TaxTMI Login
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →Just a moment...
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether the import of MS pipes was pursuant to the contract between the parties and whether the import and supply formed an integral and inseparable part of the contractual arrangement; (ii) whether the sale of the imported MS pipes was a sale in the course of import within section 5(2) of the Central Sales Tax Act, 1956 and consequently exempt from State sales tax.
Issue (i): Whether the import of MS pipes was pursuant to the contract between the parties and whether the import and supply formed an integral and inseparable part of the contractual arrangement.
Analysis: The contract documents, award letter, import licence, end-use certificate and special marking on the pipes showed that the goods were identified for exclusive use in the project and were brought in to discharge the supply obligation under the turnkey arrangement. The import was not a detached commercial purchase for the appellant's independent use. The contractual framework and the actual deployment of the pipes established that the imports were linked to the supply obligation for the plant.
Conclusion: The issue was answered in favour of the assessee; the imports were held to be pursuant to the contractual arrangement and integral to it.
Issue (ii): Whether the sale of the imported MS pipes was a sale in the course of import within section 5(2) of the Central Sales Tax Act, 1956 and consequently exempt from State sales tax.
Analysis: A sale falls within section 5(2) when it occasions the import and there is an integral connection or inextricable link between the contract of sale and the import. Applying that test, the imported pipes were required for performance of the supply contract, were earmarked for the project, and were used exclusively for it. The Court also treated the transaction as protected by article 286(1)(b) of the Constitution of India, since the sale took place in the course of import and could not be subjected to State tax.
Conclusion: The issue was answered in favour of the assessee; the sale was held to be in the course of import and not liable to State sales tax.
Final Conclusion: The assessment and appellate orders were set aside, and the appellant was held entitled to the benefit of section 5(2) of the Central Sales Tax Act, 1956, with consequential refund relief.
Ratio Decidendi: Where the contractual arrangement and surrounding circumstances show an integral and inextricable link between the sale and the import, so that the import is occasioned by the supply obligation, the transaction is a sale in the course of import and cannot be subjected to State sales tax.
TaxTMI 
TaxTMI 
