TMI Blog2022 (1) TMI 1117X X X X Extracts X X X X X X X X Extracts X X X X ..... foreign buyers with the Head Office occasioned the movement of the goods from Bangalore branch office. This inextricable link has not been properly examined by the authorities. However, learned Additional Government Advocate argued that it is revenue neutral. This argument would not take the dispute to logical conclusion. The matter requires to be re-examined by the Tribunal in the light of the judgments referred to above vis- -vis the documents produced before this Court. If the Excise pass has any inextricable link with the export, certainly the transaction would come within the purview of Section 5(1) of CST Act - the movement of goods occasions such export. These aspects require to be verified by the Tribunal considering the material evidence placed on record by the assessee. The Revision Petition is allowed in part and part matter on remand. - S.T.R.P.No.26/2017 - - - Dated:- 12-1-2022 - HON BLE MRS.JUSTICE S. SUJATHA AND HON BLE MR. JUSTICE S. VISHWAJITH SHETTY PETITIONER (BY SRI AJAY J. NANDALIKE, ADV.) RESPONDENT (BY SRI JEEVAN J. NEERALGI, AGA.) O R D E R S. SUJATHA, J., The petitioner/assessee has filed this Sales Tax Revision Petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re to Mumbai and the export invoices would depict that the goods were exported from Maharashtra. However, no F-Forms were filed by the assessee for the stock transfer effected from Karnataka branch office to the head office situated at Maharashtra, from where the goods are said to be have been exported and has not proved that only those goods stock transferred for the purpose of export are exported. The First Appellate Authority though accepted F-Forms, granted the relief inasmuch as the stock transfer based on F-Forms holding that the petitioner has not received any order for the export of goods nor sending the goods from Bangalore to abroad directly. Hence, considering the said movement of goods to the extent of F-Forms furnished as stock transferred allowed the appeals in part. On further appeals before the Tribunal, ignoring the F-Forms filed, it was held that there is no privity of contract between the petitioner s branch office and the foreign buyers. The petitioner was treated as an intermediary interposed in the transactions. The Tribunal concluded that in the absence of F-Forms, stock transfers effected by the petitioner to its registered office i.e., in view of non-compli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e transaction which links the sale to export. To occasion export there must exist such a bond between the contract of sale and the actual exportation, that each link is inextricably connected with the one immediately preceding it, without which a transaction of sale cannot be called a sale in the course of export of goods out of the territory of India. Thus, it has been held that the test to be applied is, whether there is an unseverable link between the local sale or purchase and export, and if it is clear that the local sale or purchase between the parties is inextricably linked with the export of the goods, then a claim under Section 5(3) for exemption from State sales tax is justified, in which case, the same goods theory has no application. 9. The Hon ble High Court of Punjab and Haryana in the case of M/s Nipha Exports Pvt. Limited vs. State of Haryana and others [(1998) 108 STC 337] has considered the issue relating to Section 5(1) of the CST Act in the context of the assessee - company therein, having its registered office at Calcutta and the branch office at Faridabad. The goods purchased by the branch office were sent to the head office at Calcutta for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be law formulate principles determining when a sale or purchase of goods takes place in the course of interstate trade or commerce. Thus, Article 269 and 286 are the sources of Parliament's power in enacting Sections 3 to 5 of the Central Act. Though Sections 3 and 5 use the word deemed while formulating the principles, Supreme Court has held that the word was not used to create a legal fiction; but, used to convey as to what are the principles governing the respective concepts stated in those provisions. Therefore, there can be no doubt that these concepts are concepts derived from the Constitution and the principles formulated under Sections 3 and 5 of the Central Act would govern them. When the State Legislature uses any one of these concepts - whether, it is sale in the course of inter-state trade or commerce, or sale in the course of export , it has to be understood by applying the principles formulated in the aforesaid Sections 3 and 5 of the Central Act. 24. Before the enactment of Section 5(3) of the Central Act, the concept of sale in the course of export was confined to the last sale which directly occasioned the export. The meaning of the term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rks contract at the premises of the contractee, who placed purchase orders with the branch office of the respondent-company at Bangalore. The branch office in turn communicates such purchase orders to the principal office of the respondent-company, which has its factory at Ghaziabad at U.P. The lifts and elevators were manufactured to the design and specification of the customers. The manufactured items were tested and thereafter dismantled and dispatched to the customers' place in the State by way of stock transfers. The branch office of the respondent-company executes the works contract by installing and commissioning of the lifts and elevators at the customers' place. Merely because the lifts and elevators are installed and commissioned in the State, it cannot be said that it is a local sale exigible to levy of tax under Section 5B of the Act on the ground that the actual transfer of property used in the works contract took place in the State of Karnataka. In view of the law declared by the apex Court in Builders Association's case [1993] 88 STC 248 and Gannon Dunkerley's case [1993] 88 STC 204, it can be safely concluded that the principles for determining when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tra in the course of export. The orders of the appellate authority relating to the subsequent assessment years 2009- 2010, 2011-2012 and 2012-2013 are also placed on record wherein the contention of the assessee that the transfer from branch office to head office was in the course of export has been accepted. 14. It is pertinent to note that the Tribunal has held that there must be a single sale to attract Section 5(1), but it is not the case of the department that the goods have moved from the branch office in Karnataka to Head Office at Mumbai as a result of sale. On the other hand, it is construed as stock transfer. The test to be applied is whether the contract of the foreign buyers with the Head Office occasioned the movement of the goods from Bangalore branch office. This inextricable link has not been properly examined by the authorities. However, learned Additional Government Advocate argued that it is revenue neutral. This argument would not take the dispute to logical conclusion. The matter requires to be re-examined by the Tribunal in the light of the judgments referred to above vis- -vis the documents produced before this Court. If the Excise pass has any inextr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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