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TMI Blog2009 (7) TMI 1181X X X X Extracts X X X X X X X X Extracts X X X X ..... nment Pleader (Taxes) appearing for the respondents. The contention of Mr. N. Sri Prakash, learned counsel appearing for the petitioner is two-fold. In the first place he relied upon the Notification of the State Government issued under section 8(5) of the Central Sales Tax Act dated July 27, 1970 and contended that by virtue of the said notification, the petitioner having satisfied that the supply effected by him was to a registered exporter and proof of such export having been satisfactorily established before the assessing authority himself in the form of "form H" and AR 4A form, no tax liability as prescribed under section 8 and as provided under section 6(1) of the Act could have been levied. The learned counsel for the petitioner then contended that even by virtue of section 5(3) of the Act, inasmuch as, the petitioner has proved that the sale and supply effected by it in its invoice dated November 14, 1988, was much later in point of time vis-a-vis foreign buyer order of the registered exporter dated December 26, 1997, there was total exemption from the charging section, namely, section 6 of the Act and on that ground as well there could have been no tax liability under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se either occasions such export or is effected by a transfer of documents of title to the goods after the goods have crossed the customs frontiers of India. (2) A sale or purchase of goods shall be deemed to take place in the course of the import of the goods into the territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goods have crossed the customs frontiers of India. (3) Notwithstanding anything contained in sub-section (1), the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of such export, if such last sale or purchase took place after, and was for the purpose of complying with, the agreement or order for or in relation to such export. (emphasis(1) added) Section 6. Liability to tax on inter-State Sales. - (1) Subject to the other provisions contained in this Act, every dealer shall, with effect from such date as the Central Government may, by notification in the Official Gazette, appoint, not being earlier than thirty days from the date of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessing authority concerned." When we consider the submissions of the learned counsel for the petitioner based on section 6(1) vis-a-vis the invocation of section 5, as rightly contended by the learned counsel for the petitioner, while section 6(1) talks of the liability on inter-State sales, the application of that very provision gets excluded in the case of export obligation when once section 5(3) gets attracted. We are convinced that when once section 5(3) gets attracted, there would be no question for the assessee being called upon to answer payment of any tax under the provisions of the Central Sales Tax Act inasmuch as the whole consideration for imposing such a tax liability will automatically stand excluded by virtue of the application of section 5(3) on the assessee. When once such an incidence of inapplicability of tax liability takes place, the assessee gets protected by the various benefits provided under the exempted clause, viz., section 5(3) of the Act. Therefore, in the event of the assessee failing to satisfy the prescribed condition under section 5(3) of the Act, thereafter, the whole gamut of rest of the provisions of the Act starting from section 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thought of after taking note of the Full Bench decision of the honourable Supreme Court rendered in Mod. Serajuddin v. State of Orissa [1975] 36 STC 136, wherein the honourable Supreme Court rejected the claim of the assessee who is stated to have effected supplies to a State Trading Corporation in respect of its export order in the course of export sale made by the Corporation by strictly construing the then existing section 5(1) and (2) of the Act which provided for exemption of the provisions of the Act confined to the exporters alone and relating to any sale made by such exporters and not to anybody else. A cumulative consideration of the above development in law, viz., how section 5(3) came to be introduced in the statute book enabling even a penultimate seller in export transaction to seek for an exemption further strengthens the submissions of the learned counsel while considering his submissions based on section 8(5) of the Act. Therefore, applying the said legal position to the facts of this case when we consider the first submission of the learned counsel, as rightly contended by him, by virtue of the proviso to section 6(1) of the Act, if the petitioner held to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the exporter was dated December 26, 1987, is also not in dispute. The order of revised assessment dated April 8, 1991, itself discloses that the petitioner filed form "H" and form "AR 4A" along with bill of lading and invoice copies to the value of Rs. 1,05,11,878 in proof to the fact that such export obligation was carried out to a registered exporter before the final check of their accounts to the concerned year, viz., 1988-89. The petitioner having thus satisfied the conditions stipulated in the notification dated July 27, 1970, the petitioner is entitled for the benefit of any liability to tax as prescribed under section 8(1) of the Act read along with section 6 and consequently the impugned order of revised assessment dated April 8, 1991, cannot stand and the order of the Appellate Assistant Commissioner as well as that of the Tribunal are also liable to be set aside. Our conclusion is also supported by the decision relied upon by the learned counsel for the petitioner-A.V. Fernandez v. State of Kerala reported in [1957] 8 STC 561 where the honourable Supreme Court has laid down the proposition of law to such a situation to the following effect at page 574, viz.: "There is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to small and medium scale manufactures desirous of exporting their goods but the requirement of the new provision is not that they must procure or have with them a foreign buyer's contract but the requirement is that before they complete the sale of their goods to the canalising agency or the private export house there must be in existence a foreign buyer's contract to implement which they should have sold their goods to such agency or export house. . ." (Emphasis Here italicised. added) Applying the ratio laid down by the honourable Supreme Court, we have no hesitation to hold that the date of invoice of the petitioner should be the relevant date to find out whether the penultimate sale occurred either prior to or after the date of the export order. In the case on hand, the export order was admittedly on December 26, 1987, the invoice prior to which the sales came to be effected by the petitioner was on November 14, 1988, which was long after the date of export order and consequently on this ground as well the petitioner is bound to succeed. For all the above stated reasons, the impugned order of assessment of the first respondent dated April 8, 1991 and the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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