STERLING FOODS, A PARTNERSHIP FIRM REPRESENTED BY ITS PARTNER SHRI RAMESH DALPATRAMversusTHE STATE OF KARNATAKA & ANR.

                                         •                                               A

      ~        STERLING FOODS, A PARTNERSHIP FIRM REPRESENTED
      '
                   BY ITS PARTNER SHRI RAMESH DALPATRAM
                                      v.
                       1HE STATE OF KARNATAKA & ANR.
                                                                                         B
                                             JULY 21, 1986

      t          [P.N. BHAGWATI, C.J., V. KHALID AND G.L. OZA JJ.]
  ._..._             Sales tax-Exigibility to tax-Whether shrimps, prawns and lob-
...            sters subjected to processing like cutting of heads and tails, peeling,   c
               deveining, cleaning and freezing cease to he the same commodity and
               becomes a different commodity for the purpose of the section 5(3) of
               Central Sales Tax Act, 1956 and therefore exigible to Purchase tax
               under section 5(3)(b) read with entry 13a of Third Schedule to the
      )r
               Karnataka Sales Tax Act, 1957 as amended.
                                                                                         D
                      The appellants are a partnership firm car,rying on business as
                dealers in shrimps, prawns and lobsters and other sea food products.
                They are registered as a dealer both under the Karnataka Sales Tax
                Act, 1957 and the Central Sales Tax Act, 1956. The appellants in the
                course of their business purchase shrimps, prawns and lobsters locally
                for the purpose of complying with orders for export and they cut the - E
                heads and tails of the shrimps prawns and lobsters purchased by them,
                peel, devein and clean them and after freezing and packing them in
                cartons, they export them to foreign buyers outside India under prior
                contracts of sale. The appellants tiled their statement of monthly turn-
                over for the month of April 1982 before the Assistant Commissioner of
      ~                                                                                  F
                Commercial Taxes, Mangalore and claimed total exemption from tax in
                respect of the purchase turn-over of shirmps, prawns and lobsters un-
                der the Karnataka Sales Tax Act, 1957. The Assistant Commissioner of
               .£ommercial Taxes rejected the said claim by his two assessment orders
                and issued two notices of demand for Rs.52,610.71 and Rs.44,237.88
                respectively against the appellants. The appellants, thereupon, filed a  G
                writ petition in the High Court of Karnataka challenging all the said
                orders and notices of demand and sou~ht appropriate direction, order
                or writ restraining the respondents from Imposing or collecting pur-
                chase-tax on purchase torn-over of shrimps, prawns and lobsters under
                the Karnataka Sales Tax Act, 1957. The writ petition was dismissed by



•J
      .,
           \
                the High Court, but having regard to the importance of the question
                                                  167
                                                                                         H
     368                    SUPREME COURT REPORTS             [1986] 3 S.C.R.
                                                 •
A    involved a certificate under Article l 33 of the Constitution was granted
     by the High Court.

           Allowing the appeal, the Court

B          HELD: 1.1. In order to attract the applicability of sub-section
     (3) of section 5 of the Central Sales Tax Act, 1956, it is necessary that
    the goods which are purchased by an assessee for the purpose of com-
    plying with the agreement or order for or in relation to export, must be
    the same goods which are exported out of the territory of India. The
    words "those goods" in sub-section (3) are clearly referable to "any
    goods" mentioned in the preceding part of the sub-section and, there-
c   fore, the goods purchased by the assessee and the goods exported by
    him must be the same. If by reason of any processing to which the goods
    may be subjected after purchase, they change their identity so that
    commercially they can no longer be regarded as the original goods, but
    instead become a new and different kind of goods and then they are
D   exported, the purchases of original goods made by the assessee cannot
    be said to be purchases in the course of export.

           1.2 The test which has to be applied for the purpose of determin-
    ing whether a commodity subjected to processing retains its original
    character and identity is as to whether the processed commodity is
E   regarded in the trade by those who deal in it as distinct in identity from
    the original commodity or it is regarded, commercially and in the trade,
    the same as the original commodity. It is not every processing that
    brings about change in the character and identity of a commodity. The
    nature and extent of processing may vary from one case to anot.her and
    indeed there may be several stages of processing and perhaps different
F   kinds of processing at each stage. With each process suffered. the origi-
    nal commodity experiences change. But it is only when the change or a
    series of changes take the commodity to the point where commercially it
    can no longer be regarded as the original commodity but instead is
    recognised as a new and distinct commodity that it can be said that a
    new commodity, distinct from the original, has come into being.
G
           Sales Tax Board v. PIO Food Packers (1980) 3SCR 1271 applied.

          1.3 The shrimps, prawns and lobsters purchased by tlw arpol-
    lants did not lose their original character and identity when the~· were
    subjected to processing for the purpose of export. So far as commercial
H   parlance or popular usage is concerned, they remained the same goods.
''


                         STERLING FOODS v. STATE OF KARN ATAKA                 369
                                                                                       A
         The dealer and the consumer regarded both as shrimps, prawns and
         lobsters. The only difference is that processed shrimps, prawns and
         lobsters are ready for the table while raw shrimps, prawns and lobsters
         are not but still both are in commercial parlance, shrimps, prawns and
         lobsters. The fact that they undergo a certain degree of processing or        B
         frozen for the purpose of preservation and ·transfer to other places
         including far otT countries in the world makes no difference in character
         or identity as the original shrimps, prawns and lobsters. Hence, the
     t   purchases of raw shrimps, prawns and lobsters by the appellants must be
         held to be purchases in the course of export and hence exempt from liabi-
·.~.


-
         lity to tax under the Karnataka Sales Tax Act, 1957 as amended. [377A-Bl
                                                                                       c
              East Taxes Motor Freight Lines v. Frozen Food Express (100)
         L.Ed. 917 quoted with approval.

                1.4 Entry 13a of the Third Schedule to the Karnataka Act also
          makes it clear that even processed or frozen shrimps, prawns and lob-        D
          sters are known commercially and in the trade as shrimps, prawns and
          lobsters. When the State Legislature excluded processed or frozen
          shrimps, prawns and lobsters from the ambit and coverage of Entry
          13a, its object obviously was that the last purchases of processed or
          frozen shrimps, prawns and lobsters in the State should not be exigible
          to State Sales Tax under Entry l3a. The State Legislature was not at all     E
          concerned with the question as to whether processed or frozen shrimps,
          prawns and lobsters are commercially the same commodity as raw
          shrimps, prawns and lobsters or are a different commodity. Merely
          because the State Legislature made a distinction between the two for the
          purpose of determining exigibility to State Sales Tax, it cannot be said
          that in commercial parlance or according to popular sense, processed         F
          or frozen shrimps, prawns and lobsters are recognised as different
         ,commodity distinct from raw shrimps, prawns and lobsters. Further
     +    the question whether raw shrimps, prawns and lobsters after suffering
         processing retain their original character or identity or become a new
         commodity has to be determined not on the basis of a distinction made
         by the State Legislature for the purpo"se of exigibility to State Sales Tax   G
         because even where the commodity is the same in the eyes of the persons
         dealing in it the State Legislature may make a classification for de-
         termining liability to sales tax.

               CIVIL APPELLATE JURISDICTION: Civil Appeal No. 220
          (NT) of 1986                                                                 H
    370                    SUPREME COURT REPORTS              11986] 3 S.C.R.
A
        From the Judgment and Order dated 20th November, 1985 of the
    Kamataka High Court in Writ Petition No. 27805 of 1982.

        C.K. Viswanath Iyer, K.M.K. Nair and S.T. Desai for the
    Appellants
B       B.R.L. Iyengar, M. Veerappa for the Respoondents.

          The Judgment of the Court was delivered by

           BHAGWATI, C.J. The short question that arises for determina-


                                                                                       -
    tion in this appeal by· certificate is whether shrimps, prawns and lobsters
    subjected to processing like rutting of heads and tails, peeling. deveining,
c   cleaning and freezing cease to be the same commodity and become a
    different commodity for the purpose of the Central Sales Tax Act,
    1956. Can they still go under the description of shrimps, prawns and
    lobsters or in other words, when we use the words 'shrimps, prawns
    and lobsters' do they mean only raw shrimps, prawns and lobsters as
D   caught from the sea or do they also include processed and frozen
    shrimps, prawns and lobsters. This question which falls for determina-
    tion in the present appeal arising out of the following facts.

          The appellants are a partnership firm carrying on business as
    dealers in shrimps, prawns and lobsters and other sea food products.
E   The appellants are registered as a dealer both under the Kamataka
    Sales Tax Act, 1957 and the Central Sales Tax Act, 1956. The appel-
    lants in the course of their business purchase shrimps, prawns and




F
    lobsters locally for the purpose of complying with orders for export
    and they cut the heads and tails of the shrimps, prawns and lobsters
    purchased by them, peel, devein and clean them and after freezing and
    packing them. in cartons, they export them to foreign buyers outside
                                                                                   )   --
    India under prior contracts of sale. The appellants filed their statement
    of monthly tum-over for the month of April 1982 before the Assistant
    Commissioner of Commercial Taxes, Mangalore and in this statement
                                                                                   +
    of monthly tum-over, they claimed total exemption from tax in respect
    of the purchase turn-over of shrimps, prawns and lobsters on the
G   ground that the same had been purchased in the course of export. The
    appellants relied on sub-section (3) of section 5 of the Central Sales
    Tax Act, 1956 which reads as follows:
                                                                                   ')-..,-
                "Notwithstanding anything contained in sub-section (1) the
                last sale or purchase of any goods preceding the sale or
H               purchase occasioning the export of those goods out of the
           STERLING FOODS v. STATE OFKARNATAKA IBHAGWATI, CJ.I             371

                territory of India shall also be deemed to be in the course of    A
                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."

     The appellants contended that since the purchases of shrimps, prawns         B
     and lobsters had been made by them for the purpose of complying with
     the orders for export, such purchases of shrimps, prawns and lobsters
     must be deemed to be in the course of export and they were accord-
     ingly not taxable under the Kamataka Sales Tax Act 1957. This con-
     tention of the appellants was rejected by the Assistant Commissioner
     of Commercial Taxes and on 30th July 1982 an order was made by the
     Assistant Commissioner of Commercial Taxes for the month of April            c
     1982 under section 12 B (2) of the Karnataka Sales Tax 1957 assessing
     the appellants to purchase-tax and other incidental taxes in respect of
     the purchases of shrimps, prawns and lobsters made by them during
     the said period. The Assistant Commissioner of Commercial Taxes
     also passed another order dated 3rd August 1982 assessing the appel-         D
     lants to purchase-tax and other incidental taxes in respect of the purch-
     ases of shrimps, prawns and lobsters made by them during the month
     of May, 1982. These two orders made by the Assistant Commissioner
    ·of Commercial Taxes were followed by issue of notices of demand for
     Rs.52,610.71 and Rs.44,237.88 respectively against the appellants.
     The appellants thereupon filed a writ petition in the High Court of          E
     Karnataka challenging the assessment orders and the notices of de-
     mand issued against them and sought appropriate direction, order or
     writ restraining the respondents from imposing or oollecting purchase-
     tax on purchase turn-over of shrimps, prawns and lobsters under the
     Karnataka Sales Tax Act 1957. The writ petition was dismissed by the
     High Court, but having regard to the importance of the question in-          F
    _volved, a certificate under Article 133 of the Constitution was granted
+    by the High Court and that is how the present appeal by certificate has
     come before us.

          It is clear on a plain reading of sub-section (3) of Section 5 of the
    Central Sales Tax Act 1956 that in order to attract the applicability of      G.
    that provision, it is necessary that the goods which are purchased by an
    assessee for the purpose of complying with the agreement or order for
    or in relation to export, must be the same goods which are exported
    out of the territory of India. The words "those goods" in this sub-
    section are clearly referable to "any goods" ·mentioned in the preced-
    ing part of the sub-section and it is therefore obvious that the goods        H
    372                  SUPREME COURT REPORTS            [1986] 3 S.C.R.
A   purchased by the assessee and the goods exported by him must be the
    same. If by reason of any processing to which the goods may be sub-
    jected after purchase, they change their identity so that commercially
    they can no longer be regarded as the original goods, but instead
    become a new and different kind of goods and then they are exported,
B   the purchases of original goods made by the assessee cannot be said to
    be purchases in the course of export. The question which therefore
    arises for consideration is as to what happens when shrimps, prawns
    and lobsters purchased by the assessee are subjected to the process of
    cutting of heads and tails, peeling, deveining, cleaning and freezing
    before export. Do they cease to be the original commodity and be-
    come commercially a new commodity or do they still retain their origi-
c   nal identity as shrimps, prawns and lobsters?

          Before we proceed to consider this question, it is necessary to
    refer to certain provisions of the Karnataka Sales Tax Act, 1957
    (hereinafter referred to as the 'Karnataka Act') which came into force
D   on ht October 1957. Section 5 of the Karnataka Act which enacts the
    charging section provides for levy of tax on sales and purchases of
    various commodities described in the Schedules to the Act. The Third
    Schedule to the Karnataka Act, as originally enacted, enumerated the
    commodities on which a single-point tax was leviable under sub-
    section 3(b) of section 5 and there were 13 entries in this Schedule.
E   None of these 13 entries included shrimps, prawns and lobsters with      J
    the result that the purchases of shrimps, prawns and lobsters were not
    exigible to purchase tax. This position continued right from the time of
    the original enactment until 31st March 1973 when the Karnataka
    Sales Tax (Amendment) Act, 1973 introduced a new En1ry '13a' in the
    Third Schedule with effect from Ist April 1973. This entry included      /
F   "shrimps, prawns and lobsters" in the Third Schedule. There was
    another amendment made in the Karnataka Act in 1978 by the
    Karnataka Sales Tax (Amendment) Act, 1978 and section 9 of this          +
    Amending Act made certain amendments in Entry 13a with retrospec-
    tive effect, so that from 1st April 1973 Entry 13aincluded in the Third
    Schedule "shrimps, prawns and lobsters other than processed or fro-
G   zen shrinips, prawns and lobsters" and the Explanation to Entry 13a
    provided that "processing" shall include "all or any of the following,
    namely, cutting of head or tail, peeling, deveining, cleaning or freez-
    ing". But, Entry 13a in this form continued only up to 31st August ~
    1978 and with effect from 1st September, 1978, a further amendment
    was made by the Karnataka Taxation and Certain Other Laws
H   (Amendment) Act, 1982 and after this amendment which was made
                 STERLING FOODS v. STATE OFKARNATAKA IBHAGWATI, CJ.I             373

            with retrospective effect from !st September 1978, Entry 13a read:           A
            "Shrimps, prawns and lobsters other than frozen shrimps, prawns and
            lobsters". The amendment made by the 1982 Amendment Act ex-
            eluded from the scope and ambit of Entry 13a, frozen shrimps, prawns
            and lobsters and brought within the net of taxation only purchases of
            shrimps, prawns and lobsters other than frozen shrimps, prawns and           B
            lobsters, provided they were last purchases within the State.

    t              It is in the context of these provisions of the Kamataka Act that
            we have to consider whether shrimps, prawns and lobsters, when sub-
-\r:-       jected to the process of cutting of heads and tails, peeling, deveining,
-           cleaning and freezing, retain their original character and identity or
            become another distinct commodity. The test which has to be applied
            for the purpose of determining whether a commodity subjected to
                                                                                         c
            processing retains its original character and identity is as to whether
    )>--·   the processed commodity is regarded in the trade by those who deal in
            it as distiilct in identity from the original commodity or it is regarded,
            commercially and in the trade, the same as the original commodity. It        D
            is necessary to point out that it is not every processing that brings
            about change in the character and identity of a commodity. The nature
            and extent of processing may vary from one case to another and indeed
            there may be several stages of processing and perhaps different kinds
            of processing at each stage. With each process suffered, the original
    -l      commodity experiences change. But it is only when the change or a            E
            series of changes take the commQdity to the point where commercially
            it can no longer be regarded as the original commodiiy but instead is
            recognised as a new and distinct commodity that it can be said that a
            new commodity, distinct from the original, has come into being. The
    -\.     test is whether in the eyes of those dealing in the commodity or in
            commercial parlance the proceS£ed commodity is regarded as distinct          F
            in character and identity from the original commodity vide Sales Tax
    +       Board v. PIO Food Packers [198013 SCR 1271.

                  It is clear on an application of this test that processed or frozen
            shrimps, prawns and lobsters are commercially regarded the same
            commodity as raw shrimps, prawns and lobsters. When raw shrimps,             G
            prawns and lobsters are subjected to the process of cutting of heads
            and tails, peeling, deveining, cleaning and freezing, they do not cease

~
            to be shrimps, prawns and lobsters and become another distinct com-
            modity. They are in common parlance known as shrimps, prawns and
            lobsters. There is no essential difference between raw shrimps, prawns
            and lobsters and processed or frozen shrimps, prawns and lobsters.           H
    374                   SUPREME COURT REPORTS           [1986[ 3 S.C.R.
A   The dealer and the consumer regard both as shrimps, prawns and
    lobsters. The only difference is that processed shrimps, prawns and
    lobsters are ready for the table while raw shrimps, prawns and lobsters
    are not, but still both are, in commercial parlance, shrimps, prawns
    and lobsters. It is undoubtedly true that processed shrimps, prawns
B   and lobsters are the result of subjecting raw shrimps, prawns and
    lobsters to a certain degree of processing but even so they continue to
    possess their original character and identity as shrimps, prawns and
    lobsters, notwithstanding the removal of heads and tails, peeling, de-
    veining and cleaning which are necessary for making them fit for the
    table. Equally it makes no difference in character or identity when
    shrimps, prawns and lobsters are frozen for the purpose of preserva-
c   tion and transfer to other places including far off countries in the
    world. There can therefore be no doubt that processed or frozen
    shrimps, prawns and lobsters are not a new and distinct commodity but
    they retain the same character and identity as the original shrimps,
    prawns and lobsters.
D
          This view finds ample support from the decision of the Supreme
    Court of the United States in East Texas Motor Freight Lines v. Frozen
    Food Express, 100 L.Ed. 917, where the question was whether dressed
    and frozen chicken was a commercially distinct article from the origi-
    nal chicken. The Supreme Court held that it was not a commercially
E   distinct article but was commercially and in common parlance the same
    article as chicken. The Supreme Court pointed out:

               "Killing, dressing and freezing a chicken is certainly a
               change in the commodity. But it is no more drastic a change
               than the change which takes place in milk from pasturising,
F              homogenizing, adding vitamin concentrates, standardising
               and bottling".

    and proceeded to add in words clear and explicit:

               " .......... there is hardly less difference between cotton
G              in the field and cotton at the gin or in the bale or between
               cottonseed in the field and cottonseed at the gin, than bet-
               ween a chicken in the pen and one that is dressed. The
               ginned and baled cotton and the cottonseed, as well as the
               dressed chicken, have gone through a processing stage. But
               neither has been "manufactured" in the normal sense of
H              the word."
              STERLINGFOODSv. STATEOFKARNATAKA [BHAGWAT!,CJ.]                375

                                                                                    A
        If dressed and frozen chicken is not a commercially distinct article
        from the original chicken, it must follow on a process of analogical
        reasoning that processed and frozen shrimps, prawns and lobsters can-
        not be regarded as commercially distinct commodity from raw
        shrimps, prawns and lobsters.            ·
                                                                                    B
               This conclusion on principle was not disputed by the High Court
        in its judgment and the High Court conceded that even after proces-
    t   sing such as cutting of heads and tails, peeling, deveining, cleaning and
        freezing, shrimps, prawns and lobsters subjected to such processing


-       continued in common parlance to be called 'shrimps, prawns and lob-
        sters'. But the High Court took the view that Entry 13a after the
        amendment effected in it with retrospective effect from 1st September,
        1978, made a distinction between raw shrimps, prawns and lobsters
                                                                                    c
        and processed or frozen shrimps, prawns and lobsters. In view of this
        distinction made in Entry 13a, it was not possible to hold that proces-
        sed or frozen shrimps, prawns and lobsters were the same commodity
        as raw shrimps, prawns and lobsters. The argument was that when the         D
        State Legislature itself made a distinction between these categories of
        commodities by making purchases of one category amenable to sales
        tax under Entry 13a and leaving out of the scope of taxation under
        Entry 13a the other category, how could it be said that both these
        categories represent the same commodity and there is no difference in
        character and identity between the two. This argument, we are afraid,       E
        is not well-founded. It is based on a total misapprehension in regard to
        the true object and intendment of Entry 13a and it erroneously seeks
        to project that Entry in the interpretation and application of Section 5
        sub-section (3) of the Central Sales Tax Act. In fact Entry 13a as
        amended, supports the argument that even processed or frozen
        shrimps, prawns and lobsters are known commercially and in the trade        F
        as 'shrimps, prawns and lobsters'. It is because Entry 13a as it stood
    +   prior to its amendment, would have, on the plain natural meaning of
        the expression 'shrimps, prawns and lobsters' included processed and
        frozen shrimps, prawns and lobsters, that it became necessary for the
        State Legislature to amend Entry 13a with retrospective effect so as to
        exclude from the scope and ambit of that entry processed or frozen          G
        shrimps, prawns and lobsters. Now when the State Legislature ex-
        cluded processed or frozen shrimps, prawns and lobsters from the
        ambit and coverage of Entry J3a, its object obviously was that the last
        purchases of processed or frozen shrimps, prawns and lobsters in the
        State should not be exigible to State Sales Tax under Entry 13a. The
        State Legislature was not at all concerned with the question as to          H
    376                   SUPREME COURT REPORTS             [1986] 3 S.C.R.
A   whether processed or frozen shrimps, prawns and lobsters are com-
    mercially the same commodity as raw shrimps, prawns and lobsters or
                                                                                ....
    are a different commodity and merely because the State Legislature
    made a distinction between the two for the purpose of determining
    exigibility to State Sales Tax, it cannot be said that in commercial
B   parlance or according to popular sense, processed or frozen shrimps,
    prawns and lobsters are recognised as different commodity distinct
    from raw shrimps, prawns and lobsters. The question whether raw
    shrimps, prawns and lobsters after suffering processing retain their        -t
    original character or identity or become a new commodity has to be
                                                                                :}
c
    determined not on the basis of a distinction made by the State Legisla-
    ture for the purpose of exigibility to State Sales Tax because even
    wiiere the commodity is the same in the eyes of the persons dealing in
    it the State Legislature may make a classification for determining Ii;:;-
    bility to sales tax. This question, for the purpose of the Central Sales
                                                                                       -
    Tax Act, has to be determined on the basis of what is commonly
                                                                                ~
    known or recognised in commercial parlance. If in commercial par!-
D   ance and according to what is understood in the trade by the dealer
    and the consumer, processed or frozen shrimps, prawns and lobsters
    retain their original character and identity as shrimps, prawns and
    lobsters and do not become a new distinct commodity and are as much
    "shrimps, prawns and lobsters', as raw shrimps, prawns and lobsters,               ~
    sub-section (3) of section 5 of the Central Sales Tax Act would be
E   attracted and if with a view to fulfilling the existing contracts for ex-   ,+_
    port, the assessee purchases raw shrimps, prawns and lobsters and
    processes and freezes them, such purchases of raw shrimps, prawns
    and lobsters w0uld be deemed to be in course of export so as to be
    exempt from liability to State Sales Tax.

F         Here in the present case, it was not disputed on behalf of Re-
    venue that fhe purchases of raw shrimps, prawns and lobsters were
    made by the appellants for the purpose of fulfilling existing contracts
    for export and after making such purchases the appellants subjected
    raw shrimps, prawns and lobsters purchased by them to the process of
                                                                                "'
                                                                                -t     •

    cutting of heads and tails, peeling, deveinlng, cleaning and freezing
G   and exported such processed and frozen shrimps, prawns and lobsters
    in fulfilment of the contracts for export. The only argument raised on
    behalf of Revenue was that the goods which were exported were not
    the same as the goods purchased by the appellants because raw
    shrimps, prawns and lobsters after processings ceased to be the same         >---~
    commodity and became a new distinct commodity. But, for reasons
H   which we have already discussed, this argument cannot be sustained.
                                                                                       !'
             STERLING FOODS v. STA TE OF KARNATAKA IBHAGWATI, CJ.I        377

      The shrimps, prawns and lobsters purchased by the appellants did not       A
      lose their original character and identity when they were subjected to
      processing for the purpose of export. So far as commercial parlance or
      popular usage is concerned, they remained the same goods and hence
      the purchases of raw shrimps, praWlls and lobsters by the appellants
      must be held to be purchases in the course of export and hence exempt
                                                                                 B
      from liability to tax under the Karnataka Sales Tax Act.

+ High We, accordingly, allow the appeal, set aside the judgment of the
       Court as. also the Orders made by the Assistant Commissioner of
      Commercial Taxes and direct that the purchases of raw shrimps,
      prawns and lobsters made by the appellants for the purpose of fulfil-
      ling the existing contracts for export shall not be included in the tax-   c
      able turnover of the appellants. The respondents will pay the costs of
      the appeal to the appellants.

      S.R.                                                   Appeal allowed.