1. The Sales Tax Tribunal (Board of Revenue) has made this reference under Section 44 (1) of the Madhya Pradesh General Sales Tax Act, 1958, (hereinafter referred to as the Act) at the instance of the assessee. The question referred to us for decision is -
'Whether on the facts and in the circumstances of the case the purchases of hemp jute were not exempt under Section 50 (1) (iii) of the M. P. General Sales Tax Act, 1958, and were liable to purchase tax under Section 7 of the said Act?'
2. The assessee-firm is a registered dealer having its head-office at Seoni and a branch-office at Calcutta. The assessee deals in various articles including jute. During the assessment period from 21st October 1960 to 8th Novemer 1961, the assessee purchased hemp worth Rs. 11,42,629.10 from agriculturists and unregistered dealers. No sales tax was payable under Section 6 of the Act on these sales by the agriculturists and unregistered dealers. The hemp urchased by the assessee was not resold in the State of Madhya Pradesh, but was sent to Calcutta. The Sales Tax Officer, Bala-ghat, held that the assessee was liable to pay purchase-tax under Section 7 of the Act.
In appeal before the Appellate Assistant Commissioner of Sales Tax, Jabalpur, the assessee contended that purchase-tax was not attracted as the despatch of hemp to Calcutta was in the course of inter-State trade or commerce. The appellate authority negatived this contention. In second appeal before the Tribunal, the ground about inter-State trade was given up; but a new ground was pressed, namely, that the purchase-tax was not attracted as the purchases were made in the course of export of hemp outside the territory of India and that the purchases were exempt from purchase-tax under Section 50 (1) (iii) of the Act.
3. The Tribunal repelled this contention. It held that-
'The test is whether there was any obligation on the appellant or whether the appellant was compelled to export the goods purchased by any contract or mutual understanding or any provision of law and he could not help exporting without a breach of them. In the instant case this has not been proved. The appellant was free to sell within the State the hemp jute purchased by him or to sell it in the course of inter-State trade or commerce or to dispose it of otherwise. It is another matter that ultimately the hemp jute purchased by him was exported outside the territories of India. According to the decision of the Supreme Court such a purchase can only be said to be purchase made for export Ben Gorm Niligiri Plantations Co. Conoor (Nilgiris) etc v. Sales Tax Officer, Ernakulam, 1964-15 STC 753: (AIR 1964 SC 1752). There is no link from the time and the point of purchase to the time and the point from which it was exported out of the territories of India to show that the purchase was in the course of export outside the territories of India'.
4. It is not disputed before us that if the transactions are not covered by Section 50 (1) (iii), purchase-tax under Section 7 will be attracted. That the despatch of hemp to the assessee's branch at Calcutta did not involve an inter-State transaction is apparent and the point was properly not pressed. The only question that remains to be decided is whether the transactions are covered by Section 50 (1) (iii) of the Act. That Section provides -
'50. (1) Notwithstanding anything contained in this Act, a tax on the sale or purchase of goods shall not be imposed under this Act -
(iii) where such sale or purchase takes place in the course of import of the goods into, or export of the goods out of the territories of India.
(2) For the purpose of this section, whether a sale or purchase takes place -
(iii) in the course of the import of goods into the territory of India or the export of goods out of such territory; shall be determined in accordance with the principles specified in Sections 3, 4 and 5 of the Central Sales Tax Act, 1956 (74 of 1956).'
Section 5(1) of the Central Sales Tax Act, 1956, says -
'5. (1) A sale or purchase of goods shall be deemed to take place in the course of the export of the goods out of the territory of India only if the sale or purchase either occasions such export or is effected by a transfer of documents of title to the goods after the goods have crossed the customs frontiers of India'.
The purchase-tax in question is being imposed on the transactions entered into between the assessee and the vendors from whom the assessee purchased the hemp. The latter part of Section 5(1) of the Central Sales Tax Act, 1956, is, therefore, not attracted in this case. The contention of the petitioner-assessee is that it had purchased the hemp in question in order to satisfy an agreement entered into with Hindley and Co. LtT. an outside purchaser. In support, an agreement dated the 9th September 1960 has been filed by the assesgee. The purchases, therefore, are said to be in the course of export to the foregin buyer. On the finding of the Tribunal it is evident that the necessary link between the two transactions, namely, the agreement of the assessee to supply certain quantity of hemp to the foreign buyer and the purchases actually made by the assessee from the local agriculturists or unregistered dealers is not established.
On this finding, the only answer possible is that the purchases were not made in the course of export o the articles outside the Indian territory. Shri Tankha. learned counsel for the petitioner, however, urged that the findings reached by the Tribunal were not justified in the face of the evidence produced by the assessee. This contention cannot be countenanced. This Court can answer the question referred to it on the basis of facts found by the Tribunal. If the assessee thought that the finding was not based on any evidence or on misapprehension of evidence, the assessee should have asked the Tribunal to refer to this Court the question as to whether there was any material on record to justify the finding reached by the Tribunal. That not having been done, we must go by the findings recorded by the Tribunal and base our answer on those findings.
5. Apart from this, it is clear from Section 5(1) of the Central Sales Tax Act that the purchase must occasion export to constitute that purchase as a purchase in the course of export. The purchases in question have not occasioned the export. The agreement filed by the assessee shows that the outside purchaser purchased certain quantity of hemp from the assessee. When the assessee sold the hemp to the outside buyer, it was a separate and distinct transaction. The assessee's sale of hemp to the outside buyer might have occasioned the export of hemp outside the Indian territory. But its purchases had not that effect. The purchases at best can be said to be made for the purposes of export, but they did not occasion the export. The agreement filed by the assessee has not been in any way connected with the purchases made by him.
6. In this view of the matter, our conclusion is that the purchases made by the assessee were not exempt under Section 50 (1) (iii) of the M. P. General Sales Tax Act, 1958 and that they were liable to purchase-tax under Section 7 of that Act. We answer the reference accordingly. The assessee shall pay costs ofthe reference. Hearing fee Rs. 200/-.