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Report No. 30

104. Cochin Coal Company's case.-

In the State of Kerala v. Cochin Coal Company Ltd., (1961) 2 SCR 219: AIR 1961 SC 408 (410)., the question decided was, whether the sale of bunker coal was in the course of export. Bunker coal was stocked at Candle Island in the State of Madras.

It was sold to steamers calling at the port of Cochin in the State of Travancore-Cochin, and delivered there The assessee contended, that no sales-tax could be levied on these sales, since they were either sales "in the course of export" or "in the course of inter-State trade", and therefore, exempt under Article 286(1)(b) or Article 286(2) of the Constitution, or under the Government notification under which sales falling within the Explanation to Article 286(1)(a) made during a particular period were exempted from liability to pay a tax.

It was held, that the delivery was for consumption within the State, and the sale fell within the Explanation to Article 286(1)(a), and though the sales were in the course of inter-State trade falling within Article 286(2), the tax was validated by the Sales Tax Validation Act, 1956. It was also held, that the sales were not made "in the course of export" and did not fall under Article 286(1)(b), and that for Article 286(1)(b) to apply, it was not sufficient that the goods merely moved out of the territory of India, but it was necessary that the goods should be intended to be transported to a destination beyond India.

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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