KANHIRAM RAMGOPAL Vs. COMMISSIONER OF SALES TAX

JUDGEMENT

(1.) THE Sales Tax Tribunal (Board of Revenue) has made this reference under section 44 (1) of the Madhya Pradesh General Sales Tax Act, 1958, (hereinafter referred to as the Act) at the instance of the assessee. The question referred to us for decision is -"whether on the facts and in the circumstances of the case the purchases of hemp jute were not exempt under Section 50 (1) (iii) of the m. P. General Sales Tax Act, 1958, and were liable to purchase tax under section 7 of the said Act?"

(2.) THE assessee-firm is a registered dealer having its head-office at Seoni and a branch-office at Calcutta. The assessee deals in various articles including jute. During the assessment period from 21st October 1960 to 8th Novemer 1961, the assessee purchased hemp worth Rs. 11,42,629. 10 from agriculturists and unregistered dealers. No sales tax was payable under Section 6 of the Act on these sales by the agriculturists and unregistered dealers. The hemp urchased by the assessee was not resold in the State of Madhya Pradesh, but was sent to Calcutta. The Sales Tax Officer, Bala-ghat, held that the assessee was liable to pay purchase-tax under Section 7 of the Act. In appeal before the Appellate Assistant Commissioner of Sales Tax, Jabalpur, the assessee contended that purchase-tax was not attracted as the despatch of hemp to Calcutta was in the course of inter-State trade or commerce. The appellate authority negatived this contention. In second appeal before the Tribunal, the ground about inter-State trade was given up; but a new ground was pressed, namely, that the purchase-tax was not attracted as the purchases were made in the course of export of hemp outside the territory of India and that the purchases were exempt from purchase-tax under Section 50 (1) (iii) of the Act.

(3.) THE Tribunal repelled this contention. It held that" the test is whether there was any obligation on the appellant or whether the appellant was compelled to export the goods purchased by any contract or mutual understanding or any provision of law and he could not help exporting without a breach of them. In the instant case this has not been proved. The appellant was free to sell within the State the hemp jute purchased by him or to sell it in the course of inter-State trade or commerce or to dispose it of otherwise. It is another matter that ultimately the hemp jute purchased by him was exported outside the territories of India. According to the decision of the Supreme Court such a purchase can only be said to be purchase made for export Ben gorm Niligiri Plantations Co. Conoor (Nilgiris) etc v. Sales Tax Officer, ernakulam, 1964-15 STC 753: (AIR 1964 SC 1752 ). There is no link from the time and the point of purchase to the time and the point from which it was exported out of the territories of India to show that the purchase was in the course of export outside the territories of India".