Murugan and Co., Tuticorin, by partner Sudalaimuthu Pillai vs State of Madras

Satyanarayana Rao, J.—The relevant assessment year in this case is 1949-50, and the turnover in dispute is Rs. 1,95,212-3-2 relating to export of onions before 26th January 1951.

Here also the assessment was justified under the explanation 2 to Section 2 (h) introduced by the Amending Act of 1947. The learned counsel, while adopting the arguments, which were addressed by the petitioner''s advocate, in -- Louis Dreyfus and Co. Ltd., Madras Vs. State of Madras, in which we have just now delivered judg ment, raised an additional point, that the tax in question was really an export duty in Entry 44 of List No. 1 of the Government of India Act of 1935, i.e., customs, including export duties, and therefore the levy was not justified. As regards the other arguments, the decision, just pronounced in -- Louis Dreyfus and Co. Ltd., Madras Vs. State of Madras, governs this case also.

The additional argument does not require serious consideration. The sales-tax is a tax on transactions of sale. It is in no sense a tax on goods exported outside a territory. The sphere of the two taxes are entirely different, and it is impossible to consider the sales tax in substance or in effect as a tax on goods by reason of the taxable event of export. There is no justification, therefore, for holding that tax is really a tax in the nature of an export duty, which is within the purview of Entry 44 of List I of VIIth schedule of the Government of India Act of 1935.

We therefore reject the argument and dis miss the petition with costs Rs. 250.