Import sales and constitutional tax bar prevented levy on stone chips brought from Bangladesh; later local sale issue remained open.

Import of stone chips from Bangladesh into Tripura was not taxable under the TVAT Act because the goods were not shown as a specific scheduled item and, in any event, fell within the residuary entry for unspecified goods. Tax could not be imposed on import transactions in the course of import into India because Article 286 bars such levy. Accordingly, the assessment order and notices founded on import were quashed, while the Department was left free to examine any later intra-State sale in Tripura in accordance with law.

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Issues: Whether import of stone chips from Bangladesh into Tripura was exigible to tax under the TVAT Act and whether the assessment order and notices issued on that basis were liable to be quashed.

Analysis: The goods were not shown to be taxable as a specific item under the schedule relied upon, and in any event they fell within the residuary entry covering miscellaneous items not otherwise specified. More importantly, sales taking place in the course of import into the territory of India are excluded from tax under the statutory scheme, and tax cannot be imposed on such import transactions in view of the constitutional bar under Article 286 of the Constitution of India. Since the notices and assessment were founded only on import into India, they could not be sustained. The possibility of tax on any subsequent intra-State sale was left open for examination by the Department.

Conclusion: Import of stone chips from Bangladesh into India was not exigible to tax under the TVAT Act, and the assessment order and notices were quashed, with liberty to the Department to proceed only in respect of any subsequent sale within Tripura in accordance with law.

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