1993 (10) TMI 309 - AT - VAT and Sales Tax

IMPORT SALES IN THE COURSE OF IMPORT TRANSFER OF DOCUMENTS OF TITLE BEFORE GOODS CROSS CUSTOMS FRONTIER MEANS BEFORE GOODS CROSS CUSTOMS STATION UPON CLEARANCE BY CUSTOMS AUTHORITIES AND FIND FREE ACCESS TO COUNTRY TRANSFER AFTER UNLOADING FROM SHIP BUT WHILE GOODS LYING IN CUSTOMS STATION - EXEMPTIONS CONDITION PRECEDENT PRODUCTION OF DECLARATION FORM PRODUCTION BEFORE APPELLATE AUTHORITY UPON SHOWING SUFFICIENT CAUSE PERMISSIBLE

Summary

Issues Involved:
1. Whether the impugned sales are sales in the course of import within the meaning of section 5(2) of the Central Sales Tax Act, 1956.
2. Whether the authorities erred in disallowing the applicant's claim under section 5(1)(aa) of the Bengal Finance (Sales Tax) Act, 1941 due to non-production of declaration forms.

Issue-wise Detailed Analysis:

1. Sales in the Course of Import:
The principal issue is whether the sales are considered in the course of import under section 5(2) of the Central Sales Tax Act, 1956. The applicant, a registered dealer, claimed exemption for sales made by transferring documents of title to the goods before they crossed the customs frontiers of India. The authorities disallowed this claim, asserting that the sales occurred after the goods had crossed the customs frontiers.

The Tribunal examined the definition of "crossing the customs frontiers of India" under section 2(ab) of the 1956 Act and concluded that goods do not cross the customs frontiers until they have cleared customs and left the customs station. The Tribunal found that the sales were effected while the goods were still within the customs station, thus qualifying for exemption under section 5(2) of the 1956 Act.

2. Disallowance of Claim Under Section 5(1)(aa):
The applicant's claim was also disallowed under section 5(1)(aa) of the 1941 Act due to the non-production of declaration forms at the time of assessment. The applicant argued that the forms were not available despite efforts to obtain them from purchasing dealers. The appellate authority did not accept this explanation, but the Tribunal found that sufficient cause was shown for the non-production of the forms at the time of assessment. The Tribunal directed that the applicant should be allowed to produce the forms at the appellate stage.

Conclusion:
The Tribunal allowed the application, setting aside the impugned orders and directing a fresh assessment. The Commercial Tax Officer was instructed to accept and consider the declaration forms if produced by the applicant. The judgment's operation was stayed for eight weeks as requested by the State Representative.