2009 (6) TMI 940 - HC - VAT and Sales Tax

Sale of goods within the customs frontiers in India - whether exempted from the sales tax in view of section 5(2) of the CST Act? - whether the learned single judge was right in dismissing the writ petition directing the appellant to avail of the alternative remedy? Held that - After careful examination of the facts of the case the learned single judge is perfectly justified in holding that the order passed by the assessing officer is not required to be interfered with and giving liberty to avail of the alternative remedy of filing an appeal against the order of assessment before the appellate authority. The said conclusion arrived at by the learned single judge is legal and valid. Therefore, the order passed by the learned single judge does not call for interference in this appeal.

Summary

Issues:
1. Jurisdiction of assessing officer to levy sales tax on transactions from duty-free shop beyond customs station.
2. Interpretation of section 5(2) of the Central Sales Tax Act, 1956.
3. Validity of the assessment order and the directive to avail alternative remedy.

Jurisdiction of Assessing Officer:
The appellant challenged the order directing them to avail of an alternative remedy of appeal, arguing that the sales from the duty-free shop beyond the customs station were not liable to tax under the Central Act. The appellant contended that the assessing officer lacked jurisdiction as the transactions were beyond the customs frontiers of India. The appellant emphasized that the assessing authority's order was without jurisdiction and should have been decided on merits by the single judge. The legal issues revolved around whether the sales were in the course of import or export and if the assessment order fell within the assessing officer's jurisdiction.

Interpretation of Section 5(2) of CST Act:
The appellant relied on decisions from the Madras High Court and the Calcutta High Court, arguing that the sale of goods within the customs frontiers in India is exempt from sales tax under section 5(2) of the CST Act. They presented documents to support their claim that the provisions of section 5(2) applied to their case, rendering the assessing officer's jurisdiction to pass the assessment order invalid. The appellant also referenced Supreme Court decisions to support their position, contending that the impugned order was legally flawed.

Validity of Assessment Order and Alternative Remedy:
The Additional Government Advocate argued that the assessing officer had jurisdiction to pass the assessment order under section 5(2) of the Act, and the order was subject to appeal. The learned single judge dismissed the writ petition, directing the appellant to pursue the alternative remedy of filing an appeal. The court examined the legal contentions and upheld the dismissal, stating that the order did not warrant interference. The court found that the assessing officer had the authority to levy the sales tax, and the appellant was advised to avail of the alternative remedy. Ultimately, the court dismissed the appeal, affirming the validity of the assessment order and the directive to seek recourse through the appellate process.