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TMI Blog2006 (12) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... who was a registered dealer under the Bombay Act and the Central Act had imported and sold to its customers certain items of steel and iron and claimed that the sales were in the course of import covered under section 5 of the Central Act and consequently not liable to tax under section 75 of the Bombay Act. The assessing officer, however, by his order dated March 30, 1996 held that the local sales and the inter-State sales of iron and steel effected by the respondent were neither covered under the first limb (sale occasioning such import) nor under the second limb (sale by transfer of documents of title before the goods crossed the customs frontiers of India) of section 5(2) of the Central Act. The appeals filed by the respondent again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 10 of 2006: 1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in allowing the claim of Rs. 51,36,02,035 in respect of various transactions of local sales and Rs. 1,67,16,740 in respect of inter-State sales (as per annexure A) covered by four bulk imports by ships and which were in unascertained stage till the clearance from customs as sales in the course of import by transfer of document of title to the goods within meaning of section 5(2) of the Central Sales Tax Act, 1956 read with section 75 of the Bombay Sales Tax Act, 1959 and hence not liable to tax under the BST Act, 1959 or CST Act, 1956? 2. Whether on the facts and in the circumstances of the case the Tribunal was justified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed. Mr. Sonpal further submitted that in the present case there is no material on record and there is no discussion as to how the findings have been arrived at. In the present case, admittedly letters of credit have not been executed by the local purchasers in favour of the foreign supplier. Therefore, there was no privity of contract between the foreign supplier and the local purchasers. Thus, in the present case there were two independent contracts, one between the respondent and the overseas supplier and another between the respondent and the local buyers. The Tribunal has nowhere discussed that the respondent was only an agent between the foreign supplier and the local purchasers and that the import is directly between the foreign sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for the opinion of this court. Mr. Jetly, learned Senior Advocate appearing on behalf of the respondent, referred to various documents furnished by the respondent before the assessing officer and submitted that in the present case the Tribunal on perusal of those documents came to the conclusion that sale occasioned movement of the goods and, therefore, sales were covered by the first limb of section 5(2) of the Central Act. Relying upon various decisions of the apex court, Mr. Jetly submitted that once it is established on facts that the sales are covered under the first limb of section 5(2) of the Central Act, the tax liability becomes exempted and in such a case the question as to whether the sales are covered under the second limb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of credit have been opened by the local buyers in favour of the respondents. Thereupon, the respondent placed orders for import of goods by opening irrevocable letters of credit in favour of the foreign suppliers. The orders placed were for the same commodity set out in the contracts entered into by and between the respondent and the local purchasers. The Tribunal has noted that the commercial invoices issued by the foreign suppliers contained the name of the local buyers to whom the goods were to be supplied and even the bills of lading contained the names of the local buyers. The Tribunal has further recorded that in the present case, the imported goods have been in fact cleared by the local purchasers by filing bills of entry. Thus, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom payment of tax, the question as to whether the sales were exempt under the second limb of section 5(2) of the Central Act became academic. In this view of the matter, the refusal on the part of the Tribunal to refer question Nos. 1 and 2 relating to the applicability of the second limb of section 5(2) of the Central Act as well as the provisions of the Sale of Goods Act to the transactions in question cannot be faulted. Similarly, question No. 4 being consequential, the said question has not been referred. However, we expressly make it clear that we have declined to refer question Nos. 1 and 2 because in the facts of the present case the said question are academic in nature and it will be open to the department to agitate those quest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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