1988 (4) TMI 406 - HC - VAT and Sales Tax

Summary

Issues:
- Assessment of sales tax on sales to foreign tourists
- Interpretation of import policy for export sales
- Validity of reassessment under section 16(1) of the State Act
- Exhaustion of appellate remedy before challenging assessment

Analysis:
The petitioner, a partnership firm dealing in various goods, sought a writ of certiorari to challenge the assessment order for the year 1978-79. The petitioner contended that sales to foreign tourists should be considered export sales eligible for exemption under the State Act based on the import policy of the Government of India. The import policy specified certain items, including handicrafts, as deemed exports for import replenishment. The sales tax authorities had previously accepted these sales as exports eligible for exemption. However, the Government Advocate argued that specific exemption for sales to foreign tourists as export sales was not provided under section 17 of the State Act, leading to the assessment of tax on such sales.

The main issue for determination was whether the relief sought by the petitioner could be granted. The court noted that there was no pre-existing agreement or order for selling goods to foreign buyers, and the sales did not qualify as exports under the Central Sales Tax Act. The reassessment under section 16(1) of the State Act, allowing assessment of escaped turnover within five years, was found to be valid and not in violation of the Constitution. The court held that the petitioner should exhaust the appellate remedy before challenging the assessment, directing them to file an appeal before the Appellate Assistant Commissioner to address all raised points.

Despite the passage of six years since the petition was filed, the court granted the petitioner two months to appeal to the appellate authority. The court emphasized that the appellate authority should consider all contentions raised by the petitioner and dispose of the appeal in accordance with the law. Ultimately, the writ petition was dismissed, and no costs were awarded.