LexBURMAH SHELL OIL STORAGE AND DISTRIBUTION CO. OF INDIA LTD., AND ANOTHER versus THE COMMERCIAL TAX OFFICER AND OTHERS (AND CONNECTED APPEAL)
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L. llu:an ,\Jal Kath1ulu , .. J'Ju ftlC01Jlf·ltlX UfJictY, sp~ctaJ Circlt, AmlnJ/ll Can!t. 902 SUPREME COURT REPOHTS [ I9&I] sub-s. (5) that "Income-tax Offic<•rs shall perform their functiorrn in respect of such persons ...... as the Commi~Hioner ...... may ...... direct" <inly show that the CommiAsioner mn.y direct that one Income-tax Officer Ahall not and !!notlwr lncomr-t-Rx Cfficer sl1all, per- form the functions in respect of such and such pnson or per80lls. The plural i11cluding the singular, the order of thu Commissio11cr waH valid, becausu he arra11ged aud distrilrnted work, and <lid not- se"k to transfer any ca~e. It is, however, contemlcd that this renders suL-s. (7 A) otioso. In 01u· opi11iu11, it does nut. Special 1irovisiu11 for transfer of pe11ding <'ases is ·~JI that i". provided there, aud if ouch a transfer takes pla<'e, the proviBions of sub-s. (7A) will be invoked. Tho8P provisions are to be rllad as 11ut pre- judicing the g<'11eral powers granted b) sub-s. (5) and vice versa. For these reasons, tlie appeal fails, r.nd will ho dis- missed with eusts. Appeal dismi.ssed. BURMAH SHELL OIL STORAGE AN'D DISTRIBUTING CO., OF INDIA, LTD, AND ANOTHER v. THE COMMERCIAL TAX OFJ.<'JCER AND OTHERS (A~D CONNECTgD APPEAL) (S. K. DAS, M. HmAYATUI.LAn, K. C. Ihs GUPTA, J.C. SHAH and X. HAJAGOPALA AYYA:SOAR, ,JJ.) Sales Tax-Sale of motor spirit for aviation purposes lo aircraft "' Ai"rport-Exemption from taxation-_Sale outside custu1ns barrier ---'J.t'hether salt u·itl1in State--A.viatio1i sp;rit loaded 011 board aircraft taken out of cotrnlry-lf exported-" J::xport ", meamng of -Bengal Motor Spint Sal<S Taxation Act, 1y41 (Beu. 5 of 1941), "22, as amcnded-Co11slitutio11 of hidia, Art 286(1)(a)(b). J::xpla- nation. .- , ' 1 S.C.R. SUPREME COURT REPORTS 903 l'he apptllant companies which \Vere, carrying on, husiness J9tl•J in Calcutta in petroleum and petroleum products maintained -- . supply depots at Dum Dum Airport from which motor spirit for Bunnah .shell Oil the purposes of aviation was sold and delivered to aircraft which Storage and either proceeded to foreign countries directly from that Airport Distributing Co .• or did so ultimately. though landing en route at some place or of India Ltd. places in the Indian territory. Dum Dum Airport was a customs v. aerodrome and all aircraft coming into it or leaving it had to Connnercial • comply with ordinary customs formalities. The sales tax autho- .Tax Officer rities of West Bengal sought to levy tax on the sales of motor spirit as aforesaid under the provisions of the Bengal Motor Spirit Sales Taxation Act. 1941. as amended. The appellant companies claimed that the sales were exempted from taxation under both the clauses (a) and (b) of Art. 286(1) of the Constitu- tion of India on the grounds (1) that the sales in question had taken place outside the State of West Bengal. as they did not come within the Explanation to Art. 286(1)(a). (2) that aviation spirit was delivered outside the customs barrier and therefore the sales were outside the State. and (3) that the sales had taken place in the course of export, as aviation spirit was taken out of the territory.of India. Held: (r) that by sale in Art. 28li(1)(a) is meant a complet- ed transaction by which property in the goods passes. Before property in the goods passes the contract of sale is only execu- . tory aµd the buyer has only a chose in action. The taxable event is not to be found at an earlier stage because the critical taxable event is the passing of property. The Explanation to cl. (1) of Art. 286 was added to avoid, among .other things. multiple taxation of the same transaction. It indicates the State where the tax can be levied and also the State where it cannot.· It achieves it by excluding from con- sideration the place where the property in the goods passed according to the law relating to sale of goods. The non obstanle . clause establishes this. By the fiction created hy the Explana- tion a sale is deemed lo have taken place in the State where the goods are delivered as a direct result of the sale for purposes of consumption in that State .. Where there are more States than one involved; any State claiming to tax a sale by reason of something anterior to the passing of property would not be able to claim that the sale took place there unless it was also the State of delivery. The Explanaiion is meant to e
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