B. K. WADEYAR versus M/S. DAULATRAM RAMESHWARLAL

B. K. WADEYAR versus M/S. DAULATRAM RAMESHWARLAL

In the absence of a special agreement, property in goods sold under FOB contracts passes on shipment. Therefore, such sales are exempt under Article 286(1)(b) as they occur in the course of export. The term 'a person' in s.10(b) of the Bombay Sales Tax Act should be interpreted as 'a registered dealer'; thus, purchase tax is payable where goods are not dispatched to a registered dealer outside Bombay within the prescribed period.

Parties
Appellant: B. K. Wadeyar; Respondent: M/s. Daulatram Rameshwarlal
Jurisdiction
India
Judgment Date
27 September 1960
Procedural Posture
Civil Appeal / Supreme Court Judgment on Appeals From the Bombay High Court
Outcome
Appeals dismissed with costs.
Legal Topics
Sales Tax, Export Under FOB Contracts, Purchase Tax, Interpretation of Tax Statutes
Tax Law Commercial Law Constitutional Law Sales Tax Export Under FOB Contracts Purchase Tax Interpretation of Tax Statutes

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Parties

B. K. Wadeyar

Appellant

M/s. Daulatram Rameshwarlal

Respondent

Procedural Posture

Civil Appeal / Supreme Court Judgment on Appeals From the Bombay High Court

Legal Issues

  1. 1 Whether sales under FOB (Free on Board) contracts are exempt from sales tax under Article 286(1)(b) of the Constitution
  2. 2 When does property in exported goods under FOB contracts pass to the buyer
  3. 3 Whether 'a person' in s.10(b) of the Bombay Sales Tax Act includes only registered dealers for purposes of purchase tax

Ratio Decidendi

In the absence of a special agreement, property in goods sold under FOB contracts passes on shipment. Therefore, such sales are exempt under Article 286(1)(b) as they occur in the course of export. The term 'a person' in s.10(b) of the Bombay Sales Tax Act should be interpreted as 'a registered dealer'; thus, purchase tax is payable where goods are not dispatched to a registered dealer outside Bombay within the prescribed period.

Court Disposition

Appeals dismissed with costs.

Orders

  • Sales of cotton and castor oil under FOB contracts exempted from sales tax under Article 286(1)(b) of the Constitution.
  • Assessment to purchase tax under s.10(b) of the Bombay Sales Tax Act upheld against the sellers.