COFFEE BOARD, BANGALORE versus JOINT COMMERCIAL TAX OFFICER, MADRAS & ANR.

Citation: [1970] 3 S.C.R. 147 · Decided: 29-10-1969 · Supreme Court of India · Bench: M. HIDAYATULLAH · Disposal: Dismissed
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Judgment (excerpt)

147 
A 
COFFEE BOARD, BANGALORE 
' 
v. 
JOINT COMMERCIAL TAX OFFICER, MADRAS & ANR. 
October 29, 1969 
B 
(M. HIDAYATULLAH, C.J., S. M. S!KRI, G. K. MITTER, A. N. RAY 
c 
D 
E 
F 
G 
H 
AND P. JAGANMOHAN REDDY, JJ.J 
Constitution of India, Arts. 31(1), 32-Corporation not being a citizen 
whether can enforce ri"ghrs under Art. 32-Circumstanoes under which tax-
ing statute can be challenged on ground of breach of fundanrental rights 
by petition under Art. 32. 
Sales T ax~Sales 'in course of export' what are-Sale by coffee Board 
constituted under the Coffee Act· 7 of 1942 to registered exporters whether 
within protection of Constitution of lndi" Art. 
286(1J(h) 
and Central 
Sales Tax Act 74 of 1956 s. 5(1). 
Under Art. 286(l)(b) of the Constitution exemption from imposition 
of sales tax is granted in respect of a sale or purchase of goods in the 
course of the import of the goods into, or export of the goods out of the 
territory of India. 
After the 6th Amendment to the Constitution, Parlia-
ment passed the Central Sales Tax Act, 1956 and in s. 5(1) thereof laid 
do\\-n that a sale of goods is 'in the course of export' out of the territo·ry 
of India on1y if the sale or purchase either occasions such export or is 
effected by a transfer of documents of title to the goods a'fter the goods. 
have crossed the customs frontiers of India. Export of coffee outside India 
is controlled under the Coffee Act. 1942, by the Coffee 
Board. 
Coffee 
especially screened and selected is sold to registered 
exporters at 'export 
auctions'. 
Permits are given to such registered exporters to participate at 
the auction. 
The Coffee Board has prepared a set of rules which incor-
porate the terms and conditions of sale of Coffee in the course Of ex.port. 
Under Condition 26 of the Rules a registered dealer has to give an 'ex-
port guarantee' under which export 
can be made 
only to stipulated or 
approved destinations. The buyer at an export auction is free to export the 
coffee either by himself or through a forwarding agent. without selling the 
goods to the forwarding agent. 
Immediately after the export evidence of 
the shipping has to be produced before the Chief Marketing Officer, other-
w'..se under Condition 30 the permit holder is liable to fine and under Con-
t.lition 31 the unexpnrted coffee is liable to be seized. 
In respect of certain sales of coffee to regis~ered exporters in March 
and April 1963 the Coffee Board aforesaid claimed 
that as the sales in 
question had been made· 'in the course of export' outside the territory of 
India they could not be taxed under the Madras General Sales Tax Act, 
1959. The taxing authorities however held that the sale3 took place within 
Tamil Nadu Slate and were liable to be taxed under the Tamil Nadu Act. 
Provisional assessments were made a·nd the tax not already paid was de· 
"landed. 
The Board thereupon filed petitions under Art. 32 of the Cons-
titution challenging the levy. 
The State, however, relying upon this Court's 
decision in ihe State Trading Corooration v. The Con1111ercial Tax Officer, 
Viw1khavatnan1 & Ors. contended that the Board wa'i a Corporation and 
not a citizen and its petition under Art. 32 could not be entertained. On 
behalf of the State it was also urged that the petitioners d;d not show any 
hreach of fundamental 
right justifying 
a petition under Art. 32; 
the 
Board had only claimed exemptions incorporated in the Constitution and 
148 
SUPREME COURT REPORTS 
[1970] 3 S.C.R. 
the statute dealing with the levy and collection of sales tax and their 
A 
grievance could be investigated and 
righted by taking recourse to 
the 
remedies provided in the relevant statute. 
HELD: 
(Per Hidayatullah, C. J., G. K. Mitter, A. N. Ray and P. 
Jaganmohan Reddy, JJ.) (i) The case of the State Trading Corporation 
considered the appl,ij;ation of Art. 19(1)(f) & (g) in relation to Corpo-
rations and it was held therein that they could not be regarded as citizens 
for the purpose Of that Article. The 
questi<>n was not cortsidered in 
B 
relation to Art. 31 ( t) which is not limited in its operation to citizens. It 
m~n.ion 'persons who may be corporations or group of persons. [155 F; 
158 G-Hl 
State Trading Corporation of India Ltd. v. Commercial Tax Officer, 
Visakhapatnam and Ors., [1964] 4 S.C.R. 99, distinguished. 
(ii) The majority in Smt. Ujjam Bai's case considered that .i breach 
of fundamental right guaranteed by Art. 32( 1) is involved in a demand 
for tax
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