A sale in the course of export is a sale that is so integrated with the export that the connection between the two cannot be voluntarily interrupted without a breach of the contract or the compulsion arising from the nature of the transaction.

D.K.Mahajan, J.

1. This order will dispose of Civil Writ Petitions Nos. 914, 915 and 916 of 1962. The controversy in all of them is identical but three petitions have been filed because they pertain to three separate assessments for three separate years. The first petition relates to the assessment for the year 1957-58, the second for the year 1958-59 and the third for the year 1959-60. The assessee is New Rajasthan Mineral Syndicate which is registered under the Punjab General Sales Tax Act, 1948. The firm is not registered under the Central Sales Tax Act, 1956. This firm carries on the business of quarry contractors and extracts iron ore from quarries. According to the petitioner the ore is actually meant for export to Japan, and other foreign countries. In paragraph 3 of the petition it is stated that the Government of India have appointed the State Trading Corporation as their nominee for the purpose of exporting iron ore from India to Japan and other countries. The petitioner-firm or any other private dealer is not competent to export any ore outside India. The method of exporting iron ore is stated as follows: The petitioner extracts ore, out of which, ore of certain quality has to be supplied to the State Trading Corporation. If the ore does not conform to the quality, it is liable to rejection at the port, or even by the buyers, who are foreign importers and the expenses incurred by the State Trading Corporation are to be recovered from the petitioner. Thus if the iron ore is rejected by the foreign buyers, the loss falls on the petitioner and not on the State Trading Corporation. The State Trading Corporation have appointed Messrs Shri Narayan and Co. as their nominee who charge Re. 1 per ton as brokerage from the petitioner-firm for the work connected with the export of ore. The agreements which the petitioner entered with Messrs Shri Narayan & Co. in all these petitions are identical. For the sake of convenience I am only referring to documents in Civil Writ No. 915 of 1962. Annexure A is a sample of that agreement. The agreement for the relevant period was not filed but I allowed an opportunity to the learned counsel to file the relevant agreement and that has been filed. So far as the phraseology of the two agreements is concerned there is no difference and therefore I am referring to the agreement which has now been filed. The agreement is dated the 1st of April, 1957. The petitioner is specified in the agreement as the seller and Messrs Shri Narayan and Co. are specified as buyer. The clause relating to payment is in the following terms:-

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Rs. 25,000 (Rupees, twenty five thousand) will be arranged for payment to the sellers after the acceptance and signing of this contract by the sellers, as an advance of Re. 1 (Rupee one) per ton for the aggregate quantity of Rs. 25,000 tons contract for supply. The balance amount shall be paid to the sellers against actual weight of iron ore loaded by the sellers when iron ore is either weighed at Kandla Port or by draft weight of the ship at the time of shipment to the foreign countries as per bargain by the buyer or by the State Trading Corporation of India.

2. In the special conditions of this agreement, condition No. (4) is a pertinent condition and is as follows:

The account shall be finally settled when the shipment is made and satisfactory report is received from the foreign buyers, or the State Trading Corporation approves the material for foreign countries where iron is extracted out of it.

3. We have on the record a copy of the letter dated the 2nd of September, 1957, from Messrs Shri Narayan & Co. to the petitioner. This copy is with reference to the agreement dated the 1st of April, 1957, already referred to and is reproduced below:-

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We are in receipt of your letter and noted your comments regarding the price schedule mentioned in our agreement referred to above, which runs as under:-

-Rs. 148 plus actual railway freight from Nizampur to Kandla Port per