- (1.) [With him Mukherjea, Bose and Ghulam Hasan, JJ.]- These are appeals from an order of the High Court of Travancore-Cochin quashing the assessments severally made on the respondents in each appeal under the Travancore-Cochin General Sales-tax Act. 1124 M. E (Act No. 18 of 1124 M. E.) (hereinafter referred to as the Act).
(2.) The Act provided by S. 3, for the levy of a tax on the total turnover of every dealer for each year. "Turnover" is the aggregate amount for which goods are either bought of sold by a "dealer" (S. 2 (j) ), who is a person carrying on the business of buying and selling goods (S. 2 (d)). "Sale", with all its grammatical variations and cognate expressions, is defined as meaning, among other things, every transfer of the property in goods by one person to another in the course of trade or business for cash or for deferred payment or other valuable consideration (S. 2 (h)). The sale or purchase is to be deemed to have taken place in the State, wherever the contract might have been made, if the goods were actually in the State when the contract was made or, if the goods are actually produced in the State, at any time after the contract in respect thereof was made. By S. 3 (4) the turnover is to be determined in accordance with such rules as may be prescribed and R. 4 of the rules framed under the Act, prescribes that, in the case of certain goods including "cashew and its kernel", the gross turnover of a dealer is the amount for which the goods were bought by him, and in all other cases the amount for which the goods were sold by him.
(3.) The respondents are dealers in cashew-nuts in the State and their business consists in importing raw cashew-nuts from abroad and the neighbouring districts in the State of Madras in addition to purchases made in the local market. and, after converting them by means of certain processes into edible kernets, exporting the kernets to other countries, mainly, America. The oil pressed from the shells removed from the cashewnuts was also exported. The Constitution having come into force on 26th January 1950, the respondent in each appeal claimed exemption under Art. 286 (1) (b) in respect of the purchases made from that date till 29th May 1950 the end of the account year. The Sales-tax authorities having rejected the claim the respondents applied to the High Court under Art. 226, and that Court upheld the claim and quashed the assessments in so far as they related to the said period. The State has preferred the appeals.;