D.K. Mahajan, J.
1. This order will dispose of Civil Writ Petitions Nos. 914, 915 and 916 of 1962. The controversy in all of them is identical but three petitions have been filed because they pertain to three separate assessments for three separate years. The first petition relates to the assessment for the year 1957-58, the second for the year 1958-59 and the third for the year 1959-60. The assessee is New Rajasthan Mineral Syndicate which is registered under the Punjab General Sales Tax Act, 1948. The firm is not registered under the Central Sales Tax Act, 1956. This firm carries on the business of quarry contractors and extracts iron ore from quarries. According to the petitioner the ore is actually meant for export to Japan, and other foreign countries. In paragraph 3 of the petition it is stated that the Government of India have appointed the State Trading Corporation as their nominee for the purpose of exporting iron ore from India to Japan and other countries. The petitioner-firm or any other private dealer is not competent to export any ore outside India. The method of exporting iron ore is stated as follows: The petitioner extracts ore, out of which, ore of certain quality has to be supplied to the State Trading Corporation. If the ore does not conform to the quality, it is liable to rejection at the port, or even by the buyers, who are foreign importers and the expenses incurred by the State Trading Corporation are to be recovered from the petitioner. Thus if the iron ore is rejected by the foreign buyers, the loss falls on the petitioner and not on the State Trading Corporation. The State Trading Corporation have appointed Messrs Shri Narayan and Co. as their nominee who charge Re. 1 per ton as brokerage from the petitioner-firm for the work connected with the export of ore. The agreements which the petitioner entered with Messrs Shri Narayan & Co. in all these petitions are identical. For the sake of convenience I am only referring to documents in Civil Writ No. 915 of 1962. Annexure 'A' is a sample of that agreement. The agreement for the relevant period was not filed but I allowed an opportunity to the learned counsel to file the relevant agreement and that has been filed. So far as the phraseology of the two agreements is concerned there is no difference and therefore I am referring to the agreement which has now been filed. The agreement is dated the 1st of April, 1957. The petitioner is specified in the agreement as the seller and Messrs Shri Narayan and Co. are specified as buyer. The clause relating to payment is in the following terms:--
Rs. 25,000 (Rupees, twenty five thousand) will be arranged for payment to the sellers after the acceptance and signing of this contract by the sellers, as an advance of Re. 1 (Rupee one) per ton for the aggregate quantity of Rs. 25,000 tons contract for supply. The balance amount shall be paid to the sellers against actual weight of iron ore loaded by the sellers when iron ore is either weighed at Kandla Port or by draft weight of the ship at the time of shipment to the foreign countries as per bargain by the buyer or by the State Trading Corporation of India.
2. In the special conditions of this agreement, condition No. (4) is a pertinent condition and is as follows:
The account shall be finally settled when the shipment is made and satisfactory report is received from the foreign buyers, or the State Trading Corporation approves the material for foreign countries where iron is extracted out of it.
3. We have on the record a copy of the letter dated the 2nd of September, 1957, from Messrs Shri Narayan & Co. to the petitioner. This copy is with reference to the agreement dated the 1st of April, 1957, already referred to and is reproduced below:--
We are in receipt of your letter and noted your comments regarding the price schedule mentioned in our agreement referred to above, which runs as under:--Rs. 148 plus actual railway freight from Nizampur to Kandla Port per ton of 2240 f.o.r. Kandla Port.
In this connection we have to clear our position as under:
(1) It is clear to all and you that the Government of India is dealing with foreign countries on Government level in the export of iron ore;
(2) The State Trading Corporation of India, New Delhi, is the business organisation on Government level and we work as the brokers;
(3) Whatever term or terms they dictate to us we pass on to you;
(4) Your iron ore is to be shipped to Japan and you are solely responsible for the quantity and quality till the material is delivered to Japanese firms;
(5) They test the material for extraction of iron, before they pass the pay orders;
(6) As such we get approximate Re. 1 (Rupee one) per ton, which is in fact our brokerage, otherwise in fact you are the sellers and Japanese firms are the buyers, through State Trading Corporation. The following details will clear your doubt.
Selling price to S.T.C. Rs. 47-8-0 per ton f.o.b. Kandla Port.
Our approximate price per ton:
1. Cost of iron ore payable to you. Rs. 14-8-02. Railway freight; Nizampur to Kandla Port. Rs. 24-8-03. Port charges, unloading of wagons, plot rent,agent's commission, shipment. Re. 1-0-04. Our brokerage and miscellaneous expenses. Re. 1-0-0 Hope you are satisfied that the price fixed is in your interest Please continue railment without any hesitation.
4. On the basis of these two documents the petitioner raised two contentions before the Assessing Authority, Mohindergarh district. The first contention was that the entire ore was exported out of the State and therefore no sales tax was leviable upon them with regard to the goods sent out in the course of inter State-trade. The second contention was that they were also not liable under the Central Sales Tax Act to inter-State sales tax leviable under Section 6 read with Section 8. The second contention that no inter-State tax is leviable is based on Section 5(1) of the Central Sales Tax Act read with Article 286 of the Constitution of India, viz. that the sale is in the course of export of goods outside the territory of India, the sale having occasioned the export. The Assessing Authority by its order dated the 29th of March, 1962, accepted the contention that no sales tax was leviable under the Punjab General Sales Tax Act, but by its order of the same date negatived the contention with regard to the exemption from the Central Sales Tax Act. This order which has been passed on the same date pertains to three different assessment years. The petitioner has not gone up in appeal against this order on the short ground that the Assessing Authority has passed the impugned order after taking the advice from the higher authorities. In this situation it is argued that the appeal had become really illusive and no useful purpose would be served by pursuing that remedy. The higher authorities have already expressed their views. In this connection reference is made to Gordhandas Lalji v. B. Banerjee and Ors.  9 S.T.C. 581. The reply on behalf of the State is that remedy by way of revision is not barred and they should have gone up in revision. This argument loses sight of the fact that revision is only competent if the remedy of appeal is exhausted and in any case revision cannot be said to be a substitute for appeal. Therefore I have proceeded to examine the matter on the merits and I have repelled the preliminary objection that the petitioner should have gone up in appeal and adhered to the remedy provided by the Act.
5. Before dealing with the controversy it will be proper to set out the relevant provisions of the Constitution and the Act. They are Article 286 of the Constitution and Section 5 of the Central Sales Tax Act which are in these terms:--
286. (1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place--
(a) outside the State; or
(b) in the course of the import of the goods into, or export of the goods out of, the territory of India.
(2) Parliament may by law formulate principles for determining when a sale or purchase of goods takes place in any of the ways mentioned in Clause (1).
(3) Any law of a State shall, in so far as it imposes, or authorises the imposition of, a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter-State trade or commerce be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament may by law specify.
6. Section 5 of the Central Sales Tax Act:--
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.
(2) A sale or purchase of goods shall be deemed to take place in the course of the import of the goods into the territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goods have crossed the customs frontiers of India.
7. There are a large number of decisions by their Lordships of the Supreme Court interpreting the expression 'in the course of export' under Article 286 of the Constitution and also the phrase 'the sale which occasions export' in Section 5 of the Central Sales Tax Act. The authorities dealing with the interpretation of Article 286 of the Constitution are The State of Travancore-Cochin and Ors. v. The Bombay Company Ltd. Alleppey, and Ors.  3 S.T.C. 434, The State of Travancore-Cochin and Ors. v. The Shanmugha Vilas Cashew-Nut Factory and Ors.  4 S.T.C. 205, The State of Madras v. Gurviah Naidu & Co. Ltd. and Ors.  6 S.T.C. 717, Burmah-Shell Oil Storge & Distributing Co. of India Ltd. and Anr. v. Commercial Tax Officer and Ors.  11 S.T.C. 764, and Hafiz Din Mohammad Haji Abdulla v. The State of Maharashtra  13 S.T.C. 292. In State of Travancore-Cochin and Ors. v. Bombay Company Ltd., Alleppey, and Ors.  3 S.T.C 434, it was held 'that a sale by export involves a series of integrated activities commencing from the agreement of sale with a foreign buyer and ending with the delivery of the goods to a common carrier for transport out of the country by land or sea. Such a sale cannot be dissociated from the export without which it cannot be effectuated, and the sale and resultant export form parts of a single transaction. Of these two integrated activities, which together constitute an export sale, whichever first occurs can well be regarded as taking place in the course of the other. Even if the property in the goods passes to the foreign buyers and the sales are thus completed within the State before the goods commence their journey the sales must, nevertheless, be regarded as having taken place in the course of the export and are, therefore, exempt under Article 286(1)(b).' This view has consistently been held by their Lordships of the Supreme Court as would be apparent from the last decision cited on this part of the case, namely, Ben Gorm Nilgiri Plantations Co., Coonoor v. The Sales Tax Officer  15 S.T.C. 753, where practically all the previous decisions are noticed and the majority view as propounded by Shah, J., is as follows:--
A sale in the course of export predicates a connection between the sale and export, the two activities being so integrated 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 this sense to constitute a sale in the course of export...there must be an intention on the part of both the buyer and the seller to export, there must be an obligation to export and there must be an actual export. The obligation may arise by reason of statute, contract between the parties, or from mutual understanding or agreement between them, or even from the nature of the transaction which links the sale to export. 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. And to occasion export there must exist such a bond between the contract of sale and the actual exportation, that each link is inextricably connected with the one immediately preceding it. Without such a bond, a transaction of sale cannot be called a sale in the course of export of goods out of the territory of India.
8. It may be mentioned that this decision also deals with the interpretation of Section 5 of the Central Sales Tax Act.
9. In this state of the law and its exposition the exact nature of the transaction in the instant case has to be examined. In other words, it has to be examined as to what is the nature of the transaction in dispute? Is the transaction in dispute a sale in the course of export and has this sale occasioned an export? A combined reading of the agreement dated the 1st April, 1957, and annexure 'B' proves beyond doubt that the petitioner was engaged in the export of the iron ore to Japan. The export by reason of the control on the commodity has to be through the State Trading Corporation. The State Trading Corporation in turn for its facility has appointed a broker, i.e., Messrs Narayan & Co. At no point of time the property in goods passes either to Messrs Narayan & Co. or to the State Trading Corporation. If the goods are rejected either at the port or by the foreign buyers, the loss must fall on the petitioner. There can be no dispute that both these documents have to be read together and as observed by their Lordships of the Supreme Court in Hafiz Din Mohammad Haji Abdulla v. The State of Maharashtra  13 S.T.C. 292, one has not to go merely by the form of the documents but to see to their substance. It has to be seen as to what is the true relationship that these two documents create between the parties. It will be proper to reproduce the observations of their Lordships in Hafiz Din Mohammad Haji Abdulla v. The State of Maharashtra  13 S.T.C. 292. They are as follows:--
The relation between the parties has manifestly to be ascertained in the light of the terms incorporated in the letter and the attendant circumstances. The designation which a party chooses to give to the relation, especially in cases of liability to pay tax, is of little consequence. The Court has in each case, having regard to the terms and the attendant circumstances, to ascertain the true relation between the parties without giving undue importance to the special expressions used by them.
10. In view of these two documents I am clearly of the view that the sale in the present case is a sale in the course of export and therefore exempt under the provisions of Article 286 of the Constitution and Section 5 of the Central Sales Tax Act.
11. Mr. Nehra, learned Counsel for the State, in the first instance contended that the sale was to Messrs Narayan & Co. and therefore such a sale was not exempt under Article 286 of the Constitution and Section 5 of the Central Sales Tax Act. Reliance for this has been placed on paragraph 5 of the petition which is rather not happily expressed but that will not in any manner disprove the facts which clearly emerge on the record. If Mr. Nehra's contention were to prevail certainly the sale would not be a sale in the course of export. This is not denied by Mr. Sibal who appears for the petitioner. In support of his contention Mr. Nehra placed reliance on State of Travancore-Cochin and Ors. v. The Shanmugha Vilas Cashew-nut Factory and Ors.  4 S.T.C. 205, The State of Madras v. Gurvidh Naidu & Co. Ltd. and Ors.  6 S.T.C. 717, Gordhandas Lalji v. B. Banerjee and Ors.  9 S.T.C. 581 and East India Tobacco Company v. The State of Andhra Pradesh and Anr.  13 S.T.C. 529 None of these cases has any application to the facts of the present case. In all these cases the sale was completed in India and was an independent transaction and no part of the transaction of sale was in the course of export. As already said, and as has been rightly accepted by Mr. Sibal, if I had come to the conclusion that the sale was by the petitioner to Messrs Narayan & Co. there would be an end of the matter so far as the petitioner is concerned. But I have not taken that view. Moreover that view is not possible on the facts and in the circumstances of this case. That being so, no assistance can be derived from these decisions.
12. Faced with this situation Mr. Nehra then fell upon a technical objection, namely, that the question whether the sale was in the course of export or not is a question of fact and this Court will not determine the question of fact. In my view this argument is wholly fallacious. The facts are clear on the record. The question what is the nature of the transaction on the facts is a pure question of law. It will be proper at this stage to assess whether the authority itself was clear as to the nature of the transaction. The relevant observations of the authority are as follows:--
I have examined the copies of the agreement as well as the various letters placed on the file and find that Messrs New Rajasthan Mineral Syndicate made inter-State sales and had not been exporting iron ore outside the territory of India. The dealer has no privity of contract with the foreign buyers. It appears to me that the State Trading Corporation of India enters into contract with foreign buyers for the supply of iron ore. In order to meet their obligations, the State Trading Corporation of India appoints certain procuring agents such as Messrs Sri Narayan & Co. as intermediaries. These intermediaries enter into contract with the quarries who extract iron ore, charge their commission and pass on ore to the State Trading Corporation. The agreement entered into between the New Rajasthan Mineral Syndicate and Sri Narayan & Co. leaves no doubt that whereas the former is the seller the latter is the buyer.
13. What I have quoted above shows confusion of thought in the mind of the Assessing Authority. These observations are contradictory in themselves and show that the Assessing Authority itself was not clear as to what was the nature of the transaction.
14. It is also necessary to point out that the copy of the letter annexure 'B' was filed along with the petition. No attempt has been made by the State to contradict its authenticity. No affidavit from any responsible officer of the State Trading Corporation has been filed to show that the real nature of the transaction was different from what the document in fact discloses. This letter really clinches the matter in favour of the petitioner. Mr. Nehra further contended that I should not decide the matter but send back the case to the authority for re-decision. I see no merit in this contention. The entire material has been placed before me and the same was also before the Assessing Authority. In these circumstances no useful purpose would be served by remanding the case to the Assessing Authority, for it had arrived at a decision on its basis.
15. For the reasons given above, this petition is allowed. The order of the Assessing Authority is quashed. In view of the difficult nature of the question involved, there will be no order as to costs.