9911796707
TMI Blog1975 (11) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... of 1970, T.C. Nos. 52 of 1972 - - - Dated:- 19-11-1975 - RAMASWAMI V. AND SETHURAMAN JJ. K. Srinivasan and R. Gangadharan for K.C. Rajappa, for the assessees. K. Venkataswami, the Additional Government Pleader I, for the department. -------------------------------------------------- The judgment of the Court was delivered by RAMASWAMI, J.- The assessees in this batch of cases are dealers in cloth, cotton yarn, dyes and chemicals carrying on business at Coimbatore. They are also exporters and importers of cotton, cotton yarn, dyes and chemicals. In the returns for the assessment years 1960-61 to 1965-66 in respect of a portion of turnover relating to sales of dyes and chemicals they contended that the sales are exempt as import sales. They contended that the sales were effected on forward or afloat basis, that the importation of those goods were made by the Radha Dyeing Factory, hereinafter called as the purchasers, by paying the value of the goods including customs duty and that the assessees acted only as the agents of the purchasers to whom the goods were sold. In this connection, they relied on a preliminary agreement between them and the purchasers as e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tures to all the documents to enable the purchasers to get delivery of the goods from the port through customs and the forwarding agents of the assessees and also render all possible help to fulfil the terms of the agreement. If, after receiving the premium or part of the price, as referred to above, the purchasers fail to take necessary steps for importation of the goods in the name of the assessees within the time allowed according to the licence or fail to utilise the licence or licences or cause the validity to expire, the advance amount received by the assessees as part of the sale price is liable for forfeiture. The agreement also provided that the assessees were at liberty after an advance information to the purchasers to make sales of imported goods to others or deliver the licence or licences at their option to anybody else, if the assessees were not able to get a fair profit from the purchasers. On these facts, the assessing and appellate authorities held that there were two sales, one by the foreign sellers to the assessees, which was an import sale, and another, a sale by the assessees to the purchasers, which was a local sale, and that the turnovers relating to the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in State of Tamil Nadu v. Visweswaradas Gokuldass [1975] 36 S.T.C. 479., the facts of which are very similar with the facts of this case. In Khosla Co. (P.) Ltd. v. Deputy Commissioner of Commercial Taxes [1966] 17 S.T.C. 473 (S.C.)., the relevant facts were these. The assessee entered into a contract with the Director- General of Supplies and Disposals, New Delhi, for the supply of axle-box bodies. The goods were to be manufactured in Belgium according to the specifications. In order to fulfil the contract, the assessee entered into a contract with the manufacturer in Belgium. The goods were got manufactured and imported into India and cleared at the Madras Harbour and supplied to certain parties on the instructions of the Director-General of Supplies and Disposals. There was no privity of contract between the Belgium manufacturers and the Government departments, who ultimately received the supplies. The Supreme Court held that the movement of the goods from Belgium into India was incidental to the contract entered into by the assessee with the Director-General of Supplies and Disposals, that there was no possibility of the goods being diverted by the assessee for any other pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny incorporated under the Indian Companies Act. They were importers and dealers in non-ferrous metals like zinc, lead, copper, tin, etc., and were on the approved lists of registered suppliers to the Director-General of Supplies and Disposals. Under the various control orders, sale and distribution of copper was not free, but controlled and it will have to be distributed only under the directions of the Controller of Non-Ferrous Metals to such of those licence- holders to whom such permission was given. The assessee imported and supplied certain non-ferrous metals to certain Government departments and charged sales tax. On the basis of the decision in Khosla Co. (P.) Ltd. v. Deputy Commissioner of Commercial Taxes, Madras Division [1966] 17 S.T.C. 473 (S.C.)., the amount paid as sales tax to the assessee was sought to be recovered by the concerned Government department. But the assessee was not able to satisfy the West Bengal State sales tax authorities that there was only one import sale and that, therefore, he was not liable to pay sales tax. On the other hand, the sales tax authorities took the view that there were two sales involved in that transaction, a sale to the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the assessee. In that case also, the assessee entered into negotiations with foreign buyers and settled all the conditions of the contract. The State Trading Corporation thereafter entered into a f.o.b. contract with the assessee and with the foreign buyers on identical terms. This procedure was followed because the commodity could not be exported directly by the assessee in view of the restrictions imposed by law. In spite of all these facts, the Supreme Court held that the export was by the State Trading Corporation and that there were two transactions of sale and not one transaction of export sale alone. These two latter decisions are, therefore, authorities for holding that the mere fact that the sale was for export, or the import was for the purpose of fulfilling a prior contract will not make it by itself a sale in the course of export or import. A privity of contract between the foreign buyer and the exporter or the importer and a foreign seller is necessary in order to make that transaction one in the course of export or import. It is also immaterial that the local purchaser had helped the importer in the import of the goods by finding out the foreign seller or assistin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
