TaxTMI 
TaxTMI 
2008 (8) TMI 821
X X X X Extracts X X X X
X X X X Extracts X X X X
....om the petitioners and consequently the petitioners were called upon to furnish accounts. On verification of accounts, the department noticed purchase and sale of goods by the petitioners in excess of the turnover that requires registration and payment of tax under the KGST Act. Petitioners conceded that there was violation of the provisions of the KGST Act and Rules inasmuch as they have not taken registration and filed monthly returns. The offence was compounded by remitting compounding fee and consequently no penalty was levied. During assessment for the same year 2001-02, the petitioners filed returns and claimed exemption on sales turnover based on form 18A prescribed under rule 28A of the KGST Rules and issued by the purchasers, wh....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... covering the transactions were not furnished therein. However, it is clarified by counsel for the petitioners that since petitioners were not registered dealers, sales bills were not issued and form 18A contained details of purchase bills issued by the exporters who are registered dealers under the KGST Act. We are unable to uphold the order of assessment confirmed by the Tribunal for more than one reason. In the first place, export exemption provided under section 5(3) of the CST Act on last sales preceding export sales cannot be disallowed on technical grounds because exemption has it's source in the constitutional provision contained in article 286(1)(a) of the Constitution of India, which prohibits levy of tax within a State on ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e taxable turnover, turnover of goods sold in the course of export should be excluded. We are of the view that rule 9(h) applies to unregistered dealers also and therefore such dealers are entitled to exemption on export sales, whether it be covered under section 5(1) or under section 5(3) of the CST Act. Therefore, if documents produced are sufficient to prove export exemption under section 5(3), then petitioners are entitled to sales tax exemption even though they were not registered dealers during the relevant year. The next question to be considered is whether want of sale bill numbers in form 18A furnished by the petitioners is a ground for disallowing sales tax exemption claimed under rule 9(h) of the KGST Rules read with section 5....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sing the goods for complying with such order for export, actual export sales should have been made by the exporter. In fact along with form 18A, the exporter should furnish copies of export order and bill of lading and other shipping documents towards proof of export. The Department has no case that the exporter did not have prior order for export or that purchase is not made for complying with such export order or that goods are not in fact exported, pursuant to the export order and the purchases made from the petitioners. If the declarations, namely, form 18A produced contain material particulars and the annexures thereto such as export order and shipping bill are sufficient to prove ingredients of section 5(3), then the forms cannot be r....