- (1.) The Sales Tax tribunal, orissa referred the following questions under Section 24 (1 of the orissa Sales Tax Act, 1947 (the Act) for the opinion of the High court of orissa, Cuttack: "(1 Whether on the facts and in the circumstances of the case, the tribunal is correct in holding that there has been no contravention of the declaration given under Rule 27 (2 of the orissa Sales Tax Rules thus attracting the proviso to Section 5 (2 (A) (a) (ii) of the orissa Sales Tax Act (2 Whether in the facts and circumstances of the case, the learned tribunal having held that there was no contravention of Section 5 (2 (A) (a) (ii) of the Act acted within its jurisdiction in remanding the appeal (3 Whether in the facts and circumstances of the case, the sale by the petitioner-company to the Japanese buyer comes within the ambit and scope of Article 286 (1) (b) of the Constitution of India read with Section 5 of the central Sales Tax Act - A three Judge-Bench of the High court by its judgment dated 11-5-1976 answered the questions as under: "(1 On the facts and in the circumstances of the case, the tribunal was correct in holding that there was no contravention of the declarations given under Rule 27 (2 of the orissa Sales Tax Rules and, therefore, the proviso to Section 5 (2 (A) (a) (ii) of the orissa Sales Tax Act was not attracted. (2 In the facts and circumstances of the case, the sales by the assessee to the Japanese buyer are covered by the embargo under Article 286 (1 (b) of the Constitution of India read with Section 5 of the central Sales Tax Act and, therefore, are not exigible to sales tax under the orissa Act. The remaining question, in view of what we have already stated, does not survive for answer. " These appeals by the State of orissa are against the full bench judgment of the High court.
(2.) The Minerals and Metals Trading Corporation of India Limited, respondent in the appeals herein, is a government company within the meaning of Section 617 of the Companies Act, 1956. The respondent-assessee is registered as a dealer under the Act. During the years 1966-67, 1967-68 and the quarters ending June, September and December 1968, the respondent purchased mineral ores from the mine-owners, who were registered dealers under the Act. While purchasing mineral ores from the mine-owners the respondent gave declarations in terms of Rule 27 of the orissa Sales Tax Rules, 1947 (the Rules) to the effect that the said mineral ores would be resold within the State of orissa. The Sales Tax Officer while examining the accounts relating to the relevant period found that the respondent had sold the mineral ores in the course of export to the Japanese buyers with whom the assessee had pre-existing export contracts. The Sales Tax Officer came to the conclusion that the mineral ores were sold in violation of the declarations furnished by the respondent and, as such, contravened the provisions of Section 5 (2 (A) (a) (ii) of the Act. The Sales Tax Officer added the amount of the relevant sales to the taxable turnover of the respondent and issued a demand for payment of the tax. The respondent filed an appeal before the first appellate authority which was dismissed. Aggrieved by the order of the first appellate authority, the respondent filed a second appeal before the Sales Tax tribunal. It was contended before the tribunal that the goods were resold in orissa and the transaction with the Japanese buyers being sale in the course of export, it was not liable to tax by virtue of Article 286 (1 (b) of the Constitution of India. The tribunal came to the conclusion that the sale by the respondent in favour of the Japanese buyers, was within the State of orissa and, as such there was no violation of the terms of the declarations. The tribunal, however, did not agree with the other contention that the transactions were in the course of export and, therefore, not exigible to sales tax. The tribunal rejected the second contention. The net result was that the assessee was not found liable on account of violation of the undertaking in the declarations but the assessee's sale in favour of the Japanese buyers was found liable to tax. As the accounts had to be re-verified to ascertain the correct figures, the tribunal remanded the matter. The tribunal stated the cases and referred the questions at the instance of both the Revenue as also the assessee for the opinion of the High court. We have already set out the answers given by the High court. S. 2 (g) and 5 (2 (A) (a) (ii) of the Act and Rule 27 (2 of the Rules are reproduced hereunder: "2.(G) 'sale' means, with all its grammatical variations and cognate expressions, any transfer of property in goods for cash or deferred payment or other valuable consideration, including a transfer of property in goods involved in the execution of contract but does not include a mortgage, hypothecation, charge or pledge and the words 'buy' and 'purchase' shall be construed accordingly. Explanation. (a) A sale or purchase of goods shall be deemed to take place inside the State if the goods are within the State (I) in the case of specific or ascertained goods at the time the contract of sale is made; and (Ii) in the case of unascertained or future goods at the time of their appropriation to the contract of sale by the seller or by the buyer, whether assent of the other party is prior or subsequent to such appropriation; (Iii) where there is a single contract or sale or purchase of goods situated at more places than one, the provisions of this Explanation shall apply as if there were contracts in respect of the goods at each of such places. 5. (2 (A) In this Act the expression 'taxable turnover' means that part of a dealer's gross turnover during any period which remains after deducting therefrom (A) his turnover during that period on* * * (Ii) sales to a registered dealer of goods specified in the purchasing dealer's certificate of registration as being intended for resale by him in orissa or for use by him in the execution of any contract in orissa, and on sales to a registered dealer of containers and other materials for the packing of such goods : Provided that when such goods are used by the registered dealer for purposes other than those specified in his certificate of registration, the price of goods so utilised shall be included in his taxable turnover. "* * * "Rule 27. (2 (i) Claim for deduction of turnover under item (ii) of sub-clause (a) of clause (A) of Ss. (2 of Section 5: A dealer who wishes to deduct from his gross turnover the amount of a sale on the ground that he is entitled to make such deduction under item (ii) of sub-clause (a) of clause (A) of Ss. (2 of Section 5 of the Act, shall, on demand, produce a copy of the relevant cash receipt or bill according as the sale is a cash sale, or a sale on credit, and a declaration in Form XXXIV duly filled up and signed by the purchasing dealer or by such responsible persons as may be authorised in writing in this behalf by the purchasing dealer. "
(3.) It would be useful to have before us Article 286 (1 (b) of the Constitution of India and Section 5 (1 of the central Sales Tax Act, 1956 which are as under: "286.Restrictions as to imposition of tax on the sale or purchase of goods. (1 No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place (A) * * * (B) in the course of the import of the goods into, or export of the goods out of, the territory of India.;