2021 (4) TMI 191 - HC - VAT and Sales Tax

Levy of tax on turnover - Bill of Lading - title to the goods or not - rate of tax - taxable at 8% or otherwise - High Seas Sale or not - claim of high sea sales denied on the ground that the document filed by the dealer did not conclusively prove the claim of high sea sales - levy of penalty u/s 16(2) of the Tamil Nadu General Sales Tax Act, 1959 - HELD THAT - There can be no quarrel over the legal position that the Bill of Entry is never treated as a document of title under the Customs Act, 1962. Rather, the Bill of Lading is the document of title, which should contain the name of the ultimate buyer - In the instant case, the Revenue did not dispute the fact that the duty was paid by the ultimate buyer and except for the alleged interpolation in the Bill of Entry, there was no other adverse finding rendered either by the Assessing Officer or by the Tribunal against the dealer. In identical circumstances, the Hon'ble Division Bench of this Court in the case of STATE OF TAMIL NADU VERSUS KAWARLAL AND CO. 2011 (9) TMI 519 - MADRAS HIGH COURT dismissed the tax case appeal filed by the Revenue and it was held that Bill of Lading is the document of title and admittedly it carried the name of the ultimate buyer and that there was no denial of the fact that the Assessee had transferred the goods before it crossed the Customs Station, Tribunal was correct in granting relief. Since the Tribunal has not rendered any finding to dislodge the factual finding arrived at by the First Appellate Authority, there is no justification for the Tribunal to reverse the order passed by the First Appellate Authority - petition allowed.

Summary

Issues:
Challenge to order under Tamil Nadu General Sales Tax Act and Central Sales Tax Act regarding high sea sales exemption disallowance.

Analysis:
1. The petitioner, a dealer in camphor, challenged an order disallowing high sea sales exemption. The Assessing Officer disallowed the claim due to an alleged interpolation in the Bill of Entry, leading to tax levy and penalty.

2. The First Appellate Authority allowed the appeal after verifying documents produced by the petitioner, including Bill of Lading, high sea sales invoice, and duty payment evidence. The Departmental Representative also confirmed the documents' authenticity.

3. The State appealed to the Tribunal, which reversed the decision solely based on the alleged interpolation in the Bill of Entry. The key issue was whether the Bill of Entry could establish title to the goods, which the Customs Act clarifies it does not.

4. Citing a similar case precedent, the High Court emphasized that the Bill of Lading, not the Bill of Entry, signifies title to goods. The Court highlighted the importance of the ultimate buyer's name on the Bill of Lading and the irrelevance of discrepancies in the Bill of Entry for determining high sea sales exemption.

5. Referring to the Customs Act, the Court reiterated that the Bill of Entry does not confer title to goods. It also cited a previous judgment regarding clearance of warehoused goods for home consumption and the qualification of duty paid for high sea sales.

6. The Court found no justification for the Tribunal to reverse the First Appellate Authority's decision, as no new findings were presented. Consequently, the writ petition was allowed, setting aside the Tribunal's order and restoring the First Appellate Authority's decision.