9911796707
TMI Blog2016 (9) TMI 827X X X X Extracts X X X X X X X X Extracts X X X X ..... a manufacturer of drums. Such drums are supplied by the respondent to various companies engaged in manufacturing and export of chemicals. The drums are used as packing material in the export consignment. The assessee also sells the drums in the local market. To the extent of such sale, the assessee is liable and regularly pays local taxes. However, the sales of the drums to the exporters being penultimate sale in connection with the export, is exempt from payment of tax. It is this issue which has given rise to the controversy between the parties. 2.2 The Assessing Officer for the assessment years 2003-04 and 2004-05 having granted such benefit as claimed by the assessee, the revisional authority took such orders into revision. The revisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed the revision petitions. The Tribunal was of the view that the sales made to the exporters cannot be identified bill to bill basis because the process of supplying such materials is ongoing and continuous. The revisional authority was not justified in demanding matching proof of documents. The manufacturer-exporters, in the opinion of the Tribunal, were particular in their business and the assessee would have to rely on them. No further proof was necessary. On the question of penalty, the Tribunal ruled that at the revisional stage, the penalty cannot be imposed for the first time. 3. Having heard learned counsel for the parties, we may refer to the relevant statutory provisions. Section 5 of the Central Sales Tax Act (`CST Act' for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in course of such export, if such last sale or purchase takes place after and is for the purpose of complying with the agreement or order for or in relation to such export. In plain terms, the penultimate sale before export of the goods shall also be deemed to be in course of such export provided the conditions contained in sub-section 3 of Section 5 are satisfied. Sub-section 4 of Section 5 worded in the nature of an exception to sub-section 3 provides that the provisions of sub-section 3 shall not apply to any sale or purchase of goods unless dealer selling the goods furnishes to the prescribed authority in the prescribed manner, a declaration filled and signed by the exporter to whom the goods are sold in a prescribed form obtained from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or in relation to such export." 6. This Certificate thus refers to the details given in items no.3 to 6 of the Schedule. These details are as under: "B- Details regarding export (3) Name of airport, seaport or land customs station through which the goods have been exported. (4) Name of the airlines/ship/railway/goods vehicle or other means of transport through which the export has taken place. (5) Number and date of air consignment note/bill of lading/railway receipt or goods vehicle record or postal receipt or any other document in proof of export of goods across the customs frontier of India (Certified copy of such air consignment note/bill of lading/railway receipt/goods vehicle record/postal receipt/other document to be en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee, he was within his rights to deny the benefit of tax exemption to such extent. Under the circumstances, the revisional orders insofar as raising tax demand with interest is concerned, we hold that the Tribunal should not have interfered. 8. At this stage, counsel for the respondent, however, submitted that in any case even if the benefit of Section 5(3) of the CST Act is to be denied, the sales should be taxed as local sales and not as inter-state sales since the respondent had admittedly sold the goods to the Valsad exporter. We find merit in this contention. When there was no dispute about the sale of drums by the petitioner to the Valsad purchaser, in absence of further proof of the goods having been exported, the authority can a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods outside India and, therefore, the respondent would also be entitled to benefit under Section 5(3) of the Act and further that "some goods" theory would not apply. 11. However, with respect to the penalty, we do not think it was a case where Commissioner should have even in exercise of discretionary powers, levied penalty. Sub-section 5 of Section 45 of the Gujarat Sales Tax Act provides that in case of a dealer, the amount of tax assessed or reassessed exceeds the amount of tax already paid by more than 25%, the dealer would be deemed to have failed to pay the tax to the extent of difference between the amounts so assessed or reassessed and the amount paid. Under sub-section 6 of Section 46, in such a case, the assessee would be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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