Report No. 30

Situs not conclusive.-That the situs of a sale is not conclusive on the question of exemption from tax on a sale vis-a-vis Article 286, has been noticed in some cases. Reference may, in this connection, be made to the following observations in an Andhra Pradesh case1:-

"That apart, as observed by Das. C. J. in Bengal Immunity Co. Ltd. v. State of Bihar, (1955) 6 STC 446 (481),"the situs of a sale or purchase is wholly irrelevant, as regards its inter-State character". His Lordship added: "Now, even when the situs of a sale or purchase is in fact inside a State, with no essential ingredient taking place outside, nevertheless, if it takes place in the course of inter-State trade or commerce, it will be hit by clause (2).

If the sales or purchases are in the course of inter-State trade or commerce the stream of inter-State trade or commerce will catch up in its vortex all such sales or purchases which take place in its course wherever the situs of the sales or purchases may be...." It is true that these remarks are made in the context of inter-State trade and commerce. But they are equally applicable to export trade.

1. Guduthur Thimmappa & Son v. State of Andhra Pradesh, (1954) 15 STC 299 (307) (Andhra).