1992 (12) TMI 210 - AT - VAT and Sales Tax

Summary

Issues Involved:
1. Imposition of entry tax under the Taxes on Entry of Goods into Calcutta Metropolitan Area Act, 1972.
2. Determination of the point of sale and transfer of title under an f.o.b. contract.
3. Applicability of constitutional provisions and Supreme Court precedents regarding octroi and entry tax.
4. Requirement of compliance with Section 9 of the Act for claiming exemption from entry tax.

Detailed Analysis:

Imposition of Entry Tax:
The primary issue revolves around whether entry tax is applicable to the profiles (industrial screens) being transported for export to Czechoslovakia. The applicants argued that the goods were meant for export and thus should not attract entry tax under the Act. The Entry Tax Officer, however, contended that the sale would occur within the Calcutta Metropolitan Area, making the goods liable for entry tax.

Determination of Point of Sale and Transfer of Title:
The applicants contended that the sale would not take place at the Port of Calcutta since the title of the goods would only transfer after the foreign buyer retired the original negotiable documents upon payment. The respondents argued that under an f.o.b. contract, the property and risk pass on shipment. The Tribunal noted that the question of where the sale takes place is a factual one but decided to address the issue based on the broader ground of export intent.

Applicability of Constitutional Provisions and Supreme Court Precedents:
The applicants relied on Supreme Court decisions, arguing that octroi or entry tax is not applicable if the goods are brought into an area for the purpose of export and not for consumption or use within that area. The Tribunal agreed, referencing cases such as Burmah-Shell Oil Storage and Distributing Co. of India Ltd. v. Belgaum Borough Municipality and Tata Engineering & Locomotive Company Limited v. Municipal Corporation of the City of Thane. The Tribunal concluded that the goods were intended for export to Czechoslovakia and thus should not attract entry tax.

Compliance with Section 9 for Exemption:
The respondents argued that the applicants did not apply for exemption under Section 9 of the Act, which provides a mechanism for exemption from entry tax for goods meant for immediate export. The Tribunal held that non-compliance with Section 9 does not justify the imposition of entry tax when the goods are intended for export. The Tribunal emphasized that the constitutional bar on octroi and entry tax for goods meant for export overrides procedural non-compliance.

Conclusion:
The Tribunal declared that no entry tax is leviable on the entry of the profiles into the Calcutta Metropolitan Area for the purpose of export to Czechoslovakia. The applicants were discharged from the bank guarantee, and the operation of the order was stayed for eight weeks upon the respondents' request. The application was allowed, and the parties were directed to bear their own costs.