il Appeals Nos 751 of 1957 and 10 of 1958
Appeal from the judgment and order dated December 7 1956 of the Calcutta High Court in Matters Nos 29 and 58 of 1956
M C Setalvad Attorney General of India C K Daphtary Solicitor General of India Sukumar Mitra Sankar Ghosh and B N Ghosh for the appellants in C A No 751 of 57
M C Setalvad Attorney General of India Sankar Ghosh and D N Mukherjee for the appellants in C A No 10 of 1958
section M Bose Advocate Generalfor the State of West 905 Bengal B Sen and P K Bose for the respondents in both the appeals 1960
September 27
The Judgment of the Court was delivered by HIDAYATULLAH J
These two appeals on a certificate under article 1321 of the Constitution have been filed respectively by the Burmah Shell Oil Storage land Distributing Co of India Ltd and the Standard Vacuum Oil Company in this judgment referred to as the appellant Companies against a common judgment of the High Court of Calcutta dated December 7 1956
The High Court was moved for writs of mandamus prohibition and certiorari under article 226 but the petition was dismissed by D N Sinha J The matter arises out of assessment to sales tax on sale of motor spirit for aviation purposes shortly aviation spirit supplied by the appellant Companies to aircraft bound for countries abroad under the Bengal Motor Spirit Sales Taxation Act 1941 as amended by section 2ai of the Bengal Motor Spirit Sales Taxation Second Amendment Act 1954
The Commercial Tax Officer the Commissioner of Commercial Taxes and the State of West Bengal have been joined as respondents in this Court as they had previously been joined in the High Court
The appellant Companies deal in Petroleum and Petroleum products and carry on business at Calcutta
They maintain supply depots at Dum Dum Airport from which aviation spirit is sold and delivered to aircraft proceeding abroad and belonging to several Companies
It appears that such sales were treated by the sales tax authorities in the State of Bombay as not falling within the taxing Acts in force in the Bombay State by reason of the provisions of article 286 of the Constitution
The sales tax authorities in West Bengal however took a different view of the matter and after sundry procedure resulting in assessment of tax presented a demand notice for the tax assessed which was paid under protest by the appellant Companies
The appellant Companies filed petitions under article 226 of the Constitution in the High 906 Court of Calcutta questioning the legality of the imposition but without success
They have now filed these appeals after obtaining a certificate as already stated
The contentions in this Court as they were also before the High Court are that such sales are made in the course of export of such aviation spirit out of the territory of India that they take place outside the State of West Bengal that inasmuch as aviation spirit is delivered for consumption outside West Bengal the sales cannot fall within the Explanation to sub cl
a of the first clause of article 286 and that unless they can be said to become Explanation Sales the power to tax does not exist
It is argued in support of the last contention that there is not even an averment in the reply of the respondents before the High Court that aviation spirit is delivered for consumption within West Bengal
The case in the High Court was restricted to consideration of supplies to aircraft which either proceed to foreign countries directly from Dum Dum Airport or do so ultimately though landing en route at some place or places in the Indian territory
The case has been similarly confined in this Court also and we are not required to express any opinion about sales of aviation spirit to aircraft flying from one place in West Bengal to another place also within that State or even to some place in another State in the territory of India
The facts are fortunately not  in dispute
Both parties admitted the procedure for the supply of aviation spirit to aircraft
Briefly described it is as follows Before the arrival of such an aircraft a representative of the appellant Companies applies to the Airport Customs Officer to depute an Officer to supervise the refuelling of the aircraft
After the aircraft lands the captain or the Ground Engineer gives instruction about the quantity of aviation spirit required and on permission being given by the Customs authorities the stated quantity is delivered in the presence of the Customs Officer deputed
Details of the delivery are entered in a delivery receipt which 907 is signed by the representative of the appellant Companies and the Customs Officer deputed
Duty drawback shipping bills are also drawn up to show the  quantity of aviation spirit and are countersigned by them and also by a representative of the aircraft
Later claims for refund of customs duty are made and refund is granted
In the petition filed in the High Court it was averred that such aviation spirit is required for consumption during flight andor outside the territory of India and is thus delivered for purposes of consumption outside West Bengal and in some cases outside the territorial limits of India as well
It was also stated that it was sold in the course of export outside the territory of India and drawback of customs duty was obtained
In the reply of the respondents it was stated that the refund of customs duty was an irrele vant fact for the purpose of assessment
It was further stated in the affidavit of the Commercial Tax Officer as follows   I further state that a foreign bound aircraft on leaving Dum Dum Airport consumes a portion of the aviation spirit taken in by it at the Airport within the territory of West Bengal before it moves out of the said territory or the territory of India
I do not admit that the entire quantity is used outside the territorial limits of India as alleged
I deny that the sale of such aviation spirit takes place outside the State of West Bengal and state that the sale takes place within the State of West Bengal and the purchaser pays its price within the State of West Bengal
The sale of such aviation spirit is completed by delivery at the Dum Dum Airport in West Bengal
 We have mentioned this fact because it was argued that the respondents had not averred clearly that aviation spirit was sold for consumption within West Bengal even though the appellant Companies had denied it
The respondents pointed out that at least some of the aviation spirit must be consumed in the State and that this was so stated in the affidavit filed in reply to the petition and quoted by us
This is 908 hardly a case for a fight on pleadings especially as the entire procedure of the supply of aviation spirit and the use to which it is put are beyond controversy
The question that we have to consider is one of principle and the answer depends upon broad facts and not on technicalities
Either the whole of the sale is within the taxing power of the State or it is not and the fact that aviation spirit is consumed in taking off or in flying over the territory of West Bengal before it leaves that territory would make no difference either way to the principles applicable
Though parties entered into a debate on this part of the case we do not propose to consider it because in our opinion the question must be considered in substance and not in abstractions
The liability to sales tax if any is attracted when aviation spirit is sold and immunity can only be claimed if as stated in article 2861a and the Explanation the sale can be said to take place outside the State or can be regarded under article 2861b as having taken place  in the course of export of the goods out of the territory of India
Before we take up these two questions we desire to refer to some provisions of certain Acts which bear upon the matter
The Indian  is an Act for the control of the manufacture possession use operation sale import and export of aircraft
Section 16 of this Act provides that the Central Government may by notification in the Official Gazette declare that any or all of the provisions of the Sea Customs Act shall with such modifications and adaptations as may be specified in the notification apply to the import and export of goods by air Sections 23 and 4 define  import and  export  respectively as  bringing into India  and  taking out of India 
A notification issued under the Indian  the rules framed thereunder and the Indian Aircraft Rules 1920 appointed the Civil Aerodrome Dum Dum a Customs Aerodrome and to that Customs Aerodrome the provisions of the Sea Customs Act mutatis mutandis were made applicable by r 63 Part IX of the Indian Aircraft Rules 1920
As 909 a result Dum Dum Airport became a Customs Aerodrome and any aircraft coming into India from foreign countries or leaving for any such country has to comply with ordinary Customs formalities
Section 42 of the Sea Customs Act which allows drawback on re export and is applicable mutatis mutandis provides  When any goods capable of being easily identified which have been imported by sea into any customs port from any foreign port and upon which duties of customs have been paid on importation are re exported by sea from such customs port to any foreign port or as provisions or stores for use on board a ship proceeding to a foreign port seven eighths of such duties shall except as otherwise hereinafter provided be repaid as drawback 
Provisos omitted
Under section 51 no drawback is allowed unless the claim to receive such drawback is made and established at the time of re export and under section 52 the person claiming drawback has to make and subscribe to a declaration
The procedure which is described in an earlier portion of this judgment bears upon these matters
Coming now to the taxing Acts with which we are concerned it may be pointed out that the Bengal Motor Spirit Sales Taxation Act 1941 originally did not contemplate levy of a tax on the sale of aviation spirit
Motor spirit was defined to mean  any liquid or admixture of liquids which is ordinarily used directly or indirectly as fuel for any form of motor vehicle or stationary internal combustion engine and which has a flashing point below 76 degrees Fahrenheit 
Sub section 4 of section 3 which is the charging section provided that no tax shall be levied on the sale of any motor spirit for the purpose of aviation
The Act was amended by the Second Amendment Act 1954 and sub section
4 of section 3 was omitted and the proviso to the first sub section was re enacted adding one more clause to the following effect 910 the tax on all retail sales of motor spirit for the purpose of aviation which are effected on or after the date of the commencement of the Bengal Motor Spirit Sales Taxation Second Amendment Act 1954 shall be charged at the rate of three annas per gallon 
By the Bengal Motor Spirit Sales Taxation Amendment Act 1955 the original Act was further amended
To the definition of motor spirit  quoted by us earlier an Explanation was retrospectively added which reads as follows  Explanation For the avoidance of doubt it is hereby declared that in this Act the expression  vehicle  means any means of carriage conveyance or transport by land air or water 
The original Act was again amended by the Bengal Motor Spirit Sales Taxation Amendment Act 1957
This time among other amendments involving rates of tax the words  and which has a flashing point below 76 degrees Fahrenheit  were omitted from the definition of motor spirit 
The result of all these amendments was to make retail sales of aviation spirit liable to sales tax and retail sale  was defined at all material times as a sale  by a retail dealer for the purpose of consumption by the purchaser 
After the coming into force of the Constitution section 22 in terms of article 286 was added to the original Act by paragraph 3 of and the Eleventh Schedule to the Adaptation of Laws Order 1950
It read  221
Nothing in this Act shall be construed to impose or authorise the imposition of a tax on the sale or purchase of motor spirit a where the sale or purchase takes place outside the State of West Bengal b where the sale or purchase takes place in the course of the import of such motor spirit into or export of such motor spirit out of the territory of India or c omitted
2 The Explanation to clause 1 of article 286 of the Constitution shall apply for the interpretation of clause a of sub section 1 911 Clauses a and b of the first sub section do no more than re enact the prohibition contained in article 286 of the Constitution with modifications to Suit motor spirit and the Explanation to sub cl
a of cl
1 of the said Article in the Constitution has been applied without an attempt to modify or adopt it
The Explanation to sub cl
a of the first clause of article 286 the meaning of which was much in dispute in this case may conveniently be quoted here
It reads  Explanation For the purposes of sub clause a a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State notwithstanding the fact that under the general laws relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State 
The High Court of Calcutta in its judgment dealt with the points urged and rejected them
The reasons of the High Court briefly were as follows The learned Judge declined to draw any inference from the fact that customs duties were refunded as drawbacks on aviation spirit delivered to the aircraft
He held that he was not required to decide whether the appellant Companies were entitled to claim and receive drawbacks of customs duty
He then gave a finding that the sale was physically within the State because both the buyer and the purchaser were at the time of sale within the State of West Bengal even though delivery of aviation spirit was beyond the customs barrier
He then considered the legal position in the light of article 286 from three points of view
He first held that it was not an inter State transaction because both the parties were in the State of West Bengal and aviation spirit was not delivered outside the State
Thus he held that el
2 of article 286 did not apply
In this connection he relied upon the decision of this Court in the Bengal Immunity Co Ltd vs State of Bihar and others 1
He next considered 1 912 the matter under the first sub clause and held that unless the fiction created by the Explanation applied the sale must be treated as within the State under the law relating to sale of goods
In his opinion the sale being completed within the State of West Bengal both as regards contract and delivery the fiction could not be held applicable because no  outside  State was involved even though the aircraft might have to consume some aviation spirit while flying over the  outside  State
He therefore held that the Explanation and article 2861a which it seeks to explain were both not applicable
He then considered the matter from the point of view of article 2861b
He explained on the authority of the decision of this Court in State Of Travancore Cochin and others vs Shanmugha Vilas Cashewnut Factory and others 2 that the expression  in the course of export out of the territory of India referred to sales which by themselves occasioned the export of goods out of the territory of India and not to sales for the purpose of export even though the goods ultimately passed the customs barrier
He pointed out that there was no foreign purchaser to whom the aviation spirit could be said to have been exported and that aviation spirit in fact was consumed en route and never taken to any foreign territory
He also pointed out that no bills of lading or shipping documents were drawn up and therefore there was neither an export nor a sale in the course of export out of the territory of India
The appellant Companies claim that these sales come within the exemption granted the sub cls
a and b of the first clause of article 286
To claim the exemption granted by the first sub clause they rely upon certain decisions of this Court and contend that unless the sale can be said to fall within the Explanation it must be treated as a sale outside the State of West Bengal and is thus exempt
With regard to the second sub clause they contend that there was an export out of the territory of India inasmuch as aviation spirit was taken abroad and any sale by which it is taken abroad is also exempt These 2  913 arguments as has been shown above were urged before the High Court but were not accepted
These two arguments need to be considered separately as they have little in common
Article 286 places restrictions upon the power of the States to tax sales and purchase of goods and cuts down the amplitude of Entry No 54 in the Second List of the Seventh Schedule
Other restrictions are also to be found in Part XIII of the Constitution
With those we are not concerned in these appeals
We are also not concerned with the subsequent amendment of article 286 nor with the ban imposed by the second clause of the Article on taxes on sales in the course of inter State trade and commerce
We are concerned with the first clause only as it stood before the amendment
That clause is divided into two sub clauses
The first sub clause prohibits the imposition of tax on the sale or purchase of goods where the sale or purchase takes place outside the State
AD Explanation is added to this sub clause which has been quoted by us earlier
This Explanation has led to a long controversy in this Court during which somewhat conflicting views have been expressed about its meaning
This conflict has further been accentuated when the interplay between the two clauses has been considered
The view now accepted is that the bans imposed by the two clauses are independent and separate and each must separately be got over
In view of this we are not required to travel beyond the first clause in this case
We have heard widely divergent arguments in these appeals
The learned Attorney General who appeared on behalf of the appellant Companies read to us copious extracts from the earlier decisions of this Court and contended that unless the sales could be said to fall within the Explanation so as to become Explanation sales  they must be regarded as having taken place outside the State of West Bengal and for that reason not taxable
According to him they could only become Explanation sales  if aviation spirit was delivered for the purpose of consumption within the State of West Bengal
The learned Advocate General of West Bengal on the other band 914 contended that the Explanation did not apply to the facts here and that the observations in the rulings were not relevant
The first sub clause in its opening portion says that 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 outside the State
It is thus plainly meant that a State is not to tax sales which take place outside that State
But where does a sale take place  Numerous elements go to make a sale and they may take place in more than one State
Under the law relating to the sale of goods property passes on the happening of certain events
When they happen the sale is complete
Now a contract for the sale of goods may be entirely within one State when all parties are within the State the offer and acceptance also take place there and the goods are also within that State and there the property in the goods passes and delivery also takes place
But it may also happen that the constituent elements may be spread over two or more States some of the elements described above falling within one State and some others falling within one or more other States
Prior to the Constitution multiple taxation of a single transaction of sale was possible and Provincial legislation then existing clearly demonstrates that States having Some connection with the sale because one or more elements took place within those States treated this as sufficient nexus between the taxing power and the States authorising them to tax sales even where property passed in another State
The Constituent Assembly desired to achieve certain objects in the matter of taxation particularly in relation to sales tax
Article 286 achieves among other objects the avoidance of this multiple taxation
The first sub clause of the Article is clear in its terms when it says that a State cannot tax sales which take place outside the State
The converse is also true that is to say that a State can tax a sale of goods which takes place within the State
By sale here is meant a completed transaction by which property in the goods passes
Before the property in the 915 goods passes the contract of sale is only executory and the buyer has only a chose in action
 Property in the goods passes either by the fulfilment of the conditions of the contract if any or by the operation of the law relating to the sale of goods
Starting from the basic fact that what is to be taxed under the Constitution is a sale completed by the transference of property in the goods we have to see at what stage and where this happens
The taxable event thus cannot be found at any earlier stage when the sale is not completed by the passing of property
The critical taxable event is the passing of property in the goods as a result of a contract for their sale
The parties to the contract can agree when that event is to take place but where it happens may be a matter of some doubt and even of difficulty
Where the parties have not agreed as to the time of the passing of property the law relating to the sale of goods furnishes the answer
There too there may be the same difficulty as to the place of the passing of property
The place of physical delivery of the goods does not help to solve this difficulty because delivery may precede or follow the passing of property in the goods
Delivery of goods is thus not always an element which determines the completion of a sale because the sale may be completed both before and after delivery
The Constitution however thinks in  terms of a completed sale by the passing of property and not in terms of an executory contract for the sale of goods
The essence of the matter being thus the passing of property in goods there was always a likelihood of more than one State claiming the right to tax the same transaction
One State might claim that goods in which property passed were in that State and hence property in the goods passed there
Another State might claim that the conditions precedent to the passing of property were fulfilled in that State and hence the sale was completed by the passing of property there
Yet another State might claim that property passed in that State according as one or more events connected with the passing of property took place within that State
916 It was to avoid this welter of confusion as far as possible that the Explanation was added and it also avoided multiple taxation
The Explanation serves two purposes
It indicates the State where the tax can be levied and also indicates the State or States where it cannot
It achieves these two purposes excluding all considerations as to where property the goods can be said to have passed under the law relating to the sale of goods
The purpose is achieved by the Explanation and particularly by the non obstante clause in the Explanation
Any State claiming to tax a sale of goods on the ground that it was completed by the passing of property in the goods in that State could not do so if the goods as a direct result of the sale were delivered for the purpose of consumption in another State
The Explanation creates a fiction that the sale must be deemed to have taken place in the latter State and not in the State where the sale was completed by reason of passing of property
It thus discards the test of passing of property and adopts the test of delivery as a direct result of such sale for the purpose of consumption in that State 
Where more than one State is involved any State claiming to tax the sale by reason of something anterior to the passing of property would not be able to claim that the sale took place there unless it was also the State of delivery because the sale is complete only on the passing Of property and till the sale is complete liability to tax does not arise
Once the sale is complete the delivery State gets the right to tax the sale by the fiction introduced
Now the Explanation must be  interpreted according to its own tenor and it is meant to explain el
1a of the Article and not vice versa
It is an error to explain the Explanation with the aid of the Article because this reverses their roles
The Explanation discards the test of passing of property and adopts the test of delivery as a direct result of the sale for purposes of consumption
This delivery may be in the State where the passing of property also took place but then there is no difficulty
The sale is then entirely within the State
The sale is outside 917 the State only when the passing of property takes place in the State but that is not the State where the goods have been actually delivered as a direct result of the sale for purposes of consumption in that State
The Constitution has thus for certain cases shifted and confined the situs of the taxable event to the State of the delivery of goods but it must be remembered that this deliverymay precede as well as follow the passing of property
It is therefore plain that no single element of the contract of sale is by itself a decisive factor in determining which State is to tax the sale where there are more States than one involved except the test of actual delivery of the goods in a State as a direct result of the sale for purposes of consumption in that State and it is that State and that State only which has the right to tax the sale and none other
The Explanation is not applicable unless there are more States than one involved
It is only a key to find out which of the States is competent to tax and which are not and is by no means a definition of an outside sale 
It is an Explanation which determines which State out of those connected with the transaction of sale can tax it
The interpretation which we have placed upon the first sub clause of article 2861 is substantially the same as was placed in the earlier rulings of this Court
In The State of Bombay and another vs The United Motors India Ltd and others 1 it was pointed out that the Explanation formulated an easily applicable test to find out an outside sale  and this it was said was done  by defining an inside sale 
It was observed further  Are the goods actually delivered in the taxing State as a direct result of a sale or purchase for the purpose of consumption therein  Then such sale or purchase shall be deemed to have taken place in that State and outside all other States 
Certain reasons were given why this test was adopted and it is these reasons and their effect on the second clause which led to a re examination of the subclause in The Bengal Immunity Company Limited vs 1  117 918 The State of Bihar and others 1
The majority in that case touched upon the various grounds which were advanced before this Court but declined to express any final opinion upon the matter 
The case went on to decide that the bans imposed by the two clauses of article 286 were independent and needed to be separately enforced
But on the meaning of the Explanation no different view was expressed
Again in M8
Ramnarain Sons Ltd vs Asst
Commissioner of Sales Tax and others2 it was observed as follows So far as article 2861a is concerned the Explanation determines by the legal fiction created therein the situs of the sale in the case of transactions coming within that category and when a transaction is thus determined to be inside a particular State it necessarily becomes a transaction outside all other States
The only relevant enquiry for the purposes of article 2861a therefore is whether a transaction is outside the State and once it is determined by the application of the Explanation that it is outside the State it follows as a matter of course that the State with reference to which the transaction can thus be predicated to be outside it can never tax the transaction Italics supplied
Now in so far as this case is concerned the words the Explanation determines by the legal fiction created therein the situs of the sale in the case of transactions coming within that category  in the extract last quoted become important
The first question to consider is whether these cases can be governed by the Explanation at all
The learned Attorney General contends that the power to tax these transactions can only be found if the sales were Explanation sales  in the sense that the goods were delivered as a direct result of the sale for consumption in West Bengal
In our opinion the explanation can apply only if more than one State is involved in the same transaction
When there is no other State in which the goods can be said to be delivered for consumption apart from the State where the property in the goods passed the Explanation is not needed as a key
The 1 2  492 919 power to tax in those circumstances which is exercisable by virtue of transfer of title to the property can only be taken away if there be some other State in  which the goods as a direct result of the sale were delivered for consumption
But if there is no such other State the question does not arise
In the present cases there is no such rival State
Where the purchaser buys goods in West Bengal for his own consumption the test of an inside sale  is satisfied when the property in the goods passes in the same State and all the elements of the contract of sale also take place inside it
Where the property in the goods passes to a buyer who is also the ultimate consumer the terms of the Explanation are themselves satisfied
To exclude thus the powers of taxation of the State of West Bengal the appellant Companies must be able to point out some other State where the goods can be said to have been delivered as a direct result of the sale for the purpose of consumption in that other State
Unless they can do so and they have not so done before us they cannot invoke the Explanation and the cases to borrow the language of the last quotation cannot be said to be within that category 
In our opinion the learned Advocate General of West Bengal was right in his argument which was accepted by the High Court that the ban contained in article 2861a and the Explanation does not apply
The appellant Companies next rely upon article 286 1b which provides that  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 in the course of the  export of goods out of the territory of India 
The contention is that the sales in question must be regarded as having taken place in circumstances which exempt sales under the sub clause
This the appellant Companies argue from the following facts that aviation spirit is delivered outside the customs barrier that aviation spirit is taken out of the territories of India and that the sales occasion this 920 export
They rely upon the definition of export  in other Acts to show that the word means no more than taking out of the country 
This clause of the Article has been construed on previous occasions by this Court and what is meant by the expression  in the course of  has been well
established
Indeed in State of Mysore vs Mysore Spinning and Manufacturing Co Ltd 1 this Court observed that the point could no longer be said to be at large
Fortunately there is less disagreement on this point than on the interpretation of the Explanation and it is sufficient to refer to the leading decisions of this Court
The earliest case on the subject is State of Travancore Cochin and others vs The Bombay Co Ltd 2 where four possible meanings of the expression  in the course of  were considered
It is not necessary to refer to all of them here and it is sufficient to point out that of the view that the clause is not restricted to the point of time at which goods are exported from India and that the series of transactions which necesssarily precede export of goods also come within the purview of the clause it was said that it was too wide
It was observed by this Court that A sale by export thus involves a series of integrated activities commencing from the agreement of sale with a foreign buyer and ending with the delivery of the goods to a common carrier for transport out of the country by land or sea
Such a sale cannot be dissociated from the export without which  it cannot be effectuated and the sale and resultant export form parts of a single transaction
Of these two integrated activities which together constitute an export sale whichever first occurs can well be regarded as taking place in the course of the other
 The meaning of these observations was further explained in State of Travancore Cochin and others vs Shanmugha Vilas Cashew Nut Factory and Others 3
It was observed p 62 that the words export out of  in this context did not refer to the article or commodity exported and that the reference to the 1 AIR 1958 section C 1002
2  3  921 goods  and to the territory of India  made it clear that the words  export out of  meant the exportation out of the country
It was then added that The word course  etymologically denotes movement from one point to another and the expression in the course of  not only implies a period of time during which the movement is in progress but postulates also a connected relation
 This inter connection of the sale sought to be taxed with the course of export was emphasised again in clear terms thus   The phrase integrated activities  was used in the previous decision to denote that such sale  ie a sale which occasions the export I cannot be dissociated from the export without which it cannot be effectuated and the sale and the resultant export form parts of a single transaction 
It is in that sense that the two activities the sale and export were said to be integrated
A purchase for the purpose of export like production or manufacture for export is only an act preparatory to export and cannot in our opinion be regarded as an act done I in the course of the export of the goods out of the territory of India  any more than the other two activities can be so regarded
 From the views here expressed it follows that every sale or purchase preceding the export is not necessarily to be regarded as within the course of export
It must be inextricably bound up with the export and a sale or purchase unconnected with the ultimate export as an integral part thereof is not within the exemption
It may thus be taken as settled that sales or purchases for the purpose of export are not protected unless the sales or purchases themselves occasion the export and are an integral part of it
The views expressed in these two cases were accepted and applied in State of Madras vs Gurviah Naidu and Co Ltd 1 Kailash Nath vs State of UP 2 State of Mysore vs Mysore Spinning and Manufacturing Co Ltd 3 and Gordhandas Lalji vs B Banerjee 1 AIR 1956 SC 158
2 AIR 1057 SC 790
3 AIR 1958 SC 1002
922 and others 1
These cases do not advance the matter further and it is therefore not necessary to refer to them in detail
In the earlier cases it was not necessary to explain the meaning of the word export  because there was always a foreign buyer to whom the goods were ultimately sent
In none of the cases the facts found here were present
Here the buyer does not export the goods to a foreign country but purchases them for his own use on the journey of the aircraft to foreign countries
This difference is vital and makes the position of the appellant Companies if anything weaker
It is for this reason that the appellant Companies depend on a wide meaning of the word export  which they illustrate from other Acts where the word is tantamount to taking out of the country 
We are of opinion that this meaning cannot be given to the word export  in the clause
The word export  may conceivably be used in more senses than one
In one sense export  may mean sending or taking out of the country but in another sense it may mean sending goods from one country to another
Often the latter involves a commercial transaction but not necessarily
The country to which the goods are thus sent is said to import them and the words export  and import  in this sense are complementary
An illustration will express this difference vividly
Goods cannot be said to be exported if they are ordered by the health authorities to be destroyed by dumping them in the sea and for that purpose are taken out of the territories of India and beyond the territorial waters and dumped in the open sea
Conversely goods put on board a steamer bound for a foreign country but jettisoned can still be said to have been exported  even though they do not reach their destination
In the one case there is no export and in the other there is though in either case the goods go to the bottom of the sea
The first would not be within the exemption even if a sale was involved while any sale in the course of the second taking out would be
In both the goods were taken out of the country
The difference lies in 1 AIR 1958 SC 1006
923 the fact that whereas the goods in the first example had no foreign destination the goods in the second example had
It means therefore that while all exports involve a taking out of the country all goods taken out of the country cannot be said to be exported
The test is that the goods must have a foreign destination where they can be said to be imported
It matters not that there is no valuable consideration from the receiver at the destination end
If the goods are ex
ported and there is sale or purchase in the course of that export and the sale or purchase occasions the export to a foreign destination the exemption is earn
Purchases made by philanthropists of goods in the course of export to foreign countries to alleviate distress there may still be exempted even though the sending of the goods was a not a commercial venture but a charitable one
The crucial fact is the sending of the goods to a foreign destination where they would be received as imports
The two notions of export and import thus go in pairs
Applying these several tests to the cases on hand it is quite plain that aviation spirit loaded on board an aircraft for consumption though taken out of the country is not exported since it has no destination where it can be said to be imported and so long as it does not satisfy this test it cannot be said that the sale was in the course of export
Further as has already been pointed out the sales can hardly be said to occasion  the export
The seller sells aviation spirit for the use of the aircraft and the sale is not integrally connected with the taking out of aviation spirit
The sale is not even for the purpose of export as explained above
It does not come within the course of export which requires an even deeper relation
The sales thus do not come within article 286 1b
These sales must therefore be treated as made within the State of West Bengal
The customs barrier is a barrier for customs purposes and duty drawback may be admissible if the goods once imported are taken out of the country
The customs duty drawbacks have nothing to do with the sale of aviation 924 spirit which takes place in West Bengal
The cus toms barrier does not set a terminal limit to the territory of West Bengal for sales tax purposes
The sale beyond the customs barrier is still a sale in fact in the State of West Bengal
Both the buyer and the seller are in that State
The goods are also there
All the elements of sale including delivery payment of price take place within the State
The sale is thus completely within the territory of the taxing State
No outside State is involved where the goods can be said to have been delivered for consumption as a direct result of the sale that takes place
Article 2861a and the Explanation are wholly inapplicable and the sale cannot even by a fiction be said to be outside the State of West Bengal
No doubt aviation spirit is taken out of the State and also the territory of India but it cannot be said to have been exported or delivered for consumption in some other State
The so called export is not occasioned by the sale and the sale on the authorities cited is not in the course of export  so as to attract article 2861b
The decision of the High Court was correct
The appeals fail and are dismissed with costs
One hearing fee
Appeal dismissed


Summary:
The appellant companies which were carrying on business in Calcutta in petroleum and petroleum products maintained supply depots at Dum Dum Airport from which motor spirit for B the purposes of aviation was sold and delivered to aircraft which either proceeded to foreign countries directly from that Airport or did so ultimately though landing en route at some place or places in the Indian territory
Dum Dum Airport was a customs aerodrome and all aircraft coming into it or leaving it had to comply with ordinary customs formalities
The sales tax authorities of West Bengal sought to levy tax on the sales of motor spirit as aforesaid under the provisions of the Bengal Motor Spirit Sales Taxation Act 1941 as amended
The appellant companies claimed that the sales were exempted from taxation under both the clauses a and b of article 286i of the Constitution of India on the grounds i that the sales in question had taken place outside the State of West Bengal as they did not come within the Explanation to article 2861a 2 that aviation spirit was delivered outside the customs barrier and therefore the sales were outside the State and 3 that the sales had taken place in the course of export as aviation spirit was taken out of the territory of India
Held i that by sale in article 286ia is meant a completed transaction by which property in the goods passes
Before property in the goods passes the contract of sale is only executory and the buyer has only a chose in action
The taxable event is not to be found at an earlier stage because the critical taxable event is the passing of property
The Explanation to cl
1 of article 286 was added to avoid among other things multiple taxation of the same transaction
It indicates the State where the tax can be levied and also the State where it cannot
It achieves it by excluding from consideration the place where the property in the goods passed according to the law relating to sale of goods
The non obstante clause establishes this
By the fiction created by the Explanation a sale is deemed to have taken place in the State where the goods are delivered as a direct result of the sale for purposes of consumption in that State
Where there are more States than one involved any State claiming to tax a sale by reason of something anterior to the passing of property would not be able to claim that the sale took place there unless it was also the State of delivery
The Explanation is meant to explain the Article and must be interpreted according to its tenor and the Explanation is not to be explained with the aid of the Article because that would reverse their roles
The Explanation is not applicable unless there are more States than one involved
The State of Bombay vs The United Motors India Ltd  State of Travancore Cochin vs Shanmugha Vilas Cashewnut Factory   Ramnayain Sons Ltd vs Asst
904 Commissioner of Sales Tax  and The Bengal Immunity Company Ltd vs The State of Bihar 1955 2 SCP 603 considered
2 that to exclude the power of taxation of the State of West Bengal under article 286ia read with the Explanation the appellant companies must be able to point out some other State where the goods could be said to have been delivered as a result of the sale for the purpose of consumption in that other State and that where as in the present case aviation spirit was delivered to the aircraft there was no such rival State and therefore the ban contained in article 286ia and the Explanation did not apply
3 that in the phrase  in the course of export out of the territory of India  in article 286ib the word  export  does not merely mean taking out of the country 
Export here means that the goods are being sent to a foreign destination at which the goods can be said to be imported
In the Article the notions of import and export go in pairs
State of Travancore Cockin vs The Bombay Co Ltd  and State of Travancore Cochin vs Shanmugha Vilas Cashew Nut Factory   relied on
4 that aviation spirit loaded on board the aircraft for consumption though taken out of the country was not exported since it had no destination where it could be said to be imported
The sales in question could not therefore be said to have occasioned the export nor were they in the course of export
Accordingly article 286ib was not applicable
5 that the sales must be treated as made within the State of West Bengal
The customs barrier did not set a terminal limit to the territory of West Bengal for the purposes of sales tax and the sales though beyond the customs barrier were still within the territory of the taxing State