J. P. DEVADHAR, J.

( 1 ) THE question referred by the Maharashtra Sales tax Tribunal, Mumbai under section 61 of the Bombay Sales Tax Act, 1959 reads as under: whether on a true and correct interpretation of Entry 222 of the notification issued under section 41 of the Bombay Sales Act, 1959, the Hon'ble Tribunal was justified in holding that the exemption claimed in respect of Sales of refined rapeseed oil to the tune of rs. 7,55,00,23/- is not admissible, though the said oil was purchased from the National Dairy Development Board and sold within the State of Maharashtra, merely because it was delivered to the applicant in gujarat?

( 2 ) THE applicant is a Federation of oilseeds growers having its head office at Ahmedabad and a branch office at Mumbai (hereinafter referred to as 'the assessee' ). The head office at Ahmedabad has registered itself as a dealer under the Gujarat Sales Tax Act and the branch office at Mumbai is registered as a dealer under the Bombay Sales Tax Act, 1959 ('bst Act' for short ).

( 3 ) DURING the assessment period July 1, 1987 to March 31, 1989 the assessee's head office at Ahmedabad purchased imported refined rapeseed oil/soyabean oil donated by the Co-operative league of United States of america/canada ('donated oil' for short) to the tune of Rs. 6,99,170/- from the national Dairy Development Board ('nddb' for short) at Ahmedabad and after transferring the said goods into Maharashtra as stock transfer sold the same within the State of Maharashtra for Rs. 7,55,00,237/ -. The assessee claimed that the sale of the above goods were exempt under Notification No. 222 issued under section 41 of the BST Act.

( 4 ) THE Assistant Collector of Sales Tax (assessment) disallowed the claim of the assessee on the ground that the assessee did not prove that the oil sold by the assessee was the donated oil. The Assistant Commissioner, accordingly, held that the impugned sales were subjected to tax and accordingly demanded a sum of Rs. 39,63,762/- towards tax and Rs. 26,05,350/- towards interest under section 36 (3) (b) of the BST Act.

( 5 ) THE assessee filed an appeal against the said order but the same was dismissed by the appellate authority. On second appeal filed by the assessee, the maharashtra Sales Tax Tribunal recorded that although it is undisputed that the donated oil was purchased by the assessee's head office at Ahmedabad from nddb and the very same donated oil on stock transfer were sold by the assessee in the State of Maharashtra, the benefit of exemption Entry 222 is not available to the assessee because the donated oil was not purchased by the assessee in the state of Maharashtra. On a reference application filed by the assessee, the maharashtra Sales Tax Tribunal has referred the aforesaid question for the decision of this Court.

( 6 ) THE entire dispute in the present reference pertains to the interpretation of notification Entry No. 222 issued under section 41 of the BST Act. For the sake of convenience, we reproduce hereinbelow the said Entry :

( 7 ) MR. Surte, learned advocate appearing on behalf of the assessee submitted that the exemption notification in question was issued in the light of the Memorandum of Understanding entered into by and between the Government of Canada and the Government of India on July 4, 1983. As per Article 4 of the above Memorandum of Understanding, Entry of the donated oil was to be kept free from all duties and tax and from any need for payment to the Government of india by the NDDB. He submitted that in the light of the aforesaid Memorandum the notification Entry 222 was issued under section 41 of the BST Act. He submitted that the said notification nowhere states that to avail exemption, the donated oil must be purchased in Maharashtra and that the donated oil if purchased from Gujarat or for that reason from any other State in India and thereafter sold in Maharashtra, the benefit of the exemption will not be available. Accordingly, the counsel submitted t