J.S. Verma, J.
1. This reference is under Section 44(1) of the M.P. General Sales Tax Act, 1958, at the instance of the department to answer the following question of law, namely :
Whether, under the facts and circumstances of the case, the sale of tyres and tubes worth Rs. 18,072 to the Gun Carriage Factory, Jabalpur, was in the course of import of goods into the territory of India from a foreign country and hence not liable to tax under Article 286(1)(b) of the Constitution of India
Initially, this question arose for decision as a result of the reference made by the Tribunal in M. C. C. No. 115 of 1978. However, at the time of hearing, it was considered necessary to call for a further statement of case from the Tribunal and, therefore, order dated 17th July, 1981, was passed in M. C. C. No. 115 of 1978 giving such a direction to the Tribunal which has then submitted a supplementary statement of case dated 17th August, 1982, and this has been registered as M. C. C. No. 322 of 1982.
2. The material facts are these. The assessee sold tyre and tubes worth Rs. 18,072 to the Gun Carriage Factory, Jabalpur, during the relevant period from 1st January, 1969, to 31st December, 1969. The assessee claimed that these sales were in the course of import as the tyres and tubes sold to the Gun Carriage Factory were imported by the assessee from U. K. The assessee's contention was that the import of the goods from U. K. was occasioned by the contract entered into with the Director-General of Supplies and Disposals, according to which the goods were to be imported from U. K. and delivered to the Gun Carriage Factory at Jabalpur. Under the contract, the indentor was the General Manager, Gun Carriage Factory, Jabalpur. No sales tax was paid treating the sales as made in the course of import, but it was agreed that sales tax, if leviable, will be paid extra.
3. The Tribunal has held that the purchase of these goods from U.K. was in pursuance of the contract, which provided that the goods will be supplied to the Gun Carriage Factory, Jabalpur, and the import permit was issued on this basis. It has held that it is the contract of sale or purchase of the goods, which has occasioned the import from U. K. to India. Accordingly, the conclusion reached is that the said transaction is in the course of import under the first part of Section 5(2) of the Central Sales Tax Act. The Tribunal has placed reliance on the decision of the Supreme Court in K.G. Khosla and Co. (P.) Ltd., Delhi v. Deputy Commissioner of Commercial Taxes, Madras Division, Madras AIR 1966 SC 1216, equivalent to  17 STC 473 (SC).
4. When the matter came up for hearing on the earlier occasion, it was pointed out in the order dated 17th July, 1981, passed in M. C. C. No. 116 of 1978 that the question whether there was any sale between the foreign exporter and the assessee will have an important bearing in deciding whether the sales made by the assessee in favour of the Gun Carriage Factory were sales in the course of import. This was obviously on account of the contention of the assessee that the export of goods from U. K. to India was made by itself and not by any third party.
The supplementary statement of case mentions that there is nothing in the record to show that there was any sale between any foreign exporter and the assessee. In other words, there is nothing to indicate that the foreign exporter was someone other than the assessee so as to reject the assessee's contention that the import of goods was made by the assessee itself and not someone else. The test for deciding whether the said purchase or sale had occasioned import in order to attract the first part of Section 5(2) is clearly pointed out in K.G. Khosla's case AIR 1966 SC 1216. It was held therein that when the movement of goods from foreign country to India was in pursuance of the condition of the contract between the assessee and the Director-General of Supplies and Disposals and there was no possibility of these goods being diverted by the assessee for any other purpose, the sales must be held to have taken place in the course of import of goods, as required by Section 6(2) of the Act. This test is fully satisfied in the present case, as found by the Tribunal on the basis of the material present. The view taken by the Tribunal is, therefore, justified.
5. Accordingly, this reference is answered against the department and in favour of the assessee as under :
The Tribunal was justified in holding that, on the facts and in the circumstances of the case, the sale of tyres and tubes worth Rs. 18,072 to the Gun Carriage Factory, Jabalpur, was in the course of import of goods into the territory of India from a foreign country and was, therefore, exempt from tax.