Export sales immunity and defective revisional notices barred sales tax assessment on jute goods and reassessment.

Sales of jute goods made directly or through the State Trading Corporation were treated as part of the export chain because the goods remained in the course of export until they crossed the customs frontier, so the turnover was protected by constitutional immunity from sales tax and could not be included in taxable turnover. The later statutory amendment was described as clarificatory and retrospective, reinforcing that position. The suo motu revision notices were held defective because no reasons were recorded or communicated, the revisional power was exercised contrary to governing rules where the original order was made by a predecessor-in-office, and revision was attempted while an appeal was pending. The notices were invalid and liable to be quashed.

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Issues: (i) whether sales of jute goods effected directly or through the State Trading Corporation in the course of export were exempt from sales tax and could be included in the taxable turnover; (ii) whether the impugned notices for suo motu revision and disallowance of the earlier assessments were valid in law.

Issue (i): whether sales of jute goods effected directly or through the State Trading Corporation in the course of export were exempt from sales tax and could be included in the taxable turnover.

Analysis: The decisive test was whether the sales formed an integral part of the export movement and whether property in the goods passed only after the goods crossed the customs barrier. The contracts through the State Trading Corporation were treated as part of the export chain, with the goods remaining in the export stream until shipment, so the turnover fell within the constitutional immunity for sales in the course of export. The later statutory amendment defining crossing of the customs frontiers was treated as clarificatory and retrospective, reinforcing the earlier judicial understanding of export sales.

Conclusion: The sales through the State Trading Corporation were sales in the course of export and were not includible in the taxable turnover. The issue is decided in favour of the assessee.

Issue (ii): whether the impugned notices for suo motu revision and disallowance of the earlier assessments were valid in law.

Analysis: The notices were defective because no reasons were recorded or communicated for reopening the concluded assessments. In addition, the revisional action was incompetent where the original order had been made by a predecessor-in-office contrary to the governing rules, and the revisional power could not be exercised while the appeal against one assessment was still pending. These defects also amounted to violation of natural justice.

Conclusion: The impugned notices were invalid and liable to be quashed. The issue is decided in favour of the assessee.

Final Conclusion: The export turnover could not be subjected to sales tax, and the attempted revision of the assessments was without jurisdiction and procedurally unsustainable, so the writ applications succeeded.

Ratio Decidendi: A sale is immune from sales tax when it is integrally connected with the export movement and the goods cross the customs frontier in the course of export, and a suo motu revisional notice must be supported by recorded reasons and lawful jurisdiction under the governing statute and rules.

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