9911796707
TMI Blog2011 (6) TMI 711X X X X Extracts X X X X X X X X Extracts X X X X ..... to 1996-97. The petitioner herein is a dealer in vegetable oil. It returned the turnover of Rs. 65,37,53,240.05. Evidently the assessee did not return the turnover pertaining to the high sea sales. The petitioner herein is a unit of Nahar International Ltd., Chennai, having their office at Ludhiana. It imported Palmolein from foreign countries and stored them in the storage tanks at Chennai harbour area. Those tanks were found to be under the custody of Nahar International Limited, Chennai. The assessee treated the sales as sales in the course of import and hence claimed exemption under section 5(2) of the Central Sales Tax Act, 1956. On April 24, 1997, there was an inspection by the Enforcement Wing Officers in the business premises of the assessee, where it was found that Tvl. Gargi Trading Corporation had purchased Palmolein from the assessee- Tvl. Nahar International Ltd., Chennai, and transported the same to various places outside the State in Bihar. Apart from that, the documents also showed that the assessee had effected high sea sales in favour of Tvl. Rasi Chem Private Ltd, Chennai. The high sea sales invoices were found to have been raised at Ludhiana, whereas Tvl. Rasi C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Nahar International Ltd., Ludhiana are one and the same. He rejected the claim of the assessee on the ground that the assessee had not produced any customs records for clearing the goods by their ultimate buyers. In the absence of any clear cut evidence to show that they effected high sea sales, the assessment was completed. He also levied penalty under section 12(3)(b) of the TNGST Act, 1959. Aggrieved by the same, the assessee filed appeal before the Appellate Assistant Commissioner, who, confirmed the order of the assessment. In the course of the proceedings before the Appellate Assistant Commissioner, the assessee is stated to have produced the following copies of documents: 1. Sale confirmation of Tvl. Nahar International Ltd., Chennai to Tvl. Rochi Chem Pvt. Ltd., 107., Cochrane Basin Road, Madras 21 dated October 10, 1996. 2. Sales invoice No. 4 dated September 27, 1996 of Tvl. Nahar International Ltd., Chennai to Tvl. Rochi Chem (P) Ltd., 107, Cochrane Basin Road, Madras 21. 3. Copies of bill of entries of M/s. Nahar International Ltd., A/c. M/s. Rochi Chem Private Ltd., 107, Cochrane Basin Road, Chennai 21. 4. Letter of the clearing agent addressed to Tvl. Nahar I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the customs frontiers of India. The Tribunal further observed that keeping of the goods in the private warehouse and clearing of the goods from the said private warehouse established that there was no sale in the course of import. In the circumstances, the assessment was confirmed. Aggrieved by the same, the present revision is filed by the assessee. The learned counsel appearing for the assessee placing reliance on the decision of this court in the case of Deputy Commissioner of Commercial Taxes, Madurai Division, Madurai v. A.R.S. Thirumeninatha Nadar Firm, Tuticorin reported in [1968] 21 STC 184 (Mad), submitted that when the assessee had placed documents evidencing the high sea sales before the appellate authorities and the genuineness of the same was not in question, the Tribunal should have allowed the assessee's claim for exemption as high sea sales. Pointing out to the decision in Deputy Commissioner of Commercial Taxes, Madurai Division, Madurai v. A.R.S. Thirumeninatha Nadar Firm, Tuticorin reported in [1968] 21 STC 184 (Mad), learned counsel submitted that the mere failure of the assessee in producing the bill of lading by itself ought not to have been held against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could be effected by handing over of the documents. This court pointed out that an endorsement to that effect on the documents is only one mode of proof, but, it is not the only way of proving the fact. The facts therein were that the assessee made a claim for the high sea sales. The assessee had pledged goods with the bank, which was subsequently sold by the bank and the bank paid the balance of the sale proceeds to the assessee after adjusting the sale proceeds towards its duty. On the contention taken by the Revenue that documents were not produced by the assessee to show that the title to the goods was transferred in the course of import by making an endorsement thereon, this court repelled the said argument and pointed out as follows (page 185 in 21 VST): ". . . There may be cases where it may be legitimately stated that the production of documents of title will be essential to see whether the sales have been effected by transfer of documents in the course of import of goods. But we are not convinced that this is the case here, because there is other evidence to show that the sales were in the course of import and should have been effected by transfer of documents. Transfer o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessing officer to look into these documents to find out whether the goods in fact were sold to Rasi Chem Pvt. Ltd. and Gargi Trading Corporation in the course of high sea sales. If the contemporaneous documents produced substantiate that there was in fact high sea sales, on the mere score of the assessee not filing the endorsed bill of lading, the assessing officer shall not disallow the claim but the assessing officer shall allow the claim of the assessee in terms of the decision of this court in Deputy Commissioner of Commercial Taxes, Madurai Division, Madurai v. A.R.S. Thirumeninatha Nadar Firm, Tuticorin reported in [1968] 21 STC 184 (Mad). To the specific objection taken by the Revenue that the purchaser had taken delivery from the tanks held by the assessee, learned counsel appearing for the assessee pointed out that these tanks were taken on lease by the high sea sales purchasers and they had also paid rental for that. He also pointed out that in respect of the turnover of Rs. 12,97,729 representing the receipt received on storage tank embedded in earth, the assessing officer himself excluded this turnover from assessment. We must point out that it is not clear from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the sale of safety matches assessable at the point of sale. The apex court held that as the same turnover was already assessed at the hands of the three depots registered as dealers, reassessment could not be made on the self- same turnover. The Supreme Court did not find it necessary to decide the question of validity of reopening of the assessment on the ground that the State itself conceded that the tax had already been collected. Thus, when the tax had already been collected, the apex court held that there was no necessity for the second set of tax. As far as the decision in Trichur Cotton Mills Limited v. State of Tamil Nadu reported in [1990] 77 STC 162 (Mad) is concerned, this court pointed out that the assessee, dealer in cotton yarn, was the last purchaser of cotton. It was found that cotton was already subjected to tax. Although the same was remitted by the vendor, yet, it was the petitioner-assessee who paid the tax to the vendor while purchasing cotton. Having regard to the facts therein, it was held that the same turnover could not again be subjected to tax. We do not find that the assessee could draw any support from this decision. The decisions referred to above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing would lead to rejection of the claim of the assessee as sales in high seas. The assessee's contention herein is that it had placed evidence as regards the high sea sales before the authorities concerned, the genuineness of which were never in question. The only ground on which the claim was rejected was the failure of the assessee in producing the endorsed copy of the bill of lading. As already pointed out, this court considered the question as to whether in the absence of evidence on the endorsement in the bill of lading, the claim for exemption as high seas sale could be granted. This court pointed out that the endorsement in the bill of lading to evidence a sale in the high seas is only one mode of proof and not the only way of proving the fact. A transfer could take place by delivery of documents also. Thus, when there were other evidence to show that the sale was in the course of import and there was transfer of documents of title, the claim for exemption was sustainable in the eye of law. Thus, so long as there are sufficient evidence to prove that there is a sale in the course of import by transfer of documents of title, the assessee would be entitled to claim exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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