9911796707
TMI Blog1980 (12) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... ts it was considered that there were two independent sales, one by the assessee in favour of the State Trading Corporation and the other by the State Trading Corporation in favour of the foreign buyer. The assessing authority, therefore, proposed to revise the assessment and bring to tax a sum of Rs. 46,41,305 representing sales to the State Trading Corporation. After hearing the assessee's objections, the said amount was taxed in the assessment under the Tamil Nadu General Sales Tax Act. Similarly, the assessments under the Central Sales Tax Act and under the State Act for the years mentioned above were revised or made bringing to tax the sales to the State Trading Corporation on the ground that they were only local sales and not sales in the course of export. The Appellate Assistant Commissioner and the Tribunal have confirmed the respective assessments. The revision petitions arise out of the Tribunal's orders. For the assessment year 1969-70 by his order dated 26th February, 1971, the assessing authority made an assessment. Subsequently it was noticed that a sum of Rs. 42,21,119.53 was deducted as export sales relating to the supply of machinery to the State Trading Corporati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our months after the last consignment whichever was later. Payments were to be made in the Indian rupee through an irrevocable, "divisible" and assignable revolving letter of credit. The customer's authorised representative was to have access to the subsuppliers' manufacturing works to inspect and test the deliveries contracted for, during and after its manufacture. The State Trading Corporation was to inform 45 days in advance about any consignment being ready for inspection and testing. The goods were to be shipped through the competent organisation for maritime transport in U.A.R. The State Trading Corporation was to supervise the complete erection of the machinery. Article 18 provided for the State Trading Corporation assigning its rights and obligations in whole or in part with the previous written consent of the customer and in that event the State Trading Corporation was to remain jointly and severally responsible with the assignee for the execution of the contract. In annexure I to the agreement in several places the types of machinery required to be supplied by the assessee are referred to. As regards 97 1/2 per cent of the price payable by the foreign customer, there is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the contract was the foreign agreement dated 12th May, 1969. It is in accordance with this contract, which is called "back to back contract" that the supplies were made by the assessee. The goods were duly booked on different dates and Voltas who were the distributors of the assessee's products undertook to erect the machinery in U.A.R. There were also inspections of the machinery as contemplated by the parties during and after the manufacture. The contention of the assessee was that in all these cases the goods were actually exported by the assessee to U.A.R. and that the sales were in the course of export and, therefore, exempt. The contention for the State was that in all these cases there were separate contracts between the assessee and the State Trading Corporation and the State Trading Corporation and the foreign customer, and that the sales effected by the assessee to the State Trading Corporation cannot be treated as export sales. It is in this context that we have to refer to the relevant provisions of the Act. It is not in dispute that in all these cases the sales would be exempt only if they fell within the scope of section 5(1) of the Central Sales Tax Act. Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir agents in Cochin bid at the auction and purchased the tea chests with export quota rights. The chests were delivered at the warehouses by Stanes and Company to the purchasers whose bids were accepted. The agents of the foreign buyers then obtained licences from the Central Government for export of the tea chests and actually exported them out of the territory of India. The question was whether the sale by auction to the agents or intermediaries of the foreign buyers was a sale in the course of export and was exempt from sales tax. It was held that the sales did not occasion the export even though the assessee knew that the buyers in offering the bids were acting on behalf of the foreign principals and that they intended to export the goods. It was pointed out that there was between the sale and the export no such bond as would justify the inference that the sale and the export formed parts of a single transaction or that the sale and export were integrally connected. The conclusion was that the sales were for export and not in the course of export. At page 759 it was observed as follows: "To constitute a sale in the course of export of goods out of the territory of India, co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory of India and export them and even if the seller had the knowedge that the goods were intended by the purchaser to be exported, such a transaction was not considered by their Lordships to be in the course of export, for the seller did not export the goods, and it was not his concern as to how the purchaser dealt with the goods. At the other end was the transaction with a foreign buyer under which the goods might under the contract be delivered by the seller to a common carrier for transporting them to the purchaser. Such a sale would indisputably be one of export, whether the contract and delivery to the common carrier were effected directly or through agents. But in-between these two types of transactions lies a variety of transactions in which the question whether the sale was one for export or was one in the course of export would have to be determined on a correct appraisal of all the facts. There was no single test laid down in the pronouncement of the Supreme Court to determine this question, and each case has to be decided on its own facts. However, in all these cases it is necessary to bear in mind the distinction between the transactions which may be called sales for ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.C.). was followed and it was pointed out that the decision in National Tractors, Hubli v. Commissioner of Commercial Taxes, Bangalore[1971] 27 S.T.C. 271 (S.C.)., of the Supreme Court was no longer good law. Thus, it is now well-established that there is a difference between a sale for export and a sale in the course of export. The delivery by the assessee of the goods on board as the agent of the State Trading Corporation is only in discharge of an obligation of a term of the contract between the assessee and the State Trading Corporation. It is the State Trading Corporation which had entered into the contract with the customer in U.A.R. There is absolutely no privity of contract between the assessee and the customer in U.A.R. Though the State Trading Corporation had procured the machinery from the assessee only for export, still the transaction of sale in the course of export was actually effected only by the State Trading Corporation. As pointed out in Ben Gorm Nilgiri Plantations Co., Coonoor v. Sales Tax Officer, Special Circle, Ernakulam [1964] 15 S.T.C. 753 (S.C.)., the knowledge on the part of the assessee that the goods were to be exported had no relevance to the deter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion further. Suffice it to say that the transfer of property in the goods depends on the intention of the parties, and in the present case the assessee had tendered the documents to the bank and put the goods on board. Until these were done, even assuming that there was any appropriation, it cannot be treated as an unconditional appropriation. In the view that we have already taken, viz., there was a local sale in favour of the State Trading Corporation as soon as the goods were put on board on its behalf, there is a liability to tax. There are two other points which arise in some of these cases. One is with reference to the power of revision and the problem arises in T.C.(R) Nos. 1300 to 1302 of 1977 and 1393 of 1977. This point has already been covered by two decisions of this Court in Yercaud Coffee Curing Works Ltd. v. State of Tamil Nadu[1977] 40 S.T.C. 531. and Surya Fertilisers and Chemicals v. State of Tamil Nadu[1971] 40 S.T.C. 538We do not think it necessary to deal with the point over again in these cases and following the said judgments we hold that the exercise of power of revision cannot be questioned. The only other point that survives for consideration arises i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
