TMI Blog1993 (10) TMI 309X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance (Sales Tax) Act, 1941 ( the 1941 Act , in short). 2.. The present application is, for all purposes one under article 227 of the Constitution of India. Briefly, the case of the applicant is that he carries on the business of selling goods including by way of import and export under the name and style of M/s. Sri Gopal Hosiery. He is a registered dealer under the 1941 Act as also the 1956 Act. During the four quarters ending C.S. 2038 R.N., he had placed orders for supply of certain goods with a party in Japan and had obtained import licence for importation of the said goods which were despatched by the foreign party to the applicant at Calcutta. The applicant had also entered into various contracts with different parties at Calcutta and Rajkot for sale of the goods to be imported and accordingly he had sold the goods so imported by transfer of documents of title to the goods, before the goods had crossed the customs frontiers of India. Therefore, in the returns filed for the four quarters ending C.S. 2038 R.N., the applicant had claimed exemption under section 5(2) of the 1956 Act in respect of the aforesaid sales. But in course of assessment for the said period, responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the case that the sales were effected after the goods had crossed the limit of the area of the customs station. Applicant has also complained that in spite of production of declaration forms at the appellate stage and despite showing cause for non-production thereof at the time of assessment, the authorities below rejected his claim for deduction under section 5(1)(aa) of the 1941 Act, and such rejection was illegal and untenable. 3.. Respondents case in the affidavit-in-opposition is that out of five sales claimed to be sales in the course of import, in three cases, agreements were allegedly made by the applicant with his buyers, after the goods had crossed the customs frontiers of India. In the other two cases, delivery of the goods was taken by the applicant himself. The orders passed by respondents 1, 2 and 3 have been defended. It is pointed out that in the case of sale to Associated Synthetics (P) Ltd. of Calcutta, offer of sale was given on April 1, 1980, the bill was raised by the applicant on April 4, 1980 but endorsement on the bills of entry was dated March 20, 1980 stating therein that the goods were there- by sold. Similarly, in the case of sale to National Mouldi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esentative, however, submitted that the evidence produced was not sufficient to establish that the applicant was prevented by sufficient cause. In the appellate order dated November 18, 1986, the Assistant Commissioner observed that the applicant s advocate had failed to produce any evidences in support of the contentions that in spite of best effort on the part of the petitioner, one form now being produced could not be obtained by the petitioner before the date of hearing of the assessment case. Elsewhere also in course of the same order, the Assistant Commissioner observed that the applicant could not avoid the onus of proving that, in spite of best efforts, he was really prevented by extraneous reasons from producing statutory forms in support of the claims under section 5(1)(bb) or 5(1)(aa). Mr. Sumit Chakraborty, learned advocate for the applicant, pointed out that letters were produced before the appellate authority to the effect that in spite of reminders, the purchasing dealers did not furnish the declaration forms up to the time of assessment. After hearing the rival contentions and having regard to the materials produced in support of the contention that the declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sales to Associated Synthetics (P) Ltd., National Moulding Co. Ltd., and Atlas Chemicals were effected after the goods crossed the customs frontiers of India. In respect of two other impugned sales, both in favour of Trishul Industries, the assessment order stated that the applicant took delivery of the goods through his clearing agent M/s. Lokenath Shipping and Clearing Agency. Since sales as such have not been disputed or disbelieved, the observation in the assessment order regarding the two sales to Trishul Industries amounts to the same observation as in the other three cases. In the appellate order dated November 18, 1986, Assistant Commissioner observed that, in every case, the sale was effected after the imported goods had crossed the customs frontiers of India. The West Bengal Commercial Taxes Tribunal in its revisional order dated December 20, 1991 held as below at page 3 of the order: The goods were sold after they reached the customs station in all cases . It will thus appear that the Assistant Commissioner and the Tribunal below did not make any distinction between the first three sales and the two sales to Trishul Industries. 7.. Mr. Sumit Chakraborty, learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment bills of another date it was as a measure of abundant caution. As we have already seen, there is really no dispute about the sales having been effected by the applicant in favour of the various purchasers including Trishul Industries. The dispute is confined to the question whether the sales were effected after the goods in question had crossed the customs frontiers of India. In the assessment order, it was stated that in the case of Trishul Industries delivery of the goods was taken by the applicant through his clearing agent. But the last fact-finding authority, namely, the Tribunal below did not stick to that position and held that all the sales were effected after the goods reached the customs station. In this connection, Mr. Chakraborty drew our attention to the claim made in paragraph 15 (ought to be 16) of the application to the effect that the goods were cleared by the buyers who paid customs duty. In paragraph 12 of the affidavit-in- opposition, while dealing with that statement, this claim was not denied. According to the respondents, the goods crossed customs frontiers of India upon unloading thereof from the ship and bringing them into the customs station. Mr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder clause (aa) of that section to be an inland container depot. There is no dispute before us that Calcutta port is a customs port within the meaning of section 2(12) of the Customs Act. In this context, we may also refer to section 2(11) of the 1962 Act which defines customs area as the area of a customs station and includes any area in which imported goods or export goods are ordinarily kept before clearance by customs authorities. Thus, limits of the area of a customs station appearing in section 2(ab) of the 1956 Act means the limits of the area of any customs port, and here, of the Calcutta port. It was common ground that the limits of the area of the customs station of the Calcutta port extended from its inner boundary abutting the watery area where the ship had arrived upto the outer boundary where the clearance of goods was effected and from where the goods were taken out for being freely dealt with inside the country. So long as the goods were in the customs station, those could not be utilised or dealt with inside the country by the owner. So long the goods were not cleared by the customs authorities upon payment of due customs duty, the goods remained within the cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods crossed the customs frontiers of India, because all the sales were effected when the goods had been brought into the area of the customs station and kept there, naturally before clearance. 9.. We are of the opinion that under section 5(2) read with section 2(ab) of the 1956 Act and the relevant definitions in the Customs Act, 1962, the expression before the goods have crossed the customs frontiers of India -means before the goods have crossed the limits of the area of a customs station, namely, a customs port, or in other words, before the goods have crossed the entire area of a customs station including its outer boundary so that the goods have found their free access into the country beyond the customs station upon clearance by the customs authorities. In the instant cases, the case of the respondents themselves is that the sales took place not after clearance of the goods by customs authorities; but only after the goods were unloaded from the ship and brought into the customs station. In our opinion, since the goods were sold by effecting a transfer of document of title to the goods, while the goods were lying in the customs station and had not gone out of the limi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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