LexB. K. WADEYAR versus M/S. DAULATRAM RAMESHWARLAL
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
924
SUPREME COURT REPORTS
[1961]
1!>60
spirit, which takes place in West Bengal. The cus-
Bumwh Sh•ll 0 ,1 tom~ barrier ?oes not set a terminal limit to the
StNoge 0 ,,J
territory of\\ oat Bengal for sales tax purposes. The
Dis1>1&ut1ng Co,. sale beyond the customs barrier is still a sale, in fact,
of Indio Ltd.
in the State of West Bengal.
Both the buyer and
v.
the seller are in that State. The goods are also thllre.
Co11u11ercia/
All h
1
f
I · 1 d'
d 1
t e e cments o sa e me u mg
e ivery, payment
Tax Offictr
of price, take place within the State. The sale is th us
HodoyatullaJ, J. completely within the territory of tho taxing State. No
outside Sta.ti; is involved where the goods can.be said
to have been delivered for consumption as a direct
1960
Sep1ember 27.
result of the sale that takes place. Article 28ti(l)(a)
. ,.
and the Explanation a.re wholly inapplicable, and the
sale cannot, oven by a fiction, be said to be outside
the State of West Bengal. Xo doubt, aviation spirit
is taken out of the· State and also the territory of
India, but it cannot be said to have been exportOO or
delivered for consumption in some other State. The
so-called export is not occasioned by the sale, and the
sale, on the authorities cited, is not in the course of
•export', so as to attract Art. 286(l)(b).
The decision of the High Court was correct. The
appeals fail, and are dismissed with costs. One hear-
ing fee.
Appeals dismissed.
B. · K. W ADEY AR
v.
M/S. DAULATRAM RAMESHWARLAL
(S. K. DAS, M. HIDAYA'l'ULLAH, K. c. DAS GUP'l'A,.
J.C. SHAH and N. RAJAGOPALA AYYANOAR, JJ.)
Sales Tax-Export-Meani11g of--Properly i11 exported goods
in F. O. B. contracts-If passes on shipment or before it-Export
licence-If obtai11able by b1<yer or seller-" Person", meaning of -
Bombay Sales Tax Act, 1953 (Rom. Il I of 1953), s. lo(b)-'Fhe
ImpOf't and Export (Control) Act, 1947 (XV I II of 1947), s. 5(2)-
Conslitution of India, Art. 286(1)(b).
The respondents firm claimed _exempti?n from Sales Tax
under Art. 286(1)(b) of the Constitut1on m respect of sales
l S:C.R. SUPREME COURT REPORTS
925
made by them of cotton and castor oil on the ground that the ·
sales were on F.O.B. contracts under which they continued to be
the owners of the goods till those crossed the custom barrier
and entered the export stream. They also contested the pur-
chase tax to which they were assessed under s. 10(b) of the Born<
bay Sales Tax Act.
The High Court upheld the contention of
the respondents regarding the Sales Tax but held that they
were liable to pay purchase tax. On appeal by both the parties
Held, that the i(OOd• remained the seller's property till
those had been brought and 'loaded on board the ship and so
the soles were exempted from tax under Art. 286(1) of the Con-
stitution.
The word "a person" in s. ro(b) of the Bombay Sales Tax
Act had been correctly interpreted as "a registered dealer"
and the purchasing dealers had been rightly assessed to pur-
chase tax.
-
The normal rule in F. 0. B. contracts was that the property
. was intended to pass and did pass on the shipment of the goods.
The presumption in F. 0. B. contracts was that it was the
duty of the buyer to obtain the necessary export licence, though
in the circumstances of a particular case that duty might fall on
the seller.
H. 0. Brandt & Co. v. H. N. Morris & Co. Ltd., [1917] 2 K.B.
784 and ill. W. Hardy & Co. v. A. V. Pound & Co., Ltd., (1953)
l Q.B. 499, considered.
"Export" under the Import and Export Control Act having
been defined as "taking out of India by land, sea or air" it
could not, under the Export Control Order, be held to have
commenced till the ship carrying the goods left the port or in
some cases passed the territorial waters.
The State of Bombay v. The United Motors (India) Ltd., (1953)
4 S.T.C. 133, held inapplicable.
.
CIVIL APPELLATE JURISDICTION:
Civil Appeals
Nos. 45 and 46 of 1959.
Appeal by special leave from the jndgment and
order dated March 25, 1957, of the former Bombay
High Court in Appeal No. 16 of 1957.
C, K. Daphtary, Solicitor.General of India, H.J.
Umrigar and D. Gupta, for the Appellant (In C. A. No.
45 of 59) and Respondent (In C. A. No. 46 of59).
11. N. Sanyal, Additional Solicitor-General of India,
S. N. A:idley and J. B. Dadachanji, for t.he respon.
dents ([n C. A. No. 45 of 59) and Appellants (In C. A.
No. 46/59).
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u8
B. /{. TVadcyar
v.
1\-ffs. Daulatram
Ran1cshwarlaExcerpt shown. Read the full judgment & AI analysis in Lexace.