9911796707
TMI Blog2011 (6) TMI 711X X X X Extracts X X X X X X X X Extracts X X X X ..... ed before the authorities concerned, we feel, the proper course herein would be to set aside the order of the Tribunal and remand the matter back to the assessing authority for a fresh consideration of the materials produced by the assessee in support of its claim for high sea sales. Consequently, the order of the Tribunal stands set aside. - Tax Case (Revision) No. 973 of 2006 - - - Dated:- 24-6-2011 - MRS. CHITRA VENKATARAMAN AND JANARTHANARAJA P.P.S. JJ. N. Inbarajan for the petitioner R. Sivaraman, Special Government Pleader (Taxes), for the respondent ORDER The assessee is on appeal as against the order of the Sales Tax Appellate Tribunal (Additional Bench), Chennai 600 104, dated December 30, 2002 in T. A. No. 1195/2002 raising the following questions of law: (1) Whether, on the facts and in the circumstances of the case, the Tribunal committed an error of law in disallowing the exemption claimed by the petitioner on high sea sales effected by the petitioners by transfer of document of title to the goods? (2) Whether, on the facts and in the circumstances of the case, the Tribunal committed an error of law in confirming the levy of penalty under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions on June 7, 1999. The assessee pointed out that the import of palmoil was only by Nahar International Ltd., Ludhiana, and not from Nahar International Ltd., Chennai. Further, the Palmolein sold to two parties, viz., Rasi Chem Private Ltd and Tvl. Gargi Trading Corporation was stored in the storage tanks belonging to Tvl. Oswal Oils and Vanaspathi Industries, Chennai and leased out to Tvl. Nahar International Limited, Ludhiana. The storage charges and other service charges were also paid for the same by Tvl. Gargi Trading Corporation and Rasi Chem Private Ltd., who had taken the storage tanks on lease. The goods were taken delivery from there only by the purchasers. The assessee had not effected any local sale to attract provisions of the TNGST Act. It was further pointed out that Nahar International Ltd., had effected the high sea sales by endorsing bill of lading; that the abovesaid two purchasers had cleared the consignment and had paid the customs duty and they themselves stored the same in the storage tanks available in the Madras port. Thus, in respect of the high sea sales, Nahar International Ltd., claimed under section 5(2) of the Central Sales Tax Act, 1956 exemption i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner confirmed the levy of penalty under section 12(3)(b) of the TNGST Act, 1959. Aggrieved by the said order, the assessee went on appeal before the Sales Tax Appellate Tribunal, before whom, the assessee is stated to have produced all the documents reiterating its contentions that even in the absence of production of endorsed bill of lading, when the contemporaneous documents were available before the authority concerned, which evidenced clearance of the goods and proof of payment of customs duty by the high sea purchaser therein, the failure to produce endorsed bill of lading would not defeat the claim of the assessee. The Tribunal, however, rejected the plea of the assessee. Basing its conclusion on the unreported decision of this court in T.C. No. 235/89 dated July 28, 1998, holding that even though the assessee has filed documents with regard to the transfer of title to the goods, it must be proved that the transfer of documents of title to the goods was effected before the goods had crossed the customs frontiers of India , the Tribunal, held, that the assessment was justified. The Tribunal, pointed out that since the goods were cleared from private warehouse and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision, learned counsel for the assessee submitted that there being no escapement, the assessment has to be set aside. Per contra, learned counsel for the Revenue submitted that the assessee produced no records before the assessing officer. For the first time, the documents were produced only before the Appellate Assistant Commissioner. No reasons were placed explaining why the assessee had not produced the documents indicating payment of customs duty by the purchaser and the enclosed bill of lading in favour of the purchasers. In the circumstances, rightly, the assessment was made on the assessee. He placed reliance on the decision in the case of C.T. Ltd. v. Commercial Tax Officer reported in [1997] 104 STC 94 (SC) and submitted that in the absence of endorsement on the bill of lading, no exemption could be allowed treating the transaction as high sea sales, consequently, he prayed for dismissal of the revision petition. Heard learned counsel appearing for the petitioner and learned Special Government Pleader (Tax) appearing on behalf of the respondent/Revenue and perused the materials available on record. It is seen from the reading of the decision in Deputy Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Assistant Commissioner and the Sales Tax Appellate Tribunal merely rejected the contemporaneous documents on the ground that endorsed bill of lading was not produced. Going by 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), when sufficient materials are in favour of the assessee evidencing high sea sales and those documents are contemporaneous in nature, we feel the authorities should have bestowed their due attention to test the claim of the assessee. Supporting the order of the Tribunal, learned Special Government Pleader pointed out that the assessee had produced only a photo copy of bill of entry filed by the purchaser. Learned Special Government Pleader further pointed out that when the assessee claimed that original documents are available with the assessee, there was no reason for producing photo copies of these documents. The learned counsel for the assessee submitted that the assessee is in possession of all the originals and they were also shown to the appellate authority. The learned counsel also produced the same before us. Given the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar Firm, Tuticorin reported in [1968] 21 STC 184 (Mad) and the contemporaneous materials to be produced in original before the assessing officer on the question of high sea sales as well as to the storing of oil in the tanks said to have been leased out to the high sea purchases. The learned counsel for the assessee made a submission that once the high sea sales purchasers had paid the tax, the question of assessing on the assessee on the said turnover does not arise. We do not think that the said line of reasoning could be sustained. The Act contemplates tax to be assessed and levied on the right person at the right rate and at the point specified. The mere circumstance that the purchasers had made the payment, by itself, will not absolve the responsibility on the assessee from substantiating its claim for exemption. Quite apart, the purchaser is admittedly not a dealer under the TNGST Act. In the background of the facts, the reliance placed on the decision of the apex court in State of Karnataka v. Ayyanahalli Bakappa Sons reported in [1988] 71 STC 202 (SC) as well as Trichur Cotton Mills Limited v. State of Tamil Nadu reported in [1990] 77 STC 162 (Mad) does not help the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee to be the shippers. The words Account State Trading Corporation of India Ltd. was typed immediately after the assessee's name and address in the column shipper only . Hence, the assessee claimed that the benefit of section 5(3) would accrue to the assessee. The State, however, contended that since the name of State Trading Corporation was there below the name of the assessee, the property in tea had passed on to the State Trading Corporation. The apex court pointed out that the contract between the assessee therein and State Trading Corporation did not contemplate a sale by the assessee to the State Trading Corporation. The requirement for endorsement in the bill of lading and in the shipping documents was to enable the Iranian buyer with whom the State Trading Corporation had an agreement to identify tea as being sent in fulfilment of the obligation under the contract between the State Trading Corporation and the Iranian buyer. Only in that context, the apex court read the words STC , i.e., below the name of the assessee therein against the column shipper as constituting an endorsement. The Supreme Court observed that in the absence of an endorsement in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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