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TMI Blog2015 (6) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerns the tax of Rs. 1,63,09,180 levied on the turnover of Rs. 5,82,47,070 relating to sale of aviation turbine fuel (ATF) to foreign aircrafts and demand notice which is at annexure H for payment of tax of Rs. 1,63,09,180. 2. Briefly stated the facts, as already noted above the petitioner is a public sector undertaking of Government of India incorporated under the provisions of the Companies Act, 1956 and registered as a dealer under the provisions of the Karnataka Sales Tax Act, 1957 (hereinafter referred to as "the KST Act, 1957") and other Acts applicable to it in the matter of sale of petroleum products. It is stated that sale of ATF is a matter which is covered within the scope of the provisions of the KST Act, 1957. It is stated that in exercise of the power conferred under article 253 of the Constitution, Parliament has enacted the Foreign Aircraft (Exemption from Taxes and Duties on Fuel and Lubricants) Act, 2002 (hereinafter referred to as "the Central Act"). This Act was made by the Parliament to implement the agreements entered into by India with foreign countries, pursuant to Convention on International Civil Aviation held at Chicago in the year 1944. The Act receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. I have heard learned counsel for the petitioner and learned Government Pleader for the respondents and perused the material on record. 4. During the course of submission, the petitioner's counsel stated that under article 253 of the Constitution, it is only the Central Government which can pass orders or issue notifications for the purpose of implementation of International Treaties and Conventions, that if any law is enacted by the Central Government, in that regard, the State Government cannot issue any executive order, instructions or pass any other order contrary to the Central Government notification and law. He contended that annexure E/notification issued by the State Government in exercise of power under section 8A of the KST Act, 1957, is without jurisdiction inasmuch as it is without legislative competence and therefore the notification would have to be quashed. 5. In the background of the said notification, it was contended that when once particulars of sale made to the foreign airlines are available in the invoices raised by the petitioner and information would be sufficient to conclude that the sale has been made to foreign airlines or forei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties and on perusal of the material on record, it is noted that the Central Act, which is at annexure B grants exemption from levy of taxes and duties on fuels and lubricants supplied to the aircrafts of other countries. Annexure C is Central Government Notification dated November 18, 2002 which has been issued pursuant to section 3 of the Central Act. Section 3 of the Act reads as under: "3. Exemption from levy of taxes and duties on fuel and lubricants supplied to aircraft of other countries.-Where, in pursuance of the convention or agreement with any other country or countries, it is necessary to grant exemption from levy of taxes and duties on fuel and lubricants filled into receptacles forming part of any aircraft of any other country or countries under any law of a State or Union territory in India, the Central Government may, by notification in the Official Gazette, make such provisions as may be necessary for giving effect to the said convention or agreement and thereupon the said provision shall apply accordingly and, notwithstanding anything contrary contained in any other law, shall in such application have the force of law in India." Notification dated November 18, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e countries which are parties to the convention on International Civil Aviation or which have entered into air service or air transport agreement with India and operating a scheduled or non-scheduled international air service to or from India. The declaration would only endorse the aforesaid facts. No doubt, the name of the purchaser of ATF and lubricants is found in the invoices raised by the petitioner when the sale of the said product takes place. From those invoices, it would not be apparent as to whether a purchaser is a foreign airline which is originating from a country which is a party to the Convention on International Civil Aviation or which has entered into air service or air transport agreement with India and operating International Air Services to or from India. There may be various other airlines originating from foreign countries which are not parties to the said convention, but in order to identify those airlines which originate from the countries which are parties to the convention,such a declaration is required. Therefore I do not find that notification dated December 3, 2003 is illegal, or it lacks competence and it is contrary to the provision of the Central ena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en produced with regard to certain aircrafts. 11. Having regard to the nature of dispute, I am of the opinion that the petitioner would have to be given an opportunity to produce evidence pointing out the list of countries which are parties to the convention or which have entered into agreements with India and in respect of whose aircrafts thesale of ATF and lubricants have taken place to the satisfaction of the third respondent/authority. If the third respondent is satisfied on the material to be produced by the petitioner, then it could consider the grant of exemption in respect of those transactions. But if the third respondent is of the opinion that the additional materials to be produced by the petitioner are not sufficient to come to a conclusion that an exemption would have to be granted, then in that case it can grant some time to the petitioner to produce requisite declarations from foreign airlines and thereafter proceed to consider the matter afresh and pass a fresh order in that regard. 12. In the circumstances, while upholding vires of annexure E/notification dated December 3, 2003, assessment order dated December 19, 2011, is set aside and matter is remi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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