1960 (3) TMI 38 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the sale of furnace oil and other petroleum products to ocean-going ships from a bonded warehouse qualifies as a sale in the course of import or export, exempt from sales tax under Article 286(1)(b) of the Constitution.
2. Whether the Deputy Commissioner of Commercial Taxes had the jurisdiction to revise an assessment already confirmed on appeal.

Analysis:
Issue 1:
The case involved the Burmah-Shell Oil Storage and Distributing Company of India Limited selling petroleum products to ocean-going vessels from a bonded warehouse at Vizagapatnam port. The primary contention was whether these sales qualified as exempt from sales tax under Article 286(1)(b) of the Constitution. The petitioner argued that since the goods had not crossed the customs barrier and were intended for export, they were still in the process of import or export. However, the court held that once the goods crossed the customs frontier, the importation was considered complete. The court emphasized that the sale to ocean-going vessels did not meet the criteria for an export sale as it lacked the essential element of delivery to a common carrier for transport out of the country. Thus, the sales were not in the course of export, and the exemption under Article 286(1)(b) did not apply.

Issue 2:
The second point raised was whether the Deputy Commissioner of Commercial Taxes had the authority to revise an assessment after confirming it on appeal. The relevant sections of the Madras General Sales Tax Act, 1939, were examined. The court noted that the powers of revision under Section 12 were distinct from the appellate powers under Section 11. It was established that the Deputy Commissioner could exercise revisional powers even after confirming an assessment on appeal, provided the procedural requirements were met. As the petitioner had not raised this issue earlier and considering the statutory provisions, the court found no jurisdictional flaw in the Deputy Commissioner's decision to enhance the assessment. Consequently, the court dismissed the petition, upholding the revised assessment and imposing costs on the petitioner.