State of U.P. Vs. Gopi and ors. - Court Judgment

Excerpt:
- [p.b. gajendragadkar, c.j.,; k.n. wanchoo,; n. rajagopala ayyangar,; j.c. shah, jj.] the appellants were carrying on the business of growing and manufacturing tea in their estates. the sellers of tea were the appellants; the purchasers were local agents of foreign buyers. the sales were by public auction at fort cochin. they were conducted by brokers of tea. the sales were in conformity with the provisions of tea act of 1953. the sales-tax officer assessed the appellants to pay sales tax on transactions of sale of tea chests at the auctions held at fort cochin in the -years 1956-57 to 1958-59. against the orders of assessment the appellants filed petitions before the high court for writs of certiorari and for writs of prohibition re-straining the sales-tax officer from proceeding with the collection of sales tax. the petitions were dismissed by the high court. with special leave the appellants appealed to this court. it was the common case of all the appellants that the pur- chases by the local agent of foreign buyers were with a view to export the goods to their principals abroad and that the goods were in fact exported out of india. it was contended on behalf of the appellants that the sales of tea were "in the course of export out of the territory of india", and thus exempt from taxation under art. 286(1)(b) ,of the constitution. held: (per gajendragadkar, c. j., shah and sikri, jj.) (i) a transaction of sale which occasions export, or which is effected by a transfer of documents of title after the goods have crossed the customs frontiers, is exempt under art. 286(1)(b) of the constitution from sales tax levied under any state legislation. a transaction of sale which is a preliminary to export of the commodity sold may be regarded as a sale for export, but is not necessarily to be regarded as one in the course of export, unless the sale occasions export. etymological the expression "in the course of export", contemplates an integral relation or bond between the sale and the export. in general where a sale is effected by the seller, and the seller is not connected with the export which actually takes place, it is a sale for export. where the export is the result of sale, the export being inextricably linked up with sale so that the bond cannot be dissociated without a breach of the obligations arising by statute. contract of mutual understanding between the parties arising from the nature of the transaction the sale is in the course of export. (ii) a sale in the course of export predicates a connection between the sale and export, the two activities being so in- tegrated that the connection between the two cannot be voluntarily interrupted, without a breach of the contract or the compulsion arising from the nature of the transaction. in the present case there was between the sale and the export no such bond as would justify the inference that the sale and the export formed parts of a single transaction or that the sale and export were integrally connected. the appellants were not concerned with the actual exportation of the goods, and the sales were intended to be complete without the export, and as such it cannot be said that the said sales occasioned export. the sales were therefore for export and not in the course of export. therefore the sales by the appellant to the agents of foreign buyers do not come with the purview of art. 286(1)(b) of the constitution. state of travancore-cochin v. bombay company ltd.. [1952] s.c.r. 1112, distinguished. state of travancore-cochin v.shanmugha vilas cashew nut factory, [1954] s.c.r. 53, state of madras v. gurviah naidu and company ltd. a.i.r. 1956 s.c. 158, state of mysore v. mysore shipping and manufacturing co. ltd. 13 s.t.c. 529 and b.k. wadear v. m/s. daulatram rameshwarlal [1951] 1 s.c.r. 924, relied on. m. r. k. abdul salem and company v. government of madras, 13 s.t.c. 629, explained. per ayyangar, j. in the present case the sale and the export being related to each other in the sense of one lead-. in.- to the other are therefore within art. 286(1)(b) of the constitution. there could be no difference in legal effect between a sale to a foreign buyer present in india to take delivery of the goods for transport to his country and a sale to his resident agent for that purpose. the buyer was an agent, who was not free to deal with the tea purchased by effecting a local sale, but was under an obligation to his foreign principal to export the goods purchased to a foreign destination. the goods purchased were in fact -exported from this country. it was with such a buyer that the appellants entered into the transaction of sale. in other words it was a part of understanding between the seller and the buyer, inferrable from all the circumstances attendant on these transactions that the buyer was bound to export. state of travancore-cochin v. shanmugha vilas cashew [1954] s.c.r. 53, state of madras v. gurviah naidu and co. ltd. a.i.r. 1956 s.c. 158,state of mysore v. mysore spinning and manufacturing co. ltd. a.i.r. 1958 s.c. 1002 and east india tobacco co. v. the state of andhra pradesh, [1963]1 s.c.r. 404, referred to. (ii) even though the tea act does not in terms prohibit in- ternal sale of tea 'purchased alongwith export quota rights, this could be explained by the circumstance that the rights to export tea is considered a privilege which secures an economic advantage to the exporter and hence there was no need for any statutory compulsion to do so. l/p(d) isci--23(a).... - the high court has given cogent reasons for disbelieving the prosecution case and has entertained a good deal of suspicion on the honesty of the police investigation in the present case. in view of the tainted investigation, the high court has scrutinized the evidence with very great care and found that all the eye-witnesses were interested excepting pw 4 and 6 and some of the eye-witnesses were completely under the control of the police and it was therefore unsafe to convict the accused.s. murtaza fazal ali, j.1. this appeal by special leave is directed against a judgment of the allahabad high court dated 13-10- 1972 acquitting the respondents of the charge under section 302/34 and section 201 ipc.we have gone through the judgment of the sessions judge and that of the high court. the high court has given cogent reasons for disbelieving the prosecution case and has entertained a good deal of suspicion on the honesty of the police investigation in the present case. in view of the tainted investigation, the high court has scrutinized the evidence with very great care and found that all the eye-witnesses were interested excepting pw 4 and 6 and some of the eye-witnesses were completely under the control of the police and it was therefore unsafe to convict the accused.2. appearing in support of the appeal, mr. uniyal submitted that so far as pvv4 babu ram & pw 6 shiv ram singh, are concerned, they were independent witnesses and bore no animus against the respondents. there was thus no reason why their evidence should not be accepted. the high court has, however, found that the occasion for the presence of these witnesses was that they were attracted to the scene of occurrence by the alarm raised by pw nanhay singh. nanhay singh however has been disbelieved by the high court firstly on the ground that it was improbable for him to accompany the deceased who was going to the village merely for the purpose of hiring labour. is was the definite case of the prosecution that nanhay singh and the deceased had gone on their respective bicycles and yet inspite of the fact that the investigating officer reached the place of occurrence he found only one bicycle which was taken by the deceased and there was no trace of a second bicycle. apart from this it was stated in the fir and also in the evidence that pws 4 and 6 were attracted to the spot by she alarm raised by nanhey singh after the deceased was attacked. the high court thought that if nanhay singh's presence at the spot was doubtful there could be no occasion at all for pws 4 and 6 to visit the place of occurrence and witness the assault on the deceased. there may be something to be said for this view of the high court and, if we were sitting as a court of appeal, we may have taken a different view and may have accepted the statement of pw 4 and 6. but that is no reason to set aside the judgment of the high court for after consideration of the various aspects of the case it cannot be said that the view taken by the high court was not reasonably possible. once this is so, this court in special leave would not interfere with the order of acquittal. for these reasons, therefore, the appeal is dismissed.