Sale in the course of import: customer-linked bulk imports through letters of authority were exempt from sales tax.

Transactions made under prior contracts with customers holding import licences, executed through letters of authority and bulk import on their behalf, were treated as sales in the course of import. The decisive link was that the customer contract occasioned the movement of goods from abroad, and the goods were imported, cleared and delivered in apportioned lots for identified buyers. The earlier ruling on similar transactions was applied, while the later Supreme Court decision cited by the revenue was distinguished as involving separate and independent sales. The turnover was therefore exempt from sales tax under section 5(2) of the Central Sales Tax Act, 1956.

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Issues: Whether the turnover arising from the assessee's transactions under import licences, carried out through letters of authority and bulk import on behalf of customers, was liable to sales tax or was exempt as a sale in the course of import under section 5(2) of the Central Sales Tax Act, 1956.

Analysis: The transactions were entered into pursuant to prior contracts with customers holding import licences, and the import was made on their behalf under letters of authority. The goods were imported in bulk for identified customers, cleared from the port by the assessee, and delivered in apportioned lots. The decisive factor was that the contract with the customers was the occasion for the movement of the goods from abroad, creating an integral connection between the sale and the import. The earlier ruling holding similar transactions to be sales in the course of import remained applicable, and the later Supreme Court decision relied on by the revenue was distinguishable on its facts because it concerned separate and independent sales.

Conclusion: The transactions were sales in the course of import and were exempt from sales tax under section 5(2) of the Central Sales Tax Act, 1956. The revision failed.

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