B.C.Mitra, J. - (1.) This appeal is directed against a judgment and order of J. P, Mitter, J. dated August 11, 1961. By this judgment a rule nisi obtained by the appellant on a petition under Article 226 of the Constitution was discharged.
(2.) The appellant is a private company, and is the owner of a coal mine in the district of Burdwan. Pursuant to an agreement between the Government of India and the Government of Pakistan, the former agreed to release large quantities of coal for consumption in East Pakistan. The appellant, as one of the colliery owners, delivered coal to the Fuel Inspector, Eastern Bengal Railway, East Pakistan, of the total value of Rs. 88,929-10-0. In respect of this supply of coal bills were drawn by the appellant in the name of the Deputy Coal Commissioner (Production), Ministry of Steel and Mines, Government of India, Calcutta, who was to realise the price of coal supplied to Pakistan. With regard to this supply of coal to Pakistan, the appellant has been made liable for sales tax under the Bengal Finance (Sales Tax) Act, 1941, (hereinafter referred to as the Act). The appellant contended before the sales tax authorities, that it was not liable to pay sales tax on the coal supplied to East Pakistan, as it was entitled to exemption under Section 5(2)(a)(v) of the Act and also under Article 286(1)(b) of the Constitution, as the coal was meant for export, and was in fact exported out of Union of India. These contentions of the appellant were overruled and rejected, firstly by the Commercial Tax Officer, and secondly by the appellate authority before whom an appeal was preferred against the order of the Commercial Tax Officer, and finally by the Additional Commissioner, Commercial Taxes, 'who disposed of a revision application made by the appellant under Section 20(3) of the Act. Being aggrieved by the orders passed by the sales tax authorities, the appellant moved an application under Article 226 of the Constitution and obtained a rule which was discharged by the judgment and order hereinbefore mentioned.
(3.) Mr. Noni Coomar Chakravarty, learned Advocate for the appellant, contended that sales could not be charged with regard to the supply of coal to the Government of East Pakistan as the coal in question was exported out of the country. He argued that the transaction was covered by the provision in Section 5(2)(a)(v) of the Act, which provides that a dealer is entitled to deduct from his taxable turn-over: "sales of goods which are shown to the satisfaction of the Commissioner not to have taken place in West Bengal or to have taken place in the course of inter-State trade or commerce within the meaning of Section 3 of the Central Sales Tax Act, 1956 or in the course of import of the goods into or export of the goods out of the territory of India within the meaning of Section 5 of that Act". It was argued that the transaction must be regarded as a sale which did not take place in West Bengal, or in any event a sale in the course of export of the goods out of the territory of India. There was no sale of coal in West Bengal. It was next argued that the sale in any event was not liable to be taxed as it was a sale in the course of export of coal out of the territory of India as provided in Article 286(1)(b) of the Constitution. The third contention of Mr. Chakpawarty was that under Clause 12-E of the Colliery Control Order, 1945, the transaction could not be regarded as a sale which was liable to tax. It was argued that under Clause 12-E of the Colliery Control Order, 1945, no person could acquire, purchase or agree to acquire or purchase any coal from a colliery, and no colliery owner or his agent could despatch or agree to despatch or transport any coal from the colliery, except under the authority and in accordance with the conditions contained in a general or special authority of the Central Government. It was argued that coal could not be sold, despatched or transported without the permission of the Coal Controller, and therefore the supply of coal to the East Pakistan Government could not be treated as a sale of coal by the appellant which was liable to sales tax.;