1991 (9) TMI 312 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the turnover claimed as sales in the course of import is exigible to tax at 10 per cent.
2. Whether the privity of contract was between the assessee and the foreign seller or between the College and the foreign seller.
3. Whether the transactions amounted to a sale in the course of import.

Analysis:

1. The appellant declared a turnover, part of which was claimed as sales in the course of import. The assessing authority proposed to reject this claim, leading to an appeal. The Appellate Assistant Commissioner found that the transaction was not exigible to tax, relying on specific clauses in the letter of authority and the licensee's license. The Tribunal's decision in a related case was also cited in support.

2. The Board of Revenue disagreed with the Appellate Assistant Commissioner's decision, stating that the privity of contract was between the assessee and the foreign seller, not the College and the foreign seller. Citing legal precedents, the Board concluded that the turnover was indeed exigible to tax, setting aside the earlier decision.

3. The appellant relied on legal cases where similar transactions were deemed exempt from tax due to the integral connection between the sale and the import process. Specific conditions in the import license and the letter of authority highlighted by the Supreme Court were crucial in establishing this connection. The Court found that the appellant acted as an agent of the licensee, and the transactions were considered sales in the course of import.

4. In the final judgment, the Court held that the transactions clearly amounted to sales in the course of import, setting aside the Board of Revenue's decision and reinstating the Appellate Assistant Commissioner's order. The appeal was allowed with no order as to costs.

In conclusion, the judgment resolved the issues by analyzing the nature of the transactions, the privity of contracts, and the legal precedents governing sales in the course of import. The decision was based on the specific conditions and arrangements between the parties involved, ultimately leading to the allowance of the appeal and the restoration of the initial ruling.