1971 (4) TMI 79 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether sales to dealers in Nepal are exempt from the Sales Tax Act under article 286(1)(b) of the Constitution of India.

Detailed Analysis:
The case involved two tax cases arising from references by the Commercial Taxes Tribunal, Bihar, regarding sales to dealers in Nepal. The first case related to sales between April 1, 1959, and June 30, 1959, and the second case related to sales between July 1, 1959, and March 31, 1960. The main issue was whether these sales were exempt from the Sales Tax Act based on being in the course of export under article 286(1)(b) of the Constitution of India. The assessing authority initially disallowed the claims, stating that deliveries took place in Muzaffarpur, Bihar. However, the Deputy Commissioner remanded the cases for reconsideration due to insufficient evidence regarding the transportation of goods to Nepal.

After reassessment, the assessing authority affirmed the tax liability for the first period and reduced it for the second period. The Deputy Commissioner revised the assessments, negating the exemption claims. The Board of Revenue dismissed the assessee's petitions in revision. The Commercial Taxes Tribunal referred the question of whether the sales should be treated as exports out of India to the High Court due to conflicting findings.

The High Court required a supplementary statement from the Tribunal to clarify the transportation of goods to Nepal. The Tribunal's statement indicated that the assessee had an obligation to transport the goods to Nepal, supporting the claim of export. The Tribunal's finding was that the goods were transported to Birganj, Nepal, fulfilling the export criteria under article 286(1)(b) of the Constitution.

The Court analyzed the evidence and arguments, noting the consistent claim by the assessee regarding the transportation of goods to Birganj. The Court emphasized that the Tribunal's supplementary statement confirmed the assessee's obligation to transport the goods to Nepal, meeting the export requirements. Citing previous Supreme Court decisions, the Court concluded that the sales should be treated as exports, entitling the assessee to the claimed exemptions.

In agreement, the Court answered the references in favor of the assessee, granting costs of Rs. 250.