Report No. 30
116. Remedy.- It may be noted that the decision of the Supreme Court in Khosla's case does not seem to go upon the present wording of section 5. The Supreme Court did not state that because the present section mentioned both "sale" or "purchase" as occasioning the import the legislature did contemplate a sale (as well as a purchase) as occasioning the import and that if so, the sale of the nature entered into by the assessees (Khosla & Co.) with D.G.S.D. must be regarded as occasioning the import as otherwise the word "sale" in this context would be wholly redundant.
It does not appear that it was this reasoning that the Supreme Court adopted in the present case. At any rate, there is no such clear indication in the judgment although I cannot positively say that this was not at the back of the minds of the learned Judges who constituted the Bench.
The Supreme Court held that it was quite clear from the contract (of sale between the assessee and D.G.S.D.) that it was incidental to the contract that the goods would be manufactured in Belgium and imported into India for the consignee (Southern Railway) and that movement of goods from Belgium to India was in pursuance of the conditions of the contract between the assessee and the D.G.S.D.
It is not, however, unlikely that the Supreme Court may, if persuaded to reconsider the present decision as suggested above, be inclined to go upon the wording of the section as much as a purchase occasions import. It is in such eventuality that Legislature may step in and amend the section so that it may be in conformity with the principles laid down in the two Travancore erases and indeed in all the later cases except the one now under reference. It is only with a view to obtaining clarification as to the grounds for the decision that I have suggested that the Supreme Court be again approached for reconsidering the matter.