2006 (2) TMI 283 - SC - VAT and Sales Tax

Whether purchase tax was not leviable under section 9 of the Haryana General Sales Tax Act 1973 on the goods purchased by the respondents for the purpose of export out of India? Held that - Appeal dismissed. Agreeing with the view taken by the High Court that the movement of the goods from Faridabad to Calcutta was occasioned in the course of export out of India and there could be no sale between the branch office and the head office.

Summary

Issues:
- Whether purchase tax was leviable under section 9 of the Haryana General Sales Tax Act, 1973 on goods purchased for export out of India.

Analysis:
The case involved an appeal against a High Court judgment that reversed the decision of the Sales Tax Tribunal, holding that purchase tax was not leviable on goods purchased for export. The respondent, a company engaged in manufacturing machinery exclusively for export, purchased machinery and spare components from registered dealers in Haryana for export. The assessing authority issued a notice for levy of purchase tax, which was upheld by the appellate authority and the Sales Tax Tribunal. The High Court, after recording findings, held that the goods purchased for export were indeed exported, and the movement of goods from one office to another was in the course of export. The High Court relied on previous judgments to support its decision. The Supreme Court agreed with the High Court's view, concluding that there was no sale between the branch office and the head office as the movement of goods was in the course of export, thereby dismissing the appeals.

The key issue revolved around the levy of purchase tax under section 9 of the Act on goods purchased for export. The respondent, engaged in manufacturing machinery for export, purchased goods from registered dealers in Haryana for export purposes. The assessing authority issued a notice for the levy of purchase tax, which was upheld by the appellate authority and the Sales Tax Tribunal. The High Court, in its judgment, found that the goods purchased were indeed exported, and the movement of goods from one office to another was in the course of export, thereby ruling in favor of the respondent. The Supreme Court concurred with the High Court's findings, emphasizing that there was no sale between the branch office and the head office as the movement of goods was directly related to export, ultimately leading to the dismissal of the appeals.

In conclusion, the Supreme Court upheld the High Court's judgment, ruling that purchase tax was not leviable on goods purchased for export out of India under section 9 of the Act. The Court agreed that the movement of goods from one office to another was directly linked to export and did not constitute a sale, thereby dismissing the appeals and leaving the parties to bear their own costs.