Report No. 30
65. Combined result of the Travancore cases.-
These two judgments, both dealing with export-import, declared the law to be thi.-
(1) (a) The Constitution had imposed a ban on the levying of sales-tax on inter-State and import-export sales, and had made either exempt from sales tax by enacting Article 286(1).
(b) The ban in the former case could, under the unamended Article, be lifted by Parliament, but not in the latter case.
(2) "In the course of" means sales or purchases which themselves occasion the export or import.
(3) In the first Travancore case,1 the Court, by adopting the principle of integrated activity, had included agreement of sale or purchase as being within the period connoted by the phrase " in the course of ", even though the agreement of sale is anterior to the actual handing over to the carrier.
(4) Where the sale and resultant export form parts of a single transaction, such a sale is exempt, as it has been held to have taken place in the course of export.
(5) Mr. Justice S.R. Das, in his minority judgment, included the last purchase preceding the export and the first sale after the import as falling within the phrase "in the course of". These, according to the majority view, were without the exemption.
1. Paras. 57 to 64, supra.
66. Pre-1956 cases regarding inter-State sales-(i) United Motors case; (ii) Bengal Immunity case; (iii) Ram Narain case.-The two cases relating to inter-State sales and the ban under Article 286 are the State of Bombay v. United Motors (India) Ltd., 1953 SCR 1069: AIR (1953) SC 252: 4 STC 133. and the Bengal Immunity Co. Ltd. v. State of Bihar, (1955) 2 SCR 603: AIR 1955 SC 666: STC 446. In the State of Bombay v. United Motor (India) Ltd., 1953 SCR 1069: AIR 1953 SC 252: 4 STC 133., the constitutionality of the provisions of the Bombay Sales Tax Act of 1952 was under challenge.
The Explanation to clause (1) of Article 286 was interpreted, and the difficulties arising from its interpretation are discernible from the three opinions given in the majority and minority judgments in that case. This difficulty of interpretation was reinforced by the opinion of Venkatarama Ayyar J. in the Bengal Immunity Co. case.1 It is also shown by the judgment in Ram Narain Sons Ltd. v. Assistant Commissioner of Sales Tax, (1955) 2 SCR 483 (504): AIR 1955 SC 765 (773): 6 STC 627., which was decided after the Bengal Immunity case.1
1. Bengal Immunity Co. Ltd. v. State of Bihar, (1955) 2 SCR 603 (790): AIR 1955 SC 661: 6 STC 446.