 5. Turning to the question of principal and agent, it observed that the system of canalisation of exports through certain corporate bodies is held to be constitutionally valid in Daruka & Co. v. Union of India (1973) 2 SCC 617, and that agency arises by an ostensible authority conferred by the principal on the agent or by an implication of law in cases of necessity. In the present case, admittedly, there is no authority conferred by the dealers on the MMTC in regard to the transaction with the foreign buyer. Even to hold that there is an agency of necessity, there should have been a contractual relationship created by the parties and on account of some emergency the law should have conf....