TaxTMI 
TaxTMI 
1973 (12) TMI 77
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....; we propose to deal with Writ Petition No. 39 of 1969 and our decision there will govern and dispose of Writ Petition No. 92 of 1969. The petitioner is a company incorporated under the Indian Companies Act, 1913. It has its registered office in Calcutta and a branch office at Binani House, Khundi Katra, Mirzapur, U.P. The petitioner is an importer and a dealer in non-ferrous metals like zinc, lead, copper, tin, etc., and is on the approved list of registered suppliers to the Directorate General of Supplies and Disposals, hereinafter referred to as DGS & D. It is also a registered dealer in the State of West Bengal under the Bengal Finance Act, 1941, and the Central Sales Tax Act, 1956. The petitioner used to procure nonferrous metals from various countries and also from within the country for fulfilling its contracts with the Government of India through the DGS & D. The import of non-ferrous metals was under Open General Licence till June 30, 1957. Thereafter, a licensing system was introduced by the Government of India and the established traders including the petitioner were asked to get their quotas fixed on the basis of their past imports. On April 2, 1958, the Governmen....
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....irecting that sales tax should not be allowed in respect of supply of stores which has been specifically imported against licences issued by the Chief Controller of Imports and Exports on the basis of Import Recommendation Certificates issued by the DGS & D or other authorities like the State Trading Corporation for supplies against contracts placed by the DGS & D. The Pay and Accounts Officer acting on annexure P-1 deducted the amounts of sales tax paid by the respondents under all the old contracts from the current bills which were submitted by the petitioner to him. Respondent No. 4 actually deducted a sum of Rs. 60,780 from the bills which were pending payment and also threatened to recover Rs. 2,35,130.01 being the amount paid by respondent No. 2 as sales tax in respect of contracts which had already been executed. The assessments on the petitioner up to the year ending October 27, 1962, were completed prior to the date of judgment in Khosla case [1966] 17 S.T.C. 473 (S.C.); [1966] 3.S.C.R. 352, and the issue of the order at annexure P-1. The petitioner, when it came to know of annexure P-1 order, approached the sales tax authorities in West Bengal and filed revised retu....
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....m the agreement of sale with a foreign buyer and ending with the delivery of the goods to a common carrier for transport out of the country by land or sea and that such a sale cannot be dissociated from the export without which it cannot be effectuated, and the sale and resultant export form parts of a single transaction. Of these two integrated activities which together constitute an export sale, whichever first occurs, can well be regarded as taking place in the course of the other. In State of Travancore-Cochin v. Shanmugha Vilas Cashew-nut Factory [1953] 4 S.T.C. 205 at 212 (S.C.); [1954] S.C.R. 53 at 63., it was observed by the same learned Chief justice that "the phrase 'integrated activities' was used in the previous decision to denote that 'such a sale' (i.e., a sale which occasions the export) 'cannot be dissociated from the export without which it cannot be effectuated, and the sale and the resultant export form Parts of a single transaction' and that it is in that sense that the two activities-the sale and the export-were said to be integrated". There was no definition of the expression "in the course of import" before the Sixth Amendment of the Constitution. By th....
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....ransaction, the sale is in the course of export. In the Khosla case [1966] 17 S.T.C. 473 (S.C.); [1966] 3 S.C.R. 352., the assessee entered into a contract with the DGS & D, New Delhi, for the supply of axle-box bodies. The goods were to be manufactured in Belgium according to specifications and the DGISD, London, or his representative had to inspect the goods at the works of the manufacturers and issue an inspection certificate. Another inspection was provided for at Madras. The assessee was entitled to be paid 90 per cent after inspection and delivery of the stores to the consignee and the balance of 10 per cent was payable on final acceptance by the consignee. In the case of deliveries on f. o. r. basis the assessee was entitled to 90 per cent payment after inspection on proof of despatch and balance of 10 per cent after receipt of stores by the consignee in good condition. The assessee was entirely responsible for the execution of the contract and for the safe arrival of the goods at the destination. The contract provided that notwithstanding any approval or acceptance given by an Inspector, the consignee was entitled to reject the goods, if it was found that the goods were ....
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...., he shall be liable to pay a penalty calculated at Rs. 50 per 50 kilos which shall be deductible from out of the amount payable to him as per condition 31. And condition 31 provided that on default by the buyer to export the coffee aforesaid within the prescribed time or such extension thereof as may be granted, it shall be lawful for the Chief Coffee Marketing Officer, without reference to the buyer, to seize the unexported coffee and take possession of the same and deal with it as if it were part and parcel of the Board's coffee held by them in their pool stock. The case of the petitioners before this court was that the purchases at the export auctions were really sales by the Coffee Board in the course of export of coffee out of the territory of India since the sales themselves occasioned the export of coffee and that the coffee so sold was not intended for use in India or for sale in the Indian markets. The case of the sales tax authorities, on the other hand, was that these sales were not inextricably bound up with the export of coffee and that the sales must therefore be treated as sales taking place within the State of Tamil Nadu liable to sales tax under the Madras General....
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....by Khosla & Co. as agent of the manufacturer in Belgium. In the concluding portion of the judgment of this court, it was observed as follows: "........It seems to us that it is quite clear from the contract that it was incidental to the contract that the axle-box bodies would be manufactured in Belgium, inspected there and imported into India for the consignee. Movement of goods from Belgium to India was in pursuance of the conditions of the contract between the assessee and the Director-General of Supplies. There was no possibility of these goods being diverted by the assessee for any other purpose. Consequently we hold that the sales took place in the course of import of goods within section 5(2) of the Act, and are, therefore, exempt from taxation." As already stated, there was to be an inspection of the goods in Belgium by the representative of the DGS & D but there was no completed sale in Belgium as, under the contract, the DGS & D reserved a further right of inspection of the goods on their arrival in India. Be that as it may, in the case under consideration we are concerned with the sales made by the petitioner as principal to the DGS & D. No doubt, for effectin....