1988 (7) TMI 399 - HC - VAT and Sales Tax

Summary

Issues:
Claim for exemption under section 5(3) of the Central Sales Tax Act, 1956 for the turnover relating to the sale of gunnies to specific firms for export.

Analysis:
The judgment of the High Court of Andhra Pradesh addressed the issue of whether a manufacturer of gunnies was entitled to claim exemption under section 5(3) of the Central Sales Tax Act, 1956 for the turnover related to the sale of gunnies to three specific firms for export. The export of barytes was canalized at the relevant time, and only certain entities were permitted to export. The petitioner's claim for exemption was rejected by all authorities, including the Tribunal, on the basis that the export was not conducted by the firms to whom the gunnies were sold, but by other individuals. The petitioner argued that the individuals who exported were partners of the firms and acted as agents on behalf of the firms. However, the Court found it not possible to agree with this argument. It was emphasized that the gunnies were sold to the firms and a private limited company, not to the individuals who exported the barytes. The Court clarified that being a partner in a firm does not automatically make the firm the mine-holder, and the distinction between a firm and its partners is crucial.

The Court also considered the issuance of H forms by the firms and the private limited company to the petitioner, as required under the Central Sales Tax (Registration and Turnover) Rules, 1957. The petitioner argued that the issuance of these forms indicated that the gunnies were purchased for export. However, the Court highlighted that the mere issuance of H forms was not enough to qualify for exemption under section 5(3) of the Act. It was essential to prove that the goods purchased were actually exported by the purchaser, which was not demonstrated in this case. The burden of proof lies with the party claiming exemption or seeking a particular benefit, and in this instance, there was no evidence to support that the export was conducted by the purchasing firms or company, or that the individuals who exported acted as agents of these entities.

Ultimately, the Court dismissed the Tax Revision Case (T.R.C.) as the petitioner failed to meet the requirements for exemption under section 5(3) of the Central Sales Tax Act, 1956. The judgment concluded that the petitioner's claim was not substantiated, and therefore, the T.R.C. was dismissed with no costs awarded.