9911796707
TMI Blog1984 (4) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee claimed to relate to sales in the course of import. In the assessment year 1974-75, the assessee reported a total turnover of Rs. 58,60,364.09 and taxable turnover of Rs. 27,50,259.22. The assessing authority on a check of the accounts, disallowed the exemption, among other things, a turnover of Rs. 14,877.66 which according to the assessee represented the sales in the course of import. Aggrieved by the order of disallowance of the exemption claimed by the assessee, it took the matter in appeal to the Appellate Assistant Commissioner who confirmed the assessment in respect of the turnovers in both the years said to relate to the sales in the course of import. The assesses took the matter in further appeal to the Sales Tax Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uiry. The Heavy Vehicles Factory accepts the tender and places the supply order. The supply order specifies the name of the makers as Messrs. Tay Tools Export Co. Ltd., England. The place of delivery is stated as f.o.r. Madras. The time of delivery is described as in about 10 to 12 weeks from the date of receipt of the order and the import recommendation certificate is also enclosed. The assessee obtained the import licence on the strength of the import recommendation certificate. In the said import licence specific mention has been made that the licence has been issued against the order of Ministry of Defence, and one of the terms and conditions of the licence is that the licence is issued subject to the condition that the goods imported s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Taxes, Madras Division [1966] 17 STC 473 (SC) and that such sales cannot be treated as local sales within the State of Tamil Nadu. On the same facts the learned Government Pleader contends that there is no privity of contract between the Heavy Vehicles Factory and the foreign manufacturers but the contract of sale is only between the Heavy Vehicles Factory and the assessee and therefore, the sale by the assessee cannot be a sale in the course of import and the transaction in this case is similar to those dealt with in the decision of the Supreme Court in Binani Bros. (P.) Ltd. v. Union of India [1974] 33 STC 254 (SC) according to which the sale by a foreign seller occasions the import of goods and the subsequent sale by the assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived the supplies. On these facts 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 purpose and that, therefore, the sale took place in the course of import of the goods within section 5(2) of the Central Sales Tax Act and exempt from taxation. The basis for the decision of the Supreme Court is that the assessee in that case was an agent of the foreign seller and therefore the assessee's sale to the Director-General of Supplies and Disposals should be taken to be a sale entered with the assessee on behalf of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplies made by him under a contract entered into with the State Trading Corporation for the sale of mineral ore was an export sale. The Supreme Court held on those facts that there were two sales, one by the assessee with the State Trading Corporation and the other by the State Trading Corporation in its turn with the foreign buyers for the sale of the identical goods purchased by the Corporation from the assessee and it is only the latter sale that occasioned the movement of the goods. We do not see how the decision in Serajuddin's case [1975] 36 STC 136 (SC) can be taken to throw any doubt on the decision in Khosla's case [1966] 17 STC 473 (SC). In Khosla's case [1966] 17 STC 473 (SC) the Court after consideration of the facts held that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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