Report No. 61
3.39. Knowledge of export does not make it an integral part.-
In the majority judgment,1 it was held that the knowledge that the goods purchased are intended to be exported, did not make the sale and export parts of the 'same transaction'. There was no statutory obligation upon the purchaser to export the chests of tea purchased by him with the export rights. The export quota merely enabled the purchaser to obtain an export licence, which the purchaser may or may not obtain. There was nothing in law or in the contract between the parties, or even in the nature of the transaction, which prohibited diversion of the goods for internal consumption. The sellers had no concern with the actual export of the goods. Once the goods were sold, they (the sellers) had no control over the goods. There was therefore, no direct connection between the sale and export of the goods, which would make them parts of an integrated transaction of "sale in the course of export."
1. Ben Gorm Nilgiri Plantation Co. v. S.T.O., (1964) 7 SCR 706 (713): AIR 1964 SC 1752.