2003 (11) TMI 568 - HC - VAT and Sales Tax

Summary

Issues involved:
Interpretation of the definition of sale under the Bombay Sales Tax Act, 1959 regarding the presentation of exim scrips for verification and endorsement of payment of premium to the Director General of Foreign Trade. Violation of an interim order by the respondents in passing an assessment order. Consideration of judicial pronouncements by apex Court and other courts in deciding the matter.

Analysis:

Issue 1: Interpretation of the definition of sale under the Bombay Sales Tax Act, 1959
The petitioners contended that the presentation of exim scrips for verification and endorsement of payment of premium does not constitute a sale as defined in the Act. They argued that there is no transfer involved as the scrips were returned to them for importing goods. The premium received on the scrips due to currency devaluation was also claimed not to be a sale price. The respondents had initially passed an assessment order despite an interim order restraining them from doing so. However, they later apologized for this action, and it was decided that a fresh order would be passed after considering all relevant legal provisions and judicial pronouncements.

Issue 2: Violation of interim order
The respondents were found to have violated the interim order by proceeding to pass the assessment order on March 31, 1997. They apologized for this oversight, and it was acknowledged that the petitioners did not pursue contempt proceedings against them. The Court quashed the assessment order dated March 31, 1997, and directed the respondents to pass a new order after hearing the petitioners and in compliance with the law and relevant judicial decisions.

Issue 3: Consideration of judicial pronouncements
During the hearing, the petitioners referred to various legal judgments, including those of the apex Court and the Calcutta High Court, to support their case. They were granted liberty to submit appropriate replies and present the necessary judicial pronouncements to the respondents for consideration. The Court emphasized that it did not express any opinion on the points raised in the petitions but directed the respondents to pass a new order after taking into account the legal precedents cited by the petitioners.

In conclusion, the Court held the assessment order to be invalid, quashed it, and instructed the respondents to issue a new order after thorough consideration of the law and relevant judicial decisions. The rule was made absolute with no order as to costs, and the petitions were disposed of accordingly.