Judgment

HEGDE, J.:- In these Appeals by certificate a common question of law arises for decision and that question is whether the sales effected by the respondent with which we are concerned in these cases occasioned import of Egyptian cotton. The Sales Tax Officer as well as the Appellate Assistant Commissioner, rejecting the contention of the assessee came to the conclusion that the sales in question were intra-state sales. But, on appeal, the Sales Tax Tribunal held that the assessee s case fell within Section 5 (2) of the Central Sales Tax Act 1956 read with Article 286 of the Constitution The High Court on revision affirmed the decision of the Tribunal. In support of its conclusion the High Court observed thus:

"One of the conditions in the contract is that the goods imported should not under any circumstances, be diverted from its determined destination, i.e, the mills. Secondly, the relative shipping documents were issued by the foreign seller in the names of the respective mills and not in the name of the assessee-firm. Again, the import licences issued to the mills author rise the mills to import the goods; and on the reverse of these licences is stated that the goods for the import of which the licences were granted should be the property of the licences at the time of clearance through the customs. Still further, the letters oil authorisation issued by the Government authorising the assessee-firm to import the cotton show that the assessee had to do it purely as an agent of the licensees and the imported goods would be the property of the licensees both at the time of the clearance through the customs and subsequent thereto."

2. The material facts of the case are fully set out in the judgment of the Appellate Tribunal and are as follows:

"The facts of the case here are not in dispute and the only point that has to be considered here is as to whether the sales are in the course of import The assessee firm submitted before the Sales Tax Officer a detailed note in regard to the procedure in this matter. According to them the firm is engaged in the supply of foreign cotton to textile mills among other places in South India on the basis of the import licences issued to the mills authorising import of foreign cotton by them The details in regard to the procedure contained in the note sub. misted by the firm are found from page 37 onwards in the assessment files. It is stated that the firm supplies cotton to the mills on the basis of specific written contracts. Under the import control regulations, import licences are necessary for import of foreign cotton and they are issued to only actual users like the mills. The appellant firm and the similar concerns are not given import licences The mills make enquiries with the firm as regards the quality of cotton they required, the period during which they would be supplied, the price and other particulars and on getting these enquiries the appellant firm contacts the foreign suppliers in Egypt, Sudan or America for ascertaining whether they could supply the cotton required If the offers received are found acceptable the appellant firm enters Into contract with the various mills concerned and immediately thereafter accept the offer made by the foreign suppliers. The supply of such foreign cotton to M/s. Mahalakshmi Textiles Mills Ltd., one of the mills to whom supply was made by the firm is detailed in the said note and it is stated that the supply made to the other mills also are under similar circumstances. According to the appellant, after receiving enquiries from the mills the firm contacts the American Suppliers in New York The foreign supplier agreed to supply the quantity at the price agreed upon. Thereafter the firm entered into a contract with the mills dated 20-3-1964, that the import licence issued in favour of the mills was made available to the firm for utilisation of the contract that the letter of authority issued authorising the firm to import cotton was also issued,