FAZL ALI - (1.) THIS is an appeal by special leave against the judgment and order of the Madhya Pradesh High Court dated 23/04/1974 dismissing the writ petition filed by the appellant before the High Court for quashing the orders of the Assessing Authorities imposing tax under the Central Sales Tax Act, 1956 on the basis of a number of sales made by the appellant Company in pursuance of multifarious contracts of sale. The appellant Company was formed in pursuance of an agreement dated 8/06/1962 between the President of India and the Central Provinces Manganese Ore Co. Limited. Before this agreement the said Company which will be hereafter referred to as the 'C. P. M. O. C.' was a private company incorporated in the United Kingdom and carried on the business of extracting manganese ore from several mines in the erstwhile States of C. P. and Berar and Bombay. By virtue of the agreement referred to above a new Company was formed under which the Government of India, the Government of Maharashtra and the Government of Madhya Pradesh held shares in the ratio of 17 Per Cent each whereas the original Company C. P. M. O. C. retained shares to the extent of 49 per cent. Thus the position was that in the present commercial venture the Central Government had preponderance of shares. The appellant, after the formation of the new Company, was known as Manganese Ore (India) Ltd. which will hereafter be referred to as the M. O. I. L. Fresh leases to extract the minerals from the various mines were issued by the Government in favour of the M. O. I. L. and the Company entered into contracts with buyers in India and outside for selling the manganese ore extracted from the various mines situated in the States of Madhya Pradesh and Maharashtra.
(2.) A close analysis of the contracts entered into by the appellant Company and the business carried on by it would manifestly reveal that the contracts may be divided into four separate and clear categories. Category-I are the contracts by which the manganese ore extracted by the appellant company is sent directly to a foreign company known as M/s. Philips Brothers on f.o.b.terms. Another such contract was entered into by the appellant with B.I.S.C. (Ore) Ltd., London for sale of oriental manganese ore f.o.b. Visakhapatnam. Copies of these contracts were filed before the High Court as Annexures Q and R. The Regional Assistant Sales Tax Commissioner accepted the contention of the appellant that so far as the sales under these contracts were concerned, they occasioned export and were clearly exempt from the Central Sales Tax Act as they fell within the purview of Section 5 (1) of the said Act. We might also mention here that the main dispute between the parties is regarding the applicability of Sections 3 (a), 4 (2) (b) and 9 of the Central Sales Tax Act, according to which the State of Madhya Pradesh was competent to levy tax on the sales made by the appellant in the course of which the manganese ore moved from the State of Madhya Pradesh to other States in India. The main contention of the appellant before the High Court as also before the Sales Tax Authorities was that all these sales were outside sales and not in the course of inter-State trade or commerce and therefore the provisions of the Central Sales Tax Act did not apply. The Assistant Sales Tax Commissioner negatived the contention of the appellant and hence a writ petition was filed before the High Court. We might also mention that the writ petition was filed by the appellant company before the High Court even before taking recourse to the normal procedure laid down under the Madhya Pradesh General Sales Tax Act, 1958. This was obviously done because the appellant chose to assail the levy of tax on the ground that the Sales Tax authorities did not possess any jurisdiction to impose the tax inasmuch as the sales were not at all covered by the Central Sales Tax Act. We have stress this fact particularly because before High Court the appellant raised some questions relating to the merits of matter which could be properly agitated before Appellate or Revisional authorities under the Madhya Pradesh General Sales Tax Act. Thus so far as the sales in Category-I are concerned, the Assistant Sales Tax Commissioner accepted the plea of the appellant and did not levy and tax on those sales. These sales, therefore, did not form the subject-matter of the present appeal before us. This position was conceded by both sides. Category-II represents contracts which were entered into by the appellant company with the Minerals and Metals trading Corporation of India Ltd-hereinafter referred to as MMTC - inder which the appellant despatched manganese ore of varying percentage to the MMTC f.o.b. Bombay. After having received the goods from the appellant the MMTC exported the goods to foreign buyers. The copies of the contracts comprising these sales are Annexures N, O and P, before the High Court.
(3.) CATEGORY-III relates to sales as per agreements copies of which are Annexures S, T and U by which the appellant and Company, Bombay and other buyers which in turn sold the goods to the MMTC. As regards these two categories, Category II and Category III, the appellant advanced two-fold contention before us. In the first place it was argued that as the goods were eventually exported by the buyers from India to foreign countries, therefore, the sales made by the appellant were not inter-State sales but sales which occasioned exports and, therefore, fell within Sec. 5 (1) of the Central Sales Tax Act. The High Court after consideration of various aspects of the matter overruled the contention of the appellant and held that as no export was involved so far as the sales made by the appellant to the buyers in India were concerned, therefore, Section 5 (1) had no application at all. This matter need not detain us further, because it is no longer res integra and is now completely concluded by a Constitution Bench decision of this Court in Md. Serajuddin v. State of Orissa, (1975) 2 SCC 47 = (AIR 1975 SC 1564) where Ray C. J., speaking for the majority, observed as follows : "To establish export a person exporting and a person importing are necessary elements and the course of export is between them. Introduction of a third party dealing independently with the seller on the one hand and with the importer on the other breaks the link between the two for then there are two sales one to the intermediary and the other to the importer. The first sale is not in the course of export because the export commences with intermediary. The test are that there must be a single sale which itself causes the export or is in the progress or process of export. There is no room for two or more sales in the course of export. The expression "occasions" in Section 5 of the Act means the immediate and direct cause. But for the contract between the Corporation and the foreign buyer, there was no occasion for export. Therefore, the export was occasioned by the contract of sale between the Corporation and the foreign buyer and not by the contract of sale between the Corporation and the appellant." The Court clearly held that where the sale was not directly and substantially connected with export, and where between the seller and ultimate buyers intermediaries were involved, such a sale would not occasion any export and would not fall within the purview of Section 5 (1) of the Central Sales Tax Act. It is not disputed that all the sales covered by Category II and Category III were actually made by the appellant not to any foreign exporter but to buyers inside India exporter but to buyers inside India whether it was MMTC or whether they were other private firms. In these circumstances, therefore, the sales mentioned above could not be said to be sales which occasioned any export. The High Court, therefore, rightly found that these sales were completed within the territory of India when the goods passed to the buyers. The High Court further found as follows : "For these reasons, it cannot be held that these sales occasioned the export within Section 5 (1) of the Central Sales Tax Act and were sales in the course of export." The High Court relied on a number of authorities, but in view of the decision of this Court in Md. Serajuddin's case it is not necessary for us to consider those authorities at all because the matter has not been concluded by a decision of this Court. In fact this position was conceded by Mr. Natu appearing for the appellant but he tried to persuade us to refer the case to a larger Bench for reconsidering Md. Serajuddin's case. We are, however, unable to agree with the prayer made by the learned counsel for the appellant because this Court has given its decision recently and the doctrine of stare decisis is a very valuable principle of precedent which cannot be departed from unless there are extra-ordinary or special reasons to do so. We are unable to find any special reasons for reconsidering Md. Serajuddin's case, particularly when this Court has laid down the rule, namely, that where the sale is in fact and in law a pure inter-State sale, it cannot be treated to be a sale occasioning export. This, therefore, disposes of the first plank of attack made by the appellant on the judgment of the Madhya Pradesh High Court so far the sales contained in Categories II and III are concerned. ;