Transfer of REP licences as goods: sale of import entitlements is treated as taxable movable property, not an actionable claim.

Transfer of REP licences and exim scrips is treated as transfer of movable property because each confers a valuable, transferable and monetisable import entitlement that is neither immovable property nor an actionable claim. On that basis, their sale is characterised as transfer of "goods" and is said to attract sales tax under the Kerala General Sales Tax Act. The text also states that the levy operates on the sale of the licence, not on import transactions or customs duty, and therefore does not trench upon the Union field over import and export regulation. The stated conclusion is that the levy is legally valid.

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Issues: (i) Whether transfer of REP licences and exim scrips amounts to transfer of "goods" within the meaning of the Kerala General Sales Tax Act, 1963 and is taxable as sales tax. (ii) Whether levy of sales tax on such transfer encroaches upon the Union field relating to import and export or customs duty.

Issue (i): Whether transfer of REP licences and exim scrips amounts to transfer of "goods" within the meaning of the Kerala General Sales Tax Act, 1963 and is taxable as sales tax.

Analysis: The expression "goods" in section 2(xii) of the Act covers movable property other than actionable claims. A REP licence is not immovable property; it confers a valuable, transferable and monetisable right to import specified goods under the import policy. That right is a present, perfected benefit and is not a mere permission or a right enforceable only in action. Applying the principle that movable property means property of every description except immovable property, the licence falls within movable property. It is also not an actionable claim within section 3 of the Transfer of Property Act, 1882, because the right created by the licence is a present transferable benefit and not a claim recoverable only by action.

Conclusion: The transfer of REP licences and exim scrips constitutes transfer of goods and is exigible to sales tax; the challenge fails.

Issue (ii): Whether levy of sales tax on such transfer encroaches upon the Union field relating to import and export or customs duty.

Analysis: The taxable event is the sale of the REP licence and not the import of goods or the levy of customs duty. The levy does not restrict transferability of the licence and does not operate on the import transaction itself. It therefore does not trench upon the Union entries dealing with customs duty or import and export legislation.

Conclusion: There is no encroachment on the Union field and the levy is within legislative competence.

Final Conclusion: The petitions challenge the taxability of the transfer of REP licences and exim scrips, but the levy is upheld as legally valid and the writ petitions fail.

Ratio Decidendi: A transferable statutory import entitlement that confers a present valuable right to import goods for consideration is movable property and not an actionable claim, and its sale can be taxed as goods without interfering with the Union power over customs or import and export regulation.

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