9911796707
TMI Blog1992 (9) TMI 323X X X X Extracts X X X X X X X X Extracts X X X X ..... pute. He claimed exemption of the said turnover on the ground that it relates to export sales. The assessing authority accepted his contention and exempted the turnover. The Deputy Commissioner (CT), Hyderabad, Division III, on examination of the record relating to the said export sales, prima facie, came to the conclusion that the contracts under which the castor oil was exported could be classified into three categories and having regard to the judgment of the Supreme Court in Mod. Serajuddin v. State of Orissa [1975] 36 STC 136 no case for sale occasioning any export, was made out. In reply to the show cause notice the appellant took a plea that the Supreme Court judgment (supra) dealt with the case under the first limb of section 5(1) of the Central Sales Tax Act, 1956 and that his case falls under the second limb of the said section, therefore the turnover in question relates to sales in the course of export. After examining the record submitted by the assessee and considering the material placed before him, the Deputy Commissioner dropped the proceedings relating to the proposed revision by his order dated February 9, 1981. The Commissioner of Commercial Taxes on a scrutiny o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said order is within the limitation. In the course of the arguments, the learned counsel contended that in effect by the said order the Commissioner has revised the order of the Commercial Tax Officer which was passed on November 7, 1977 and which was served on December 9, 1977 and it is on this assumption the question of limitation was pressed. From the order under appeal it is clear to us that the Commissioner purported to revise the order of the Deputy Commissioner dated February 9, 1981, but not the order of the Commercial Tax Officer dated November 7, 1977. We, therefore, hold that the order of the Commissioner under appeal dated February 14, 1986 is not bad as being beyond the period of limitation prescribed under sub-section (3) of section 20 of the A.P. General Sales Tax Act. It is next contended that the Commissioner proceeded on the footing that the appellant was claiming the sales as export sales under the first limb of section 5(1) of the Central Sales Tax Act and did not consider or refer to the material placed on record by the appellant and erred in holding that no material was placed so as to bring the case under the second limb of section 5(1) of the Act. He has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods had crossed the customs frontiers of India. Now we shall refer to the material placed by the appellant on record. In the order of assessment the Commercial Tax Officer recorded that in support of the claim, the appellant has produced the vouchers, bills of lading and shipping documents, which were verified and found correct. The Deputy Commissioner who proposed to revise the order of the Commercial Tax Officer granting exemption of the turnover as export sales, classified the contracts into three categories. In the first category he placed five contracts and in the second and third categories he placed three contracts each. He has also referred to the relevant terms of the contract relating to each category. In the first category price is f.o.b. which includes the cost of loading the goods in the tank or vessels and includes duties, taxes, charges, etc., if any payable in India only. The risk of the sellers ceases with the loading of the goods in the ship as per the terms of the invoices. The payment is to be made by the STC of India to the seller on furnishing of the shipping documents complete in all respects with full set. In the second category the relevant conditions a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 75 4,40,008.40 21-3-1975 1-4-1975 5. 2/11-4-75 9,09,032.19 10-4-1975 18-4-1975 6. 3/11-4-75 2,18,770.54 10-4-1975 19-4-1975 7. 5/30-9-75 2,03,833.74 2-10-1975 11-10-1975 8. 1/5-11-75 8,52,149.70 3-11-1975 13-11-1975 9. 2/29-11-75 1,91,518.94 30-11-1975 9-12-1975 10. 5/24-3-76 3,88,174.66 24-3-1976 1-4-1976 ---------------------------------------------------------------------------- Thus the appellant has placed the material with regard to each invoice, the date of sailing of ship and the date of payment. This is the material on record. Now we shall see whether in the light of the requirements noted above, the claim of the appellant that the sales in question are in the course of export, is substantiated. Before we do so, we consider it necessary to refer to the judgments cited at the Bar. Mod. Serajuddin v. State of Orissa [1975] 36 STC 136 (SC): In that case the appellant entered into two contracts with STC for sale of mineral ore. The price of the goods under the contract between the appellant and the Corporation was expressed in U.S. dollars per long ton, f.o.b. ocean liner vessel, Calcutta. The contract, inter alia, provided that 90 per cent payment against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort, the turnover relating to the said sale was claimed by the assessee as being in the course of export and, therefore, exempt from tax. The Madras High Court held that under the terms of the contract in that case, title would pass only on making payment and, therefore, the bill of lading would become a document of title to the goods as far as M/s. Wilson and Co. was concerned only on payment. Till then the document of title to the goods remained with the assessee. It was further held that as the transfer of documents of title to the goods took place only after the ship had crossed the customs frontiers therefore the sale was an export sale exempt from tax under the second limb of section 5(1) of the Central Sales Tax Act. The Division Bench of the Madras High Court also pointed out that Mod. Serajuddin's case [1975] 36 STC 136 referred to above, related to the first limb of section 5(1) of the Act. Hindustan Steel Ltd. v. State of Madhya Pradesh [1982] 50 STC 287 (MP): In that case, the assessee entered into f.o.b. contract with export promoter. There was no privity of contract between the assessee and the foreign buyer. The licence to export was also in the name of export pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the territorial waters also. They relied on the judgment of the Supreme Court in State of Madras v. Davar and Co. [1969] 24 STC 481. In the instant case, the Deputy Commissioner dropped the proposed revision of the order of the Commercial Tax Officer by applying a wrong test, viz., payment of the price for the goods sold. Under the second limb of section 5(1) the payment of price is not the only relevant criteria. It may only be a relevant factor in considering whether the requirements of the second limb have been satisfied. Further the Deputy Commissioner did not record any finding with regard to the date on which the goods crossed the customs frontiers and the date on which the documents relating to transfer of title in the goods passed. Therefore, the Commissioner was justified in setting aside the order of the Deputy Commissioner. But in the show cause notice issued by the Commissioner, the Commissioner has not indicated the grounds relating to non-satisfaction of the requirements of the second limb, therefore on that ground the claim of the appellant cannot be defeated. Indeed, the appellant did not have any opportunity to place the necessary material before the Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
