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TMI Blog1984 (8) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,619.88. The Appellate Assistant Commissioner granted partial relief on a turnover of Rs. 10,25,078.04 but dismissed the claim in respect of the rate of tax. Dissatisfied with the order of the Appellate Assistant Commissioner, the assessee filed an appeal before the Tribunal disputing its liability on a turnover of Rs. 68,43,169.84 and the rate of tax on a turnover of Rs. 4,31,619.88. In respect of the assessment year 1965-66 which is the subject-matter of T.C. No. 656 of 1978, the assessee claimed exemption in respect of a turnover of Rs. 12,60,409.00 on the ground that the turnover represents the sales in the course of the import and therefore, they have to be exempted under section 5(2) of the Central Sales Tax Act which is the subject-matter of T.C. No. 655 of 1978. Since the said claim for exemption was rejected by the assessing authority the matter was taken up in appeal before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner granted a partial relief on a turnover of Rs. 38,834.17 and dismissed the claim for exemption in relation to the rest of the turnover. Thereafter the assessee went before the Tribunal disputing his liability on a turnover of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s seen that rule 6(b) of the Tamil Nadu General Sales Tax (Turnover and Assessment) Rules originally allowed deduction from the total turnover excise duty paid by the assessee in respect of the goods manufactured; but subsequently, rule 6(b) has been deleted with effect from 5th January, 1957. After the deletion of rule 6(b), we do not see how the assessee could claim the benefit of exclusion of excise duty from the total turnover. As a matter of fact, the deletion of rule 6(b) with retrospective effect was challenged in writ proceedings and this Court had upheld the validity of the deletion. Therefore, the Tribunal is right in holding that the claim for deduction cannot be allowed. Therefore, we are not in a position to interfere with that part of the order of the Tribunal. 5.. Coming to the first and substantial question as to whether the goods imported by the assessee and sold to the local buyer can be taken to be a sale in the course of the import as contended by the assessee, the Tribunal has chosen to rely on the decision of the Supreme Court in Binani Bros. (P.) Ltd. v. Union of India [1974] 33 STC 254 (SC), and the unreported decision of this Court in T.C. No. 227 of 1976 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the goods to the local buyers. In the light of these admitted facts on which there is no dispute beeween the parties, the assessee claimed that its sale to the local buyer is the sale in the course of the import attracting section 5(2) of the Central Sales Tax Act and therefore, they are exempted from tax under the Tamil Nadu General Sales Tax Act. In support of this plea, the assessee relied on the decision of this Court in T.C. No. 105 of 1972 which related to the assessee's own case for the assessment year 1966-67. In that case, this Court has specifically dealt with the assessee's plea for exemption and accepted the sale on the ground that its sale to the local buyer had occasioned the import of the goods and therefore, the said sale to the local buyer attracts section 5(2) of the Central Sales Tax Act. It is also the assessee's submission before us that the decision in T.C. No. 105 of 1972 State of Tamil Nadu represented by Deputy Commissioner of Commercial Taxes, Madras Division, Madras-1 v. East Asiatic Company (India) Private Ltd., Madras which is a decision of a Bench of this Court and which was rendered on exactly similar facts has to govern these cases as well. The le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said import entitlement, the assessee entered into agreements with the local buyers to supply copra at a particular price. Thereafter, it entered into a contract with the foreign seller and imported the goods. When the goods arrived at the port, the assessee directs the local buyer to take delivery of the goods at the port premises. The question is whether the sale transaction between the assessee and the local buyer could attract section 5(2) of the Central Sales Tax Act. In more or less in the same circumstances or on the same facts, the Supreme Court in Binani Bros. (P.) Ltd. v. Union of India [1974] 33 STC 254 after dealing with the development of the law on the aspects of the case in detail, if we may say so with respect, have squarely laid down that there are two sales involved in such a transaction, one sale between the foreign seller and the assessee and the other sale between the assessee and the local buyer and only the first sale between the foreign seller and the assessee that could be considered to be sale in the course of the import and not the second sale. In that case, the assessee entered into contracts with the Directorate General of Supplies and Disposals for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the agency of the petitioner to the DGS D and the movement of goods from the foreign countries was not occasioned on account of the sales by the petitioner to the DGS D." As pointed out earlier, the assessee has all along been acting as principal on the basis of the import entitlement and the letter of authority. The fact that before the assessee importing the goods for the contract of sale with the local buyer will not make it an agent of the local buyer for the import of the goods. Nor can the assessee claim that it is an agent of the foreign seller in supplying goods to the local buyer. As a matter of fact, in this case, the assessee never put forward a claim of agency either on behalf of the local buyer or on behalf of the foreign seller. Therefore, the decision of the Supreme Court referred to above squarely applies to the facts of the instant cases and there is no question of the assessee avoiding the application of the principles laid down in that case to the cases on hand. Though the decision rendered in T.C. No. 105 of 1972 by a Bench of this Court has taken a contrary view, we are not in a position to accept the said decision as laying down the correct law having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oxes, meter boxes, switch boxes, meter boards, switch boards, electrical earthenware and porcelain-ware. --------------------------------------------------------------------------- After that date it was amended. There were subsequent amendments to this item but we are not concerned with those amendments as we are concerned only with the assessment years 1962-63, 1963-64, 1965-66 and 1966-67. Thus, it is seen that item 41 did not contain the expression "machinery" and it is only after 1st September, 1964, the expression "machinery" is found in the said item. Even after the inclusion of the expression "machinery" in item 41 on and from 1st September, 1964, the Courts have unanimously taken the view that the expression "machinery" occurring in item 41 should take the colour from the expression "electrical goods" occurring in the opening part of item 41 and that it is only such machinery which will fall within the general expression "electrical goods", that will be covered by that item and not all the machineries. In Textool Company Limited v. State of Madras [1968] 21 STC 232, this Court held that the word "machinery" appearing in entry 41 of the First Schedule to the Tamil Nadu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontext in which the word "machinery" is used in entry 41, it should be understood as machinery of the same nature as electrical goods, that the expression "machinery" should take its sense and scope from the term "electrical goods " that precedes it and that therefore any other machinery, which could not be characterised as electrical goods, cannot fall within entry 41. The Court also observed that in order to attract, entry 41 of the First Schedule, intrinsically the goods must be electrical goods and their use cannot be had without electrical energy and that merely because an article cannot be had without electricity, it may not be decisive. In Deputy Commissioner, Ernakulam v. Equipment Agencies [1981] 47 STC 68 (Ker), the question arose whether the pumpsets, grinders, air-compressors, rotaries, etc., sold by the assessee are liable to be regarded as "electrical goods" falling within entry 26 of the First Schedule to the Kerala Sales Tax Act which is the same as entry 41 of the Tamil Nadu General Sales Tax Act, and it was held that the mere fact that the assessee had simultaneously sold to the purchasers electrical motors also will not create any difference in the legal position ..... X X X X Extracts X X X X X X X X Extracts X X X X
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