TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether the Bombay dealer acted as the assessee's agent in importing the cotton or whether the transaction was a sale. (ii) Whether the purchase of cotton was in the course of import so as to attract the constitutional ban under Article 286 of the Constitution of India.
Issue (i): Whether the Bombay dealer acted as the assessee's agent in importing the cotton or whether the transaction was a sale.
Analysis: The contract described the Bombay dealer as seller and the assessee as buyer, fixed a sale price, contained provisions for payment against railway receipt and on weighment, and included an arbitration clause typical of a sale transaction. The import-control arrangements and the letter of authority were held to regulate the import for governmental control purposes and to prevent trafficking in licences, but not to convert an otherwise genuine sale into a mere agency relationship. The relationship between the parties remained that of buyer and seller.
Conclusion: The transaction was a sale and not a principal-agent arrangement; this issue was decided against the assessee.
Issue (ii): Whether the purchase of cotton was in the course of import so as to attract the constitutional ban under Article 286 of the Constitution of India.
Analysis: Once the transaction was found to be a sale by the Bombay dealer to the assessee, the import was treated as complete after the goods were cleared through customs and taken beyond the customs barrier. The sale to the assessee took place after such clearance and delivery, and was therefore not part of the import itself. The constitutional prohibition did not apply.
Conclusion: The purchase was not in the course of import and was not hit by Article 286; this issue was decided against the assessee.
Final Conclusion: The tax revision failed because the transaction was held to be an ordinary sale completed after import, and the constitutional protection against levy on imports was inapplicable.
Ratio Decidendi: A transaction remains a sale where the contractual terms and conduct of the parties disclose buyer-seller relations, and a sale effected after customs clearance is not a sale in the course of import for the purpose of Article 286.
TaxTMI 
