LIBERTY FOOTWEAR CO Vs. COMMISSIONER OF SALES TAX

JUDGEMENT

(1.) The applicant, Liberty Footwear Company, Agra, deals in footwears. His case is that during the year 1974-75 purchases of shoes of the value of Rs. 11,09,784.50 made by him were exempt from payment of purchase tax for they had been made in the course of export thereof outside India. His claim having been rejected by the authorities under the U. P. Sales Tax Act, necessity arose for him to approach this Court in the present revision under Section 11(1) of the Act.

(2.) The claim of the dealer has been rejected on account of the law laid down by the Supreme Court in Mod. Serajuddin v. State of Orissa AIR 1975 SC 1564. A Constitution Bench of the Supreme Court, by majority, ruled in that case that sale in the course of export out of the territory of India means sale taking place not only during the activities directed to the end of exportation of the goods out of the country but also as part of or connected with such activities. The appellant before the Supreme Court had entered into contract with State Trading Corporation which had entered into contracts with foreign buyers for sale of identical goods purchased by the Corporation from the appellant. The Supreme Court, amongst others, made the following observations :

(3.) The case of the dealer is that, on facts, its case was different from that of Serajuddin [1975] 36 STC 136 (SC); AIR 1975 SC 1564 or of Nihal Shoe Factory [1976] 37 STC 154 ; 1976 UPTC 45 wherein, relying upon that decision, a Division Bench of this Court held that the transaction of sale of shoes by Nihal Shoe Factory to another firm Agra Charm Kala Kendra which, in turn, had entered into an agreement with the State Trading Corporation for supply of shoes to be exported by the Corporation to foreign buyers could not be said to be in the course of export. It was held to be a local sale attracting liability to tax under the U. P. Act.