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TMI Blog1975 (12) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... user s licence though the imports were made in pursuance of specific orders. The appellant s claim had not been accepted by the assessing authority for all the years on the ground that the appellant had not imported the goods against actual user s licence though the imports were made in pursuance of specific orders. The appellant s imports against actual user s licence were however alleged under s. 5(2) of the Central Sales Tax Act, 1956 and exempted. It was assumed that sales under D.G.S. D contract made merely on import recommendation certificate (IRC) issued by Government concerns according to the practice adopted by the Government in respect of imports for Government undertakings, it was considered that the sales would not qualify for exemption in view of the decision of the Supreme Court in Binani Bros. (P) Ltd. vs. Union of India Ors. (33 STC 254). The disputed turnovers for the four years under consideration are as under : Assessment year Turnovers 1968-69 2,29,114.43 at 10 per cent 1969-70 7,05,750.19 at 10 per cent . 15,673.00 at 3 per cent 1970-71 7,14,159.83 at 10 per cent . 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubject to inspection by the Directorate General of Supplies and Disposals (Inspection), New Delhi, though the place of inspection was to be decided in consultation with the Inspecting Officer. It is however agreed that the inspection be as usual be done at the Indian end. Price was fixed exclusive of source under Central Sales Tax and it was further stipulated "the sale being in the course of import against IRC issued by the purchaser, no sales tax is leviable". Though Sales Tax cannot be a matter of contract between the parties, it appears that both the parties were of the view that sale tax will not be leviable as being exempt as sales in the course of import 95 per cent of the contract price was to be paid on despatch from a station in India and 5 per cent after final inspection, unless the seller is prepared to accepted the full price after inspection. It has been stipulated and the same schedule to acceptance of tender that the purchaser will send Import Recommendation Certificate (IRC). It is further made clear that the contract is for/cif contract and that the name of the ultimate Government consignee should be indicated on the bills of landing as in the following stipulatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t clearly specific the name of the consignee. The identity of the goods can therefore never be in doubt. These could not be diverted to any other person in view of written contract and law (import).Since the invoice has been issued by the importer to the purchaser and there are two sales one by the foreign exporter to the appellant and the other by the appellant to the Government concerns. It is the appellant s case that there is no reason why the concession extended to sales to holders of actual user s licence should not be extended to the appellants also notwithstanding the decision of the Supreme Court in Binani Bros. (P) Ltd. vs. Union of India Ors. 33 STC 254. At this stage, the learned State Representative pointed out that the question of IRC was specifically considered in Binani s case in at 262 and the Supreme Court observed that a mere appellation on the part of DGS D to procure import licence did not carry any imperative obligation upon the Chief Controller of Imports and Exports to issue import licence" and that therefore import could not be said to have been occasioned in the contract of sale. But the learned counsel claimed that the status to the IRC has not been g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State of Tamil Nadu or for that matter, India. According to him the fact that the bills of landing was to contain the name of the consignee even at the time of the shipping of the goods showed that there was appropriation even in respect of the second contract between the appellant and DGS D. He argued that there is nothing in sales tax law against the same appropriation serving the purpose of appropriation in two contracts. Where A sells to B and B sells the goods to C, it could well be that the appropriation of As sale to B, when it takes place after B s sale to C would serve as an appropriation in respect of both the sales. He contended that the argument is not novel. He referred upto certain observations of the Madras High Court in the case of Bengal Corporation Pvt. Ltd. vs. State of Madras 16 STC 62. In this case, it was pointed out that there had been difficulty and conflict between the various states in determining the place of sale for purposes of sales tax law. It was in this context that the place of sale for the purposes of Sale of Goods Act was given up as the basis of taxation. Instead, the legislature chose to adopt a different test under s. 4(2) of the CST Act whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, in my opinion the appropriation referred to in s. 4(2)(b) signifies and connotes the earmarking and setting a apart of the goods as specified goods to be delivered under the contract of sale and does not signify an appropriation carrying with it the ideas of passing of property. I am of the clear view that this objection based under s. 4(2)(a) or (b) goes to the root of the matter and on this view alone the petitioner is entitled to succeed". The learned counsel further claimed that the position in law as enunciated by the High Court is not new. Even in Khosla s case 17 STC 473 similar stand was taken by the tax-payer. However the Madras High Court did not find it necessary to base its decision on this aspect of the case and therefore did not deal with this contention as is evident from its discussion of the argument on the part of the tax payer s counsel mentioned at page 478 in 17 STC. The learned counsel claimed that the place of sale in view of this contention could never be taken to be the State of Tamil Nadu. The learned State Representative expressed surprise that such a novel argument should be raised at such a late state. He contended that the argument itself ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paragraph relates to the restricted claim. The learned State Representative however claimed that it is too late for the appellant to file these forms at this stage. While he claimed that buyer had accepted liability by providing C D forms and wanted us to confirm liability on the strength of the same, he was not prepared to grant concessional rate on the strength of the same. He claimed that the right to the concessional rate is subject other condition that C forms are filed in time. No such C or D forms were filed. At any rate, they should have been filed before the assessment. But the learned counsel had an impressive array of arguments for condoning the delay in filing the D forms. Initially he claimed that he wanted time even before assessing authority to get the D forms from the DGS D authorities if his claim for exemption is not allowed. He wanted the DGS D to be impleaded as the party to the proceedings. He also wanted 6 months time for filing the forms (for example, the appellant s Lr. dt. 6th Feb., 1970 with reference to assessment for 1969-70 filed at page 159 of the assessment file). Similar stand had been taken in appeal also and the appellant had complained that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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