1995 (8) TMI 292 - HC - VAT and Sales Tax

Summary

Issues:
- Interpretation of sub-section (3) of section 5 of the Central Sales Tax Act, 1956 regarding exemption for goods exported out of India.
- Determination of whether the last purchase or sale of goods within the State can be deemed to be in the course of export.
- Consideration of agreements or orders for export in relation to claiming exemption under the Central Sales Tax Act.

Analysis:
The judgment pertains to eight tax revision cases filed by Mica Trading Corporation of India Limited, Gudur, concerning assessment years 1976-77 to 1983-84 under the Andhra Pradesh General Sales Tax Act, 1957. The assessee, engaged in mica trading, claimed exemption under sub-section (3) of section 5 of the Central Sales Tax Act, 1956, for the turnover relating to its mica purchases exported by it. The dispute arose as the purchases were made without any agreement or order for export. The Commercial Tax Officer exempted some turnovers but rejected others, leading to appeals by the assessee before the Appellate Deputy Commissioner and the Sales Tax Appellate Tribunal.

The Tribunal's orders rejecting the exemption claims were challenged through various Tax Revision Cases (T.R.C.). The crux of the issue was whether the last purchases of mica made within the State before export agreements or orders were deemed to be in the course of export, as required by the Central Act. The Court analyzed the language of sub-section (3) of section 5, emphasizing the conditions that the sale or purchase should occur after the export agreement or order and for the purpose of complying with it. The Supreme Court's decision in Consolidated Coffee Ltd. v. Coffee Board was cited to clarify the requirements for deeming a sale in the course of export.

Regarding the contention that protocol agreements and bilateral trade agreements between governments justified the purchases, the Court held that the actual exports were based on agreements with foreign buyers, not government agreements. The Tribunal's findings supported this position, leading to the rejection of the exemption claims. In cases where mica was transferred out of the State, the Court upheld the tax on the turnover related to such last purchases within the State. Ultimately, the Court dismissed all tax revision cases, emphasizing the lack of entitlement to exemption under section 5(3) due to non-compliance with the statutory conditions.

In conclusion, the judgment underscores the strict interpretation of the Central Sales Tax Act provisions regarding exemptions for goods exported out of India. It highlights the necessity for sales or purchases to align with export agreements or orders to qualify for exemption, as established by judicial precedents and statutory language. The Court's decision reaffirms the importance of meeting the specified conditions for deeming a sale in the course of export, ultimately upholding the tax assessments in the present cases.