TaxTMI 
TaxTMI 
2010 (4) TMI 991
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.... in allowing the appeal by holding that there is an export?" We have heard the learned counsel for the parties. Before considering the arguments advanced by the learned counsel appearing for both the parties, we feel it appropriate to narrate the background of this case: The assessee is a public limited company registered as a dealer under the provisions of the Karnataka Sales Tax Act, 1957 and the Central Sales Tax Act, 1956. The assessee is engaged in the manufacture and sale of Indian-made foreign liquor. For the assessment year 1999-2000 the assessee claimed a turnover of Rs. 18,24,545 and for the assessment year 2000-01 the turnover of the assessee in respect of the sales made to Air India was Rs. 22,78,993. According to the assessee, the sale of IMFL by it to Air India is in the course of export and out of the territory of India and claimed that it is not liable to collect the Central sales tax from Air India as the goods sold by it are for the purpose of export. The Revenue did not accept the arguments advanced by the assessee. According to the Revenue, the sales made by the assessee to Air India were inter-State sales and they attracted the Central Sales Tax Act. A....
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....earing for the assessee contends that the Tribunal was justified in granting an order in favour of the assessee. According to him, Air India purchased the liquor from the assessee from Nanjangud and in terms of the contract the assessee is required to deliver the liquor crossing the customs frontiers in Bombay and when once Air India takes delivery of the goods sold by the assessee crossing the customs frontiers of India, such sale has to be treated as an export sale or in the course of export sale. Therefore, the Tribunal was justified in granting relief to the assessee. To support his claim, he has relied upon the judgment of the apex court in the case of State of Travancore-Cochin v. Bombay Company Ltd., Alleppey reported in [1952] 3 STC 434 and also the judgment of the Madras High Court in M.R.K. Abdul Salam and Co. v. Government of Madras reported in [1962] 13 STC 629 and also the judgment of the Supreme Court in B. K. Wadeyar, Sales Tax Officer v. Messrs Daulatram Rameshwarlal reported in [1960] 11 STC 757; AIR 1961 SC 311. Relying upon these decisions, he contends that considering the nature of transaction between the assessee and Air India, even if Air India is not a for....
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....rities." From this, it is clear that goods which are to be exported shall be kept crossing the limits of the area of a customs station. But as said earlier, Air India is not contending that the sale as an export sale. When a buyer is not a foreign buyer, according to us the transaction between the assessee and Air India cannot be treated as an export sale. Therefore, the only question is whether the transaction between Air India and the assessee has to be treated as a sale during the course of export. In order to appreciate the arguments of the learned counsel for the assessee, we have to consider the judgments relied upon by him in the State of Travancore-Cochin v. Bombay Company Ltd. [1952] 3 STC 434 (SC). In order to appreciate the facts, it would be appropriate for us to consider section 5 of the Central Sales Tax Act, 1956 which reads thus: "5. When is a sale or purchase of goods said to take place in the course of import or export-(1) A sale or purchase of goods shall be deemed to take place in the course of the export of the goods out of the territory of India only if the sale or purchase either occasions such export or is effected by a transfer of documen....
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....stances, we are of the opinion that the purchase made by Air India from the assessee cannot be treated as purchase of goods by Air India for export. In the decision of the Madras High Court in M.R.K. Abdul Salam and Co. v. Government of Madras [1962] 13 STC 629 which reads as hereunder: "We have now to deal with the question whether the sales to Gordon Woodroffe and to Dharamsee Parpia are sales which are outside the Madras General Sales Tax Act by reason of article 286 of the Constitution. The Constitution prohibits a State from imposing a tax on the sale or purchase of goods where such sale or purchase takes place in the course of the import of the goods into or export of the goods out of the Territory of India. A sale by a dealer in the State to a foreign buyer outside the Indian Territory is a sale which occasions an export and may be called a direct export sale. No State law can impose a tax on such export sales. A sale in the course of export is something different from a direct export sale as such a sale need not be to a foreign buyer but can be made by a dealer in the State so as to pass the property in the goods sold after exportation." The learned counsel relying up....