Report No. 30
105. Burmah Shell case.-
A similar point was raised in Burmah Shell Oil Storage and Distributing Co. of India Ltd. v. Commercial Tax Officer (1961) 1 SCR 902 (921,923): AIR 1961 SC 315 (323,324): 11 STC 764, where the sale was of aviation spirit to international aeroplanes, and exemption was claimed on the ground that the sale was in the course of export. But such sales were held to be excluded from the phrase "in the course of export", because there was no destination into which the aviation spirit could be said to be imported, the sale being for use on the journey.
Giving the judgment of the Court, Mr. Justice Hidayatullah said.-
"From the views here expressed, it follows that every sale or purchase preceding the export is not necessarily to be regarded as within the course of export. It must be inextricably bound up with the export and a sale or purchase unconnected with the ultimate export as an integral part thereof is not within the exemption."
"It may thus be taken as settled that sales or purchases for the purpose of export are not protected, unless the sales or purchases themselves occasion the export and are an integral part of it."
Explaining the meaning of the word "export", Mr. Justice Hidayatullah said that the test in the case of exports, is, that the goods must have a foreign destination where they can be said to be imported.
"If the goods are exported and there is a sale or purchase in the course of that export, and the sale or purchase occasions the export to a foreign destination, exemption is earned. The crucial fact is the sending of the goods to a foreign destination where they would be received as imports. The two notions of export and import, thus, go in pairs."
"Applying these several tests to the cases on hand, it is quite plain that aviation spirit loaded on board an aircraft for consumption, though taken out of the country, is not exported since it has no destination where it can be said to be imported, and so long as it does not satisfy this test, it cannot be said that the sale was in the course of export. Further, as has already been pointed out, the sales can hardly be said to occasion the export.
The seller sells aviation spirit for the use of the aircraft, and the sale is not integrally connected with the taking out of aviation spirit. The sale is not even for the purpose of export, as explained above. It does not come within the course of export, which requires an even deeper relation. The sales, thus, do not come within Article 286(1)(b)".
1. Burmah Shell Oil Storage and Distributing Co. of India Ltd. v. Commercial Tax Officer (1961) 1 SCR 902 (903): AIR 1961 SC 315 (323-324): 11 STC 764 (Review case law).
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