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Report No. 30

37. Gokal's case.-In J.V. Gokal & Co. v. Assistant Collector of Sales Tax [AIR 1960 SC 595: (1960) 2 SCR 852], the Supreme Court in para. 9 of its judgment on p. 598, AIR posed the question: "What does the phrase 'the course of the import of the goods into the territory of India convey?" and proceeded to explain the phrase as follows:

'The crucial words of the phrase are "import" and "in the course of". The term "Import" signifies etymologically "to bring in". To import goods into the territory of India therefore, means to bring into the territory goods from abroad. The word "course" means "progress from point to point". The course of import, therefore, starts from one point and ends at another.

It starts when the goods cross the customs barrier in a foreign country and ends when they cross the customs barrier in the importing country. These words were subject of judicial scrutiny by this Court in State of Travancore-Cochin v. Shanmugha Vilas Cashew Nut Factory [(1954) SCR 53: AIR 1953 SC 333]. Construing these words Patanjali Sastri C.J. observed at p. 62 (SCR) (at p. 336 of AIR):-

'The word "course" etymologically denotes movement from one point to another and the expression "in the course of" not only implies a period of time during which the movement is in progress but postulates also a connected relation.'.

As regards the limits of the course, the learned Chief Justice observed at p. 68 (of SCR) (p. 338 of AIR):-

"It would seem, therefore, logical to hold that the course of the export out of, or of the import into, the territory of India does not commence or terminate until the goods cross the customs barrier."

"The course of the import of the goods may be said to begin when the goods enter their import journey, i.e., when they cross the customs barrier of the foreign country and end when they cross the customs barrier of the importing country."



Section 5 of the Central Sales Tax Act, 1956 - Taxation by the States of Sales in the Course of Import Back




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