Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2012 (6) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (6) TMI 770 - HC - VAT and Sales Taxy for claim of exemption u/s 5(2) of the Central Sales Tax Act - Privity of contract between the Government of India and the foreign party for importation of any goods or not – Whether in the absence of any sale in the course of import, the finding of the Tribunal that the transaction continued to be in pursuance of the earlier contract made by the Government of India, Mint, Noida with the first respondent and, therefore, there existed a privity of contract, is liable to be interfered with or not - Held that:- The assessee has entered into contracts with the foreign seller for conversion of steel strips into coin blanks for valid consideration - under the CST Act, 1956, tax is leviable on the sale of goods and not because of the movement of the goods - The movement of the goods is only material for the purpose of deciding whether the sale took place in the course of inter-State trade or commerce or whether such sale was purely an intra-State transaction - the name given to a transaction by the parties concerned does not decide the nature of the transaction - in order to make a transaction taxable under the CST Act, 1956, the transaction must be a "sale" as defined in section 2(g) - To claim exemption u/s 5(2) of the Act, the sale or purchase of goods should be deemed to take place in the course of the import of the goods into the territory of India - as per the definition, "sale" means any transfer of property in goods by one person to another for cash or for deferred payment or for any other valuable consideration. In K. Gopinathan Nair Versus State of Kerala (and other appeals) [1997 (3) TMI 513 - SUPREME COURT OF INDIA] the Supreme Court formulated the following three essential conditions to come to a conclusion whether the sale can be said to be in the course of import to claim exemption under section 5(2) of the CST Act or not – starting with, there must be a sale, goods must actually be imported and sale must occasion the import - the assessee has not established that there was any term or condition prohibiting the diversion of the goods after the import, i.e., the inextricable link between the transaction of the sale and the actual import making sale in the course of import - Moreover, in order to qualify for the exemption, the goods must move from the foreign country to India in pursuance of the conditions in the contract of sale between the foreign seller and the local purchaser, but, the goods were imported from the foreign country to India in pursuance of the contract entered into between the foreign seller and the first respondent, who was not the local purchaser – thus, the sale contemplated u/s 5(2) of the Central Sales Tax Act, 1956 is not applicable – the transaction took place between the parties had amply made it clear that the sale contemplated under section 5(2) had not taken place and, moreover, even assuming that there was an import of goods from Italy, such import was not occasioned as a result of sale by a dealer in Italy - The dealer was prevented from selling the goods to any person other than to whom the import licence had been granted, i.e., to be sold only to the Mint Government of India by the dealer – thus, the order of the Tribunal is set aside – Decided in favour of petitioners.
|