1975 (12) TMI 100 - AT - Income Tax

Issues Involved:
1. Dispute over turnover assessment for the years 1968-69 to 1971-72.
2. Claim for sales in the course of import and exemption under Section 5(2) of the Central Sales Tax Act, 1956.
3. Consideration of Import Recommendation Certificate (IRC) as equivalent to an import license.
4. Appropriation of goods and place of sale under Section 4(2) of the CST Act.
5. Allowance of reasonable opportunity to file C and D forms for concessional tax rates.
6. Remand by the AAC for concessional rate of tax for certain turnovers.

Detailed Analysis:

1. Dispute over turnover assessment for the years 1968-69 to 1971-72:
The appellant disputed turnovers for the assessment years 1968-69 to 1971-72, arguing that the sales were made in the course of import. The turnovers in question were Rs. 2,29,114.43 at 10% for 1968-69, Rs. 7,05,750.19 at 10% and Rs. 15,673 at 3% for 1969-70, Rs. 7,14,159.83 at 10% and Rs. 1,21,732.00 at 3% for 1970-71, and Rs. 3,93,812.00 at 10% and Rs. 3,588 at 3% for 1971-72.

2. Claim for sales in the course of import and exemption under Section 5(2) of the Central Sales Tax Act, 1956:
The appellant claimed that the sales were made in the course of import. The Assessing Authority rejected this claim on the grounds that the appellant did not import the goods against an actual user's license, despite the imports being made pursuant to specific orders. The appellant argued that sales under D.G.S. & D contracts should be exempt under Section 5(2) of the CST Act, 1956. However, the Supreme Court's decision in Binani Bros. (P) Ltd. vs. Union of India & Ors. was cited, which held that sales under IRC issued by Government concerns do not qualify for exemption.

3. Consideration of Import Recommendation Certificate (IRC) as equivalent to an import license:
The appellant contended that the IRC issued by DGS & D should be considered equivalent to an import license. The Supreme Court in Binani's case had observed that the mere issuance of an IRC did not impose an imperative obligation on the Chief Controller of Imports and Exports to issue an import license. The appellant argued that the IRC effectively functions as an import license, as evidenced by the procedural rules outlined in the Import Trade Control Handbook.

4. Appropriation of goods and place of sale under Section 4(2) of the CST Act:
The appellant argued that the appropriation of goods, which occurred at the time of shipment, should be considered as the place of sale under Section 4(2) of the CST Act. This argument was based on the fact that the bills of lading contained the name of the consignee, indicating appropriation at the time of shipment. The appellant referred to the Madras High Court's decision in Bengal Corporation Pvt. Ltd. vs. State of Madras, which supported the notion that appropriation could occur outside the State, making the sale exempt from state sales tax.

5. Allowance of reasonable opportunity to file C and D forms for concessional tax rates:
The appellant requested an opportunity to file C and D forms to avail concessional tax rates. The appellant argued that they were denied reasonable time to obtain these forms from the DGS & D authorities. The Madras High Court has held that appellate or revising authorities can accept declarations if the delay is reasonable. The appellant's belief in exemption and subsequent delay in filing forms was deemed reasonable.

6. Remand by the AAC for concessional rate of tax for certain turnovers:
For the assessment years 1969-70 and 1970-71, the AAC remanded the matter for granting concessional tax rates on certain turnovers if the D forms were found in order. The appellant argued that the AAC should have granted the concession directly. However, the remand was considered appropriate to address the Department's technical objections.

Conclusion:
The appeals were remanded to the assessing authority to reconsider the appellant's claims for exemption, appropriation of goods, and concessional tax rates, taking into account the legal arguments and evidence presented.

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