TMI Blog1999 (2) TMI 720X X X X Extracts X X X X X X X X Extracts X X X X ..... e exporter Allanasons (P) Limited, Bombay at Rs. 1,38,871 had to be necessarily taxed at 5 per cent and under Section 7-A(1)(c) of the TNGST Act, as the goods were despatched to a place outside the State except as a direct result of inter-State sales ; besides the sale value of jaggery Rs. 28,615 had to be taxed at 5 per cent as there was no proof for the export sale, and also levied penalty at 150 per cent of the tax due under Section 12(5)(iii) of the TNGST Act on the ground that the assessees wilfully suppressed the taxable turnover of chillies of Rs. 13,88,871 during the assessment year 1982-83. 3. Aggrieved by the said order the assessees preferred appeals in A.P. No. 321 of 1984 and 353 of 1984 before the Appellate Assistant Commissioner, Tiruchirapalli against the levy of purchase tax at 5 per cent under Section 7-A(1)(c) of the TNGST Act on the purchase value of the chillies and on the sale value of jaggery and also against the levy of penalty under Section 12(5)(iii) for the wilful suppression of the turnover of chillies as stated above. The Appellate Assistant Commissioner dismissed both the appeals by confirming the findings of the assessing authority that the sale by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the claim of sales of jaggery of the sale value of Rs. 28,615 under form H would itself show that it is only for export and thereby exempted from tax. In respect of penalty it is claimed that the levy of penalty could not be automatic even if there is any suppression, as the alleged suppression should be wilful. 6. Considering all these aspects now the points for consideration are : (i) Whether the levy of purchase tax at five per cent under Section 7-A of the TNGST Act on a turnover of Rs. 13,88,871 for chillies is sustainable, or the goods involved moved to a place outside the State as a direct result of inter-State sale. (ii) Whether the levy of tax at five per cent on a turnover of Rs. 28,615 for sale of jaggery is permissible. (iii) Whether the levy of penalty of Rs. 69,444 calculated at 100 per cent of the tax due (chillies) is sustainable. 7. It is admitted fact that the assessee being the dealers in chillies and coriander purchased chillies locally from the agriculturists and marketing committee (non-dealers) and thereby the purchase turnover for the same is Rs. 13,88,871.15 and for the same admittedly the corresponding sale turnover is Rs. 15,83,190 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plied by M/s. Allanasons (P) Limited, Bombay, and transported in a truck bearing Regn. No. TNB 3838 on April 10, 1982 to Ariyalur as per the bill issued by transport service by name Jamnagar Roadways and the telegram for having sent the same to Ariyalur would amply prove the fact that the particulars mentioned in the sale bill as excluding gunny bag is in consonance with the fact of export of chillies by M/s. Allanasons (P) Limited, Bombay of the same chillies purchased from the dealer under the sale bill dated May 29, 1982. In addition even as per form H certificate the export was under agreement with or order of the foreign buyer in No. Ex 50086 dated May 12, 1982. So the mere fact of non-production of the said agreement of export as mentioned by lower authority would not stand in the way of our conclusion that it was in the course of export out of India, especially as the form H certificate issued by the Bombay authority concerned had been handed over by the exporter to the assessees. In other words the particulars in H form tallying with sale bill, bill of lading, etc, had not been disputed by the revenue, and thereby the non-production of the said agreement would not i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale, of the assessee, to another dealer Allanasons (P) Limited, Bombay. Of course this arguments may be outwardly attractive but really it is nothing but ignoring the provisions of the CST Act much less Section 5(3) of the said Act. Even on facts as already stated above the goods moved to Cochin port for shipment for export by Allanasons and it was moved not as a direct result of inter-State sale. So there is no inter-State sale by despatching goods to a place in the other State. 10-A. At this stage, it is pertinent to point out that in the Punjab Sales Tax Act the sale in the course of export has been also included, in order to entitle the dealer for exemption of purchase tax as in the case of inter-State sale as may be seen in Section 4-B of the said Act as follows : 4-B Levy of purchase tax on certain goods.--Where a dealer who is liable to pay tax under this Act purchases any goods other than those specified in Schedule 'B' from any source and............ (i) to (iii).................... (iv) sends them outside the State other than by way of sale in the course of inter-State trade or commerce or in the course of export out of the territory of India. So ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the TNGST Act. It is nobody's case that the sale effected by the assessee to Allanasons was for the despatch of goods to a destination in other State or there was any agent of the assessee at Cochin. On the other hand, as already stated this penultimate sale was effected and the goods despatched at Ariyalur for export out of India through Cochin Port, by Allanasons, Bombay for the purpose of complying with the agreement or order in relation to such export. It is obvious that the goods never moved either as a consignment sale or as a direct result of inter-State sale as it was sent to clearing agent at Cochin port for shipment to ODESSA, USSR. To name it as an inter-State sale it is not as if Allanasons issued C forms and on the other hand form H certificate was issued to specify that the purchase of goods were in the course of the export, as the date of agreement or order for export from the foreign buyer (foreign) in ODESSA, was May 12, 1982. So it is obvious that the last purchase or sale within the State was for the purpose of complying with the agreement for or in relation to such export. 12. There are three transactions in this case, viz., (1) The purchase of ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ombay was the sale immediately preceding export and thereby it is in the course of export eligible for the benefit of Section 5(3) of the TNGST Act and with the result the purchase (first transaction) made by the assessees from the non-dealers which was preceding the last sale in the State should be liable for purchase tax under Section 7-A(1) (parent section) of the TNGST Act. In all these decisions it has been held that under Section 5(3) of the CST Act only the last sale or purchase preceding the export sale is deemed to be a sale in the course of export. Hence it is clear that the purchases made by the assessees from the non-dealers were not the immediate preceding purchase which occasioned the export eligible for exemption under Section 5(3) of the CST Act. So the petitioners could not seek exemption from the levy of tax on their purchases made by them from the unregistered dealers which were transactions preceding the penultimate sale. In other words the petitioners could not claim any exemption from the levy of purchase tax under Section 7-A(1) of the TNGST Act as the last sale in the State is not inter-State sale, but only a sale in the course of export covered under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chillies and more specifically urged that no purchase tax could be levied much less under Section 7-A(1)(c) of the TNGST Act and in support of his contention cited certain decisions : (1) State of Orissa v. Minerals Metals Trading Corporation of India Ltd. reported in [19941 95 STC 80 (SC). (2) Murli Manohar Co. v. State of Haryana reported in [1991] 80 STC 79 (SC). (3) State of Orissa v. Johrimal Gajanand reported in [1994] 95 STC 93 (SC) and on Onkarlal Nandlal v. State of Rajasthan reported in [1985] 60 STC 314 (SC). In Onkarlal Nandlal case [1985] 60 STC 314 (SC) three honourable Judges of Supreme Court while dealing with the expression resale within the State in form ST-17 to the Rajasthan Sales Tax Rules by applying Section 4(2) inclusive of explanation in the CST Act had held that a sale which is in the course of inter-State sale cannot be taxed by State Legislature even if situs is within the State, because the State Legislature has no legislative competence to impose tax on the inter-State sale and that can be done only by the Parliament. Here factually in this case the second transaction is not a sale in the course of inter-State trade or commerce, but only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufactured certain goods with the aid of the raw materials and sold it to the dealers who in turn exported the goods outside India. In such circumstances, the question was whether purchase tax could be levied for the raw materials purchased and it was held that it was not in the course of export as envisaged under Section 5(1) of the CST Act. Here, in this case it has been already held that the penultimate sale is in the course of export and further there is no question of finished product or undertaking involved in this case. So the facts of the cited cases are also not applicable in the facts of this case. 17. So bearing all these facts in mind the principles laid down in the above referred decisions reported in (1) State of Karnataka v. B.S. Ashraf Co. [1997] 107 STC 571 (SC). (2) Sovereign Spices v. State of Kerala [1998] 110 STC 429 (Ker). (3) Jayalaxmi Industries v. Deputy Commissioner of Commercial Taxes (Assessments), Tumkur [1996] 103 STC 182 (Kar). (4) Mohammed Ishaq Sons v. Commissioner of Commercial Taxes in Karnataka [1992] 87 STC 36 (Kar). are applicable to the facts of this case--due to the fact that the penultimate sale is neither a consignment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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