Judgment :- The revenue has come up in this Revision Petition being aggrieved by the order passed by the Karnataka Appellate Tribunal in S.T.A. Nos.1706/2004 and S.T.A.No.39/2005 dt.29.3.2007 raising the following substantial questions of law: i) Whether the term and meaning extended territorial jurisdiction or territorial jurisdiction which is recognized by international law can be considered while interpreting the provisions of Sales Tax Act and if so to what extent? ii) Whether in view of the facts and circumstances of this case, the absence of importer is an essential meaning of the word `export`? iii) Whether M/s. Air India Limited is a `foreign company` or `domestic company`? iv) Whether in view of the facts and circumstances whether the Tribunal is right in allowing the appeal by holding that there is an export. 2. We have heard the learned counsel for the parties. 3. Before considering the arguments advanced by the learned appearing for both the parties, we feel it appropriate to narrate the background of this case: The assessee is a Public Limited company registered as a dealer under the provisions of the Karnataka Sales Tax Act.1957 and The Central Sales Tax Act. The assessee is engaged in the manufacture and sale of Indian made foreign liquor. For the assessment year 1999-2000 the assessee claimed a turnover of Rs.18,24,545/- and for the assessment year 2000-2001 the turnover of the assessee in respect of the sales made to Air India was Rs.22,78,993/-.According to the assessee, the sale of IMFL by it to Air India is in the course of export and out of territory of India and claimed that it is not liable to collect the central sales tax from Air India as the goods sold by it is for the purpose of exports. The revenue did not accept the arguments advanced by the asseesee. According to the revenue, the sale made by the Assesse to Air India as a inter-state sales and it attracts Central Sales Tax Act. Accordingly, the tax was levied. 4. Being aggrieved by the order passed by the Assessing Officer, the assessee filed an appeal before the first Appellate Authority – the Joint Commissioner of Commercial Taxes, Bangalore in No.CST:AP:47/02-03, which appeal came to be rejected on 18.7.2003. Accordingly, the tax was levied. 4. Being aggrieved by the order passed by the Assessing Officer, the assessee filed an appeal before the first Appellate Authority – the Joint Commissioner of Commercial Taxes, Bangalore in No.CST:AP:47/02-03, which appeal came to be rejected on 18.7.2003. Being aggrieved by the concurrent findings, the assessee filed a second appeal before the Karnataka Appellate Tribunal, Bangalore, which appeal came to be allowed holding that the sale made by the assessee to Air India is in the course of export. Accordingly, the Tribunal held that the assessee is not liable to pay the central sales tax on the turnover in respect of sale made to Air India. 5. Being aggrieved by the same, the present Revision Petition is filed by the revenue raising the substantial questions of law narrated above. 6. The main contention of the learned Government Advocate is that the transaction between the assessee and the Air India cannot be considered as a sale made by the assessee as an export sale. According to her, it is an inter-state sale. She further contends in order to claim benefit by the assessee contending that the sale made by it to the Air India is an export sale, the buyer shall be a foreign buyer or in the alternative even if the buyer were to be an Indian, the purpose for which the goods are purchased by him shall be for the purpose of export business. Since these two aspects are lacking, the Assessing officer as well as the Jt. Commissioner of Commercial Taxes, were justified in rejecting the claim of the assessee. She further contends that when Air India itself is not claiming the transaction as an export sale, the assessee being the seller of the goods cannot contend that the sale was in the course of export and such Sale cannot be treated as an export sale in order to claim exemption of Payment of central sale tax. Therefore, she requests to answer the substantial questions of law in favour of the revenue and against the assessee. She further contends that the Tribunal has committed a serious error in coming to the conclusion that the transaction between the assessee and the Air India is in the course of export governed by section 5(1) of the C.S.T.Act. 7. Therefore, she requests to answer the substantial questions of law in favour of the revenue and against the assessee. She further contends that the Tribunal has committed a serious error in coming to the conclusion that the transaction between the assessee and the Air India is in the course of export governed by section 5(1) of the C.S.T.Act. 7. According to the Government Advocate, the Tribunal has wrongly interpreted the provisions of section 5(1) of the CST Act. 8. Per contra, the learned counsel appearing for the assessee contends that the Tribunal was justified in granting an order in favour of the assessee. According to him, the Air India purchase the liquor from the assessee from Nanjangud and in terms of the contract the assessee is required to deliver the liquor crossing the customs frontiers in Bombay and when once the Air India take delivery of the goods sold by the assessee crossing the customs frontiers of India, such sale has to be treated as an export sale or in the course of export sale. Therefore, the Tribunal was justified in granting relief to the assessee. To support his claim, he has relied upon the Judgment of the Apex Court in the case of STATE OF TRAVANCORE-COCHIN & OTHERS VS. THE BOMBAY COMPANY LIMITED, ALLEPPEY & OTHERS reported in Vol III STC 434 and also the Judgment of the Madras High Court in M.R.K. ABDUL SALAM AND COMPANY Vs. THE GOVT. OF MADRAS reported in Vol. XIII STC 629 and also the Judgment of the Supreme Court in B.K.WADEYAR, SALES TAX OFFICER VS. M/S DAULATRAM RAMESHWARLAL AND OTHERS reported in AIR 61 SC 311. Relying upon these decisions, he contends that considering the nature of transaction between the assessee and Air Indian, even if Air India is not a foreign company, still the transactions are to be held as in the course of export business. Therefore, he requests the court to dismiss the petition. 9. Having heard the counsel for the parties, the facts in this case are not in dispute to the following extent: The assessee is engaged in the manufacture of Indian made foreign liquor situated at Nanjangud in the State of Karnataka. Air India is a company incorporated under the Companies Act, which is a public sector undertaking of the Union of India. Air India is a company incorporated under the Companies Act, which is a public sector undertaking of the Union of India. The assessee as well as the buyer are Indian Companies registered under the provisions of Companies Act. It is also not in dispute that in terms of the contract, the assessee has agreed to deliver the goods at Bombay crossing the customs frontiers of India. In other words, the Air India has to take delivery of the goods so purchased after crossing the customs limit in Bombay. The only dispute is whether the transaction between the assessee and Air India can be treated as an export business or sale in the course of export. 10. The Air India has not claimed that the purchase made by it from the assessee as an export sale. When the Air India has not contended that the purchase by it as not an export sale, we are of the opinion that in all fairness the assessee as a seller cannot contend the nature of transaction between it and the Air India as an export sale. If the purchase made by Air India has to be treated as export sale, it is for the Air India to contend that such transaction as an export sale. Admittedly, the Head Office of the Air India is situated within the territory of India. This fact is not in dispute. If it is to be treated as an export transaction, according to us, the buyer shall be a foreign origin. In this case, Air India cannot claim itself as a non-Indian Company. Now the only point raised by the assessee is since the goods are delivered to Air India crossing the customs frontiers of India as defined under section 2(ab) of the CST Act, such transaction has to be treated as a sale in the course of export. In order to appreciate this fact it is useful for us to narrate the definition of section 2 (ab) of the Central Sales Tax Act, which reads as hereunder: “2(ab) Crossing the customs frontiers of India means “crossing the limits of the area of a customs station in which imported goods or export goods are ordinarily kept before clearance by customs authorities”. 11. From this, it is clear that goods which are to be exported shall be kept crossing the limits of the area of a customs station. 11. From this, it is clear that goods which are to be exported shall be kept crossing the limits of the area of a customs station. But as said earlier, Air India is not contending that the sale as an export sale. When a buyer is not a foreign buyer, according to us the transaction between the assessee and the Air India cannot be treated as an export sale. Therefore, the only question is whether the transaction between Air India and the assessee has to be treated as a sale during the course of export. 12. In order to appreciate the arguments of the learned counsel for the assessee, we have to consider the Judgments relied upon by him in the STATE OF TRAVANCORECOCHIN & OTHERS VS. THE BOMBAY COMPANY LTD. 13. In order to appreciate the facts, it would be appropriate for us to consider Section 5 of the Central Sales Tax Act, 1956 which reads thus: “5. When is a sale or purchase of goods said to take place in the course of import or export- (1) A sale or purchase of goods shall be deemed to take place in the course of the export of the goods out of the territory of India only if the sale or purchase either occasions such export or is effected by a transfer of documents of title to the goods after the goods have crossed the customs frontiers of India. (2) A sale or purchase of goods shall be deemed to take place in the course of the import of the goods into the territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goods have crossed the customs frontiers of India. (3) Notwithstanding anything contained in sub-section (1), the last sale or purchase or any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of such export, if such last sale or purchase took place after and was for the purpose of complying with, the agreement or order for or in relation to such export. 14. This court had an occasion to examine what constitute an export sale in Coffee Board V/s. State of Karnataka (1990) 76 STC 337 (Kar.). 14. This court had an occasion to examine what constitute an export sale in Coffee Board V/s. State of Karnataka (1990) 76 STC 337 (Kar.). Wherein it is held that in order to constitute an export sale there must be an Indian Exporter and a foreign importer and the goods reach foreign destination. If the court has taken a view that in order to constitute an export sale, the seller shall be an Indian exporter and a buyer shall be a foreign importer. In the instant case, the assessee cannot claim itself as an Indian exporter and Air India cannot call it as a foreign importer. Therefore, the basic concept of export sale is not there in the present case. Now merely because the assessee has to deliver the goods crossing customs frontiers of India, can a transaction be held as sale during the course of export. According to us it attracts such a provision provided the first custom business is attracted to the transaction in question. When Air India cannot be considered as an import buyer and the importer cannot be called an exporter even if the goods are stated in terms of the agreement crossing the customs frontiers limit, we are of the opinion that the transactions will not attract as a sale during the course or custom. It is also not in dispute that Air India is purchasing liquor from the assessee not to export the same to any other company, but it is for the use of its customers wherein liquor would be offered to its passengers. The passengers may be of Indian origin or foreign passengers. Therefore, it is not for an export business of Air India and in the circumstances, we are of the opinion that the purchase made by Air India from the assessee cannot be treated as purchase of goods by Air India for customs. In the decision of Madras High Court in M.R.K. Abdul Salam & Co. v/s. The Government of Madras (STC (Vol.XIII 1962) 629) which reads as hereunder: “We have now to deal with the question whether the sales to Gordon Woodroffe and to Dharamsee Parpia are sales which are outside the Madras General Sales Tax Act by reason of Article 286 of the Constitution. v/s. The Government of Madras (STC (Vol.XIII 1962) 629) which reads as hereunder: “We have now to deal with the question whether the sales to Gordon Woodroffe and to Dharamsee Parpia are sales which are outside the Madras General Sales Tax Act by reason of Article 286 of the Constitution. The Constitution prohibits a State from imposing a tax on the sale or purchase of goods where such sale or purchase takes place in the course of the import of the goods into or export of the goods out of the territory of India. A sale by a dealer in the State of a foreign buyer outside the India territory is a sale which occasions an export and may be called a direct export sale. No State law can impose a tax on such export sales. A sale in the course of export is something different from a direct export sale as such a sale need not be to a foreign buyer but can be made by a dealer in the State so as to pass the property in the goods sold after exportation.” 15. The learned counsel relying upon the last sentence of the said paragraph contends that even if the sale is not to a foreign buyer but can be made by a dealer in the State during the course of export. But according to us, this judgment has no application to the facts of the case since Air India has not purchased liquor from the assessee for the purpose of custom. Accordingly, we are of the opinion that the said judgment will not help the assessee in any manner. 16. In the case of State of Travancore-Cochin V/s. Bombay Co. Ltd., the Supreme Court while considering the definition of sale in the course of export sales of commodities to a foreign buyer, but in the instant case, the buyer is not a foreign buyer as stated earlier. Therefore, the said judgment has no application to the facts of this case. 17. Lastly, we have to consider the judgment relied upon by the learned counsel for the assessee of the Apex Court in G.K. Vodeyar’s case. In the said case, order is for the sale under FOB contracts and their Lordships had an occasion to consider when actually the ownership to the goods would be passed on to the buyer. 17. Lastly, we have to consider the judgment relied upon by the learned counsel for the assessee of the Apex Court in G.K. Vodeyar’s case. In the said case, order is for the sale under FOB contracts and their Lordships had an occasion to consider when actually the ownership to the goods would be passed on to the buyer. Therefore, all the facts of this case have no application to the judgments cited above. 18. Considering the background of this case that the Air India is an Indian company and is not engaged in exchange of export business as the Air India has not purchased liquor from the assessee for exporting to the foreign country, we are of the opinion that the question of law framed in this revision petition are to be answered in favour of the revenue and against the assessee. We are also of the opinion that the tribunal without considering the nature of transaction between the assessee and Air India has wrongly come to the conclusion that the transaction between Air India and the Assessee falls in the course of export business. Therefore, we have to set aside the order passed by the tribunal by answering all the questions of law in favour of the revenue and against the assessee. 19. In the result, the revision petition is allowed.