JUDGMENT
Kanakaraj, J.
1. The petitioners are dealers and exporters of cycles. For the assessment year 1975-76 they reported a total and taxable turnover of Rs. 5,62,07,757.71 and Rs. 2,01,530 respectively. The petitioners claimed among other things deduction on a turnover of Rs. 1,44,78,969.76 as being sales in the course of exports. Out of this turnover claimed as sales in the course of the export, a turnover of Rs. 34,12,666.59 represented the purchase value of headless shrimps (crabs). The sale value of this item was excluded but the assessing authority proposed to tax the said purchase value under item 137 of the First Schedule to the Tamil Nadu General Sales Tax Act at 5 per cent. To a notice issued by the authority calling for objection if any, the assessee filed his objection on March 12, 1977. It is necessary and also interesting to note the objections petitioners. They were as follows :
“1. They object to the levy of 5 per cent on Rs. 34,12,666.59 contending that they represented export sales, i.e., sales having occassioned export.
2. The above turnover represents sale in the course of export as documents of title were transferred while the goods were on high seas that is to say after the goods crossed customs frontiers.
3. Rs. 4,94,086.40 represented the goods exported from the Port of Cochin over which Government of Tamil Nadu has no jurisdiction.
4. The observation that they were last purchasers in Tamil Nadu will not affect legal position.”
The assessing authority therefore, rightly held that he was only taxing the amount for which headless shrimps were bought. He also referred to the fact the petitioners had purchased the goods at Nagapattinam, within the State of Tamil Nadu. So far as the export from Cochin Port is concerned, in respect of one of the consignments the assessing authority again held that he was not taxing the sale, but he was only holding that the petitioners were the last purchasers in the State of Tamil Nadu.
2. Before the Appellate Assistant Commissioner the contentions of the petitioners were that they did not actually purchase the goods and export the same outside India. They had procured orders from Japan and one M/s. George Maijo of Cuddalore exported the goods and shipping documents were endorsed in favour of the petitioners after goods crossed the customs frontier. It was therefore contended that the real exporter was M/s. George Maijo and they alone were the last purchaser in the State of Tamil Nadu. It was also contended that M/s. George Maijo had suffered tax at the purchase point. An affidavit of the Manager of M/s. George Maijo was also filed in support of the contention. The stand of the Revenue was that during the year 1975-76 there were exports to Japan in pursuance of order secured by the petitioners. There was a separate agreement between M/s. George Maijo and the petitioners for the supply of frozen shrimps and such a contract was independent of the contract entered into by the petitioners with the foreign buyers. Therefore the petitioners had alone purchased the goods from M/s. George Maijo, and they were the last purchasers in Tamil Nadu. The petitioners alone were direct exporters to the foreign country in respect of the three shipments. The Appellate Assistant Commissioner came to the conclusion that, inasmuch as the documents proved beyond doubt that the exporters were the petitioners, they alone are the last purchasers of the frozen shrimps and prawns and rightly the purchase turnover of Rs. 34,12,666.59 was assessed at 5 per cent. The three shipments were no doubt made by M/s. George Maijo but on accounts of the petitioners. The invoices are drawn by the petitioners for all the three shipments. There was also no evidence to show that M/s. George Maijo had paid the tax on the identical goods exported.
3. On second appeal, the Tribunal examined tile document and came to the conclusion that the seller was only the petitioners and the purchaser was M/s. Mistubishi Corporation, Japan. The Tribunal, also held that the contract of the petitioners with M/s. George Maijo was an independent contract and not an integrated contract. Relying on Mod. Serajuddin v. State of Orissa and Murarilal Sarawagi V. State of Andhra Pradesh , the Tribunal held that the privity of contract was between the petitioners and the foreign firm. The exporter was only the petitioners and consequently they alone are the last purchasers in the State of Tamil Nadu. The Tribunal proceeded to say that the affidavit filed on behalf of M/s. George Maijo clearly indicated that the shipping documents were handed over after putting the goods on board. The affidavit did not state that the shipping documents were handed over after the ship crossed the customs frontier. There being no evidence available to show that the documents were handed over after the ship crossed the customs frontier, the Tribunal rejected the contention that the sale was in the course of export. The Tribunal also referred to the fact that the petitioners did not have a consistent case. They had included the turnover of Rs. 34,12,666.59 as representing the sale in the course of the export. But when the assessing authority found that the petitioners were the last purchasers in the State of Tamil Nadu and therefore liable to be taxed under item 137 of the First Schedule to the Tamil Nadu General Sales Tax Act, the petitioners found themselves in an inconvenient situation and came out with an explanation that M/s. George Maijo was the last purchaser. Having regard to all these unimpeachable circumstances the Tribunal upheld the levy and dismissed the appeal.
4. Before us, Mr. C. A. Sundaram, learned counsel for the petitioners, has presented the case in three parts : (1) M/s. George Maijo had suffered tax at purchase point and the copy of the assessment order made by the Deputy Commercial Tax Officer, Cuddalore, against George Maijo had been filed before the appellate authority. The argument is that there cannot be two last purchasers in respect of the same goods within the State of Tamil Nadu. (2) The transaction between M/s. George Maijo and the petitioners came to be completed only after the goods crossed the customs frontier and therefore exempt as a transaction taking place in the course of the export. (3) In any event the levy of tax in respect of the consignment shipped at Cochin to the tune of Rs. 4,94,086.40 cannot be sustained under the Tamil Nadu General Sales Tax Act.
5. Since there was a doubt as to the fact whether M/s. George Maijo and Company had suffered tax as the last purchasers, we called for the relevant records relating to M/s. George Maijo. Learned Additional Government Pleader has produced a letter from the Commercial Tax Officer. It is stated in the letter that for the year 1975-76 M/s. George Maijo was assessed on a total and taxable turnover of Rs. 4,73,64,802 and rupees nil respectively. The connected assessment file had been destroyed due to efflux of time. But the extract from the assessment register shows that for the year 1975-76 a fresh order was passed on May 30, 1991, after remand and the entire turnover of Rs. 4,73,64,802 was exempted and there was no taxable turnover. Consequently no tax was paid by M/s. George Maijo for the year 1975-76. The said letter and extracts will form part of the records. Consequently the main basis of the attack that the petitioners are not the last purchasers within the State of Tamil Nadu is now knocked out. Inasmuch as there is unimpeachable evidence to show that the petitioners are the only exporters, the conclusion is inevitable that they are the last purchasers in the State of Tamil Nadu subject, of course, to the third contention of the petitioners. In this connection we will refer to three shipments made during the year 1975-76. They are as follows :
“1. 1,070 cartons net weight 17,120 kgs. ex-Cochin Port, bill of lading dated March 6, 1976 shipment on March 4, 1976 by s.s. Rakko Maru.
2. 792 cartons ex-Madras Port shipping on March 7, 1976 by Vishva Amber, bill of lading on March 9, 1976.
3. 1,861 cartons ex-Madras Port on March 7, 1976 by s. s. Vishva Amber, bill of lading on March 8, 1976.”
The Tribunal examined certain pro forma invoices of M/s. George Maijo as well as the actual invoices of the petitioners and came to the conclusion that the petitioners were the sellers and M/s. Mistubishi Corporation, was the purchaser. There was a clear contract for the sale of goods between the petitioners and the foreign buyers and the contract of M/s. George Maijo with the petitioners was an independent contract and not an integrated contract. Therefore the first contention of the petitioners fails. So far as the second contention is concerned, there is absolutely no evidence to show that the documents were handed over after the ship crossed the customs frontier. It cannot therefore be said, that the transaction was in the course of the export. The Tribunal has also rightly relied upon the statement of Mr. Rajagopalan, Manager of M/s. George Maijo to the effect that the shipping documents were handed over immediately after loading the goods on board. The said manager does not say that documents were handed over after the ship crossed the customs frontier. The Tribunal also rightly relied on order of the court in T.C. No. 120 of 1972 [State of Tamil Nadu v. S. Mohammad Yousuff [1978] 42 STC 335 (Mad.)] to the following effect :
“On the basis of this decision it will follow that mere shipping of the goods, after the goods have gone through the customs barriers, will not constitute the goods having crossed the ‘customs frontiers’ because the ‘customs frontiers’ will take in the boundaries of the territory including the territorial waters also.”
The second contention also fails.
6. The third contention relating to the consignment of 1,070 cartons as per bill of lading dated March 6, 1976 and shipment made on March 4, 1976 by s. s. Nokko Maru requires serious consideration. Admittedly the shipment was made at the Cochin Port by M/s. George Maijo. The decision of the authorities that the petitioners are the last purchasers is based on the footing that they are the actual exporters and consequently they are the last purchaser in the State of Tamil Nadu. This conclusion can only apply to the two consignments which were shipping at Madras Port. This is because, if the goods are exported by the petitioners at Madras Port, necessarily the are the last purchasers in the State of Tamil Nadu. But if the goods are exported from Cochin Port, it cannot be deduced that the petitioners are the last purchasers in the State of Tamil Nadu. Some further evidence is necessary to show that the petitioners had purchased those goods of 1,070 cartons also in the State of Tamil Nadu. Such evidence is lacking in this case. Though the assessing authority had casually remarked that all the goods had been purchased at Nagapattinam in the State of Tamil Nadu, there was actually no evidence and this statement had been throughout disputed by the petitioners. We are therefore of the opinion that the basis on which the conclusion was arrived at, namely, that the petitioners are the actual exporters and therefore they should be deemed to be the last purchasers, cannot apply in respect of the goods shipped at Cochin Port. Learned Additional Government Pleader, however, sought to contend that, even if the goods had been shipped from Cochin, the fact remains that the petitioners being the exporters, should be deemed to be the last purchasers. But the question is whether they are the last purchasers in Tamil Nadu. There is absolutely no evidence on this aspect of the case. On the other hand, the invoice dated March 10, 1976 of the petitioners relating to the shipment of the consignment of 1,070 cartons shows that the goods were shipped on March 6, 1976 at Cochin. The case of the parties had always been that the goods were shipped by M/s. George Maijo and the shipping documents were sent to the petitioners. Therefore so far as this consignment is concerned, there is no evidence to show that the petitioners are the last purchasers in the State of Tamil Nadu. Consequently the value of the said consignment, namely, 1,070 cartons valued at Rs. 4,94,086.40 has to be deleted from the turnover relating to the last purchase of headless shrimps. The tax payable on the said amount of Rs. 4,94,086.40 at 5 per cent works out to Rs. 24,704. The petitioners will get a relief of this amount of Rs. 24,704 in this tax case.
7. The tax case is partly accepted and relief to the extent above indicated will be given. There will be no order as to costs.
8. Petition partly allowed.