MANCHANDA, J. - (1.) THIS is a case stated under section 11(1)of the U.P. Sales Tax Act (hereinafter referred to as the Act).
(2.) THE material facts are these : The assessees are dealers in brassware and scrap and carry on business at Farrukhabad in the State of U.P. The assessees, infer alia claimed that out of the sales totalling Rs. 35,907-1-3, goods worth Rs. 25,569 were sales in the course of export of goods outside the territory of India, they having been exported to Nepal and the remaining Rs. 10,537-15-9 were intra-State sales. The admitted facts are : (1) that the delivery of goods had taken place at Nepalganj, the rail-head terminus, which is situate in the State of U.P., (2) that the purchasers, who were dealers carrying on business in Nepal had themselves after taking delivery taken the goods into Nepal from Nepalganj, and that there was no direct rail link or other common carrier between the State of U.P. and Nepal In regard to gales totalling Rs. 25,569 as delivery of goods was made at the railway terminus of Nepalganj within the State of U.P., the Sales Tax Officer held that the sale must be deemed to have been effected within the State of U.P. and as such was assessable under the Act. The remaining sum of Rs. 10,337-15-9, which represented inter-State sales, was assessed under the Central Sales Tax Act. Aggrieved, the assessee went up in appeal only in respect of the sales to Nepal parties. The Judge (Appeals), in view of certain circulars issued by the U.P. Government interpreting Article 286(1)(b) of the Constitution, considered that it was essential to enquire whether the goods were exported outside India and for that purpose customs receipts, if any, would be relevant in order to show that goods which had moved from the 'U.P. dealer were the very goods which had crossed the border and had gone into Nepal for consumption there. He, therefore, remanded the case with a direction that if the assessee established this fact to the satisfaction of the Sales Tax Officer then sales of Rs. 25,569 would qualify for the exemption. This time it was the Commissioner of Sales Tax who was aggrieved and he took up the matter in revision. The Judge (Revisions) was of the view that the circular of the U.P. Government dated 26th February, 1961, and the circular dated 9th January, 1962, issued by the Commissioner of Sales Tax to all Sales Tax Officers, had no relevance to the transactions which had taken place before 9th January, 1961, and according to him, the legal position was that as delivery of goods had taken place at the rail-head which happened to be in U.P. the sales stood completed, and, therefore, there could be no question of the sale of the goods being in the course of export outside the territory of India. He, accordingly, set aside the order of the Judge (Appeals) and restored that of the Sales Tax Officer. Hence, this reference at the instance of the assessee and the questions referred are :- (1) Whether on the facts and circumstances of the case mere delivery by the common carrier to the foreign buyers or their agents at railhead terminus at Nepalganj situated at the Indo-Nepal border within the State of Uttar Pradesh of goods moving for export pursuant to sales would disentitle the applicant from exemption of tax granted under Article 286(1)(b) of the Constitution ? (2) Whether on the facts and circumstances of the case the export sales in which delivery of goods had been taken by foreign buyers at railhead terminus at Nepalganj within the State of U.P. could be deemed to be sales taking place in the course of export within the meaning of section 5 of the Central Sales Tax Act, 1956 ?
(3.) AT the outset, attention requires to be drawn to the assumptions on which the aforesaid questions proceed. Question No. 1 assumes : (1) that delivery of the goods by the assessee was made to a common carrier; and (2) that the common carrier delivered those goods to the foreign buyers or the agents at the railhead terminus; (3) and that those goods were moving for export pursuant to sales. On these assumptions the only question asked is whether mere delivery by the common carrier at the railhead terminus would disentitle the assessee to the exemption of tax granted under Article 286(1)(b) of the Constitution. In substance, therefore, the question that we are called upon to answer is, whether pursuant to the sales when goods have been entrusted to a common carrier for export would they cease to be goods in the course of export merely because delivery is given by the common carrier to the foreign buyers within the State of U.P. ?;