9911796707
TMI Blog2005 (7) TMI 606X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts and in the circumstances of the case and on a true and correct interpretation of section 5(2) of the Central Sales Tax Act, 1956, was the Tribunal justified in law in holding that the disputed transaction under sale invoice No. 16 dated April 9, 1987 was allowable under section 5(2) of the Central Sales Tax Act, 1956 on the ground that sales are effected by transfer of documents of title to the goods before the goods had crossed the customs frontier of India?" 2.. To decide the above question of law raised hereinabove, following provisions of law will be relevant. Section 2(4) of the Sale of Goods Act defines "document of title to the goods". "'document of title to goods' includes a bill of lading, dock-warrant, warehouse keeper's certificate, wharfinger's certificate, railway receipt, (multimodal transport document), warrant or order for the delivery of goods, and any other document used in the ordinary course of business as proof of the possession or control of goods, or authorising or purporting to authorise, either by endorsement or by delivery, the possessor of the document to transfer or receive goods thereby represented;" 3.. Section 4 of the Sale of Goods Act def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... October 15, 1980. At that time, the Bill of Exchange dated October 15, 1980 was also drawn on Grindlays Bank Limited, Bombay and the copy is endorsed to the respondents. The goods were then despatched by air through Jugo Transport, Zagrab, and in due course, Airway Bill dated October 15, 1980 was received by the bank and a copy of the same was also received by the respondent. Thereafter, on November 12, 1980, the respondent had written to the Assistant Collector of Customs, declaring sales of consignments to different parties on "highsea sales basis". The goods were then despatched by Air India and the respondent was informed of the cargo arrival, directing them to contact their agents, M/s. Airfreight (P) Ltd., for delivery thereof. The respondent deposited the price of the goods with the Grindlays Bank Ltd., and thereafter, on November 14, 1990, letters were issued by the bank addressed to Airfreight Private Limited instructing them to deliver the goods to the respondent or order against payment of customs duty and all charges. The respondent had endorsed these letters in favour of their customers who had got their respective goods cleared on payment of customs duty and other ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dissatisfied, the respondent filed second appeal before the Deputy Commissioner of Sales Tax (Appeals) who held that the delivery orders issued by the Canara Bank can be taken as a document of title to the goods and accordingly, allowed the appeal. The Additional Commissioner of Sales Tax reversed the above order on the ground that the delivery order is not a document of title to the goods. The respondent filed an appeal to the Maharashtra Sales Tax Tribunal who held that the delivery order issued by the Canara Bank is a document of title to the goods which is negotiable, and when it was endorsed by the importer in favour of the purchasing dealer. III. Sales Tax Reference No. 11 of 2000: 9.. In the Commissioner of Sales Tax v. K. Mohan & Co. case, the respondents are registered dealers. They are exporters in ready- made garments and importers in machines, cloth, chemical, etc. They have opened the letter of credit with the State Bank of India, Bombay to facilitate import of goods from foreign exporters. The respondent had contended that the goods were sold by transfer of document of title to the goods before the goods had crossed the customs frontiers of India, and therefore, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t from Rs. 14,749 to Rs. 1,000. V. Sales Tax Reference No. 8 of 2001: 15.. In the Commissioner of Sales Tax v. Ashapura Minechem Private Limited case, the respondent M/s. Ashapura Minechem Private Limited are registered dealers under the Act and Central Act. They are importers and exporters in chemical, electronics and electrical goods. The respondents were assessed for the period July 1, 1986 to June 30, 1987 and they made claim of sales during the course of imports under section 5(2) of the Central Act and claim exemption. However, the Sales Tax Officer disallowed the claim in respect of invoice No. 19 dated April 9, 1987 amounting to Rs. 41,534 pertaining to the import of goods by air. These goods were allegedly sold to Oriental Colour Laboratories (purchasing dealers). The respondent opened the letter of credit with the bankers for the import of goods on February 28, 1987. The delivery order was issued by bankers endorsed in favour of the purchasing dealer, Oriental Colour Laboratory, by the respondent. The purchasing dealer on February 28, 1987 entered bill of entry for home consumption. On February 27, 1987, the respondent cleared the goods from customs at the airport afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under the facts and circumstances of the cases as we had enumerated hereinabove, delivery order would clearly be a document of title. He strongly relied on the judgment of the Supreme Court in Bayyana Bhimayya & Sukhdevi Rathi v. Government of Andhra Pradesh [1961] 12 STC 147; AIR 1961 SC 1065 wherein the Supreme Court has clearly observed as under: "A delivery order is a document of title to goods and the possessor of such a document has the right not only to receive the goods but also to transfer it to another by endorsement or delivery." Thereafter, the learned counsel Shri Surte brought to our notice another judgment of the Bombay High Court in Chhaganlal Savchand v. Commissioner of Income-tax, Bombay [1966] 62 ITR 133 wherein the division Bench has clearly held as under: "It would be clear that in India, the bill of lading in the commercial world is used in the ordinary course of business as proof of possession or control of the goods themselves, and the possessor of the bill of lading is taken in the commercial world as a person authorised to transfer these goods either by making an endorsement on the bill of lading or even by mere delivery of the bill of lading. The en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he seller as well as the buyer. The issuing banker did not purport to act as agent of the buyer and the intermediary banker accepted the general offer of the issuing banker by negotiating the draft. By so accepting the offer and by taking over the bill of lading, the insurance certificate and the invoice which represented title to the goods the intermediary banker did not act as an agent of the seller." 22.. Shri Surte contended that not only sale but even agreement to sell if takes place on the high sea, the same would also be covered. In the case of State of Maharashtra v. Embee Corporation [1997] 107 STC 196 wherein the Supreme Court has held as under: "The above definition of 'sale' in the Act shows that the word 'sale' has been given a very wide meaning so as to include not only the sale of goods, but also the transactions, namely, a transfer of goods on hire purchase system. Further, the use of words 'sale of goods' in section 3 of the Act and the words 'contract of sale' occurring in section 4(2) of the Act have been assigned the same meaning which is wider to the meaning of sale in the general law. In such a situation the word 'sale' defined in section 2(g) of the Act and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Surte. Over and above, Mrs. Badeka also pointed out the judgment of West Bengal Taxation Tribunal in the case of Satyanarayan Bagla v. Commissioner of Commercial Taxes, West Bengal [1992] 84 STC 368. In the said order, the Tribunal has held that: "A delivery order is a document of title to goods and the possessor of such document has the right not only to receive the goods but also to transfer it to another by endorsement or delivery. Mere transfer of pucca delivery orders does not amount to sale; it is only when the ultimate endorsee in the chain of transactions takes delivery of the goods that all the intermediate transactions fructify to sales and the ultimate delivery feeds back the title of the intermediate dealers. The question of delivery having been effected is of paramount importance to a decision regarding taxability in a transaction governed by pucca delivery orders." 25.. Mrs. Badeka also brought to our notice that the judgment of Supreme Court in Bayyana Bhimayya & Sukhdevi Rathi v. Government of Andhra Pradesh [1961] 12 STC 147 which was referred to hereinabove has been followed by the Supreme Court in State of Andhra Pradesh v. Kolla Sree Ramamurthy [1962] 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
