Court dismisses writ petition, ship-stores taxed at 50% rate, reduced tax request rejected, interim injunction denied.

The Court dismissed the writ petition, ruling that the ship-stores imported were subject to tax at a 50% rate under sub-item (a) of item 70 of the First Schedule to the Tamil Nadu General Sales Tax Act. The request for a reduced tax rate under item 1 of the Sixth Schedule was rejected, and the interim injunction request was also dismissed.

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Issues Involved:
1. Whether the sales were outside the State or in the course of export and therefore not exigible to tax.
2. Whether the sale took place within the State of Tamil Nadu and liable to be taxed under the Tamil Nadu General Sales Tax Act, 1959.
3. Interpretation of sub-item (a) of item 70 of the First Schedule and item 1 of the Sixth Schedule of the TNGST Act.
4. Whether the ship-stores were dealt with under the Indian Tariff Act, 1934 or any law relating to customs duties.
5. Whether the ship-stores are exigible to tax at a reduced rate under item 1 of the Sixth Schedule.

Detailed Analysis:

1. Sales Outside the State or in the Course of Export:
The petitioner argued that the sales were outside the State or in the course of export, and thus not subject to tax under the Andhra Pradesh General Sales Tax Act, 1957. The Andhra Pradesh High Court held that:
- The goods were specific or ascertained and were within the State when the contract of sale took place, satisfying section 4(2)(a) of the Central Sales Tax Act, 1956.
- As the goods were meant for consumption during the voyage and had no destination in any foreign country, they were not sales in the course of export.

2. Sales Within Tamil Nadu:
The issue raised was whether the sale took place within Tamil Nadu and was liable to tax under the Tamil Nadu General Sales Tax Act, 1959. The Court held:
- There was no evidence that the goods had to be supplied only on the ship; officers could take delivery locally, making it a local sale.
- The goods were not specific or ascertained at the time of the contract as they were part of a larger stock in the bonded warehouse, thus local sales as per section 4(2)(b) of the Central Sales Tax Act, 1956, and section 2(n), explanation (3) of the TNGST Act.

3. Interpretation of Sub-item (a) of Item 70 of the First Schedule and Item 1 of the Sixth Schedule:
The Court analyzed sub-item (a) of item 70 of the First Schedule and item 1 of the Sixth Schedule of the TNGST Act, which read:
- Sub-item (a) of item 70: Foreign liquors imported into India and dealt with under the Indian Tariff Act or any law relating to customs duties.
- Item 1 of the Sixth Schedule: All kinds of alcoholic liquors for human consumption, other than those falling under sub-item (a) of item 70.

4. Dealt with Under the Indian Tariff Act or Any Law Relating to Customs Duties:
The Court concluded that:
- The import was complete when the goods reached the territorial waters of India and were bonded in a warehouse.
- The goods were dealt with under the Customs Act, 1962, which replaced the Indian Tariff Act, 1934, and included both fiscal and regulatory measures.
- The expression "dealt with" included compliance with customs formalities, making the ship-stores subject to tax under sub-item (a) of item 70 of the First Schedule.

5. Exigibility to Tax at a Reduced Rate:
The Court rejected the petitioner's argument that the ship-stores should be taxed at a reduced rate under item 1 of the Sixth Schedule, holding:
- The ship-stores were exigible to tax at the point of first sale in the State at 50% under sub-item (a) of item 70 of the First Schedule.
- Consequently, the contention for a reduced tax rate at 30% under item 1 of the Sixth Schedule failed.

Conclusion:
The writ petition was dismissed, and the Court held that the ship-stores imported by the petitioner were subject to tax at the rate of 50% under sub-item (a) of item 70 of the First Schedule to the TNGST Act. The argument for a reduced tax rate under item 1 of the Sixth Schedule was not accepted. The Court also dismissed the interim injunction request.

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