1992 (9) TMI 323 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Limitation period for the revision order.
2. Classification of sales as export sales under the second limb of section 5(1) of the Central Sales Tax Act, 1956.
3. Procedural fairness in the revision process by the Commissioner of Commercial Taxes.

Detailed Analysis:

1. Limitation Period for the Revision Order:
The appellant contended that the revision order by the Commissioner was barred by limitation. However, the court found that the order of the Deputy Commissioner was passed on February 9, 1981, and served on the assessee on February 18, 1982. The limitation period prescribed under sub-section (3) of section 20 of the A.P. General Sales Tax Act is four years from the date of service. The Commissioner's order dated February 14, 1986, was within this period. The court held that the order was not beyond the limitation period.

2. Classification of Sales as Export Sales:
The appellant claimed exemption on the turnover of Rs. 50,56,144, arguing that it related to export sales under the second limb of section 5(1) of the Central Sales Tax Act, 1956. The court examined the requirements of the second limb, which necessitates:
(a) The sale is effected by transfer of documents of title to the goods.
(b) The transfer of documents occurs after the goods have crossed the customs frontiers of India.

The appellant provided various documents, including vouchers, bills of lading, and shipping documents, to support this claim. The Deputy Commissioner had initially classified the contracts into three categories and noted relevant terms and conditions, such as f.o.b. pricing and transfer of risks and payments. However, the Commissioner found that evidence regarding the date of boarding, sailing, crossing customs frontiers, and transfer of documents was lacking.

3. Procedural Fairness in the Revision Process:
The appellant argued that the Commissioner did not consider the material placed on record and failed to address the plea under the second limb of section 5(1). The court noted that the Commissioner had not indicated the grounds relating to the second limb in the show cause notice, thus depriving the appellant of an opportunity to present necessary material. The court emphasized that the lack of specific grounds in the show cause notice and the failure to request relevant documents from the appellant were procedural flaws.

Conclusion:
The court concluded that the Commissioner was justified in setting aside the Deputy Commissioner's order due to procedural errors. However, the appellant was not given a fair opportunity to present material supporting their claim under the second limb of section 5(1). Consequently, the court set aside the Commissioner's order and directed the Deputy Commissioner to provide the appellant an opportunity to submit relevant material and to pass a fresh order in accordance with the law.

Judgment:
The special appeal was allowed, and the case was remanded to the Deputy Commissioner for further proceedings. No order as to costs was made.