M.S. Menon, AG. C.J.
1. These appeals are directed against the common judgment of Vaidialmgam, J., in O.P. Nos. 181, 179, 180, 242, 612, 243, 254, 585, 611, 629, 581, 583, 1107, 227, 226, 1324, 1175 and 1323 respectively of 1960. The sole question for decision is whether the sales of tea covered by the petitions were in the course of export out of the territory of India and thus exempt from taxation under Article 286(1)(b) of the Constitution.
2. The years concerned are 1956-57, 1957-58, 1958-59 and 1959-60. Article 286 of the Constitution was amended by the Constitution (Sixth Amendment) Act, 1956, on 11th September, 1956. The Central Sales Tax Act, 1956, with the exception of Sections 6 and 15, came into force on 5th January, 1957. Section 6, the charging section, came into force on 1st July, 1957.
3. Clause (1) of Article 286 provides :
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;
and Clause (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).
Section 5 of the Central Sales Tax Act, 1956, formulates the principles for determining when a sale or purchase can be said to take place in the course of import or export as contemplated by Clause (2) of Article 286 of the Constitution. Sub-section (1) of that section reads as follows :-
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.
4. It is common ground that the sales in these cases followed an identical pattern in all essential particulars, and that they were in conformity with the provisions of the Tea Act of 1953. The sellers were the estates that produced and processed the tea ; the purchasers were the local agents of foreign buyers. The sales were by public auction. They were conducted by brokers of tea.
5. Sections 20 and 21 of the Tea Act, 1953, deal with export quotas and export licences. The export rights under the Act are transferable and all the sales with which we are concerned were sales with export rights. We are told that the purchases by the local agents of foreign buyers were with a view to export the goods to their principals abroad, and that the goods were as a matter of fact exported from this country. This, however, as held by Vaidialingam, J., is not sufficient to make the sales sales in the course of export out of the territory of India as contemplated by Article 286(1)(b) of the Constitution or, in the words of Section 5 of the Central Sales Tax Act, 1956, sales which occasioned the export of the goods from this country.
6. The words 'in the course of' have repeatedly come up for discussion before the Supreme Court of India and as stated by that Court in State of Mysore v. Mysore Spinning and . and Ors.  9 S.T.C. 188 and Burmah-Shell Oil Storage & Distributing Co. of India Ltd. v. Commercial Tax Officer  11 S.T.C. 764 their meaning should now be considered as well established and not at large. In State of Travancore-Cochin and Ors. v. The Bombay Co., Ltd.  3 S.T.C 434 the Supreme Court said :
A sale by export thus 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;
and in State of Travancore-Cochin and Ors. v. Shanmugha Vilas Cashew-nut Factory  4 S.T.C. 205,
The phrase 'integrated activities ' was used in the previous decision to denote that ' such a sale '(i.e., a sale which occasions the export) ' cannot be dissociated from the export without which it cannot be effectuated, and the sale and the resultant export form parts of a single transaction'. It is in that sense that the two activities-the sale and the export-were said to be integrated. A purchase for the purpose of export like production or manufacture for export, is only an act preparatory to export and cannot, in our opinion, be regarded as an act done ' in the course of the export of the goods out of the territory of India', any more than the other two activities can be so regarded.
7. In Bengal Immunity Co., Ltd. v. State of Bihar  6 S.T.C. 446 Venkatarama Ayyar, J., had to deal with the analogous provision relating to inter-State trade. He said :
A sale could be said to be in the course of inter-State trade only if two conditions concur : (1) a sale of goods, and (2) a transport of those goods from one State to another under the contract of sale. Unless both these conditions are satisfied, there can be no sale in the course of inter-State trade.
This passage was quoted with approval in Endupuri Narasimham & Son v. State of Orissa  12 S.T.C. 282.
8. It is clear from the passages extracted above that mere purchases in the State with a view to export, and subsequent export, are not sufficient to secure the exemption. In order to attract the exemption there must be a causal connection between the sale arid the export, a connection which is intimate and real. The sales must inextricably be bound up with the export and form an integral part thereof. One must be able to say that without the export the sale is not effectuated, or, in other words, that it was the sale which occasioned or produced or caused the export.
9. The sales in these cases imposed or involved no obligation to export, there was no movement under the contract of sale, and in those circumstances we must hold that the exemption claimed is unavailable, that the decision of Vaidialingam, J., is right, and that these appeals have to be dismissed.
10. The appeals fail and are hereby dismissed with costs.