JUDGMENT
Balasubrahmanyan, J.
1. This is a sales tax appeal under the Tamil Nadu General Sales Tax Act, 1959. The assessee in this case is M.M.T.C. (the Minerals and Metals Trading Corporation of India Ltd.). Its dealings in the year 1968-69 revealed a turnover in tin plates and steel plates imported from Japan. They are declared goods subject to single point sales tax at the point of first sales in this State.
2. The Board of Revenue, Madras, passed an order of suo motu revision against the M.M.T.C. By that order, they restored an assessment made by the assessing authority on the M.M.T.C. of a turnover amount in all to Rs. 26,59,787. The Board held that the said turnover represented sales of declared goods by the M.M.T.C. which were first sales in the State and assessable to sales tax as such. This determination is questioned by the M.M.T.C. before us.
3. The Board’s order contains an account of the relevant facts bearing on their determination. They may be briefly restated. Steel plates and tin plates are required as raw material in the manufacture of certain goods such as metal boxes and the like. Quality tin plates and steel plates for this purpose could be had in Japan. Indian manufacturers like the Metal Box Company of India accordingly approached a concerned Governmental agency called the Directorate of Technical Development in this regard. There was yen credit at the disposal of the country. The Directorate allocated allotment of the yen credit to the Metal Box Company and some other manufacturers in need of imports of Japanese tine plates and steel pates. Under advice to the Directorate, who allocated the yen credit, the Metal Box Company and other allottees approached the M.M.T.C. to arrange for the import of the raw material from Japan. Thee allottees gave to the M.M.T.C. their specifications, the quantity required, delivery schedule and other details. The M.M.T.C. then placed firm orders to the Japanese manufacturer of tin and steel plates to effect the supplies to meet the respective requirements of each of the allottees. The M.M.T.C.’s orders to the Japanese firm contained separate annexures showing the names of the allottees, their specifications of goods, quantities required, and also the distinguishing marks to be used in the shipments. The terms and conditions of the orders placed by the M.M.T.C. with the Japanese firm were accepted and confirmed by the allottees. The Japanese firm thereafter shipped the goods for delivery at Madras Port. The shipping documents were made out in the name of the M.M.T.C. as consignee. On payment of the entire value of the goods by the respective allottees, the M.M.T.C. effected delivery to them. This was done in two different ways. In some cases the M.M.T.C. advised their clearing agents to deliver the consignments to the allottees ex wharf at the madras Port. In some other cases, the M.M.T.C. transferred the shipping documents in favour of the allottees even before the vessel berthed at the harbour, in which event, as endorsees of the bills of lading, the allottees made their own arrangements to take delivery of the cargo.
4. On these facts the Board spelt out two distinct transactions in these goods. According to the Board, there was first a sale by the Japanese firm to the M.M.T.C., followed by a sale, or sales, by the M.M.T.C. of the same goods to the allottees. According to the Board, the latter transactions between the M.M.T.C. and the allottees took place after the goods arrived at the Madras Port, and hence they must be treated as first sales in the State by the M.M.T.C. to the allottees. The Board rejected the contention that the transactions, viewed as a whole, must be treated as sales in the course of import.
5. We think that the Board’s reasoning is a fault. The Board’s decision comes to this : that the M.M.T.C. imported the goods as their own goods and resold them locally to the allottees. The question is : do the facts on record bear this out ? We think not. There is nothing in the record to show that the import orders with the Japanese firm were placed by the M.M.T.C. on their own account. On the contrary, the materials show that the actual importers were only the allottees. They held the quota licences. Yen credit had been allocated only to them. The goods were imported according to their specifications and according to their requirements. Consignments were marked to each one of them distinctly and separately under separate shipping documents. The M.M.T.C. might have placed the orders with the Japanese firm. The bills of lading might have been made out in the name of the M.M.T.C. as the consignee. But these aspects of the transactions are yet consistent with the position that the allottees alone were the real importers, and the M.M.T.C. only played the part, may be a considerable part, of an agent for import. The imports were but a single transaction. Only the Board, from their peculiar focus, saw them double.
6. Even on the Board’s assumption that the M.M.T.C. were the importer of the goods from Japan, there is no basis for the further assumption that the M.M.T.C. had effected sales of those goods to the allottees after the goods arrived in this country. The law of sales tax does not, and cannot, treat as a sale what the general law governing sale of goods does not regard as a sale. Under the general law, a transaction is a sale only if there is, at the back of it, either an express or implied contract of sale. If no contract of sale exists, there is no sale either, even though the transaction might involve, or result in, a transfer of goods from one person to another and a passing of the general proper in those goods from the one to the other. In this case, the M.M.T.C. never were, and they never could claim to be, the owners of the gods. Even treating the M.M.T.C. somehow as the owners of the goods, at least at the moment the goods touched port at Madras and even assuming that the M.M.T.C. as owners transferred the ownerships in the goods to the allottees, the question whether they can be treated as sales by the M.M.T.C. to the allottees. This question, as we earlier indicated, could only be answered in the affirmative if the facts on record show that as between themselves, the M.M.T.C. and the allottees had entered into contracts of sale in respect of these goods, and in pursuance of such contracts of sale, the M.M.T.C. had effected delivery of the goods to the allottees. But that really was not the case. We have searched the record in vain to find the slightest evidence, or even indication, of any contracts of sale between the M.M.T.C. and the allottees. We must, therefore, reject the Board’s finding to that effect as a mere figment of the imagination. It is necessary to emphasis that the Board’s order fails even at the very first stage of the inquiry. The materials before the Board do not make out any sales at all by the M.M.T.C. to the allottees. We accordingly feel it would be a waste of time to proceed to examine whether they are first sales in this State.
7. Equally superfluous is the search for statutory exemptions as if some kind of exemption or other would be the only means of the M.M.T.C. obtaining immunity from taxation of the disputed turnover of Rs. 26,59,787. For instance one of the contentions seriously urged before for the M.M.T.C. related to a part of the disputed turnover, i.e., Rs. 18,20,444. The contention was that in respect of this turnover the transactions must be held to be transactions in the course of import, since the M.M.T.C. had effected delivery of shipments to the concerned allottees by transfer of the shipping documents even while the vessel carrying he goods was at sea, anchored off the coast of Madras. The Board dismissed this contention on the ground that the M.M.T.C. did not produce evidence to show that at the time when they endorsed the bills of lading in favour of the allottees, the distance between the Indian Coast-line and the place where the ship had come to anchor was more than 12 nautical mils. The Board’s view accordingly was that there was nothing to show that the transfer of shipping documents had been effected by the M.M.T.C. before the goods had crossed the customs frontiers of India.
8. Mr. Srinivasan for the M.M.T.C. pointed out that the transfer of documents of title had been admittedly effected before the cargo had crossed the customs station in Madras Port. The learned counsel said that this fact was enough to qualify the transaction as a sale in the course of import within the meaning of section 5 of the Central Sales Tax Act, 1956, read with the amended provisions of section 2(ab) of that Act. We must reject these submissions. The reason is that the amended section 2(ab) brought about a distinct change in the law. It introduced, for the first time, a practical test about customs frontiers, which was easy to prove by the sales tax assessees and others. Nothing like the test laid down by this provision existed in the statute book at the material time when the transactions in this case had occurred. Mr. Srinivasan suggested that this provision, although newly enacted, must be applied even to prior transactions. According to him, the provision was merely clarificatory, in nature, of the pre-existing law. We do not agree. We hold that section 2(ab) breaks new ground, and there is nothing to show that it was retrospective in operation. We accordingly reject all the contentions based on this provision. This, however, does not affect our determination that the Board misdirected themselves in holding that the M.M.T.C. had effected sales to the allottees of declared goods imported into India from Japan.
9. A few reported cases were cited in argument. We think we need notice only one of them, and even that only because it might help to further clarify the position in the present case. The decision is that of the Supreme Court in Murarilal Sarawagi v. State of A.P. . This case was cited by the learned Government pleader apparently for the reason that there also the M.M.T.C. happened to figure in the transactions in question. The case had to do with the export of manganese abroad. The assessee who figured in that case was a dealer in manganese in Andhra Pradesh. The export, however, was effected through the M.M.T.C. The question was whether the assessee could be said to be “the last purchaser” in the State. From the Facts on record, the Supreme Court were in a position to hold that there was a sale by the assessee of the mineral to the M.M.T.C., who in turn, exported the commodity to the foreign purchaser. In this view the court treated the M.M.T.C. as the last purchaser in the State, holding that the assessee before them was not the last purchaser.
10. The learned Government Pleader suggested before us, in argument, that even as the M.M.T.C. figured as the last purchaser in the State of the Manganese exported abroad, they figure in the present case as the first seller in the State of the imported steel plates and tins plates after their arrival in this country. We must reject this contention on the grounds we have earlier stated. We do not see any analogy whatever, even an inverse analogy, between the two cases. In the Supreme Court case, the M.M.T.C. were found to be the purchaser of the goods which thereafter, on their own account, they proceeded to export. In the present case the facts do not show that the M.M.T.C. imported the goods from Japan on their own account. Much less is their evidence of a sale, or resale, by the M.M.T.C. of these goods, after import, to the allottees. The Board’s finding to the contrary is therefore, insupportable both on facts and on principle.
11. We accordingly allow this appeal and set aside the Board’s order. The M.M.T.C. will have their costs from the State. Counsel’s fee Rs. 250.