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Commissioner of Commercial Tax Versus Shakti Containers

2016 (9) TMI 827 - GUJARAT HIGH COURT

Demand of tax with interest - imposition of penalty under Section 45(6) of the Act - documents in support of the claim for exemption from demand of tax - GVAT - Penultimate sale - drums - packing material - export consignment - local sales - benefit of tax exemption on penultimate sale - Held that: - the penultimate sale before export of the goods shall also be deemed to be in course of such export provided the conditions contained in sub-section 3 of Section 5 are satisfied. For applicability o .....

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escribed under the Rules would have to be made. This would include declaration containing specified details. These details provided in items no.3 to 6 to the Schedule contain various information such as name of airport, seaport or land customs station through which the goods have been exported, name of airlines, ship etc. or other means of transport through which the export has taken place and such other relevant details. All these requirements would relate to actual export of goods sold by the .....

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claim the benefit of the export sale. - When the revisional authority noticed discrepancies in the different documents supplied by the assessee, he was within his rights to deny the benefit of tax exemption to such extent. - The penalty is discretionary and can be levied upto 1 ½ times the difference between the amount paid and tax assessed. Their is no attempt on part of the assessee to avoid payment of legitimate taxes - no penalty levied. - Demand of tax and interest upheld. Impo .....

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bunal' for short) in four separate revisions filed by the respondent-assessee. 2. Brief facts are as under: 2.1 The respondent is a manufacturer of drums. Such drums are supplied by the respondent to various companies engaged in manufacturing and export of chemicals. The drums are used as packing material in the export consignment. The assessee also sells the drums in the local market. To the extent of such sale, the assessee is liable and regularly pays local taxes. However, the sales of th .....

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tutory provisions. He thereupon gave a notice to the assessee to produce the same and after considering the documents produced by the assessee, passed two separate orders dated 19.5.2010. He was of the opinion that there were discrepancies in the documents produced by the assessee which would go to the root of the matter. He, therefore, for the assessment year 2003-04 raised an additional tax demand of ₹ 2,83,825/- and interest of ₹ 1,53,265/- on such unpaid tax. He levied penalty @4 .....

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gs before the Tribunal, the assessee contended that all necessary documents in support of the claim for exemption from demand of tax were produced. The Commissioner committed an error in rejecting the claim on some minor discrepancies noticed. Regarding the penalty, it was mainly contended that at the revisional stage, the penalty cannot be imposed for the first time. 2.4 The Tribunal allowed the revision petitions. The Tribunal was of the view that the sales made to the exporters cannot be iden .....

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learned counsel for the parties, we may refer to the relevant statutory provisions. Section 5 of the Central Sales Tax Act ( CST Act' for short) pertains to a case when a sale or purchase of goods takes place in the course of import or export. As per sub-section 1 of Section 5, a sale or purchase of goods would be deemed to take place in the course of the export of goods out of the territory of India only if the sale or purchase either occasions such export or is effected by transfer of docu .....

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d was for the purpose of complying with, the agreement or order for or in relation to such export. (4) The provisions of sub-section (3) shall not apply to any sale or purchase of goods unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner a declaration duly filled and signed by the exporter to whom the goods are sold in a prescribed form obtained from the prescribed authority. (5) xxxx 4. In terms of sub-section 3 of Section 5 of CST Act, the last sa .....

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ion 4 of Section 5 worded in the nature of an exception to sub-section 3 provides that the provisions of sub-section 3 shall not apply to any sale or purchase of goods unless dealer selling the goods furnishes to the prescribed authority in the prescribed manner, a declaration filled and signed by the exporter to whom the goods are sold in a prescribed form obtained from the prescribed authority. Thus, for applicability of sub-section 3 of Section 5, the seller has to fulfill the requirements of .....

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e declaration referred to in sub-section 4 of Section 5 shall be in Form H and shall be furnished to the prescribed authority upto the time of assessment by the first Assessing Authority. Form H, under the said Rules of 1957, in turn refers to a certificate containing the following specifications: Certificate I - Certified that the goods (the particulars whereof have been specified in terms (1) and (2) of the Schedule below) supplied in pursuance of our purchase order No........ dated purchased .....

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der: B- Details regarding export (3) Name of airport, seaport or land customs station through which the goods have been exported. (4) Name of the airlines/ship/railway/goods vehicle or other means of transport through which the export has taken place. (5) Number and date of air consignment note/bill of lading/railway receipt or goods vehicle record or postal receipt or any other document in proof of export of goods across the customs frontier of India (Certified copy of such air consignment note .....

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ntain various information such as name of airport, seaport or land customs station through which the goods have been exported, name of airlines, ship etc. or other means of transport through which the export has taken place and such other relevant details. All these requirements would relate to actual export of goods sold by the assessee to the exporter. Only through such declarations would it be possible for the Assessing Authority to verify the claim of a dealer that the goods supplied were fo .....

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isional authority noticed discrepancies in the different documents supplied by the assessee, he was within his rights to deny the benefit of tax exemption to such extent. Under the circumstances, the revisional orders insofar as raising tax demand with interest is concerned, we hold that the Tribunal should not have interfered. 8. At this stage, counsel for the respondent, however, submitted that in any case even if the benefit of Section 5(3) of the CST Act is to be denied, the sales should be .....

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refore revise the demand of sales tax on such basis. 9. Before closing, we may refer to two decisions cited by the counsel for the assessee. In the case of Chettiar Industrial Corporation V/s State of Tamil Nadu, reported in 113 Sales Tax Cases page 334, the question was whether packing material used for exporting the goods would qualify for the benefits under sub-section 3 of Section 5 of the CST Act. It was in this background, the Court held that the packing materials are essential for export .....

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