The main legal point established in the judgment is the interpretation of the term 'customs frontiers of India' and its impact on determining the course of import under section 5 of the KST Act.

( 1 ) THESE revision petitions under section 23 of the Karnataka Sales Tax Act, 1957 (KST Act), are by the Cashew Corporation of India Limited (Corporation) and are directed against the common order dated 31st March, 1981, of the Karnataka Appellate Tribunal, Bangalore (Tribunal), in s. T. Appeals Nos. 185 to 190 of 1978.

( 2 ) THE Corporation is a subsidiary of the State Trading Corporation owned by the Government of india. The Corporation came to be constituted in August, 1970, and has its registered office at cochin in Kerala State. The Corporation is a registered dealer under the Sales Tax Act of that state but is not a registered dealer under the KST Act of Karnataka State. The Corporation imports cashew from East African countries under licences issued by the Controller of Imports and Exports and allots the imported cashew to actual users for being proceeded and for export of certain percentage of the raw cashew so allotted. One of the conditions of the import licence granted to the Corporation is that it should remain as the owner of the cashew imported under the licence up to the time of clearance through customs. Prior to the coming into existence of the corporation in the year 1970, the users of raw cashew were themselves importing raw cashew from East African countries. The Corporation ascertains the requirements of the users, takes letters of acceptance from them and thereafter places orders for the supply of cashew with the foreign exporters. Separate bills of entry are drawn, each lot is separately marked and after the ship arrives at the Mangalore Harbour, the Corporation given letter of authority to the captain of the ship authorising the delivery of the goods earmarked to the allottees. The letters of authority are sent through banks and the allottees receive the same after making payments. The allottees pay customs duty, etc. , on behalf of the Corporation and take delivery of the goods.

( 3 ) THE Commercial Tax Officer, II Circle, Mangalore (CTO), issued notices dated 8th December, 1975, calling upon the Corporation to file returns and to show cause as to why the Corporation should not be assessed to tax as a non-resident dealer for the years 1970-71 to 1975-76. The corporation in their reply pointed out that "all the sales of imported raw cashew" to the allottees in Mangalore were made on the high seas and in the course of import and no sales having taken place within the State of Karnataka, the Corporation is not liable to pay any sales tax. The corporation also urged in the alternative that even if the sales are effected by transferring documents of title after the ship entered the territorial waters, even then such a sale was before the goods are removed from the customs station and therefore the sale is in the course of import relying on section 2 (ab) of the CST Act.

( 4 ) THE assessing authority overruled the objections and passed orders subjecting the sales to tax under the KST Act. The Deputy Commissioner of Commercial Taxes (Appeals), Mangalore division, Mangalore, by his order made on 31st October, 1978, dismissed the appeals of the corporation. The Karnataka Appellate Tribunal, Bangalore, having dismissed the second appeals, the Corporation has filed these revision petitions.

( 5 ) SRI K. Srinivasan, learned counsel, argued for the Corporation and Sri S. Rajendra Babu, learned Government Advocate, argued for the revenue.

( 6 ) SRI Srinivasan made the following three submissions for our consideration :

(1) The sales were effected by the Corporation in favour of the allottees by transferring documents even before the goods were cleared by the customs authorities, the sales were therefore before the goods crossed the "customs frontiers of India" as defined in section 2 (ab) of the CST Act and therefore the sales were in the course of import. (2) The Corporation only acted as the agent of the allottees and therefore the import was by the allottees and not the Corporation. (3) The g