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TMI Blog2003 (5) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... idence of basic customs duty on the import content of the export product. The neutralisation is to be provided by way of grant of duty credit against the export product. The duty credit under the said scheme is calculated by taking into account the deemed import content of the said export product as per Standard Input Output Norms and determines basic customs duty payable on such deemed imports. The value addition achieved by export of such product is also taken into account while determining the rate of duty credit under the scheme. Under the D.E.P.B. Scheme an exporter is eligible to claim credit as a specified percentage of F.O.B. value of exports made in freely convertible currency. The credit is available against such export products and at such rate as may be specified by the Director General of Foreign Trade by public notice issued in this behalf. Any item except those appearing in the Negative list of imports is allowed for import without payment of basic customs duty, special duty of customs as well as additional duty of customs against the credit under the D.E.P.B. Scheme. The holder of D.E.P.B. shall have an option to pay additional customs duty, if any, in cash as well. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... permits as set out therein. Section 22 in this Chapter contemplates that no dealer shall, while being liable to pay tax, carry on business as a dealer unless he possesses a valid certificate of registration. Chapter V contemplates every registered dealer furnishing returns for such periods to such authority as may be prescribed, and further provides for assessment, re-assessment and imposition of penalty in certain cases. Chapter VI provides for every dealer liable to pay tax under the Act and every other dealer required so to do by the Commissioner by notice served on him in the prescribed manner to keep a true account of the value of the goods purchased or sold by him. Chapter VIII provides for offences and penalties. The Schedules to the Act give the rates at which tax is to be levied. 8.The State Government now seeks to levy sales tax on the transfer of credit in the D.E.P.B. as goods. By the Maharashtra Tax Laws (Levy Amendment) Act, 21 of 1998. Sub-entry (6) was added to Entry No. 26 in Schedule 'C' to the Bombay Sales Tax Act with effect from 1st April, 1997 Sub-entry (6) of Entry 26 reads as under : (6) Credit of Duty Entitlement Pass Book . 9.The defini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioners, in D.E.P.B. credits are made on completion of exports and debits are made on utilisation thereof or on payment of import duty, as such credit in the D.E.P.B. is nothing but money. Hence transfer of credit in the D.E.P.B. is nothing but transfer of money and, therefore, not goods as contemplated or defined under Section 2(13) of the Bombay Sales Tax Act. 13.Alternatively, learned Counsel appearing for the petitioners contends that in the event of this Court holding that credit in the D.E.P.B. is not a cash, then in that event such a credit has to be treated as 'debt' owed by the Central Government to the holder of the D.E.P.B. The Central Government to the extent of credit entry is indebted to the holder of the D.E.P.B. The Central Government is bound to liquidate the said debt against import duty payable for future imports within the specified time, failing which action at law is necessary, as such it would be nothing but an actionable claim. If that be so, the credit in the D.E.P.B. cannot be said to be goods within the meaning of Section 2(13) of the Bombay Sales Tax Act. 14.In support of the aforesaid submissions, learned Counsel for the petitioners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly, tax is being levied on sale or purchase thereof. He submits that such a tax legislation is operating in various States and validity thereof has been upheld. One of such judgments referred to by him was delivered by the Delhi High Court in the case of Philco Exports (supra). 17.The learned Counsel for the revenue pressed into service the monthly returns filed by the petitioners for the period 1st October, 1997 to 31st October, 1997 and 1st November, 1997 to 30th November, 1997; wherein the petitioners have disclosed sale of credits made in the D.E.P.B. during the relevant period and paid taxes accordingly, even though the specific entry with regard to credit in the D.E.P.B. was added much later by the ordinance dated 1st May, 1998, retrospectively, from 1st April, 1997. The learned Counsel for the revenue, in the premises, submitted that the petitioners rightly understood credit of D.E.P.B. and paid taxes thereon. He placed reliance on the tax returns filed by the petitioners themselves. 18.The learned Counsel for the revenue relied on judgment of the Apex Court in the case of Vikas Sales Corporation v. Commissioner of Commercial Taxes, 1996 (102) S.T.C. 106. He submits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty in final discharge of debts and full payment for commodities; being accepted equally without reference to the character or credit of the person who offers it, and without the intention of the person who receives it to consume it or apply it to any other use than in turn to tender it to others in discharge of debts or payment for commodities see [1989 (2) Q.B. 111]. The term money means ready money at call . Money cannot be considered as specific movable property, though it is a movable property. The credit of D.E.P.B. is not freely transferable to anybody bereft of the EXIM Policy. It cannot be passed on freely from one hand to another in discharge of any debt or for payment of value without reference to the character or credit of the person who offers it. Lindley L.J. in 1891 said It is well at the outset to guard against confusion between meaning and the legal effect of expression used in the statute . As Scoot L.J. said Where the words of an Act of Parliament are clear, there is no room for applying any of the principles of interpretation which are merely presumption in cases of ambiguity in the statute . The Cardinal rule of construction of Acts of Parliament is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of claims, i.e. the claim to unsecured debts and claim to beneficial interest in movable property not in the possession, either actual or constructive, whether present or future, conditional or contingent. 23.The proper reading of the aforesaid definition would indicate that the debt for which action is necessary to realise can only be said to be an actionable claim. In other words, where no action is necessary to realise the debt, it cannot be said to be actionable claim. Actionable claim under Section 130 of the Transfer of Property Act refers only to the claims capable of enforcement, at the time of assignment, by suit in the Civil Court. It does not include a claim, in respect of which cause of action had not arisen at the time of transfer, but which, in future, will mature into a claim so as to be enforce at once. In other words, a claim could not be treated as an actionable one unless, at the date of the transfer, an action could have been brought therein. A claim could have been regarded as actionable only when it was a claim in respect of a cause of action which had already matured, and which, subject to procedure, might have been enforced by suit. The Apex Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d reliance on the Black's Law Dictionary, Seventh Edition, page 410, which inter alia defines debt as under: debt .. 2. The aggregate of all existing claims against a person, entity, or state (.........). 3. A non-monetary thing that one person owes another, such as goods or services (her debt was to supply him with 20 international first-class tickets on the airline of his choice). He also brought to our notice definition of 'debt', defined in the Law Lexicon, by P. Ramanath Aiyar, Second Edition, page 483, which reads as under : DEBT: A sum of money due under an express or implied agreement (as) as bond or bill or note; amount due or payable from one person to another in return for money, services, goods, or other obligation. (Emphasis supplied) 26.The learned Counsel for the petitioners also placed reliance on the judgment of the Apex Court in Keshoram (supra); wherein the Apex Court while interpreting the word debt in a case related wealth tax had held as under: A debt is a present obligation to pay an ascertainable sum of money, where the amount is payable in praesenti, solvendum in futuro; debitum in prassenti, solvendum in futuro . In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi High Court while holding that the sales tax is payable on transfer of credit in D.E.P.B. under the Delhi Sales Tax Act, has heavily relied on the judgment of the Apex Court in the case of Vikas Sales Corporation (supra). The said judgment, according to the petitioners, was on the point of applicability of sales tax on transfer of R.E.P. licence under the EXIM Policy. The Apex Court held that R.E.P. licence is goods and is liable to sales tax. In the submission of the learned Counsel for the petitioners, reliance on the judgment of the Vikas Sales Corporation (supra) by the Delhi High Court was erroneous. In his submission, R.E.P. licence cannot be equated with the transfer of credit in the D.E.P.B. R.E.P. licence is merely a licence which grants a right to import goods, which right is transferable. Whereas, credit in the D.E.P.B. is not a licence, which merely gives right to import goods. It is an amount available to the credit of the holder to be liquidated against the payment of import duty for future imports. Therefore, in his submission, reliance placed on the judgment in the case of Vikas Sales Corporation (supra) while deciding that the credit in the D.E.P.B. is goods i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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