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1997 (2) TMI 493 - HC - VAT and Sales TaxHeld that where imports were effected by an agent on behalf of the actual user against an actual user s import licence on the strength of letters of authority, the sales by the agent were sales in the course of import; that where pursuant to the acceptance of tenders by the Director-General of Supplies and Disposals and orders placed by him, goods were imported, there would be two sales one by the foreign seller to the Indian dealer (importer) and the other by the Indian dealer to the ultimate consignee, and the second of these sales could not be considered a sale in the course of import.
Issues:
1. Whether transactions based on 'actual user licenses' are exempt from sales tax as sales in the course of import? 2. Whether transactions involving supply of goods to government departments based on import recommendation certificates are exempt from sales tax as sales in the course of import? Analysis: The High Court dealt with two references from the Sales Tax Appellate Tribunal concerning the assessment year 1971-72 under the Bengal Finance (Sales Tax) Act, 1941, and the Central Sales Tax Act, 1956. The first issue revolved around imports made by the assessee on 'actual user licenses' obtained by Indian constituents, where the assessee acted as an agent for the license holders. The Tribunal found that these transactions constituted sales in the course of import and were exempt from sales tax. The Court referenced a prior case to support this conclusion, affirming that such sales were indeed in the course of import, thereby ruling in favor of the dealer on this issue. Regarding the second issue, which involved transactions supplying goods to government departments based on import recommendation certificates, the Court relied on another precedent. It was determined that in such transactions, two sales occurred: one between the foreign seller and the Indian dealer, and the second sale by the dealer to the ultimate consignee. Consequently, these sales were not considered to be in the course of import, leading to a ruling against the department on this matter. The Court answered question No. 1 affirmatively in favor of the dealer and question No. 2 negatively in favor of the department. No costs were awarded in this judgment.
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