2009 (4) TMI 884 - HC - VAT and Sales Tax

Refund application rejected - whether the purchase made by the petitioner from M/s. Tata Iron and Steel Company Ltd. on payment of tax cannot be treated as sale in the course of export and as such it is not exempted from tax? Held that - n the facts of the present case it is clear that while M/s. Rajarishi Exports Ltd. may have purchased the chrome ore for meeting its export obligation to its foreign buyer the same is not an export transaction and therefore the said transaction cannot be treated as a transaction exempted rom tax under section 5 of the CST Act as it then was. It is also important to note here that sub-section (3) of section 5 of the CST Act covering a penultimate transaction prior to export came to the statute book by way of amendment with effect from April 1 1976 while the transaction on the basis of which refund is claimed is for the transactions effected for the period from December 31 1972 to March 31 1973 1973-74 and 1974-75. Therefore clearly since the period of such transaction being prior to the insertion of sub-section (3) of section 5 of the CST Act neither benefit thereunder can be claimed nor granted to the petitioner since the amendment was not retrospective but prospective in its application. Thus no merit in the claim of the petitioner. Appeal dismissed.

Summary

Issues:
Challenge to rejection of refund application based on purchase from TISCO; Refusal of registration by Sales Tax Officer; Assessment as unregistered dealer; Appeal allowed for refund of tax paid; Repeated rejection of refund application; Claim of export transaction exemption; Applicability of CST Act provisions; Non-retrospective nature of statutory amendment.

Analysis:
The writ application challenges the rejection of a refund application by the Sales Tax Officer concerning a purchase made from TISCO, contending it as an export sale exempt from tax. The petitioner entered into a contract with a foreign buyer for high-grade chrome ore, purchased from TISCO, which was supplied to the foreign buyer. The Sales Tax Officer refused registration, assessed as an unregistered dealer, and imposed penalties. An appeal allowed refund of tax paid, but subsequent refund applications were rejected, leading to the present writ petition.

The court noted two distinct transactions: purchase from TISCO and sale to the foreign buyer. The contract with TISCO did not reference any pre-existing export contract, indicating an intra-State sale subject to Orissa sales tax. The sale to the foreign buyer was considered an export transaction, but this did not justify a refund claim for the purchase from TISCO. The transaction predated the statutory amendment allowing exemptions for penultimate transactions prior to export, making the claim ineligible for retrospective benefit.

In conclusion, the court found no merit in the petitioner's claim, dismissing the writ petition without costs. The judgment highlights the importance of distinguishing between transactions and the statutory provisions governing tax exemptions, emphasizing the non-retrospective nature of statutory amendments in determining refund eligibility.

Judgment:
The High Court of Orissa dismissed the writ petition challenging the rejection of a refund application related to a purchase from TISCO, emphasizing the distinction between intra-State sale and export transaction, and the non-retrospective nature of statutory amendments governing tax exemptions.