1982 (3) TMI 220 - HC - VAT and Sales Tax

DECLARED GOODS SINGLE POINT TAX FIRST SALE EXPORT OR IMPORT ALLOCATION OF YEN CREDIT BY DIRECTORATE OF TECHNICAL DEVELOPMENT FOR IMPORT OF TIN PLATES FROM JAPAN ALLOTTEES OF YEN CREDIT PLACING ORDERS FOR IMPORT THROUGH M.M.T.C. DELIVERY OF GOODS TAKEN BY ALLOTTEES OF YEN CREDIT M.M.T.C., WHETHER IMPORTER OF TIN PLATES WHETHER THERE WAS FIRST SALE OF TIN PLATES, A DECLARED GOODS, BY M.M.T.C. IN STATE LIABILITY TO TAX

Summary

Issues:
Sales tax appeal under the Tamil Nadu General Sales Tax Act, 1959 regarding the turnover of tin plates and steel plates imported from Japan by M.M.T.C. (Minerals and Metals Trading Corporation of India Ltd.). The main issue is whether the transactions should be treated as first sales in the State by M.M.T.C. to the allottees or as sales in the course of import.

Analysis:
The Board of Revenue, Madras, passed an order restoring an assessment on M.M.T.C. for a turnover of Rs. 26,59,787, considering the sales of declared goods as first sales in the State. The Board's order was based on the view that there were two distinct transactions: first a sale by the Japanese firm to M.M.T.C., followed by sales by M.M.T.C. to the allottees. However, the High Court found fault in the Board's reasoning, stating that there was no evidence to show that M.M.T.C. imported the goods as their own, as the actual importers were the allottees. The Court emphasized the lack of contracts of sale between M.M.T.C. and the allottees, rejecting the Board's finding of sales by M.M.T.C. to the allottees.

The High Court further addressed the contention related to transactions in the course of import, specifically focusing on the transfer of shipping documents before the goods crossed the customs frontiers of India. The Court rejected the argument that the transactions qualified as sales in the course of import under the Central Sales Tax Act, emphasizing that the amended provisions introduced a new test regarding customs frontiers, which did not apply retroactively. The Court dismissed all contentions based on the amended provisions, affirming that M.M.T.C. did not make sales to the allottees of the imported goods from Japan.

In comparing the present case to a Supreme Court decision involving M.M.T.C. in export transactions, the High Court rejected the analogy suggested by the Government Pleader, emphasizing the differences in the nature of transactions. The Court highlighted that in the present case, there was no evidence of M.M.T.C. importing the goods on their own account or making sales to the allottees after import, contrary to the Board's finding. Ultimately, the High Court allowed the appeal, setting aside the Board's order and directing the State to bear the costs incurred by M.M.T.C. along with counsel's fee.