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Report No. 30

82. State Trading Corporation's case and Singareni Collieries' case.-

Another case referred to in K.G.Khosla's case was State Trading Corporation of India Ltd. v. State of Mysore, (1963) 3 SCR 792: AIR 1963 SC 548: 14 STC 188: (1963) 2 SCJ 131. and there the decision was dependent upon whether the sale "occasioned the movement" of cement from a State other than Mysore into the State of Mysore within the meaning of section 3 of Central Sales Tax Act.

It was found, that the cement in the disputed State was actually moved from another State into Mysore, and it was contended that the movement was not a result of a covenant or an incident of the contract of sale. In that case also, the sale was under a permit and on the terms contained in it and, in the permit, it was provided that the supply had to be made from one or other of the factories situated outside Mysore and therefore, the contracts were held to have contained a covenant that the goods would be supplied into Mysore from a place outside its border.

A sale under such a contract, it was held, clearly fell within the term "inter-State sale" as defined in section 3(a) of the Central Sales Tax Act and, therefore, no sales-tax could be levied by the State of Mysore on such a sale. The Supreme Court, in Khosla's case , lastly referred to the case of Singareni Collieries, which is dealt with later1.

1. Para. 107, infra.



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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