TaxTMI 
TaxTMI 
2010 (1) TMI 947
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....tion (1) of the Bombay Sales Tax Act, 1959? The Facts: 3. The applicant is a dealer registered under the BST Act. The applicant is acting as an authorised dealer to promote and market the products of M/s. R.K. Machine Tools Pvt. Limited, Ludhiana. The Sales Tax Officer (48), 'A' Ward, Unit IV, Mumbai vide his order dated 27" March, 1985 assessed the applicant for the period 1st April, 1983 to 31st March, 1984 levying sales tax under the BST Act on the transaction of sale which, according to the applicant, did not attract sales tax since it occasioned export out of the territory of India. 4. Aggrieved by the aforesaid order of assessment, the applicant preferred first appeal before the Assistant Commissioner (Appeals), Bombay City Division, Bombay, which, according to the applicant, was dismissed without considering the legal contentions raised leading to sale of goods which occasioned export out of country. 5. Aggrieved by the aforesaid order, the applicant preferred second appeal before the Deputy Commissioner (Appeals), Bombay, who was pleased to accept the contention raised by the applicant. However, instead of deciding the appeal ....
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....export'. He further submits that the delivery of goods had taken place at Airport for being exported out of India. There was no possibility of goods coming back to India since goods were sold to foreign buyers only for being taken out of India. That the sale price was received in foreign currency. Under these circumstances, the goods have crossed customs frontiers as such subject sales ought to have been treated as sales in the course of export. He placed reliance on the judgment of the Apex Court in the case of The State of Travancore- Cochin v. The Bombay Company Ltd. Alleppey, 3 STC 434. 10. Mr.Joshi also placed reliance on the judgment of this Court in the case of Abdulgafar A. Nadiadwala v. Asst.C.I.T., (2004) 267 ITR 438 affirmed by the Apex Court in C.I.T. v. B.Suresh 313 ITR 149 contending that the said judgment though deals with the provisions of the Income Tax Act under section 80HHC and the explanation thereto, however, the said judgment would be applicable to the facts of the present case with full force. He submits that both the enactments i.e CST Act and the Income Tax Act are parliamentary enactments providing for non-liability of tax by the State Legis....
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....Mr.Joshi, this Court, in the course of its judgment at page 503 of the Report has referred to the provisions of the BST Act and Customs Act for the purpose of determining the meaning of the term "goods". That at page 509 of the Report this Court held that if the goods are taken from India to outside India it amounted to export and the object of section 80HHC was to grant an incentive to foreign exchange earners. That after referring to the provisions of the Customs Act, this Court referred to the Delhi High Court judgment in the case of C.I.T. v. Sriram Piston Rings Ltd., 181 ITR 230; wherein the Delhi High Court referred to the approval by the Company Law Board under the Companies Act that has to be followed by the Income Tax Department which cannot take a contrary view, to the one under the Companies Act. 14. Mr.Joshi further submits that after interpreting the meaning of the term 'goods' this Court at page 513 referred to the definitions under the Sale of Goods Act, Trade and Merchandise Marks Act and Indian Contract Act. That this Court further referred to the Supreme Court judgment in the case of C.S.T. v. Madhya Pradesh Electricity Board, 25 STC 188 for find....
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....t of this Court, this Court is bound by the said judgment. 17. Mr. Joshi submits that factual scenario in the case in hand is the same and that the cases decided in relation to the interpretation of section 80HHC vis-a-vis the transaction of sale to the foreign tourists at the counter against foreign exchange as consideration would apply with full force. According to him, it is on record that the goods selected by the foreign going foreign tourists moved from the shop of the assessee to the International Airport since goods were delivered for onward journey by the applicant to such tourists while they were checking-in for their foreign going flights, from where goods cannot come back nor can goods come out of the airport. Each such foreign buyer obtained custom clearance for the items so delivered by the applicants, and then boarded the plane. 18. Mr.Joshi submits that it is well settled that when the words have acquired a particular meaning flowing from the authoritative construction given by the superior Courts, then they are presumed to have been used by the Legislature in the same sense that was assigned to by the Courts. Reliance is placed on Kesheji Ravji ....
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....e respondent- State submits that the transaction in question can at the most be said to be sale for export and not sale in the course of export. That the sale has taken place in India under a reasonable belief that the purchaser will take it out of country. Taking out of country is after the sale is completed in India. According to him, agreement of sale is entered into in India. Delivery was agreed to be given in India before the customs area at International Airport. Money is received in India and the seller had no control over the goods once the goods are delivered before the customs area before checking in, as such the sale of goods was in India and delivery thereof was also in India. According to Mr.Sonpal, it hardly matters whether the delivery was given at counter or outside the customs area at Airport. In both cases, the chances of goods coming back in India from where the same is delivered could not be ruled out. The sale is complete when payment is received and goods delivered outside customs area or station where movement of goods is not controlled by any authorities. 23. According to Mr. Sonpal, by delivery of goods at Air Port does not ipso facto prove that t....
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....r both are postponed. Admittedly, the goods were in a deliverable state and the payment was made before delivery of goods as such unequivocal conclusion can be drawn that the sale was complete in a shop. In other words, the sale having been completed prior to export, the sale is exigible to local sales tax. Reliance is placed on the judgment of this Court in case of Narang Hotels and Resorts Pvt. Ltd., Bombay v. State of Maharashtra, (2004) 135 STC 289 in support of the submission made. Mr. Sonpal, thus, urged that the Reference may, accordingly, be answered in favour of the Revenue and against the Assessee. Issue: 27. The core question involved in the present case is: whether the sale of goods was voluntary constituting sale in the course of export within the meaning of section 5(1) of the Central Sales Tax Act, 1963? Consideration: 28. Having heard rival parties, the issue in question is no more res integra. The same can be answered on the basis of various reported judgments of the Apex Court as well as of this Court. 29. The decisions of the Apex Court dealing with this question are to be found in the reported judgment of this Co....
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....The Apex Court held that a transaction of sale which is a preliminary to export of the commodity sold could be regarded as a sale for export, but not necessarily be regarded as one in the course of export, unless the sale occasions export. On facts, the Apex Court found that the sales by the appellants were intended to be complete without the export and as such it could not be said that the sales had occasioned export. The sales were held for export and not in the course of export. 34. In the Coffee Board, Bangalore v. Joint Commercial Tax Officer, Madras, AIR 1971 SC 870 the Apex Court held that the phrase "SALE IN THE COURSE OF EXPORT" authorises not only a sale and an actual export but that the sale must be a part and parcel of the export. The word "occasion" in the context of sale or purchase was held to mean cause for export or to be the immediate cause of export. In this case, the phrase "SALE IN THE COURSE OF EXPORT" was held to comprise of three ingredients. Firstly, there must be a sale. Secondly, the goods must actually be exported. Thirdly, the sale must be a part and parcel of the export. It was held that the same meaning must obviously be given to the phrase ....
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.... held that the sales were not in the course of export. In that case, the price of the goods was in US cents, the destination was a foreign port, Richco was required to arrange a certificate pertaining to the discharge of the charge chrome at the discharging port, the final settlement of the price was to be based on the weight determined either at the port of discharge or at the works of the ultimate buyer and the analysis mentioned in the certificate. The issue was whether the charge chrome fell below the specifications could only be determined by the assay carried out at the port of discharge. Title to the charge chrome passed to Richco only when the goods were found to have met the contractual specification, which was abroad. Therefore, the Charge Chrome Agreements were the contracts of sales of charge chrome and not the Off-take Agreement. The sales of charge chrome under the charge chrome agreements were held as sales to Richco abroad and that the export of the charge chrome had occasioned virtue of by the charge chrome agreements. The sales were, thus, held to be in the course of export within the meaning of section 5(3) of the CST Act. 39. This Court had also occasi....
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.... Explanation:-- For the purposes of this section,-- (a)...... ....... ....... (aa) "export out of India" shall not include any transaction by way of sale or otherwise in a shop, emporium or any other establishment situate in India, not involving clearance at any customs station as defined in the Customs Act, 1962 (52 of 1962); (b) to (e) ..... ....... ....." 44. Reading of the aforesaid relevant part of the statutory provision of the Income Tax Act by way of explanation has explained the concepts of "export out of India". This Court had an occasion to interpret this concept and observed as under: "The phrase 'export out of India' has been defined in Clause (aa) in Explanation to Sub-section (4A). The apex Court has considered this clause in the case of CIT v. Silver Art Palace [2003] 259 ITR 684 (SC), wherein the apex Court has observed that for the purposes of special deduction under that section there will be no export out of India; if two cumulative conditions are fulfilled, viz., (a) the transaction is one by way of sale or otherwise in a shop, etc. situated in India, and (b) it does not involve clearance in any customs....
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....t therein was incomplete without export and as such it could not be said that the sale had occasioned export. The sales were for export and not in the course of export. 47. If one turn to the facts of the present case, it is a sale on the shop counter. The moment goods were segregated for sale and the amount of sale consideration was paid in the shop, the sale was complete. The delivery of the goods was to be given just before the Customs area. Therefore, the sale was complete with the factum of delivery of goods. There was no compulsion on the purchaser to export it. It was at the sweet will of the purchaser whether or not to take it to its country. Absence of export was not to nullify the transaction of sale. The sale was complete the moment goods were identified on the counter and sale price was paid in the shop though delivery of goods was postponed till the date of journey, which the foreign going passenger (purchaser) was to undertake. It was open to the foreign going passenger (purchaser) to gift it before customs clearance. Such an act was not to invalidate sale. In other words, validity of sale was not to depend upon necessity of export. It may be a sale for expo....