Sales in the course of export of goods out of India are exempt from sales tax under Article 286(1)(b) of the Constitution.

1. In this case the petitioner Dulichand Harwari Mull is a firm which carried on business at Nirmali in the district of Saharsa. The petitioner firm is registered under the Bihar Sales Tax Act in the district of Darbhanga and bears registration certificate No. DR 68. For the period from the 1st of April, 1959, to the 3oth of June, 1959, the petitioner was assessed to sales tax by the Superintendent of Sales Tax, Darbhanga Circle, on the 22nd February, 1960. The petitioner claimed before the Superintendent of Sales Tax that the sale of goods made to customers in Nepal to the extent of Rs. 50,015.55 nP. should be exempted from assessment of sales tax, but the claim of the petitioner was rejected by the Superintendent of Sales Tax. The relevant portion of the order of the Superintendent of Sales Tax reads as follows:-

"The dealer claimed that the despatches to the extent of Rs. 50,015.55 nP. made to Nepal parties should be allowed in full. It was found that the credit memos were prepared in the name of the Nepal parties. Bharisar receipts were in the name of the selling parties. Bhansar tax (Chungi) paid by the selling dealer does not find entry into his accounts. The goods having been sold in Bibar in the Indian Union, prices having been paid either in full or part thereof the title of the goods passed in India in the hands of the purchasers. The delivery of the goods to the purchaser or his representatives is finalised in India without any conclusive evidence to establish that the dealer continued to be owner of the goods up to and beyond the time when the goods entered into the export or until after the goods cross the customs barrier to make the sale. The books of accounts do not show that the cost of transport or on custom duty borne by the selling dealer. I am, therefore, of the view that the sales are interstate sales and completed in India and transport, if any, to Nepal takes place under the direction of the purchaser. In view of the facts stated above, the transactions are liable to assessment under the Bihar Sales Tax Act, 1947. I therefore, assess to tax the despatches of Rs. 50,015,55 nP. made to Nepal parties, the details of which are as follows: -

At the rate of 2 np. ... Rs. 19,820/65np.

At the rate of 4 np. ... Rs. 29,638/36np.

At the rate of 7 np. ... Rs. 462/30np.

Dharmadha etc. ... Rs. 94/24np.

The sale of taxable goods at various rates is finally determind as below:

At the rate of 2 np. ... Rs. 99,683/47np.+

Rs. 19,820/65np. or

Rs. 1,19,454/12 np.

At the rate of 2 np. ... Rs. 61,564/97np.+

Rs. 29,638/36np. or

Rs. 91,203/33np.

At the rate of 2 np. ... Rs. 820/75np.+Rs.

462/30 np.or Rs.

1,283/05

Allowing the statutory deduction at the rate of 2% under Sec. 5 (2) (b), the taxable turnover comes to Rs. 1,17,065/-, Rs. 89,379/- and Rs. 1,258/- taxable at the rate of 2 nP., 4 nP. and 7 nP., respectively. Tax thereon is assessed at Rs. 2,341.30 nP., Rs. 3,575.16 nP. and Rs. 88.06 nP. or Rs 6,004.5-2 nP. only."

2 The petitioner has moved the High Court under Article 227 of the Constitution for setting aside the order of the Superintendent of Sales Tax on this point and for making a fresh assessment in accordance with law.

3. On behalf of the petitioner the argument is put forward that the Superintendent of Sales Tax had no legal authority to impose tax on the transaction of sale between the assessee and his customers in Nepal to the extent of Rs. 50,015/-and odd because of the constitutional bar imposed under Article 286 (1) (b) of the Constitution, which is to the following effect: -

"No law of a State shall impose, or authorise the imposition of a tax on the sale or purchase of goods where such sale or purchase takes place - (a) outside th