1984 (4) TMI 266 - HC - VAT and Sales Tax

Summary

Issues:
1. Disallowance of exemption claimed by the assessee regarding turnover in different assessment years.
2. Determination of whether the disputed turnover constitutes sales in the course of import.
3. Interpretation of relevant legal precedents regarding sales in the course of import and application to the current case.

Detailed Analysis:
1. The judgment involves tax revision cases concerning the disallowance of exemptions claimed by the assessee for turnover in the assessment years 1973-74 and 1974-75. The assessing authority disallowed exemptions relating to sales in the course of import, leading to appeals by the assessee to higher authorities, ultimately reaching the Sales Tax Appellate Tribunal.

2. The primary issue revolves around whether the disputed turnovers in the mentioned years qualify as sales in the course of import. The assessee contended that the sales to Heavy Vehicles Factory occasioned the import of goods from England, falling under the scope of section 5(2) of the Central Sales Tax Act. The Tribunal upheld the assessee's claim, leading to the Revenue challenging the decision in the High Court.

3. The judgment extensively discusses legal precedents such as Khosla & Co. case and Serajuddin's case to determine the nature of the sales in question. The court analyzed the privity of contract, agency relationship, and the concept of sales in the course of import as established in previous Supreme Court decisions. The court emphasized that in cases involving two sales transactions without privity of contract between the foreign seller and local buyer, the sale by the foreign seller or through their agent is considered to have occasioned the import of goods.

4. The court concluded that the assessee acted as an agent of the foreign manufacturer, and the sales to Heavy Vehicles Factory should be viewed as sales by the foreign seller through the agency of the assessee. Relying on the principles laid down in Khosla's case, the court held that the turnovers in dispute represented sales in the course of import, making them exempt under section 5(2) of the Central Sales Tax Act.

5. Ultimately, the High Court dismissed the tax revision cases, upholding the Tribunal's decision. The Revenue was directed to pay the costs of the assessee, concluding the legal proceedings in favor of the party claiming exemption on the grounds of sales in the course of import.