TaxTMI 
TaxTMI 
TaxTMI 
2009 (10) TMI 496
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.... Whether on the facts and circumstances of the case, the Tribunal was justified in holding that the sales of petitioner made to foreign buyers could not be said to be sale in the course of export out of the territory of India within the meaning of Section 5 of the Central Sales Tax Act?" According to the statement of case, the petitioner is a registered dealer engaged in the business of manufacture and sale of oil machinery and spare parts at Ballabgarh, District Faridabad under the Haryana General Sales Tax Act, 1973 (for brevity "1973 Act"). In the returns filed under the Central Sales Tax Act, 1956 (for brevity "1956 Act"), for the assessment year 1975-76, the petitioner claimed deduction of an export sale of Rs.7,95,000/- made to M/s Egyptian Salt and Soda Company, Alexendria (Egypt) (for brevity "Egyptian Firm") concerning sale of two cotton oil seed expellers. The case of the petitioner is that M/s United Engineering (Eastern) Corporation, Calcutta (for brevity "Calcutta Firm") had negotiated for supply of two cotton seed oil expellers to the Egyptian Firm for a sum of Rs.6,36,000/-. Calcutta Firm realizing that it could not meet the order, forwarded the name of ....
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....ort through the Calcutta Firm. Thus, the Tribunal vide order dated 2.3.1987 upheld the orders passed by the lower authorities in disallowing such transaction as an export sale. 5. Aggrieved against the order dated 2.3.1987 passed by the learned Tribunal, the petitioner filed an application for making reference to this Court on the aforesaid/reproduced two questions of law arising out of the order dated 2.3.1987. Learned Tribunal, however, vide its order dated 18.3.1988 referred the questions of law framed at (i) only. Petitioner then approached this Court by filing GSTR No.1 of 1989 praying for reference of questions of law framed at (ii) as well. This Court vide its order dated 21.1.1987 directed the Tribunal to refer the question (ii) as well and hence the aforesaid two questions have been referred for adjudication of this Court along with the statement of case. 6. Learned counsel for the petitioner-firm/dealer has contended that keeping in view the material placed on record, there could be only one irresistible inference that the transaction was a direct export sale between the petitioner-firm and the foreign buyer (Egyptian Firm) and covered under Sub Section (1) of Section 5....
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.... (2) xx xx xxx xxx [(3)] Notwithstanding anything contained in sub-section (1), the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of such export, if such last sale or purchase took place after, and was for the purpose of complying with, the agreement or order for or in relation to such export.]" Sub Section (1) of Section 5 of 1956 Act was authoritatively interpreted in AIR 1964 SC 1752 titled Ben Gorm Nilgiri Plantations Company Coonoor v. S.T.O, Special Circle, Ernakulam and (1969) 3 SCC 349 titled Coffee Board, Gangalore v. Joint Commercial Tax Officer, Madras. The crucial test for sale purchase to be in the course of export, which was laid down in Nilgiri Plantations' case (supra) as well as in Coffee Board's case (supra), is whether there were independent transactions or only one transactions, which occasioned movement of goods in the course of export. It was propounded that to occasion export there must exist such a bond between the contract of sale and the actual exportation that each link is inextricably connected with the one immediately preced....
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....m and not a case of export through Calcutta Firm. The property in goods i.e 2 machines was never transferred to the Calcutta Firm. Before proceeding any further, it would be advantageous to refer to the following provisions of the Indian Contract Act, 1872 (hereinafter referred to as "Contract Act"). Section 2(h) of the Contract Act defines that an agreement enforceable by law is a contract. Section 10 of the Contract Act envisages what agreement are contract and which reads as under: "10. What agreements are contracts- All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void. Nothing herein contained shall affect any law in force in India and not hereby expressly repealed, by which any contract is required to be made in writing or in the presence of witnesses, or any law relating to the registration of documents." Keeping in view the provisions of the Contract Act & Sub Section (1) of Section 5 of 1956 Act reproduced hereinabove, we are to see whether the sale of two cotton-seed oil expellers by the petitioner to Egyptian Firm could b....
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....p; However, for your convenience we are requesting our Bankers to accept "THIRD PARTY B/LADING ACCEPTANCE" in which case you can ship the machinery direct to us. As regards financial implications for recovering the invoice value you may deal direct with M/s United Engineering (Eastern) Corporation, Calcutta. Subject to the above terms and conditions may treat the order as confirmed and with the manufacture of the expellers as specifications given in your letter dated 2.3.1974. Yours faithfully, The Egyptian Salt & Soda Company. Sd/- " 14. Perusal of communication dated 1.4.1974 sent by the Egyptian Firm to the petitioner proves in no uncertain terms that the contract of export sale of two Cotton Seed Oil Expellers has emanated from this particular letter and had in all safety concluded with the export of the machines by the petitioner to the Egyptian Firm and receipt of consideration through the Calcutta Firm. Keeping in view the above reproduced provisions of the Contract Act, it cannot be even suggested that the contract between two parties was not legally valid. It is not disputed that the movements of two aforesaid expellers was occasioned by the aforesaid letter dat....