TMI Blog2008 (1) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 42 made pursuant to Section 17(3)(a)(xi) of the Act and Rule 81 made pursuant to Section 17(3)(3)(iii) of the Act which provided for exemption of tax on sales of tea at such auctions if such tea with or without further processing is exported. It further appears that under the said provision, for availing such exemption the petitioner has to furnish a declaration in the prescribed Form 9 to the seller which has to be obtained from Sales Tax Authorities. The case of the petitioner that the petitioner used to apply for such declaration forms from the authorities and used to furnish the same to its sellers at the auctions. In the year 2001, sales tax authorities refused to give such declaration forms to the petitioner. Representations were filed which were rejected on the ground that tea purchased at the auctions were sent by its two units in Pune and Cochin for blending and for packeting and were exported from the said place and the said Sales Tax authorities held that in terms of Rule 42 of the Rules such activities i.e. blending, packeting etc. had to be undertaken within the territory of West Bengal for availing the exemption and the exports also should have been made from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods out of India shall also be deemed to take place in the course of such export. However, such last sale or purchase takes place applying with the agreement or order for or in relation to such export. He also drew our attention to Section 17(3)(a)(xi) and Section 17(3)(a)(iii) and submitted that where goods purchased are exported in India, it would be excluded from taxable turnover and Section 17(3)(a)(xi) provides for excluding such other sales on such conditions or restrictions as may be prescribed and he drew our attention to Rule 42 which was framed in accordance with Section 17(3)(a)(xi) of the Act. The said Rule 42 is set out hereunder:- 42. Exemption from tax on sales of tea for the purpose of export (1) Where any dealer makes sale in auction held in Kolkata under the auspices of the Calcutta Tea Traders Association or at Siliguri under the auspices of Siliguri Tea Auction Committee or on internet under the auspices of the Teauction. Com Limited, an auction house for tea holding licence issued by the Tea Board, Calcutta to a registered dealer, of tea (including containers or other materials for its packing sold along with the tea) for the purpose of export (whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h is also necessary to reproduce herein :- 81. Declaration and evidence for deduction of sale of tea at auction immediately preceding export (1) Where a dealer makes a sale to a registered dealer of tea act auction held in Kolkata under the auspices of the Calcutta Tea Traders Association or at Siliguri under the auspices of the Siliguri Tea Actuion Committee or on internet under the auspices of the Teauction.Com Limited, an auction house for tea holding license issued by the Tea Board Kolkata and such sale is claimed to be the last sale for export within the meaning of sub-section (3) of section 5 of the Central Sales Tax Act, 1956 and he intends to claim deduction of such sale under sub-clause (iii) of clause (a) of sub-section (3) of section 17, such dealer shall, on demand by appropriate assessing authority, furnish a declaration in Form 9 obtainable from the purchasing dealer duly filled in and signed by the dealer who exports such tea out of the territory of India along with the evidence therefor as referred to in the Schedule to the declaration as aforesaid. ( Emphasis added) He further pointed out that Rule 81 has been made with reference to Section 17(3)(a)(i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... auctions, which are primarily held at Kolkata and Siliguri. Blending and packeting are most important elements of tea trade both within and outside India. Therefore, he submitted that Rule 42 equally applies in the case of processing or blending of tea purchased at the auctions to be done only in West Bengal or such activities can be undertaken outside West Bengal and whether exports have to be made only from West Bengal. He further submitted that Rule 42 does not provide so. No restrictions or conditions can be added to Rule 42. Learned Tribunal also accepted that there is no geographical limitation that export has to be made only from a place in West Bengal. In these circumstances, he drew our attention to certain Sections, which are specifically mentioned about West Bengal. The said Sections are as follows: - Section 17(2)(b)(i). Four per centum of such part of his taxable turnover of sales as represents sales to a registered dealer of goods, other than goods specified in Part B of the Schedule IV, of the class or classes specified in the certificate of registration of such dealer, as being intended for use by him directly in the manufacture in West Bengal of goods other tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods have to be covered by such declaration in Form F . Therefore, use of Form F is only for procedural purpose and further for ensuring that there is no evasion of tax. Therefore, Mr. Bajoria submitted that the order of the Learned Tribunal holding that the sales of tea at the tea auctions to the petitioner are not entitled to exemption be set aside and such sales are entitled to get the exemption under Rule 42 of the Rules and the respondents should be directed to issue Form 9 to the petitioner and the Bank Guarantee already furnished by the petitioner, should be discharged. Mrs. Roy, Learned Advocate appearing in support of the respondents contended that once the goods have already been transferred from the State to the other, then automatically the said Rule 42 has no application in case of the petitioner s export in question. Therefore, she submitted that Learned Tribunal correctly held that the said Rule 42 has no application in the case of the petitioner and the petitioner is not entitled any benefit out of that. Accordingly, she submitted that this application should be dismissed and furthermore, on the ground of furnishing the Form F , is nothing but to prove that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ament ex abundanti cautela, but in order to restrict the applicability of the exemption clause in section 5(2)(a)(ii). The statement of objects and reasons admitted in clear and explicit terms that: At present sales of raw materials in Delhi are exempted from tax irrespective of the fact whether the goods manufactured therefrom are sold in Delhi or not. It is, therefore, made clear that sales of raw materials will be tax-free only when such sales are made by those who manufacture in Delhi taxable goods for sale. At Pages 435-6 of the Reports it was further held as under:- Lastly, it was contended that the resales effected by the branches of the assessees outside Delhi could not be regarded as resales by the assessees must be held to have utilised the goods for a purpose of different from that for which the goods were purchased, namely, resale by them, and the price of the goods purchased must be included in their taxable turnover under the second proviso. But this contention fails to take into account the plain and obvious fact that when the branches of the assessees resell the goods outside Delhi, it is really the assessees who resell the goods, for the branches are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the language of section 8(3)(b) according to its plain word and it cannot write in the section words which are not there. To read the words by him after the words for sale in section 8(3)(b) would not be construction but judicial paraphrase which is impermissible to the court. It is also important to note that the word use is followed by the words by him clearly indicating that the use of goods purchased in the manufacture of goods for sale must be by the registered dealer himself but these words are significantly absent after the words for sale . On a plain grammatical construction these words govern and qualify only use and cannot be projected into the words for sale . The goods purchased by the registered dealer must be used by him the manufacture of goods which are intended for sale but such sale need not be by the registered dealer himself; it may be by anyone. (Emphasis added) In the case of Hindalco Industries Ltd. Vs. Stateof Bihar and others (supra), the Hon'ble Patna High Court held at Page 257 of the Reports as follows :- I accordingly find and hold that section 13(1)(b) of the Bihar Finance Act, 1981 cannot be constructed so as to put a geo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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