# EAST INDIA TOBACCO CO v. STATE OF ANDHRA PRADESH

- **Citation:** [1963] 1 S.C.R. 404
- **Court:** Supreme Court of India
- **Decided:** 1963
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/east-india-tobacco-co-v-state-of-andhra-pradesh-2594
- **Pages:** 12

## Headnote

1962
R. K. Dalmia
••
Delhi Administration
Ra:liubar Dayal J.
J96B
A;ril 6.
404
SUPREME COURT REPORTS (1963)
he ·was the chief person to oa.rry out the ma.in work
of the conspiracy.
We also do not consider Dalmia.'s sentence, in
the circumstances of the case, to be severe.
We therefore dismiss these appeals.
Appeals Dismissed.
EAST INDIA TOBACCO CO.
v.
STATE OF ANDHRA PRADESH
(B. P. SINHA, c. J., P. B.
GAJENDRAGADKAR,
K. N. WANCHOO, N. RAJAGOPALA AYYANGAR
and T. L. VENKATARAVA ArYAR, JJ.)
Sales 'I'ax-Tobacca-Imposition of Tax on sale of Virginia
Tobacco and exemption of country tobacco-Provision if discrimi·
natory-Purchase which procedes sale for export if could be oxem•
pted from tax-Madras General Salts Tax Act. 1939 (Mad. 9 of
J939), as amended by the Madras General Sales Tax and the
Madras Tobacco (Taxation of Sales and Registration) (Andhra
Amendment) Act(Andhra XIV of 1956), ss. 5, 6-0onstitution of
India, Arl.9. 14, 286 (I) (b).
The appellants firms were doing business in the export of
Virginia tobacco. The usual course of that business was
stated to be that appellants first entered into contracts with
their customers abroad for the sale of tobacco and there·
after they purchased the requisite quantities of goods locally
and then exported them to foreign purchasers in performance
of their contracts. Section 5 of the Madras General Sales Tax
Act 1939, was amended by the Andhra State Legislature
wh:n the Andhra State came into existence by the Amending
Act XIV of 1955. As a result of this enactment to sales of
countr)' tobacco were exempted ; while sale of Virginia tobacco
were liable to be taxed. The appellants were called upon to
produce their account books relating to their business in
tobacco for the purpose of assessing salos tax. The appellants
ftled petitions undrr Art. 226 of the Constitution challenging
the constitutionality of the Amending- Act. XIV of 1955, on
•
I S.C.R.
SUPREME COURT REPORTS 405"
the grounds inter alia that in taxing sales of Virginia tobacco
and exempting from tax sales of other: tobacco, the Act was
discriminatory, as obnoxious to Art. 14, and besides that
having regaid to their course of busine~s, any tax levied on
their sales was in contravention of Art. 286 (l) (b) as amount·
ing to a tax on sales
'~in the course of export" of tobacco.
'the High Court dismissed the petition holding that the
impugned Act did not infringe any constitutional provision,
but granted certificate under Art. 133 of the Constitution to
appeal to the Supreme Court.
Held, that it is for the person who assails a legislation
as discriminatory to establish that it is not based on a valid
classification and this burden is all the heavier when the
legislation under attack is a taxing statute.
Though taxation laws must pas~ the test of Art. 14 of
the Constitution, in deciding whether such a law is discriminatory or not, it is necessary to bear in mind that the State
has a wide discretion in selecting the persons or objects it will
tax, and that the statute is not open to attack on the mere·
ground that it taxes some persons or objects and not others.
It is only when within the range of its selection, the law
operates unequally, and this catinot be justifieJ on the basis
of a valid classification, that there would be a violation of
Arts. 14.
The Madras General Sales Tax '(Andhra Amendment)
Act, 1955, which taxed sales of Virginia Tobacco but exempted
sales of 'Nattu' or country tobacco could not be said to be
discriminatory and was not obnoxious to Art 14.
Virginia tobacco has features which distinguishes it from
country tobacco and can be treated as a class in itself. It was
therefore ~it~ii:1 the power of ~he State to impose tax on the
sales of Vug101a tobacco while exempting sales of country
tobacco.
. .
It is only the sale undl r which the export is made that
is protected by Art. 286 (I) (b) ; a purchase which prcedes
such a sale doe~ not faU within its purview though made for
the purpose of or with a view to effect an

## Text

1962
R. K. Dalmia
••
Delhi Administration
Ra:liubar Dayal J.
J96B
A;ril 6.
404
SUPREME COURT REPORTS (1963)
he ·was the chief person to oa.rry out the ma.in work
of the conspiracy.
We also do not consider Dalmia.'s sentence, in
the circumstances of the case, to be severe.
We therefore dismiss these appeals.
Appeals Dismissed.
EAST INDIA TOBACCO CO.
v.
STATE OF ANDHRA PRADESH
(B. P. SINHA, c. J., P. B.
GAJENDRAGADKAR,
K. N. WANCHOO, N. RAJAGOPALA AYYANGAR
and T. L. VENKATARAVA ArYAR, JJ.)
Sales 'I'ax-Tobacca-Imposition of Tax on sale of Virginia
Tobacco and exemption of country tobacco-Provision if discrimi·
natory-Purchase which procedes sale for export if could be oxem•
pted from tax-Madras General Salts Tax Act. 1939 (Mad. 9 of
J939), as amended by the Madras General Sales Tax and the
Madras Tobacco (Taxation of Sales and Registration) (Andhra
Amendment) Act(Andhra XIV of 1956), ss. 5, 6-0onstitution of
India, Arl.9. 14, 286 (I) (b).
The appellants firms were doing business in the export of
Virginia tobacco. The usual course of that business was
stated to be that appellants first entered into contracts with
their customers abroad for the sale of tobacco and there·
after they purchased the requisite quantities of goods locally
and then exported them to foreign purchasers in performance
of their contracts. Section 5 of the Madras General Sales Tax
Act 1939, was amended by the Andhra State Legislature
wh:n the Andhra State came into existence by the Amending
Act XIV of 1955. As a result of this enactment to sales of
countr)' tobacco were exempted ; while sale of Virginia tobacco
were liable to be taxed. The appellants were called upon to
produce their account books relating to their business in
tobacco for the purpose of assessing salos tax. The appellants
ftled petitions undrr Art. 226 of the Constitution challenging
the constitutionality of the Amending- Act. XIV of 1955, on
•
I S.C.R.
SUPREME COURT REPORTS 405"
the grounds inter alia that in taxing sales of Virginia tobacco
and exempting from tax sales of other: tobacco, the Act was
discriminatory, as obnoxious to Art. 14, and besides that
having regaid to their course of busine~s, any tax levied on
their sales was in contravention of Art. 286 (l) (b) as amount·
ing to a tax on sales
'~in the course of export" of tobacco.
'the High Court dismissed the petition holding that the
impugned Act did not infringe any constitutional provision,
but granted certificate under Art. 133 of the Constitution to
appeal to the Supreme Court.
Held, that it is for the person who assails a legislation
as discriminatory to establish that it is not based on a valid
classification and this burden is all the heavier when the
legislation under attack is a taxing statute.
Though taxation laws must pas~ the test of Art. 14 of
the Constitution, in deciding whether such a law is discriminatory or not, it is necessary to bear in mind that the State
has a wide discretion in selecting the persons or objects it will
tax, and that the statute is not open to attack on the mere·
ground that it taxes some persons or objects and not others.
It is only when within the range of its selection, the law
operates unequally, and this catinot be justifieJ on the basis
of a valid classification, that there would be a violation of
Arts. 14.
The Madras General Sales Tax '(Andhra Amendment)
Act, 1955, which taxed sales of Virginia Tobacco but exempted
sales of 'Nattu' or country tobacco could not be said to be
discriminatory and was not obnoxious to Art 14.
Virginia tobacco has features which distinguishes it from
country tobacco and can be treated as a class in itself. It was
therefore ~it~ii:1 the power of ~he State to impose tax on the
sales of Vug101a tobacco while exempting sales of country
tobacco.
. .
It is only the sale undl r which the export is made that
is protected by Art. 286 (I) (b) ; a purchase which prcedes
such a sale doe~ not faU within its purview though made for
the purpose of or with a view to effect an export.
K. T. Moopil Nair v. State of K erala, [1961J 2 S.C.R. 77,
Budhan Ohoudhry v. State of Bihar. [1955J I S. C. R. 1045
Sri Ram Krishna Dalmia v. Shri Justice SR. Tendolkar [1959j
S. C.R. 270, Mad_dan v. Kantucky, [1940J 309 U. s.'83: 34
L. Ed. 590, 0. lleisfer v. Thomas Oolliary Oo. 250 U. S. 345 :
67 L. Ed. 237, State of Travancore Cochin v. Bomba11 Oo. Ltd.·
1962
East India Tobacco
Co.
v.
State of
Andhra Pradesh
1961
EJsl India ToHcco
Co.
v.
S1ti1< of
dndhra P1adtsh
406
SUPREME cOURT REPORTS [1963]
P.952] S. C. R. 1112, State of Travancore Oochtn v. Shamugka
Vila• Oashew Nut Factory. [1954] S. C. R. 53 State of Madras
v. Ourivish Neidue & Oo., A. [. R 1955 S. c.' 158 and State of
Mysore v. Mysore Spinning .r. Manufacture Go., A. I. R. 1958
S. C. 1002, referred to.
CrVIL APPELLATE JurusDICTrON: Civil Appeals
Nos. 290 & 291 of 1961.
App0als from the judgment a.nd order dated
September 25, 1957, of the Andhra Pradesh High
Court, in writ Petitions No. 1172of1956 of 1957.
A. S. R. Chari and K. R. Ghoudhri, for ·the
Appellants.
A. V. Vishwanatha Sastri, T. V. R. Tatachary,
P. D .. Menon, for the respondent.
I 962. April 6.
The Judgment of the Court
was delivered by
VENKATARAMA ArYAR, J.-Thcse are appeals
against the judgment of the High. Court of Andhra.
Pradesh in petitions Nos.
1172 of 1956 and 56 of
1957 filed under Art. 226 of the Constitution ques.
tioning the validity of the Andhra Act XIV of 1955
insofar as it imposes a ta.x on the sale of Virginia
tobacco. The appellants are firms doing business
in the export of tobacco. The usual course of thiit
business is stated to be that they first enter into
contracts with their customers a.broad for the sale
of' tobacco, that thereafter they purchase the
requisite quantities of goods locally and then
export them to the foreign purchasers in perfor.
mance of thAir contracts. Prior to October l, 1953,
the arAa wherein the appellants aarried on business
formed part of the State of Madras, and on that
date the State of Andhra was constituted, and the
area in question fell within that State. The law
relating to sales tax in force in that area. ia the
Madras General Sales '.J,'ax Act, IX of 1939. Section
..
I S.C.R. SUPREME COURT REPORTS
407
5 of this Act provides for exemption of tax on sales
of goods specified therein and s. 6 confers on the
State Government power to exempt the tax payable
on the ea.le of a.ny specified class of goods or by any
apecified class of persons. In exercise of the powers
conferred by s. 6 the Government of Madras issued
on March 31, 195 ;, a notification No. 144 exempting
the sales of unmanufactured tobacco from sales tax.
After the Andhra State came into existence, the
Legislature of that State enacted Act XIV of 195.1)
hereinafter referred to as ''the Amendment Act"
wherebv it amended s. 5 of the Madras General
Sales 'Tax Act by adding as item (viii) the
following:-
''(viii) raw
tobacco
(except
country
variety thereof) whether cured or uncured,
shall be liable to tax under Se"tion 3, Sub
Section 1 Oiily at the point of the first purchase effected in the State of Andhra by a dealer
who is not exempt from
taxation under
Section 3, Sub Section 3 but at the rata of
seven .and half pies for every rupee on his
turnover.
Explanation :-For the purpose of this
item, country variety of tobacco means
variety of tobacco other than Virginia and
ot.her similar varieties of tobacco".
As a result of this enactment exemption from tax
was limited to sales of what is known as country
tobacco (Nattu tobacco) and so far as sales of
Virginia. tobacco are concerned, they became liable
to be taxed. Pur1mant to the Amendment Act, the
Andhra. Government issued on November 4, 1955,
a notification No. 711 cancelling the earlier notification No; 144 dated March 31, 1953.
Acting undAr the provision~ of the Amendment Act, the Additional Commercial Tax Officer,
Guntur, issued notices to the appelJants to prod11ce
J962
East India Tobacco
Oa,
v.
Sta" of
Andhra P1ad,sh
1962
East India Tobacco
Co.
v.
Stat1 nf
Andhra Pradesh
Ai.JarJ.
408
SUPREME COURT REPORTS (1963]
the account books relating to their business in
tobacco for the purpose of assessing sales tax. To
this the appellants replied by filing petitions under
Art. 226 of the Constitution in the High Court of
Andhra Pradesh challenging the constitutionality
of the Amendment Act on the grounds inf.er alia
that in taxing sales of Virginia tobacco and exemp·
ting from tax s•des of other tobacco, the Act was
discriminatory, and that in consequen ~ it was
obnoxious t.o Art. 14 of the Constitution ° and that
further ·it was in contravention of Art. 286 (I) (b)
as it was really a tax on sales in the course of
export of tobacco. They accordingly prayed that
a mandamus might be issued directing the respondents to forbear from making an assessment on the
sales of tobacco. The learned Judges disagreed
with these contentions and dismissed the petitions,
holding that the impugned Act did not infringe any
con3tit.utional provisions, but granted ce1 tificates
under Art. 133 of the Constitution. That is how
these appeals come before us.
On the arguments addressed to us, two
questions arise for our determination :
(I) Is the impugned Act repugnant to
Art. 14 for the reason that it singles out
Virginia tobacco for taxation ?
(2)
Is the impugned legislation in contravention of Art. 286 (I) (bl as imposing a tax
on sales in the course of export ?
( l) On the first question the contention of
the appellants miiy be thus stated. All laws must
satisfy the requirements of Art. 14. Taxation laws
are no exception to it. In imposing a tax on the
sales of Virginia tobacco and not on other kinds of
tohacco the impugned Act is on the face of it
discriminatory. It is therefore obnoxious to Art.
14 and is void,
1 S.C.R.
SUPREME COURT REllORTS"'
409
It is not in dispute that taxation laws must
a]so pass the test of Art. 14. That has been laid
down recently by this Court in M oopil Nair v. 'I'he
8f,afie of Kerala (1). But in deciding whether a taxa·
tion law is discriminatory or not it is necessary to
bear in mind that the State has a wide discretion in
selecting the persons or objects it will tax, and tha.t
a statute is not open to attack on the ground that
it taxes some persons or obje<Jts and not others.
It is on]y when within the range of its selection, the
law operates unequally, and that cannot be justified
on the basis of any va~id classification, that it
would be violative of Art. 14.
The following statement of the law in Willis on "Constitutional Law"
page 587, would correctly represent the position
with reference to taxing statutes under our
Constitution :-
''A State does not have to tax everything
in order to tax something. It is allowed to
pick and choose districts, objects, persons,
methods and even rates for taxation if it does
so reasonably ........................ The Supreme
Court has been practical and has permitted a
very wide latitude . in
classification
for
taxation',,
In the light of these principles, we may now proceed to discuss whether the impugned Act is repug·
nant to Ar~. 14 of the Constitution. The point for
consideration is whether there is in fact a real
distinotion between Virginia tobacco and other
tobacco called country tobacco 'Nattu tobacco,.
If there is, then the Act is valid, if not it must be
held to be unconstitutional. The finding of learned
Judges on this point is as follows :-
" Broadly, there are two types,Virginia
and Nattu, differing in taste, light, colour
and
texture ............... There are
obvious
(I) [1961) 2 S c. R, 77,
J96J
East India Tobatco
Co.
v.
State of
Andhra Prode!h
East India Tobacce
Co.
v.
State.11{
AmlhTo p,.,.tJash
A(1arJ.
410 SUPREME OOURT REPORTS [1963]
differences between the two categories of tobacco, in the
nomenclature used, in the
process of growing, curing and grading, in
the market facilities foreign and inland, in
the price and in the variety of uses to which
they are put and also the class of cmstomers
that take to them."
Thus it will be seen that Virginia tobacco has features which distinguiMh it from countary tobacco,
and can be treated as a class in itself. It will
therefore be within the power of the State to impose a tax on the sales of Virginia tobacco while
exempting the count~y tobacco.
It it argu1id for the appellants that to repel
the charge of dUicrimination in taxing only Virginia
tobacco, and not the country tobacco, it is not
sufficient merely to 1how that there are differences
between the two varieties, but that it must further
be shown, as held in Budhan Clwudhry v. The St,ate
of Bihar (1) and Shri Ram Krishna Dalmia v. Shri
Justice 8. R. Tendolkar ('), that the differtntia bas
reasonable relation to the object of the legislation.
The differences betwee11 the Virginia tobacco and
the country tobacco, as found be
the learned
Judged, are not, it is argued, germane to the levy
of sales tax, and so there is no valid claBBification.
We are unable to agree with this contention. If
a State can validly pick and chose one commodity
for taxation and that is not open to attack under
Art. 14, the same result must follow when the
State vicks out one eategory of goods and subjects
it to taxation.
It should, in t.his connection, be remembered
that under the law it is for the person who assails
a legislation a discriminatory to established that
it is not based on a valid classification and it is well
settled that this burden is all the heavier when
(1 l c1955J 1. s.c.R. 1045.
c2J [19591 s.c.R. 219.
I S.C.R.
SUPitEME OOU.ltT REPORTS
411
the legiidation u:nder attack is a taxing statute.
''In taxation eyen more than in other fields" it
was observed by the Supremo Court of United
States in Mad<Uin v. Kentucky (1) "Legislatures
possess the greatest freedom in classification. The
burden is on tile one attacking the
le~ishtive
arrangement to .negative every conceivable basis
which might snp:port it". How wide the powers
, of the Legislature are in classifying objects for
purposes of taxa1tion will be seen from the following resume of the law given by Rottschaefer, in
his "Constitutional Law" p. 668 :-
'1The :Federal Supreme Court has seldom
any classification made in connection with
the levying of property taxes.
ft has sustained the le-vy of a heavier burden of taxation
upon motor vehicles using the public high
ways than that levied upQn other forms of
property, and the imposition of a heavier
tax upon oil than upon other property. The
equal prot;ection clause does not prohibit the
levy of a. tHi.x on ores which is not imposed
upon similar interests in quarries, forests and
other forms of wasting asset, nor even the
imposition of a. tax upon anthracite that is
not levied upon bituminous coal. A statute
providing for the assessment of one type of
intangible at its actual value while other intangibles a.re assessed at their face value does
not deny e:qua.1 protection even when both a.re
subject. to the same rate of tax. The decision
of the Supreme Court in this field have permitted a State legislature to exercise an extremely
wide discretion in classifying property for tax
purposes so long a.s it refrained from clear and
hostile
discrimination
Against
particular
persons or classes".
A decision near to the present case on the
facts is 0. Hei.~ler v. ThomJJs Colliery Company (2).
(J) (1&40) 309 US EIS; Bf L. Bd. 590.
(2) 260 US 245; 67 L. Bd 237.
1J61
East lndi11 Tob•cco
Co.
v.
St1t1tf
Andhra Prod11li
Ai)lar J'.
1961
East lmlia Tobacco
Co.
v.
State af
.Andlira P1 atlesh
412
SUPREME COURT REPORTS (1963]
There the question was whether a law imposiug a
tax 011 Anthracite coal and not upon bituminous coal
wns uncon8titutional as violating the equal protection of laws guaranteed by the 14th Amendment to
the Federal Constitution. In upholding the validity
of the Jaw, Justice Mckenna observed as follows:-
"The fact of competition may be accepted.
Both coals, being compositions of carbon are
of course capable of combustion and may be
used as fuels but under different conditions
and manifestations and the difference determines a. choice between them as fuels.
By
disregarding that difference and the greater
ones which exist and by dwelling on competition alone, it is easy to erect an argument of
strength against the taxation of one and not
of the otherBut this may not be done. The
differences between them are a just basis for
their different classification; and the differences are great and important. They differ even
as fuels, they differ fundamentally in other
particulars. Anthracite coal has no sutshntial use beyond a fuel; bituminous coal has
other uses. Products of utility are obtained
from it. The fact is not denied and the
products are enumerated that the extent of
their use.
They are therefore incentives to
industries that the State in natural policy
might well hesitate to obstruct or burden and
to yield to the policy or consider it is well
within the concession or the power of the
State expressed in the cases we have cited.
The distinction in the treatment of the respec-
. tive coals being within the power conceded by
the cases to the State it has logical and legal
justification and is' necessarily, not unreasonable or arbitrary".
'
In our Judgment the differences which exist
between the Virginia and 'Nattu' oountry tobaooo,
'
I S.0.R.
SUPREME COURT R~POR'rS
as found by the learned Judgea, a.re materials on
which the State could treat Virginia tobacco as
forming a class by itself for purpose of taxation,
and the impugned legislation must be held to be not
obnoxious to Art. 14 of the Constitution.
(2) It is next argued that the Amendment
Act i1 ultra vires because in reality it imposes a tax
on sales in the c.')urse of export and that is hit by
Art. 286 (1) (b). The course of business followed
by the appellants has already been set out. It
may be assumed for the purpose of the present
discussion that the purchases made by the appellants on which the ta::x iEI sought to be imposed were
made for the purpose of executing specHic orders
which they had received from their foreign customers. The question is whether even so the sales in·
question took place in the course of export for the
purpose of Art. 286 (1) (b).
In suppOTt of their
contention that they did, the appeJlants rely on the
following observations· in St,at,e of Travancore-Oochin.
v. ·The, Bombay Co. Ltd. (1) :-
"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 bay la.nd or sea. Such a sale cannot be
dissociated from the export without which it
cannot be effectuated, and the sale and resultant export forms parts of a single transaction.
Of these two integrated activities, which
together constitute an export sale, whichever
first occurs can well be regarded as ta.king
place in the course of the other".
Now the contention is that the agreement
entered into with the foreign purchasers for sale of
the Virginia tobacco, the purchase of the same
(J) [l9 52] S. C.R. 1112, Ul8.
1968
l!Jut India Tobacco
••
Stat.a!
A. ndlira Pradtsll
.fiyar J.
""
llMI Will ToJ"'°
c..
••
SW.ti
"""'• p,..,,,
414
SUPREME OOURT REPORTS [1963]
locally by the appellants for performing the contract and their subsequent export to the foreign
purchasers must all be held to form one integrated
trn.nsaction of sale in the course of export.
Now the observations quoted above were
made in refutation of the contention that the
expression "sale in the course of export or import"
meant only a sale which takes place while the goods
are actually in movement, in the course of export
or import, as for example, when shipping documents are endorsed and delivered when the goods
are in transit. This Court held that this was too
narrow an interpretation to put on the words in
question and that a sale which actually occasions
the export or import would fall within Art. 286
(1) (b). The question whether sales which precede
export are sales in the course of export within
Art. 286 (1) (b) arose directly for decision in State of
Trarxmcore-Oonhin v. Shanmuga VilaB Oaakew Ntl.t
Factory(') and it was held that they were not.
Explaining, in the course of the judgment, the true
scope of the obs11rvations in State of TravancoreOonhin'8 caae (') quoted a.hove, Patanjali Sastri, C.J.
observed :-·
"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 from parts
of a single transaction'. It is in that sense
that the two activities-the sale ud the
export-were said to be integrated .. A pur·
-·
chase for the purpose of export like produc-
,
tion or manufacture for export, is only Ml act
preparatory to export and cannot, in our opi·
nion, be regarded as an act done 'in the course
(I) ~J!IMJl5.1C.(R. 53,
{2)[[1952) S. C.R. 1112, lll8.
•
l
I -
I s.c.:e..
SUPREME OOURT REPORTS
415
of the export of the goods out of the territory
of India', and more than the other two activities can be so regarded."
We may refer to two other decisions of this
Court where this question has been considered. In
The, St,ate of Madras v. Guriviak Npidue & Co. Ltd.(1),
the facts were that an assessee secured orders
for the supply of untanned hides and skins from
London purchasers and then, he purchased them
locally in order to implement those orders and exported them, and the question was whether a tax on
those purchases was hit by Art. ~86(l)(b). In holding that it was not, this Court observed :-
"Such purchases were, it is true, for the
purpose of export but such purchases did not
themselves occasion the export and consequently did not fall within the exemption of
Art. 286(l)(b) of the Constitution as held by
this Court in The, State of Travancore-Cockin v.
The Bombay Company Ltd. ((1952] S.C.R. 1112).
Nor did such purchases in the State by the
exporter for the purpose of export come within
the ambit of Art. 286(1)(b), as held by the
decision of the majority in The St,ate of TravanC<Yre Cochin v. Shanmuga V ilaB Caske.w Nut
Factory ((1954] S.C.R. 53)."
The point came up again .for consideration
before this Court in The, 8tme of Mysore v. Mysore
Spinning & Manufacturing Co. (2) and it was held
following the decision cited above that Art.286((l)(b)
could be invoked only in :respect of the sale which
occasions the export, and not of any sales precedent
to it.
On these authorities the law muat be taken· to
be well settled that it ia only the sale under which
the export is made that is protected by Art. 286
(l)(b), and that a purchase which precedes such a
(1) A.LR. 1956 S.C. 158.
(2) A I.R. 1958 S.C. 1002, 1005.
196!
East India Tob"co
011.
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