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TMI Blog1982 (5) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... cords. It was stated that if the purchasers could obtain the necessary import licences in their own name and execute letters of authority in favour of the petitioner only, for enabling the importation of goods, they used to undertake or take the task of importation of such goods as specified. In fact, it has been stated that in the instant case, the actual user's licence was obtained by the consumers and they also obtained the necessary letter of authority from the Chief Controller of Imports and Exports, New Delhi, authorising the petitioner to import on behalf of such actual users, whose particulars would be mentioned hereinafter, such goods as required. It has also been stated that such actual users opened the necessary letters of credit and made remittance of foreign exchange against the licences and to the extent of the values as specified in the letters of authority, which were issued under the provisions of the Import Trade Control Hand Book. A copy of such actual user's licence, as issued to actual user or customer, viz., Damodar Valley Corporation, and the corresponding letter of authority, as issued by the office of the Chief Controller of Imports and Exports, have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as ordered to them by the actual users against their licences and the letters of authority as obtained by those actual users and the contracts in question, besides giving the specifications and relevant particulars of the concerned goods, also mentioned f.o.b. price of the imported materials and such price as mentioned, was for delivery f.o.b. Calcutta, and were firm contracts, subject of course to the variation in the rate of exchange and customs duty. The petitioners have mentioned the stipulation with regard to payment as under: "95 per cent payment against each consignment will be paid by our consignee officers against R/R through bank. Balance 5 per cent payment will also be made by our said consignee officers pertaining to their portion within 30 days from the date of receipt of your 5 per cent bill supported by S.R.V. which will be granted by our officer not below the rank of an Assistant Engineer/Assistant Stores Officer, after due verification of the materials at site. All bills and papers, in duplicate, should be submitted to our consignee officers along with R/R through bank." The actual contracts were not disclosed with the petition, but the petitioners have cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ills for the supply of the concerned materials and they also charged the agreed margin for importation on behalf of the customers or such undertaking as taken by them. It would appear from the statement as made, that during the period commencing from 1st September, 1970, to 31st August, 1971, and 1st September, 1971, to 31st August, 1972, the petitioners had supplied imported goods to their different customers/clients of the value of Rs. 4,12,038.00 and Rs. 29,47,885.00 in the manner as indicated hereinbefore. The petitioners have also disclosed the documents relating to such price as mentioned above in the petition and have claimed that it would also establish and prove ex facie on the basis of such documents as disclosed that Damodar Valley Corporation had imported electrical goods of substantial value and according to the petitioners, the said corporation took delivery from the petitioners all shipping documents while the goods were on high seas and long before they reached the port of destination at Calcutta. It has also been stated by the petitioners that they are duly registered as dealers under the 1941 Act and so also under the 1954 Act, apart from the Central Sales Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioners. On the basis of such orders of assessment, respondent No. 1 raised a demand on the petitioners for a sum of Rs. 1,11,214.77, which according to the petitioners was wrongful and illegal and it has been claimed that the said authority, who had in the facts and circumstances of the case, disallowed the claim for exemption under section 5(2)(a)(v) as mentioned hereinbefore, had acted improperly. Mr. Biswarup Gupta, on the facts and circumstances as indicated hereinbefore, claimed and contended that firstly, there was no sale by the petitioners within the State and secondly, if at all, and sale if any, being in the course of import, was not taxable and due exemption should have been given to the petitioners in terms of the provisions of the State Acts as mentioned hereinbefore. It was then contended by Mr. Gupta that as the petitioners imported the goods as an agent of the consumers/customers and such goods being irrevocable for those consumers and customers and the import of those goods was inextricably linked up with the contract which the petitioners had with those customers/consumers and the movement of the goods was occasioned by such contract, due exemption should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Import Recommendation Certificates issued by the DGS D or other authorities like the State Trading Corporation for supplies against contracts placed by the DGS D and was held that for effecting sales made by the petitioner as principal to the DGS D, the petitioner had to purchase goods from foreign sellers and it was these purchases from the foreign sellers which occasioned the movement of goods in the course of import. No movement of goods in the course of import took place in pursuance to the contracts of sale made by the petitioner with the DGS D. The petitioner's sales to the DGS D were distinct and separate from his purchases from the foreign sellers. The purchases of the goods and import of the goods in pursuance to the contracts of purchases were, no doubt, for sale to the DGS D. But it would not follow that the sales or contracts of sales to DGS D occasioned the movement of the goods into this country. There was no privity of contract between the DGS D and the foreign sellers. There was no obligation under the contracts on the part of the DGS D to procure import licences for the petitioner. And, it was the obligation of the petitioner to obtain the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mport cotton was issued as an agent of the licensee and the bill of lading obtained by the foreign suppliers on shipment of the goods was also issued in the name of the mills. The price was fixed on c.i.f. terms and the payment was to be made by the mills against the document and on such facts it was held that from the facts it was clear that the assessee could not have sold the goods to anybody other than the licence-holders. The sale effected by the assessee occasioned import of cotton within section 5(2) and as such was exempt from taxation. In the case of Dean and Webber Mill Stores Company v. State of Maharashtra [1977] 39 STC 161, the assessees were carrying on the business of supplying bobbins to textile mills, but they purchased bobbins from manufacturers of bobbins. NBI was also manufacturing bobbins. The assessees were, if not the sole purchasers of all bobbins manufactured by NBI, at least one of their biggest customers. For the purpose of manufacturing bobbins, NBI used to import certain special type of wood from japan. The question arose whether the supplies of wood made by the assessees under their debit notes to NBI on importing the goods on the strength of the actua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt being inextricably linked up with sale so that the bond cannot be dissociated without a breach of the obligations arising by statute, contract or mutual understanding between the parties arising from the nature of the transaction, the sale is in the course of export. Those apart, it has been held that the crucial words in the section are that a sale or purchase of goods shall be deemed to take place in the course of the export of the goods only if the sale or purchase occasions such export. The distinction between sales for export and sales in the course of export is never to be lost sight of. Mr. Gupta also made a reference to the determinations in the case of Deputy Commissioner of Sales Tax (Law) v. I.C.I. (P.) Ltd. [1981] 47 STC 149. That was the case where, the assessee initially entered into written contracts with prospective buyers for the import and sale of the goods. Thereafter, the goods were imported from outside India against actual user's licence of the customers under the letter of authority. In all correspondence and documents including the customs bill, it was required to be indicated that the goods had been imported by the assessee on behalf of the licensees. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e pendency of these comprehensive appeals, that part of the points as raised there, which are in issue in this proceeding should not be entertained or quashed. It was also claimed by Mr. Dutta that the assessments as involved in this case, being for different quarters and years, should not also be entertained in one application and as such, the application should be deemed to be not maintainable. It was further contended by Mr. Dutta that in fact no evidence has been adduced by the petitioner before the authorities concerned or even appropriately disclosed in this proceeding, if the sales were in the course of import or sales in West Bengal, and if at all, such question could be decided on proper materials by the authorities concerned and not in this case. Mr. Dutta specifically claimed that the concerned agreements, which were and are vital for the appropriate and necessary determination of such points in issue, have not been disclosed. After placing the relevant facts as disclosed in the pleadings of the petitioner and on his construction of them, Mr. Dutta contended that there was no dispute or in holding that the petitioner was joint-holder and the goods, if at all, were transf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eneral Sales Tax Act, 1959. The assessee objected to its inclusion and contended that under the condition of the letter of authority G was only the assessee's agent for the import of cotton and there was therefore no sale by G to it and that in any case the transaction of purchase was in the course of import and was therefore exempt under article 286(1)(b) of the Constitution and it has been observed on such facts that it could not be said that the contract between G and the assessee was not a sale, though it purported to be a sale and was intended to be a sale by the parties, because of the provisions of the Regulation enabling the Government to treat the imported goods as belonging to the licensee for the purpose of its fiscal policy. The transaction was a sale and G was not a mere agent of the assessee for the import of cotton; that the sale to the assessee was effected after the goods were taken out beyond the customs barrier and it was therefore not hit by the constitutional ban under article 286(1)(b). It has also been observed that what constitutes agency is the jural relationship of principal and agent. The rights and liabilities of the parties flow from such relationship. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en held that (i) the expression "occasions the movement of goods" occurring in section 3(a) and section 5(2) had the same meaning; (ii) before a sale could be said to have occasioned the import it was not necessary that the sale should have preceded the import; (iii) the movement of goods from Belgium into India was incidental to the contract that they would be manufactured in Belgium, inspected there and imported into India for the consignee, and was in pursuance of the conditions of the contract between the assessee and the Director-General of Supplies. There was no possibility of the goods being diverted by the assessee for any other purpose, and therefore, the sales took place in the course of import of goods within section 5(2) of the Act, and exempt from taxation. In view of the above, Mr. Dutta wanted to contend that the nexus in K.G. Khosla's case [1966] 17 STC 473 (SC) would apply in this case and not the determinations in Kotak's case [1973] 32 STC 6 (SC); AIR 1973 SC 2491, the more so when the facts in this case were different from those determinations or the basis in Kotak's case [1973] 32 STC 6 (SC); AIR 1973 SC 2491 and more particularly when the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the decision of a court or tribunal to correct errors of fact and does not by assuming jurisdiction under article 226 trench upon an alternative remedy provided by statute for obtaining relief. Where it is open to an assessee to move another tribunal, or even itself in another jurisdiction for obtaining redress in the manner provided by a statute, the High Court normally will not permit, by entertaining a petition under article 226, the machinery created under the statute to be by-passed, and will leave the party applying to it to seek resort to the machinery so set up. These apart, Mr. Chowdhury adopted the other arguments as advanced by Mr. Dutta and on the question of statutory agency or who should be regarded as such, he also referred to the determinations in Rajeswari Mills Ltd.'s case [1964] 15 STC 1 and also claimed that the petitioner having done everything in this matter and as such agent, cannot claim the exemptions as asked for. It was appropriately pointed out by Mr. Ghosh, the learned Advocate appearing on behalf of the petitioners and assisting Mr. Gupta, that the law with regard to the statutory agent or who is such and the tests to find out the same as laid down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rue sense of the term or where the assessment as a whole is ultra vires, the remedy contemplated by section 148 is no remedy and secondly, on the basis of the determinations in the case of Electric Lamp Manufacturers (India) P. Ltd. v. Collector of Central Excise, Calcutta and Orissa (1980) 2 CHN 49. That was a case where the appellant, a manufacturer of diverse electric lamps which are excisable goods, sells its products only to selected companies at a price which represents actual manufacturing cost and manufacturing profit only. But the products of the appellant company have been assessed and duty collected on them not on the prices at which the appellant sells its products to the customer companies, but on the basis of the price list of the said customer companies less the trade discount allowed by these companies. The appellant's case is that it has been paying the duty on the mistaken belief that the duty was payable on the said basis. The appellant for the first time came to know from the decision of the Supreme Court in A.K. Roy v. Voltas Limited AIR 1973 SC 225 that the assessment of excise duty on its products on the said basis was without jurisdiction. Thereupon, the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possible in this case, in support of his contentions as indicated above, Mr. Gupta also referred to the determinations in the case of Toronto Railway Company v. Corporation of the City of Toronto [1904] AC 809, the observations whereof also lay down that interference, if the assessment is void ab initio, would be possible, even on the face of other remedies available. Mr. Gupta also contended that if all relevant and material facts are available from the pleadings like the present one, the court would not be powerless to mould the prayers necessarily to give complete and effective relief to the party. Such submissions were sought to be supported, firstly on a reference to the case of Gopi Nath Khanna v. Babu Bansidhar (1905) LR 32 IA 123, wherein it has been observed that when the plaint contains a statement of all the material circumstances, but the prayer of it is inartificially framed, it would be sufficient with the aid of the prayer for further relief, to enable the court to give the plaintiff the appropriate relief, if he was otherwise entitled to it. While on the point, Mr. Gupta secondly referred to the observations in the case of Dwarka Nath v. Income-tax Officer AIR 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncept of a quasi-judicial act with a view to keep the administrative tribunals and authorities within bounds. Mr. Gupta argued that in a case like this, the transfer of property as involved, would be immaterial, the more so when, the importation was the incident of the contract and furthermore, as such contract with the purchaser occasioned the movement of the goods and there was no doubt or any dispute that the sale was in the course of import. It was also claimed by Mr. Gupta that because of the covenant in the contract, the fact whether the petitioner was an agent or not or as claimed and contended by Mr. Dutta, would be immaterial. The existence and availability of other remedy in the statute would ordinarily be a bar to maintain an application under article 226 of the Constitution of India, but there are exceptional circumstances amongst others like the proceedings being void ab initio or taken in excess of or in abuse of jurisdiction and power, or on total and initial lack of jurisdiction or if they are against principles of natural justice, when the High Court will have and retain the power and jurisdiction to interfere. But, while exercising such power, it should be re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble. But when the challenge is such as cannot be determined by the authority appointed to take action, the writ jurisdiction of the High Court remains unimpaired. In such a case, the Court has to see whether the ground on which the challenge is based can be entertained, tried and determined by the authority created by the statute. In such view of the matter, perhaps, Mr. Dutta wanted to contend that no interference by this Court and at this stage, should or need be made by this Court, more particularly when the points regarding jurisdiction and those on facts and law are in issue in the pending appeals and can be decided conveniently by the Tribunal. In such view of the matter, Mr. Gupta argued on the possibility of the dissection of prayers and the power of this Court, to have the prayers moulded, for doing effective justice and giving proper relief to the petitioner, on reference to the determinations in the cases of Electric Lamp Manufacturers (India) P. Ltd. v. Collector of Central Excise (1980) 2 CHN 49, Bennett and White (Calgary) Ltd. v. Municipal District of Sugar City [1951] AC 786 and Gopi Nath Khanna v. Babu Bansidhar (1905) LR 32 IA 123. The question thus would be whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s raised or to decide whether the sales in this case were sales in the course of import or not and thus to find out and determine on that basis the taxability of the petitioner along with other matters and facts on merits and that too on consideration of the available evidence, I see no reason why the High Court should ordinarily interfere at this stage. But such interference, even on the admitted position as indicated above, would be possible as the determinations in the case of Deputy Commissioner of Agricultural Income-tax and Sales Tax v. Kotak Co., Bombay [1973] 32 STC 6 (SC); AIR 1973 SC 2491, which determinations again were and are appropriately applicable in this case, have not been applied by the authorities concerned, duly. Such determinations, if applied, would have found that the initiation as made and continuation of the proceedings, on that basis, were absolutely without jurisdiction. As such, it may be safely held and observed that the authorities concerned have not acted duly or in proper use of their jurisdiction and power, and furthermore, such initiation and determination being without jurisdiction, viz., was lack of jurisdiction, which would go to the root o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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