Report No. 30
89. Gordhandas Lalji's case.-
In Gordhandas Lalji v. B. Bannerjee, AIR 1958 SC 1006: 9 STC 581, the facts found were, that the property in goods (tea) purchased by the dealer in West Bengal, had passed to Bombay merchants before the goods were handed over to the common carrier. Soon after the goods were purchased by the dealer, they were appropriated to the contract by the Bombay parties. The Calcutta dealer, on advice from the Bombay parties, applied for and obtained the requisite licenses for export of the goods, but the licences were all in the name of the Bombay parties.
Thereafter in the usual course of business, the Calcutta dealer handed over the goods to the common carrier-the Master of the Ship in this case-through the shipping agents, the goods being bound down for export overseas. Thus, the goods were shipped from Calcutta to outside countries. These transactions were held not to be within Article 286(1)(b), because the property in the goods had passed to the Bombay parties as soon as they were appropriated, and the export of the goods outside Calcutta was not on behalf of the dealer but was by and on behalf of the Bombay parties.
The dealer could not be entitled to claim the exemption, because the title to the goods had passed in favour of the Bombay parties long before the goods were entrusted to the carrier, and there was no privity between the dealer in Calcutta and the foreign merchants to whom the goods were ultimately exported.
The Court relied on its previous decision,1 where it was held, that all sales that precede the one that occasions the export are taxable even if the goods are manufactured with the main intention of export. The decision in Kailash Nath.v. State of U.P., AIR 1957 SC 790: 8 STC 358., was distinguished, as in that case a certain notification which used the words "with a view to export" were construed, and the sales made were exempted because of the notification.
1. State of Mysore v. Mysore Spinning & Manufacturing Co. Ltd., AIR 1058 SC 1002: 9 STC 188.