1997 (1) TMI 510 - HC - VAT and Sales Tax

Court rules goods were for export, quashes authorities' orders.

Nipha Exports Pvt. Limited Versus State of Haryana and Others

The court ruled in favor of the petitioner, finding that the goods purchased were indeed for export and were subsequently exported. The authorities' ... - Issues Involved:1. Levy of purchase tax u/s 9 of the Haryana General Sales Tax Act, 1973.2. Applicability of Section 5(1) of the Central Sales Tax Act, 1956.3. Interpretation of Article 286 of the Constitution of India.4. Relevance of past judicial decisions.1. Levy of Purchase Tax:The petitioner challenged the levy of purchase tax u/s 9 of the Haryana General Sales Tax Act, 1973, on goods purchased for export. The Assessing Authority, Faridabad, imposed a purchase tax of Rs. 43,802.36, which was upheld by the Deputy Excise and Taxation Commissioner (Appeals), Rohtak Circle, and the Sales Tax Tribunal, Haryana.2. Applicability of Section 5(1) of the Central Sales Tax Act, 1956:The petitioner argued that the levy of purchase tax was unauthorized as the goods were meant for export, relying on Section 5(1) of the Central Sales Tax Act, 1956. The respondents contended that the goods purchased did not result in export, citing the Supreme Court's decision in Mod. Serajuddin v. State of Orissa [1975] 36 STC 136.3. Interpretation of Article 286 of the Constitution of India:Article 286 restricts states from imposing tax on sales or purchases that occur in the course of export out of India. The court emphasized that the state cannot impose tax on such transactions, supported by Section 5 of the Central Sales Tax Act, 1956, which defines when a sale or purchase is deemed to occur in the course of export.4. Relevance of Past Judicial Decisions:The court referred to several past decisions, including International Cotton (Waste) Corporation v. Assessing Authority, Bhatinda [1965] 16 STC 1045, which held that purchases made by a branch office for export by the head office are exempt from tax. The court distinguished the present case from Mod. Serajuddin's case, noting that the petitioner had a direct contractual obligation for export.Judgment:The court found that the petitioner had proven the goods were purchased for export and were indeed exported. The Tribunal and other authorities erred in not recognizing the movement of goods from Faridabad to Calcutta as part of the export process. The orders by the Assessing Authority, appellate authority, and Tribunal were declared illegal and quashed. The writ petition was allowed, with each party bearing its own costs.