Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

1991 (8) TMI 289

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... Tax Act, 1975, by the Sales Tax Appellate Tribunal, Delhi, who has referred the following questions of law to this Court: "1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the sale by the assessee of EMI Vidicon tube type 2677 and EMI tape video recroding tape type 620/48/200 VP to the All India Radio in pursuance to the tender notice issued by the Directorate General of Supplies and Disposals was exempt from the levy of sales tax? 2.. Whether the sales of goods imported by M/s. Gramophone Co. of India from Middlesex, England, and subsequently sold to All India Radio constitute one sale or two distinct and different sales; one from the foreign seller to M/s. Gramophone Co. of India an .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... stipulated that the prices were exclusive of sales tax, as the transaction being during the course of import recommendation certificates to be issued by the Government of India, sales tax was not legally leviable. The assessee then wrote a letter dated January 17, 1972 to the Directorate General of Supplies and Disposals for the issue of import recommendation certificates. One such was issued by the Directorate on February 1, 1972. A certificate was also issued by All India Radio on February 3, 1972 that the items mentioned therein were the property of Government of India. The assessee wrote another letter on February 7, 1972 to the Directorate General of Supplies and Disposals for the expeditious issue of import licence of the said ite .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... t from the nature of transaction that the assessee was competent to dispose of those items independently, and was not obliged to supply them to the All India Radio. The goods were rather, in fact supplied in terms of the accepted tender to the All India Radio. The delivery schedule of those items to the All India Radio was further made dependant and co-related to the receipt of import licences. The nature of the goods were also specified to be of a particular manufacturer of Middlesex, England. Their sale to the Government, therefore, necessarily involved import, and this was very well understood by the parties to that tender and they made this as part of the accepted tender. Section 5(2) as aforesaid comes into play where the sale oc .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... nd duly deposited. Subsequently by a writ, its refund was sought and reliance was placed upon the case of KG. Khosla and Co. [1966] 17 STC 473 (SC). The dealer in that case was found to be importing non-ferrous metals, for several years and it was noted that the particular sale transaction had not resulted in the import. I, therefore, allow this appeal and hold that the sale of the aforesaid two items did not invite the levy of sales tax. " On an application being moved by the petitioner the aforesaid three questions of law have been referred to this Court. As will be evident from what has been stated hereinabove, the Sales Tax Tribunal has based its decision on the judgment of the Supreme Court in the case of KG. Khosla and Co. [1966 .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... clearly applicable to the present case is that of Binani Bros. [1974] 33 STC 254. In that case the assessee, in order to effect supplies to the DGS D had to obtain additional import licence. The import licences were obtained on the import recommendation certificates which were issued to the assessee. It was always contemplated and known that the goods which were to be supplied to the DGS D had to be imported from abroad. Nevertheless the Supreme Court came to the conclusion that there were two sales which were involved in that case. One sale was that of the foreign supplier who sold to Binani Bros. and the other by the latter in favour of the DGS D. The import had not been occasioned by the sale contract between Binani Bros. and th .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... C 473 (SC) would have been applied. Notwithstanding the fact that the assessee, in the present case, obtained the import licence on a certificate being issued by the All India Radio and also notwithstanding the fact that in the acceptance of tender, it was stipulated that the goods were being imported from abroad, nevertheless two independent sales transactions have taken place. There was a sale by a foreign exporter to the assessee and thereafter there was a sale by the assessee to the DGS D. The sale which has occasioned the movement of goods from England to India is the sale made by the foreign exporter in favour of the assessee and not the sale made by the assessee in favour of the DGS D. This sale has been made after the goods had .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates