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TMI Blog1991 (7) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporation, the canalising agent. On the basis of licenses issued by the Chief Controller, orders were placed with the State Trading Corporation. Held that:- in the case of import under actual user licences, the ownership of the goods was transferred by the foreign seller to the licensees. There was no principal to principal contract of sale between dealer and the licensees. As the goods belonged to the licensees, there could obviously be no question of the dealer selling those very goods to the licensees. - S.T.R. No. 44 of 1978 - - - Dated:- 25-7-1991 - KIRPAL B.N. AND JAIN D.K. JJ. Balram Sangal, for the respondent. S.P. Shringi, for the petitioner. -------------------------------------------------- The judgment of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the sales falling into first category, i.e., where the bills were raised directly by the State Trading Corporation against respective authorities the Central sales tax or local sales tax, as the case may be, has been charged by the State Trading Corporation. In such transactions the actual user licensees placed orders with the State Trading Corporation through this dealer. The dealer finances the purchases of the newsprint through bankers. The licensees authorise the dealer to pay to the State Trading Corporation and collect goods against authorisation. The dealer writes to the bankers to issue demand draft in favour of the State Trading Corporation against particular order, with the request to send the release order and demand draft to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was not liable for payment of sales tax on newsprint imported through the State Trading Corporation which was later passed on to third parties or licence-holders? 3.. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that for entire transactions under the import and disposal of newsprint, the assessee was not exigible to sales tax?" As would be evident from the above, there are two categories of cases with which we are concerned. The first is where imports were made on behalf of various actual user licensees on the basis of the import licences issued by the Chief Controller of Imports and Exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of clearance through the customs authorities, he shall inform the licensing authority concerned explaining the reasons for the same. B. The holder of the letter of authority shall clearly indicate on all the relevant customs documents including the triplicate copy of the customs bill of entry that the goods have been imported by him on behalf of the licensee. This endorsement will be duly attested by the customs authority. C. The holder of the letter of authority shall not under any circumstances be entitled to any quota licence or quota certificate on the basis of these imports. " It is an admitted case that the terms of the import licence as well as the letter of authority were complied with. A perusal of the aforesaid conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessees, holding a letter of authority from an actual user, imported goods which were supplied to the actual user licensee. The question which arose was whether there was any transaction of sale between the assessees and the licensee. After examining the documents on record, including the letter of authority, the Division Bench of the Bombay High Court came to the conclusion that the legal effect of the documents on the record left no doubt that in the matter of imports under the contract, the assessees had acted as agents of the licensee and that they did not purchase any of the goods imported under the contract themselves and that there was no sale of goods by the assessees to the licensee. To the similar effect is another decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apers and not on the name of the agent or the dealer and that the imports are through a single canalised agent, viz., the State Trading Corporation. No direct licence of import is issued to the publishers or to any agent or dealer of newsprint and that the agents and dealers are not issued with any terms of allocation. The State Trading Corporation, however, recognises the arrangement between the dealer and the licensee whereby the licensee is allowed to authorise the dealer to lift the newsprint on its behalf. It has been found as a fact that in the supplies made by the State Trading Corporation to the licensees, the State Trading Corporation has paid sales tax. In respect to the same transactions, it is obvious, sales tax cannot once agai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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