vil Appeal No 350 NT of 1987
632 From the Judgment and Order dated 1911
1985 of the Allahabad in STR No 401 of 1985
SC Manchanda and Ashok K Srivastava for the Appellant
Raja Ram Agarwal Ajay Kumar Jain Pramod Dayal and AD Sanger for the Respondent
The Order of the Court was delivered by THAKKAR J A transaction of sale or purchase which takes place in the course of export  falling within the purview of sub section 3 of Section 51 of the Central Sales tax Act
1956 hereinafter called the Act  cannot be subjected to sales tax by any State
The said provision inter alia provides that the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of such export
i provided such last sale or purchase took place after  and ii was for the purpose of complying with the agreement or order for or in relation to such export Such a transaction cannot be subjected to sales taxpurchase tax by any State in view of the embargo imposed by article 2861 a1 The controversy centering around this question has been set at rest in Consolidated Coffee Ltd v 
Coffee Board Bangalore AIR Vol 46 p 164
Under the circum stances if the last sale in favour of the respondent who is a dealer in hides and skins and exports the same out of the territory of India has taken place 1 after an agreement was entered When a sale or purchase of goods said to take place in the course of import or export 1 X X X X 2 X X X 3 Notwithstanding anything contained m  sub section1 the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of such export if such last sale or purchase took place after and was for the purpose of complying with the agree ment or order for or in relation to such export
 1 2861 a 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 the State or b in the course of the import of the goods or export of the goods out of the territory of India
633 into for such export or order for such export had been accepted by him
2 last sale made in his favour was for the purpose of complying with the obligation undertaken under the said agreement or order the transaction reflected in such last sale or purchase cannot be lawfully taxed under the Sales Tax Act
It cannot be taxed because of the consti tutional bar embodied in Article 286 1 a of the Consti tution of India
The view taken by the High Court in the Judgment under appeal that such transactions are not exigi ble to sales taxpurchase tax under the UP Sales Tax Act is unexceptionable in the light of the aforesaid provisions of the Constitution and sub section 3 of Section 5 of the Act and the law declared by this Court in Consolidated Coffee Ltd We therefore see no reason to interfere with the order of the High Court
It is no doubt true that Form III A under Rule 12 A of the UP Sales Tax Act is not an appropriate form to use in the context of such a transaction of last sale or purchase for the purpose of complying with an agreement or order for export which has already come into existence
However it is equally true that an appropriate form to meet the situation in relation to such last sales which are not exigible to sales purchase tax under the UP Sales Tax Act having regard to the constitutional bar and having regard to the provision contained in sub section 3 of Section 5 of the Act has not been devised under the afore said Rules
It was under these circumstances that the respondent has furnished to his vendors form III A which is not appropriate except in regard to purchases made for sales of undressed hides as such within the State or in the course of inter State trade
But the mere fact that such a form has been given will not empower the State to collect or levy the sales taxpurchase tax in respect of a transaction in the course of export which satisfies the aforesaid tests prescribed by Section 5 3 of the 
It would be unconstitu tional in view of the constitutional bar to levy tax on sales in the course of export regardless of the fact whether an appropriate form is used or not
The transactions entered into by him which are such on which sales taxpurchase tax cannot be levied on account of the constitutional bar read with sub section 3 of Section 5 of the cannot become exigible to tax merely because a wrong form is used particularly when the appropriate form has not been devised by the Rule making authority
Liability for tax in respect of such transactions cannot be fastened on the respondent for the very good reason that the State has no power to collect or levy sales taxpurchase tax on such transactions
The UP Sales Tax authorities should have devised an appropriate form in this behalf
They can do so even now as has 634 been done under the Delhi Sales Tax Act by prescribing Form 49 to meet such a situation
Learned counsel for the appel lant submits that till such a form is prescribed the re spondent who claims to have entered into these transactions in the course of export as defined by sub section 3 of Section 5 of the Act may furnish to his vendor a copy of Form H as provided by the 
The respondent has no objection and is prepared to do so
Under the circumstances for the future purposes instead of fur nishing form III A under Rule 12 A of the Sales Tax Act the respondent will furnish a photostat copy of form H under the 
Learned counsel for the respondent states that if such a copy is furnished to the vendor it will be accepted by the competent authority and the vendor will not be held liable for payment of sales taxpurchase tax in respect of such transactions subject to the rider that respondent will be held liable in case the purchases made by him do not satisfy the conditions and tests prescribed by sub section 3 of Section 5 of the and are not made in the course of export within the meaning of the said provision
So far as the past transactions are concerned the respondent will not be liable provided he satisfies the aforesaid tests and the transactions of last sales made to him are in the course of export within the deeming clause of sub section 3 of Section 5 of the Act
The appeal is disposed of accordingly
There will be no order as to costs
NP V Appeal dis posed of


Summary:
The respondent a dealer in hides and skins and export ing the same out of the territory of India entered into transactions failing within the purview of sub section 3 of Section 5 of the and which could not be taxed because of constitutional bar under Article 286 1 a of the Constitution of India furnished Form III A under Rule 12 A of the UP Sales Tax Act as an appropriate form to meet the situation was not devised under the UP Sales Tax Act and sought a clarification from the Commissioner Sales Tax as to whether the firm was liable to tax under Section 3 AAAA of the UP Sales Tax Act on the purchases made against Form III A or H under the  when such dressed hides and skins were ex ported beyond the territory of India
The Commissioner Sales Tax clarified and held that the purchases of dressed hides and skins made against Form H were not liable to purchase tax under Section 3 AAAA of the UP Sales Tax Act provided the same were exported outside the territory of India and the conditions laid down in Section 53 of the were satisfied but if the purchases were made against Form III A and exported outside the terri tory of India they shall be liable to purchase tax under Section 3 AAAA
On appeal the Sales Tax Tribunal held that the respond ent was not liable to any purchase tax under Section 3 AAAA of the UP Sales Tax Act whether they were purchased against or without Form III A or H as the same were export ed outside the territory of India in compliance with the order received from the foreign buyers and those transac tions were exempted under Section 6 of the 
631 A Revision Petition filed before the High Court by the appellant Revenue contending that the decision of the Tribunal was bad in law was dismissed
Disposing of the appeal by the UP Sales Tax authori ties this Court HELD 11 The mere fact that Form III A has been given will not empower the State to collect or levy the sales taxpurchase tax in respect of a transaction in the course of export which satisfies the tests prescribed by Section 53 of the 
It would be unconstitu tional in view of the constitutional bar to levy tax on sales in the course of export regardless of the fact whether an appropriate form is used or not
633E F 12 The transactions entered into by the respondent which are such on which sales taxpurchase tax cannot be levied on account of the constitutional bar read with sub section 3 of Section 5 of the  cannot become exigible to tax merely because a wrong form is used particularly when the appropriate form has not been devised by the rule making authority
633F G 13 Liability for tax in respect of such transactions cannot be fastened on the respondent for the very good reason that the State has no power to collect or levy sales taxpurchase tax on such transactions
The UP Sales Tax authorities should have devised an appropriate form in this behalf
They can do so even now as has been done under the Delhi Sales Tax Act by prescribing Form 49 to meet such a situation
633G H 634A 14 For the future purposes instead of furnishing Form III A under rule 12 A of the UP Sales Tax Act the re spondent will furnish a photostat copy of Form H under the 
634B So fas as the past transactions are concerned the respondent will not be liable provided the tests prescribed under Section 53 of the  are satis fied
634D Consolidated Coffee Ltd vs Coffee Board Bangalore AIR Vol 46 p 164 refferred to