TaxTMI 
TaxTMI 
1990 (11) TMI 347
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....ion of sales which are said to be in the course of the import we are not required to state the other facts although the impugned orders referred to them in some details and decided their respective disputes. 2.. T.C. No. 79 of 1980: The disputed turnover, according to the assessee, related to sales made to Heavy Vehicles Factory, Avadi, under the import recommendation certificate issued by the purchasers for the specific purpose of importing the goods under their order. It is not in dispute that certain particular type of machineries were required by the Heavy Vehicles Factory which had to be imported from abroad. The Heavy Vehicles Factory accordingly invited quotations from such persons who could supply to them such specified machineries and the assessee submitted its quotation, according to it, after obtaining the quotations of the foreign principals in which they specified the prices as well as the estimated charges, customs duty, etc., and stating that the prices were subject to enhancement depending upon final actual price of the makers and other expenses up to the time of delivery and that the customer should take upon himself all risks involved in price fluctuations a....
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.... sale or purchase of goods said to take place in the course of inter-State trade or commerce, when is a sale or purchase of goods said to take place outside a State and when is a sale or purchase of goods said to take place in the course of import or export. Section 5 thereof states: "5. When is a sale or purchase of goods said to take place in the course of import or export.-(I) A sale or purchase of goods shall be deemed to take place in the course of the export of the goods out of the territory of India only if the sale or purchase either occasions such export or is effected by a transfer of documents of title to the goods after the goods have crossed the customs frontiers of India. (2) A sale or purchase of goods shall be deemed to take place in the course of the import of the goods into the territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goods have crossed the customs frontiers of India. (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 ter....
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....the other to the importer. The first sale is not in the course of export for the export begins from the intermediary and ends with the importer." 9.. True, in the case of Coffee Board [1970] 25 STC 528 (SC), the phrase "sale in the course of export" has been considered, but it is significant to note that the phraseology in sub-section (2) of section 5 of the Central Sales Tax Act, 1956, quoted above is not dissimilar to the phraseology in sub-section (1) of section 5, and thus a sale or purchase of goods in the course of the import or a sale or purchase of goods in the course of the export must have such elements as indicated by the Supreme Court in the said case. 10.. In Deputy Commissioner of Agricultural Income-tax and Sales Tax v. Kotak & Co. [1973] 32 STC 6, the Supreme Court considered a case in which a firm on import licence supplied cotton to the mills on the basis of a specified written contract. In their detailed note, before the Sales Tax Officer they had submitted that they were engaged in the supply of foreign cotton to textile mills, among other places in South India on the basis of the import licences issued to the mills authorising import of foreign cotton by ....
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....y received the supplies when the manufacturers consigned the goods to the assessee under bills of lading, which, after clearance at the Madras Harbour by the assessee, were despatched for delivery to the ultimate consumers indicated by the buyer, and accordingly concluded that there was no sale in the course of the import. In the Supreme Court in appeal, however, the judgment of this Court was reversed and it was observed thus: "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." 12.. An attempt, however, was made in Kotak & Co.'s case [19731 32 STC 6 (SC) to distinguish Khosla & Co.'s case [1966] 17 STC 473 (SC). The Supre....
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....d and accordingly reiterated that, whether the importer acted under his own import licence and had freedom to do away with the contract or not, will always be the test to find out whether there has been any sale in the course of import or not. 16.. Coming to the facts of the case in hand while the assessee in T.C. No. 79 of 1980 acted under its own independent licence to import and although there was some sort of contract to supply certain specified items to Heavy Vehicles Factory and it appears that it did supply such articles to Heavy Vehicles Factory, there was no nexus between the import and the sale. It is a case falling under the rule in Binani Bros. (P.) Ltd.'s case [1974] 33 STC 254 (SC). 17.. The case of the assessee in T.C. No. 222 of 1980, however, is different It was under the import licence of M/s. Gimpex Minerals Pvt. Ltd. that two electric typewriters were imported and handed over to them. Some doubt, however, has been sought to be created for the reason of four electric typewriters having been imported as per the invoice. It is not known whether the other two typewriters were similarly imported under the licence of any other buyer or not and the department has....