2004 (4) TMI 563 - HC - VAT and Sales Tax

Summary

Issues:
Exemption from sales tax on the basis of export to Nepal for the assessment years 1986-87 and 1987-88.

Analysis:
The judgment involves revisions filed by the Commissioner of Trade Tax challenging the orders of the Tribunal regarding the claim of exemption from sales tax by the dealer on the basis of export to Nepal for the assessment years 1986-87 and 1987-88. The dealer claimed exemption on the sale of spices and haldi worth specific amounts for each year. The assessing authority accepted the dealer's books of account but rejected the exemption claim. However, the first appellate authority and the Tribunal allowed the claim of the dealer, leading to the present revisions.

The main contention revolved around whether the sales were in the course of export to qualify for exemption from sales tax. The Tribunal approved the dealer's claim, arguing that the sales were indeed in the course of export. The legal analysis delved into the provisions of Section 5 of the Central Sales Tax Act, 1956, which defines when a sale or purchase of goods can be considered to take place in the course of export or import. The judgment referred to relevant legal precedents, including the Supreme Court's interpretation in Ben Gorm Nilgiri Plantations Co. v. Sales Tax Officer [1964] 15 STC 753, to establish the criteria for a sale in the course of export.

The judgment highlighted the importance of establishing a connection between the sale and export, with obligations and intentions from both parties to export the goods. The legal analysis also referenced the Full Bench judgment in National Carbon Co. v. Commissioner of Sales Tax, U.P. [1969] 23 STC 388, emphasizing the need for a clear intention and obligation to export the goods. The judgment further cited other legal cases to support the argument that the passing of title in Indian Territory was immaterial in determining whether a sale was in the course of export.

Ultimately, the judgment concluded that the sales in question did not meet the criteria to be considered in the course of export. The assessing authority found that the sale was complete at Varanasi, with the Nepali buyer taking delivery there and carrying the goods to Nepal. There was no evidence to show an obligation on the buyer to export the goods, and the selling dealer had no control over the goods after the sale. Therefore, the court allowed the revisions, setting aside the orders of the first appellate authority and the Tribunal for both assessment years and restoring the assessment orders.