DEVURAPALLI APPARAO Vs. STATE OF MADRAS

JUDGEMENT

(1.) THIS appeal, under clause 15 of the Letters Patent is against the judgment of Umamaheswaram, J., in Appeal No. 1066 of 1953.

(2.) THIS arises out of the assessment made by the Sales Tax Department on a turnover of Rs. 3,30,303-10-11 relating to the period from 1st April, 1949, to 25th January, 1950. During this period, the assessee, whose legal representatives are the appellants, exported copra to merchants in the United Kingdom and other European countries. Exemption was claimed in regard to this turnover on the ground that they did not constitute sales within the meaning of section 2(h) of the Madras General Sales Tax Act (IX of 1939). It was contended by the appellants that as the sales took place outside India there was no scope for invoking the Madras General Sales Tax Act. This plea did not find favour with the department with the result that this turnover was brought to tax. This was confirmed on appeal by the Commissioner of Commercial Taxes. Questioning the validity of this assessment, the appellants filed a suit in the Subordinate Judge's Court, Kakinada (O.S. No. 111 of 1951) for a declaration that the assessment to sales tax for that period was ultra vires and for the injunction restraining the respondent Government from collecting the same.

(3.) THE main contention advanced by Sri K. B. Krishanamurthy in support of this appeal is that the tax levied by the Department is indirectly an export duty and the power to impose such an export duty is vested exclusively in the Central Government, which power is derived under section 140 of the Government of India Act, 1935, read with entry 44 of List I of the Seventh Schedule. His argument is that the tax levied by the Sales Tax Department on these sales is indirectly an export duty and, consequently, it is outside the purview of the Madras General Sales Tax Act. We do not think we can give any weight to this argument. The sales tax is in no sense a tax on goods exported outside a territory. As pointed out by the Bench of the Madras High Court in Murugan and Co. v. The State of Madras ([1954] 5 S.T.C. 353; (1954) 2 M.L.J. 682),