Sujata V.Manohar, J. - (1.) The applicants, M/s. Batliboi & Company Pvt. Ltd., had entered into a contract with M/s. Kirloskar Brothers Ltd. to sell to them a double column vertical turning and boring mill, Model SK-40A complete with standard equipment and electrical equipment, manufactured in Czechoslovakia. The applicants have an import licence for import of machinery. Prior to their contract with M/s. Kirloskar Brothers Ltd., the applicants had placed an order with the Czech manufacturers of the machine for the import of the machine in question. The applicants had also filled in a tender with the defence department under which, inter alia, they were required to supply this machine to the defence department. Thereafter by their letter dated 1st April, 1972, the applicants made an offer to M/s. Kirloskar Brothers Ltd. (hereinafter referred to as "Kirloskars") offering to sell to them the same machine. In the letter of 1st April, 1972, addressed by the applicants to Kirloskars the applicants set out a telex which was sent by them to Kirloskars. In the telex they had mentioned that the machine was under offer to the defence department until the end of June, 1972, and that they could sell the machine to M/s. Kirloskar Brothers Ltd., provided the defence department released the same. In the offer which was set out in the said letter the applicants set out the term relating to delivery as follows : "Ready at works in Czechoslovakia, subject to prior sale, to be imported against our own import licence. ........"
(2.) Thereafter by their letter dated 3rd April, 1972, addressed to the applicants, Kirloskars placed an order with the applicants for the purchase of this machine. This order stipulated for erection and commissioning of the machine by the applicants with the help of erection engineers from the works in Czechoslovakia. By another letter of 5th April, 1972, addressed by Kirloskars to the applicants, Kirloskars added a further stipulation in the purchase order to the effect that the property in the machine offered by the applicants shall stand transferred to Kirloskars as soon as the machine is ready-packed in crates for shipment from Czechoslovakia. The addition of this stipulation was confirmed by the applicants. Thereafter in May, 1972, the machine was shipped by the Czech manufacturers to Bombay. The machine arrived in Bombay on or about 11th July, 1972. The applicants cleared this shipment and thereafter some time in the months of July/August, 1972, the machine was sent by the applicants to Kirloskars at Kirloskarwadi by rail. The railway receipts in connection with the goods so sent are dated 17/19th July, 1972, 26/27th July, 1972, and 5/12th August, 1972. In respect of this sale of the machine effected by the applicants to Kirloskars the applicants sent their bill dated 14th August, 1972, to Kirloskars.
(3.) The applicants thereafter made an application under section 52 of the Bombay Sales Tax Act, 1959, for the purpose of determining whether the transaction between the applicants and Kirloskars was a sale within the State of Maharashtra as defined under section 2(28) of the Bombay Sales Tax Act, 1959, and whether any sales tax was payable under the Bombay Sales Tax Act, 1959, by the applicants in respect of this transaction. The Deputy Commissioner, on this application, concluded that the sale in question had taken place in the State of Maharashtra. It was, therefore, a sale as defined under section 2(28) of the Bombay Sales Tax Act, 1959, and hence sales tax was payable by the applicants on this transaction. Being aggrieved by the order of the Deputy Commissioner, the applicants preferred an appeal before the Tribunal. This appeal was dismissed by the Tribunal. Thereafter at the instance of the applicants, a reference has been made to the High Court. The question which has been referred to us for determination is as follows : "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the transaction covered by the applicant's bill dated 14th August, 1972, was a sale as defined in section 2(28) of the Bombay Sales Tax Act, 1959, and was subject to tax ?" 2. In this connection the first submission which is made by Mr. H. K. Shah, who appears for the applicants, is that this is a sale in the course of import and hence it is not liable to tax under the provisions of the Bombay Sales Tax Act, 1959. Section 5 of the Central Sales Tax Act, 1956, lays down the principles for determining when a sale or purchase of goods can be said to take place in the course of import or export. The relevant provision for the present case is laid down in section 5, sub-section (2), of the Central Sales Tax Act, 1956, which provides as follows : "5. (1) .................. (2) A sale or purchase of goods shall be deemed to take place in the course of the import of the goods into the territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goods have crossed the customs frontiers of India." 3. In the present case, admittedly, it is not necessary to consider the latter part of section 5, sub-section (2), because in the present case, the documents of title to the goods were not transferred by the applicants to the name of Kirloskars at any time. The delivery of the goods was taken by the applicants when the goods arrived from Czechoslovakia. It was only after the goods were cleared by the applicants from the customs, that they were sent by the applicants by rail to Kirloskars under railway receipts which were in the name of Kirloskars.;