The main legal point established in the judgment is the interpretation of the word 'delivery' in S. 5 of the Uttar Pradesh Sales Tax Act, 1948, emphasizing the requirement for actual delivery to fulfill the legislative object of promoting export of goods.

Judgement

SIKRI, J.: These four appeals by special leave are directed against the judgment of the Allahabad High Court in a Sales Tax Reference made by the Judge (Revisions), Sales Tax, Uttar Pradesh, Lucknow, on being directed to do so by the High Court under S. 11 of the Uttar Pradesh Sales Tax Act, 1948, hereinafter referred to as the Act. The question referred was as follows:

"Whether in law the revising authority was right in holding that the sales in dispute were not for delivery outside Uttar Pradesh and that the applicant was not entitled to a rebate under S. 5 of the Act."

2. The question was referred in the following circumstances. The appellant, hereinafter referred to as the assessee mills, carries on the business of manufacturing and selling sugar and is registered as a dealer under the provisions of the Act. During the previous year relevant to the Assessment year 1948-49, the assessee company had sold sugar to parties who carried on business outside Uttar Pradesh and also delivered the same outside Uttar Pradesh. It also sold sugar to parties who carried on business inside Uttar Pradesh but the sugar was despatched to stations outside Uttar Pradesh in compliance with the instructions issued by the buyers. The assessee mills submitted an application under S. 5 of the Act, in Form VII, prescribed by the Uttar Pradesh Sales Tax (Temporary) Rules, 1948, claiming 50 per cent rebate on the sales of sugar delivered outside Uttar Pradesh. The Sales Tax Officer allowed rebate in respect of the sales of sugar to parties who carried on business outside Uttar Pradesh but rejected the claim for the sales which were made to parties carrying on business inside Uttar Pradesh. In respect of the assessment year 1948-49 there was four assessment orders covering each quarter of the year, the first quarter being April 1948 to July 1948. Section 5 of the Act reads as follows:

"Sales of certain goods for delivery outside the State-In respect of such manufactured goods as may be notified by the State Government and subject to such restrictions and conditions as may be prescribed, a rebate of one -half of the tax levied on sales of such goods for delivery outside the Uttar Pradesh shall be allowed if such goods are actually so delivered."

In exercise of the powers conferred by S. 5 of the Act, the Governor was pleased to order that rebate, of one half of the tax levied on sales of certain goods including sugar manufactured in Uttar Pradesh for delivery outside. Uttar Pradesh shall be allowed if such goods were actually so delivered. It appears that this notification was modified on March, 30, 1949, but we are not concerned with this modification.

3. The Sales Tax Officer dealt with the question at issue in his order in respect of the quarter ending March 31, 1949, in detail and he was of the view that if property passed from the seller to the purchaser in Uttar Pradesh S. 5 and the notification issued under it could not apply.

4. The assessee mills then filed four revision applications before the Judge (Revisions) Sales Tax. The Judge (Revisions) disposed of the four applications by two orders, first dated February 1, 1950, and the second dated December 5, 1950. He held that "the words sales of such goods for delivery outside U. P. clearly show that the intention of the framers of the act was to allow a rebate only in cases in which the goods are sold subject to the condition that they would be delivered outside U. P. It is also clear that S. 5 contemplates only one buyer who purchase the goods and also takes their delivery outside U. P. In other words the party who buys the goods and the party who takes the delivery must be one and the same. It is not disputed that the sales of sugar in respect of which the claim has been disallowed were in favour of one party and delivery was taken by another party outside U. P. The party after buying the sugar under a contract of sale had the goods despatched outside U. P. by the Mills to another party outs