Judgment

SUBBA RAO, J. : This is a petition under Art. 32 of the Constitution for quashing the order of the first respondent dated February 9, 1959, setting aside the order of the second respondent allowing a deduction of an amount of Rs. 1,86,42,730-15-0 from the petitioner s sales tax turn-over on the ground that the said amount was not liable to tax by virtue of S. 46 of the Bombay Sales Tax Act, 1953 (Act III of 1953), (hereinafter called the Act).

2. The material facts are not in dispute and they may be briefly stated: The petitioner is a private company within the meaning of the Companies Act, 1956, and has its registered office at Kasturi Buildings, Bombay-1. On March 24, 1954 and April 15, 1954, the petitioner entered into two contracts with the Government of India for selling to the latter two consignments of sugar -one of 9500 Long tons of sugar of Peruvian origin and the other of 25000 Metric Tons of sugar of continental origin. To fulfil the terms of the contracts, the petitioner placed order with dealers in foreign countries. The following are the particulars relating to the first contract dated March 24, 1954, for the supply of 9500 Long tons of sugar :

(i) 3rd April, 1954 Letter of Credit opened by the petitioner.

(ii) 3rd May, 1954 S. S. Alba sails from Salaverry (Peru) carrying 9782.01688 Long Tons of sugar.

(iii) 26th May, 1954 The petitioner delivered to its Bankers, the Central Bank of India Limited, Bombay, along with the invoice for Rs. 50,35,405-11-0 the Documents of Title (viz. the Bills of Lading duly endorsed in favour of the Government of India, Ministry of Food & Agriculture (Agriculture) to the above goods) together with other papers (such as Certificates) and instructed the said Bankers to present the same to the Government of India, and to collect the said amount of Rs. 50,35,405-11-0 from the Deputy Accountant General (Food & Rehabilitation), New Delhi.......

(iv) 7th June, 1954 Payment made to petitioner s Bankers by the Government of India against delivery of Invoice and Bills of Lading.

(v) 26th June, 1954 Date of arrival of S. S. Alba at Bombay Harbour.

The corresponding details pertaining to the second contract are as follows:

VESSEL VESSEL VESSEL

S. S. ELENI STATHATOS S. S. GIOVANNI AMENDOLA S. S. INGER MARIE

I. II. III. IV:

(i) 9910-858 9919-7158 4464-315 Total 24292-8888 Tons.

Tons. Tons. Tons.

(ii) 15/6th June, 15/6th June, 15/6th June, Letter of Credit opened by petitioner.

1954. 1954. 1954.

(iii) 10th July, 31st July, 31st July, Date of Sailing of Vessel.

1954. 1954. 1954.

(iv) 22nd July, 12th August, 16th August,

1954. 1954. 1954.

(v) 26th July, 18th August, 19th August,

1954. 1954. 1954.

(vi) 12th August, 3rd September 9th September,

1954. 1954. 1954.

The petitioner delivered to its bankers, the Bank of Baroda Limited, Bombay, along with its invoices for Rs. 50,43,501-8-0, Rs. 22,69,800. 13-0. Rs. 50, 38, 997-14-0 respectively theDocuments of Title (viz. the Bills of Lading) Duty endorsed in favour of the Government of India, Ministery of Food and Agriculture(Agriculture) to the above goods together with other papers (such asCetificates) and instructed the said Bankers to present the same to the Government of India and collect the said amounts of Rs. 50,43,501-80, Rs. 22,69,800-13-0 and Rs. 50,38,997-14-0, from the DeputyAccountant General (Food and Rehabilitation) New Delhi.

* * * * *Payment made to the petitioner s Bankers by the Government of India against delivery of Invoices and bills of Lading. Date of arrival of Vessel at Bombay Harbour.

3. The foregoing particulars disclose that some weeks before the vessel arrived at the Bombay harbour, i.e., when the vessels were on the high seas, the Government of India received the documents of title, including bills of lading, pertaining to the sugar purchased by them and paid the price to the petitioner, Indeed after the goods reached the port, they were unloaded, taken delivery of, and cleared by the Government of India after paying the req