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Report No. 30

17. Khosla's case.- In paragraph (9) of its judgment (p. 1221), the Supreme Court observed:-

"It seems that the expression 'occasions the movement of goods' occurring in section 3(a) and section 5(2) must have the same meaning. In Tata Iron and Steel Company Limited, Bombay v. S.R. Sarkar, [AIR 1961 SC 65], Shah J. speaking for the majority interpreted section 3 as follows:-

"In our view, therefore, within clause (b) of section 3 are included sales in which property in the goods passes during the movement of the goods from one State to another by transfer of documents of title thereto; clause (a) of section 3 covers sales, other than those included in clause (b) in which the movement of goods from one State to another is the result of a covenant or incident of the contract of sale and property in the goods passes in either State."

18. Though the wording in the two sub-sections is not exactly the same, in section 3(a) the wording is "occasions the movement of goods," while in section 5(2) it is "occasions such import"; and indeed it could not be otherwise in view of the different topics therein dealt with, there cannot be any doubt that the construction which the Supreme Court placed upon section 5(2) following that which had been placed by Mr. Justice Shah on section 3 (a) in the earlier case referred to above is correct and wholly consistent with the earlier decisions of the Supreme Court bearing on the point.



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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