TaxTMI 
TaxTMI 
2011 (2) TMI 1248
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....ional customs duty. The petitioner also exports furniture outside India. 3. For the assessment year 2006-07 for Central Sales Tax, the Deputy Commissioner (Administration) Sector 14, Commercial Tax Noida rejected the account books and has imposed tax liability of Rs.1,08,51,076/- on the petitioner, on the turn over of Rs.11,71,68,654/-. He issued demand of Rs.7347798/- after adjusting the deposit of Central Sales Tax of Rs.35,03,278/-. The Assessing Authority imposed central sales tax on the sales from SEZ to DTA, on the ground that vide notification dated 5.5.2006 the Central Sales Tax the sales from SEZ to DTA was exempt. By a notification dated 17.1.2007 issued by the State Government, the exemption on Central Sales Tax on sales from SEZ to DTA was withdrawn. Consequently the exemption was applicable only from 5.5.2006 to 17.1.2007. The Circular Letters dated 17.7.2007 and 9.8.2007 issued by the Commissioner, Commercial Tax it was clarified that the exemption was applicable only from 5.5.2006 to 16.1.2007. The assessing authority found that the circulars of the Commissioner of Commercial Tax are binding, and thus assessed and imposed Central Sales Tax. 4. The....
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....entral Sales Tax Act, there is no levy or liability of Central Sales Tax on such sales. Art.286 of the Constitution of India provides:- "286. Restrictions as to imposition of tax on the sale or purchase of goods- (1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place- (a) outside the State ;or (b) in the course of the import of the goods into, or export of the goods out of, the territory of India. (2) Parliament may by law formulate principles for determining when a sale or purchase of goods takes place in any of the ways mentioned in clause (1). (3) Any law of a State shall, in so far as it imposes, or authorised the imposition of- (a) a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter-State trade or commerce; or (b) a tax on the sale or purchase of goods, being a tax of the nature referred to in sub-clause (b), sub-clause (c) or sub-clause (d) of clause (29A) of article 366, be subject to such restrictions and conditions in regard to the system of levy, rat....
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.... Act and Rules read with Customs Act and Central Sales Tax Act makes the special transaction as import, exempt from Central Sales. (iv) The SEZ are deemed to be territory outside customs territory of India and thus they cannot be treated as part and parcel of any particular State in India. In the transaction of sale from SEZ to DTA there is no moment of goods from one State to another, calling for imposition of Central Sales Tax. (v) The deeming fiction has to be given full play and affect and regulations assuming all facts on which fiction can operate, vide Ali M.K. and Ors. vs. State of Kerala, (2003) 11 SCC 632 (pages 263 and 264); State of West Bengal vs. Sadan Bormal and Anr., (2004) 6 SCC 59 (page 276) and Commissioner of Commercial Taxes vs. Swarn Rekha Cokes and Coals (P) Ltd. and Ors., (2004) 6 SCC 689 (page 304-306). (vi) Section 50 of SEZ Act provides exemption from State Taxes to the developer or entrepreneur. The notification under Section 50 can be issued, where a taxable event is in respect of various taxes other than taxes under the Central Act. No notification is required under Section 50 of the SEZ Act in respect of sale in the course....
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.... NOTIFICATION KA.NI.-2-2542/XI-9 (820)/92-U.P. Act-15-48- Order-(01)-2007 Lucknow: Dated: January 17, 2007 In exercise of the powers under section 22 of the Uttar Pradesh Special Economic Zone Development Authority Act, 2002 (U.P. Act No. 10 of 2002) and section 50 of the Special Economic Zone Act, 2005 (Act No. 28 of 2005) read with section 21 of the Uttar Pradesh General Clauses Act, 1904 (U.P. Act No. 1 of 1904), the Governor is pleased to make with effect from January 17, 2007, the following amendment in Government Notification No. KA.NI-2-770/XI-9(820)/92-U.P. Act-15-48- (07)-2006 dated May 05, 2006:- Amendment In the aforesaid notification for the words "with effect from May 05, 2006 the provisions of the Uttar Pradesh Trade Tax Act, 1948 shall apply with the modification that the transactions of sale from Domestic Tariff Area to authorised units in Special Economic Zone, and the transactions of sale from authorised units in Special Economic Zone to Domestic Tariff Area shall be exempted from the provisions of the Uttar Pradesh Trade Tax Act, 1948. "the word" The developer the co-developer and the units established....
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....king Regulations Act, 1949 and Stamp Act, 1899. He submits that the Central Sales Tax payable on transactions by unit established in SEZ to DTA is not referred to in any of the Schedules, and is thus not exempt. He submits that expression import has been specifically defined in SEZ Act to mean bringing goods or receiving services in SEZ by a unit or developer from a place outside India by land, see or air or by any other mode whether physical or otherwise or receiving goods or services by a unit or developer from another unit or developer in the same economic zone or a different Special Economic Zone. Where any expression has been defined in the Act, the fiction as suggested by the petitioner under Section 30 of the Act or Rule 47 (1), 47 (4), Rule 48 (1), 48 (2) of the Rules and Section 53 (1) of the SEZ Act is not attracted to the transactions and levies. The provisions of the Central Sales Tax Act will apply to the interstate sales. 11. Shri Kesarwani submits that under Section 8 (1) of the Central Sales Tax Act, 1956 every dealer, in the course of interstate trade or commercial sales to the registered dealer goods of the description referred to in sub-section (3), is ....
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....ty specified by the Central Government in this behalf. (8) The provisions of sub-sections (6) and (7) shall not apply to any sale of goods made in the course of inter-State trade or commerce unless the dealer selling such goods furnishes to the 51[prescribed authority referred to in sub-section (4), a declaration in the prescribed manner on the prescribed form obtained from the authority specified by Central Government under sub-section (6)], duly filled in and signed by the registered dealer to whom such goods are sold." 12. Shri Kesarwani refers to Form-1 of the Central Sales Tax Rules. He also refers to the definition of import under Section 2 (23) of the Customs Act, and Section 3 of the Central Sales Tax Act, 1956. He submits that even deemed import are covered under Section 5 (2) of the Central Sales Tax Act, 1956 and thus the Court would not readily interpret the provisions of SEZ Act, 2005 for giving deeming effect to the sales from SEZ to DTA. Section 3 and Section 5 (1) and (2) of the Central Sales Tax Act relied upon by Shri Kesarwani is quoted as below:- "3. When is a sale or purchase of goods said to take place in the course of inter-State....
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.... India Ltd., AIR 1985 SC 330. 15. We have carefully considered the submissions, the relevant provisions of law, and the case law cited by the parties. 16. Art.286 of the Constitution of India places restriction on any law made by a State to impose, or authorise the imposition of the tax on the sale or purchase of goods, where such sale or purchase takes place (a) outside the State; or (b) in the course of the import of the goods into, or export of the goods out of, the territory of India. By the Constitution (6th Amendment) Act, 1956 Clause (2) was added to the Article accepting the Parliament to formulate principles for determining when a sale or purchase of goods takes place in any of the ways mentioned in clause (1). The Constitution (46th Amendment) Act, 1982 substituted Clause (3) to the Article providing that any law of a State, in so far as it imposes, or authorises the imposition of (a) a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter-State trade or commerce; or (b) a tax on the sale or purchase of goods, being a tax of the nature referred to in sub-clause (b), sub-clause (c) or sub-clause (d) of c....
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....s given as below:- "Statement of Objects and Reasons The Government of India had announced a Special Economic Zone Scheme in April, 2000 with a view to provide an internationally competitive environment for exports. The objectives of Special Economic Zones include making available goods and services free of taxes and duties supported by integrated infrastructure for export production, expeditious and single window approval mechanism and a package of incentives to attract foreign and domestic investments for promoting export-led growth. 2. There are at present eleven functioning Special Economic Zones. While seven Zones have been set up by the Central Government, four by the private/joint/State sector. In addition, approvals have been given for setting up of thirty-five new Special Economic Zones in the private/joint/State sector. 3. While the policy relating to the Special Economic Zones is contained in the Foreign Trade Policy, incentives and other facilities offered to the Special Economic Zone developer and units are implemented through various notifications and circulars issued by the concerned Ministries/Departments. The present system, ....
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....d out of or imported into or produce from DTA by unit in SEZ or a developer subject to terms and conditions as may be prescribed and be exempt from the payment of tax, duties or cess under all enactment specified in the First Schedule. Section 27 of the SEZ Act, 2005 applies Income Tax Act with certain modifications in relation to developers and interpreneurs carried out authorised operations in SEZ and modifications are specified in Second Schedule. Section 57 amends the enactment specified in the Third Schedule, which are amended by SEZ Act, 2005. The Central Sales Tax is not included in any of these Schedules. 22. We also do not find any substance in the contention of Shri Bharat Ji Agrawal that the sales from SEZ unit to unit in DTA shall be deemed to be imports. No such presumption can be drawn from Section 5 (2) of the Central Sales Tax Act or any of the provisions of the SEZ Act of 2005. 23. The deeming provision is not to be inferred in law. It has to be either provided by legislation validly elected and competent to declare such deeming provision with its consequences. There can be no inference drawn from deeming provisions from the provisions of any Ac....