J. V. GOKAL & CO. (PRIVATE) LTD. versus THE ASSISTANT COLLECTOR OF SALES-TAX (INSPECTION) AND OTHERS

Citation: [1960] 2 S.C.R. 852 · Decided: 25-01-1960 · Supreme Court of India · Bench: BHUVNESHWAR PRASAD SINHA · Disposal: Case Allowed

Cited by 5 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

January 25. 
852 
SUPREME COURT REPORTS 
[1960 (2)] 
J. V. GOKAL & Co. (PRIVATE) LTD. 
v. 
THE ASSISTANT COLLECTOR OF SALES-TAX 
(INSPECTION) AND OTHERS 
(B. P. SINHA, c. J., P. B. GAJENDRAGADKAR, 
K. SUBBA RAO, K. c. DAS GUPTA AND J. c. SHAH, JJ.) 
Sales Tax-Sale in the course of import-Goods on high seas-
Transfer of shipping documents against payment ·Whether amounts 
to delivery of goods-Whether transaction exempt from tax-
Constitution of India, Art, 286(r)(b). 
The petitioner who entered into contracts with the 
Government of India for the supply of certain quantities of sugar 
of foreign origin, placed orders \vith dealers in foreign countries 
and made arrangements for transporting the goods to Bombay 
by engaging steamers. When the goods were on the high seas 
and before the vessels arrived at Bo1nbay harbour, the petitioner 
delivered to the Government the shipping documents including 
the bill of lading pertaining to the goods and received the price. 
After the goods reached the port, they were taken delivery of by 
the Government of India after paying the requisite customs 
duties to the authorities concerned. 
For the assessment year 
1954-55, the Assistant Collector of Sales Tax held that sales tax 
was payable by the petitioner in respect of the transaction 
relating to the sugar sold to the Government. The petitioner 
claimed, inter alia, that the sales had taken place in the course 
of import and therefore they were not liable to sales tax under 
Art. 286(1)(b) of the Constitution of India. 
But it was contended 
for the Sales Tax Authorities that the sales were not in the 
course of import and that, in any case, under the terms of the 
contracts the intention of the parties was that notwithstanding 
the delivery of the bills of lading against payment the property 
in the goods should not pass to the Government till actual 
delivery was made. 
Held: 
(1) that under Art. 286(r)(b) of the Constitution of 
India the course of the import of the goods starts at a point when 
the goods cross the customs barrier of the foreign country 
and ends at a point in the importing country after the goods 
cross the customs barrier ; 
(2) that an importer can, if he receives the shipping 
documents, transfer the property in the goods when they are on 
the high seas to a third party by delivering to him shipping 
documents against payment and such a sale is one made in the 
course of import; 
(3) that the delivery of a bill of lading while the goods are 
afloat is equivalent to the delivery of the goods themselves; 
Sanders Brothers v. Maclean & Co,, (1883) II Q. B. D. 327, 
relied on. 
(4) that oii a true construction of the contracts in question 
the property in the goods passed to the Government of India 
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S.C.R 
SUPREME COURT REPORTS 
853 
when the shipping documents were delivered to them against 
I{!6o 
payment; and 
(S) that the sales in question took place in the course of]. V. Gol1at & Co· 
import into India and were exempted from sales tax under Art. 
v. 
286(r)(b) of the Constitution. 
Assistant 
State of Travancore-Cochin v. The Bombay Co. Ltd., [1952] 
Collector of 
S. C. R. III2, followed. 
Sales-Tax 
ORIGINAL JURISDICTION: Petition No. 38 of 1959. 
Petition under article 32 of the Constitution of 
India for enforcement of Fundamenal Rights. 
Purshottam Tricumdas, and I. N. Shroff, for the 
Petitioner. 
A. V. Viswanatha Sastri, R. Ganapathi Iyer and 
R. H. Dhebar, for the respondents. 
N. A. Palkhivala and I. N. Shroff, for Interveners 
Nos. 1 to 3 (The Bombay Chamber of Commerce & 
Industry, Bombay and others). 
C. J(. Daphtary, Solicitor General of India and 
T. M. Sen, for intervener No. 4 (Attorney-Gen~ral 
for India). 
1960. January 25. 
The Judgment of the Court 
was delivered by 
Subba Rao]. 
SuBBA RAO, J.-This is a petition under Art. 32 of 
the Constitution for quashing the order of the first 
respondent dated February 9, 1959, setting aside the 
order .of the second respondent allowing a deduction 
of an amount of Rs. 1,86,42,730-15-0 from the 
petitioner's sales tax turn-over on the ground that 
the said amount was not liable to tax by virtue of 
s. 46 of the Bombay Sales Tax Act, 1953 (Act III of 
1953), (hereinafter called the Act). 
The material facts are not in dispute and they may 
be briefly stated : 
The petitioner is a private 
company within the meaning of the Companies. Act, 
1956, and has its registered office at Kasturi Buildings, 
Bombay-I. On March 24, 1954 an

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