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TMI Blog2014 (5) TMI 611X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) of the Act – The law as it existed required that so long as the assessee was in a position to substantiate the penultimate sale claim, that it was for the purpose of complying with the agreement or order that the exporter had for or in relation to such export, the assessee would be entitled to claim exemption u/s 5(3) of the Act - A reading of the amended Rule 12(10)(a) of the CST (Registration and Turnover) Rules, 1957, shows the mandatory character of the furnishing of Form H by the dealer to the prescribed authority upto the time of assessment before the first Assessing Authority - Thus, as evident from the amendment inserting Section 5(4), with effect from 13th May 2005, It is agreed that the claim u/s 5(3) as it stood at the material time cannot be rejected solely on the ground that Form H was not filed - Therefore, it is open to an assessee to prove the claim for Section 5(3) exemption through such materials also and not necessarily through Form H Agreement – Direct Agreement – Penultimate sale - Overseas Contract – Held That:- Judgment in STATE OF A.P. v. LARSEN AND TOURBO LIMITED [2008 (8) TMI 21 - SUPREME COURT] followed The ground on which the said claim was rejecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment leading to its export. Levy of tax - Purchase tax on purchase of Fly Ash - Whether the petitioners are liable to pay purchase tax on the purchase of Fly Ash from the TNEB (Tuticorin Thermal Power Plant) - Held that:- Assessee himself submitted that the said issue is covered by the decision of this Court rendered in T.C(R). No. 34 of 2011 dated 22.9.2011 in the assessee's own case, wherein this Court rejected the assessee's plea - Following the said decision, this question of law is answered against the assessee – Decided against the assessee. Levy of Penalty – Held that:- As already held that the purchase tax on purchase of Fly Ash was held against the assessee by reason of this decision of this Court rendered in T.C(R). No. 34 of 2011 dated 22.9.2011 in the assessee's own case - The levy of penalty was however deleted by the Tribunal in the appeal relating to the assessment year 1986-87, which was also not subjected to any revision at the hands of the Revenue - On the mere score of purchase tax being levied, the penalty should not be sustained, particularly with reference to the sustained portion of the assessment on purchase tax levy on fly ash - In the circumstances, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsence of Form-H, the entire claim was to be disallowed. Aggrieved by this, the assessee went on appeal before the Appellate Deputy Commissioner, who confirmed the assessment on the ground that the assessee had not produced Form H in respect of the export of goods. He further pointed out that the assessee had not proved that the sale by the assessee to NBCC was occasioned by any contract of sale or an agreement of sale that NBCC had with the foreign buyer. Thus, in the absence of any such contract either by NBCC or by the assessee, the claim under Section 5(3) of the Central Sales Tax Act could not be granted. The first Appellate Authority pointed out that NBCC had a contract for construction of a building at Maldives, for which they had locally purchased cement from the assessee and then moved the cement to their work site in Maldives. Since NBCC were not entitled to issue Form H for such purchase of cement, the assessee were not eligible for claim of exemption on such sales of cement as sales in the course of export. Aggrieved by the same, the assessee went on further appeal before the Sales Tax Appellate Tribunal, which once again confirmed the order of the first Appellate Autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory requirement and the claim under Section 5(3) of the Act could be proved by other materials too. Pointing out to Rule 12(10)(a) of the Central Sales Tax (Registration and Turnover) Rules, 1957, he submitted that filing of Form H not being a mandatory requirement, when the finding of the authorities below was that there had been sale by the assessee to NBCC, who had in fact exported the same for the purpose of execution of the works contract, the question of rejection of the claim on the ground that Form H had not been filed is not legally a justifiable view. 4. Referring to the decision reported in [2008] 17 VST 1 - STATE OF A.P. v. LARSEN AND TOURBO LIMITED, learned counsel for the assessee submitted that even in the absence of privity of contract between NBCC and the contractee at Maldives, when the Revenue does not dispute the fact that the Government of India is the principal contractor and NBCC had executed the work as a sub contractor for supply of cement for the execution of works contract to NBCC, normal consequences on the penultimate sale leading to expand would apply to deemed sale too. Mere absence of a contract between NBCC, as a sub contractor and the Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - and the works was to be executed within a period of 36 months. Clause 9 of the order states that the cost of the project was based on the design, specification and other parameters given in the project report by NBCC to the Ministry of External Affairs. The order also contemplate payment of advances for the purpose of enabling NBCC to arrange for mobilisation for works contract. The order shows that contract for execution of 200 bed Indira Gandhi Memorial Hospital was outsourced to NBCC and in the execution of the said project, NBCC in turn placed orders with the assessee for the supply of cement. It is an admitted fact that the assessee sold cement to NBCC, who in turn, exported the same to Maldives from Tuticorin Port. The Revenue does not dispute the export of cement as well as sale of cement by the assessee to NBCC. The only ground on which the Revenue rejected the assessee's case was for non filing of Form H. As rightly pointed out by the learned counsel for the assessee, at the relevant assessment year under consideration viz., 1991-92, Section 5(4) of the Act was not there to hold that filing Form H as a mandatory requirement for claiming exemption under Section 5(3) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... INDIA, the Apex Court rejected the contention of the Revenue that where the main contractor and sub contract enter into an execution of works contract, even "if there is no privity of contract between the contractee and the sub contractor, that would not do away the principle of transfer of property by the sub contractor by accretion on the property belonging to the contractee. The question therein arose in the context of the principal contractor assigning parts of the construction work to sub contractors. On the question as to whether there were two deemed sales, one from the main contractor to the client and other from the sub contractor to the main contractor, on a writ petition, the High Court allowed the assessee's claim that the work executed by the sub contractor resulted only in a single transaction and not multiple transaction. Affirming the view of the High Court, on an appeal by the State, the Supreme Court rejected the State's contention. 13. Referring to the decision reported in [1989] 73 STC 370- BUILDERS ASSOCIATION OF INDIA v. UNION OF INDIA, the Apex Court considered the question as to whether the goods employed by the sub contractor would be in the form of singl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the absence of the same and the grant of sub contract would stand in the way of granting the claim of the assessee. Treating the sub contract given to NBCC as the contract for execution by Government of India, we hold that the assessee is entitled to succeed in its claim for exemption under Section 5(3) of the Act as the penultimate sale leading to export. Since the claim relates to penultimate sale in relation to the deemed sale executed inter state India, learned standing counsel submitted that in any event the assessee is not entitled to claim the benefit under Section 5(3) of the Act. 15. In the decision reported in 88 STC 204 GANNON DUNKERLEY CO., v. STATE OF RAJASTHAN, the Apex Court referred to the decision of BUILDERS ASSOCIATION OF INDIA [1989] 73 STC 370, and held that the object of the new definition introduced in clause (29-A) of the Article 366 of the Constitution of India was only to enlarge the scope of definition on sale or purchase of goods, wherever it occurred in the Constitution, so that, it may include within its scope, deemed sales arising on account of works contract and various other deemed sale enumerated in clause (29-A) of the Article 366 of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an applicable to an interstate works contract as the deemed sale has to be come for its application to an execution of an overseas works contract. 18. In the light of the above, when the Revenue does not dispute the fact that based on the sub contract alone and subsequent thereto alone the assessee had sold cement to NBCC, who exported the same to Male for use in the execution of the works contract, we allow the Tax Case (Revision) in respect of question Nos. 1 and 2. In the circumstances, we hold that the assessee is entitled to Section 5(3) exemption on the penultimate sale of cement leading to its export. 19. It is seen from the order of the Tribunal that it had confirmed penalty to the extent of 50% on the disputed turnover relating to claim on penultimate sale as well as on the claim on purchase tax on the purchase of Fly Ash. 20. As already held in preceding paragraphs, the purchase tax on purchase of Fly Ash was held against the assessee by reason of this decision of this Court rendered in T.C(R). No. 34 of 2011 dated 22.9.2011 in the assessee's own case. The levy of penalty was however deleted by the Tribunal in the appeal relating to the assessment year 1986-87, whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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