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Report No. 30

101. J.V. Gokal's case.-

The case of sale in the course of import is J.V. Gokal & Co. Pvt. Ltd., v. Assistant Collector of Sales Tax (Inspection), (1960) 2 SCR 852: AIR 1960 SC 595.

In that case, sale of foreign sugar to the Government by Gokal and Co., was by delivery of documents to the Government, while the goods were still outside the Customs barrier, and even the price was received during the period. This transaction was held to be a contract in which the sale took place in the course of import into India, and was therefore exempt from sales-tax under Article 236(1)(b) of the Constitution.

102. The legal position vis-a-vis the import-sale was summarised thus by Mr. Justice Subba Rao J. (as he then was).-

"(1) The course of import of goods starts at, a point when the goods cross the customs barriers of the foreign country and ends at a point in the importing country after the goods cross the customs. barrier;

(2) the sale which occasions the import is a sale in the course of import;

(3) a purchase by an importer of goods when they are on the high seas by payment against shipping documents is also a purchase in the course of import; and

(4) a sale by an importer of goods, after the property in the goods passed to him either after the receipt of the documents of title against payment or otherwise, to a third party by a similar process is also a sale in the course of import."

In that case the sale was by delivery of shipping documents, and there was no intention to the contrary proved.

1. J.V. Gokal & Co. Pvt. Ltd. v. Assistant Collector of Sales Tax (Inspection), (1960) 2 SCR 852 (861) (Subha Rao J.): AIR 1960 SC 595.

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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