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Commissioner, Sales Tax Vs. Dhampur Sugar Mills Ltd. and anr. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAllahabad High Court
Decided On
Case NumberS.T.R. No. 651 of 1965
Judge
Reported in[1970]26STC65(All)
AppellantCommissioner, Sales Tax
RespondentDhampur Sugar Mills Ltd. and anr.
Appellant AdvocateStanding Counsel
Respondent AdvocateJ. Sarup and ;Devendra Sarup, Advs.
Excerpt:
- .....this combined reference.2. at the outset, we must point out that the procedure adopted by the revising authority in making a combined reference in the case of two different dealers is highly irregular and is not permissible under the law. section 11 contemplates a reference at the instance of the dealer or the commissioner in respect of questions arising out of a particular order passed by the revising authority under section 10 of the act. when therefore two different dealers apply for a reference or the commissioner seeks reference in respect of two different dealers, the revising authority cannot club them together even if the questions of law are identical. see sarju prasad behari lal v. commissioner of sales tax,u.p. [1956] 7 s.t.c. 665. we shall, however, confine ourselves to.....
Judgment:

R.L. Gulati, J.

1. This is a reference under Section 11(3) of the U.P. Sales Tax Act (hereinafter referred to as the 'Act') at the instance of the Commissioner, Sales Tax, U.P. It is a combined reference relating to two dealers, M/s. Dhampur Sugar Mills and M/s. Upper Ganges Sugar Mills both of the district Bijnor, arising out of two separate revision petitions filed by the two dealers. The Commissioner of Sales Tax asked for a reference in both the cases and the Additional Judge (Revisions) Sales Tax, Meerut Range, has accordingly submitted this combined reference.

2. At the outset, we must point out that the procedure adopted by the revising authority in making a combined reference in the case of two different dealers is highly irregular and is not permissible under the law. Section 11 contemplates a reference at the instance of the dealer or the Commissioner in respect of questions arising out of a particular order passed by the revising authority under Section 10 of the Act. When therefore two different dealers apply for a reference or the Commissioner seeks reference in respect of two different dealers, the revising authority cannot club them together even if the questions of law are identical. See Sarju Prasad Behari Lal v. Commissioner of Sales Tax,U.P. [1956] 7 S.T.C. 665. We shall, however, confine ourselves to the facts of the case of Dhampur Sugar Mills only.

3. The Commissioner of Sales Tax had asked for a reference on the following question of law :

Whether in the facts and the circumstances of the case the Additional Revising Authority was justified in treating the sales in question as sales made during the course of export outside India and in exempting them from levy of sales tax.

4. The dealer, namely, M/s. Dhampur Sugar Mills Ltd. did not make any application for a reference under Section 11(1) of the Act, but it appears that at the time of the hearing of the reference application filed by the Commissioner, the dealer requested the revising authority to refer another question. The revising authority appears to have accepted that request and has referred an additional question for the opinion of this court at the instance of the dealer; i.e., question No. (2) which reads as follows:

Whether the sales made to the State of Jammu and Kashmir till 17th November, 1958, under the Central Sales Tax Act, 1956, should have been made subject to Central sales tax.

5. This procedure adopted by the revising authority is again irregular. Section 11(1) confers a right upon the dealer to ask for a reference on any question of law which arises out of the Order of the Judge (Revisions) passed under Section 10. Likewise, the Commissioner of Sales Tax has been given a right under Section 11 (3) of the Act to ask for a reference on any question of law which he desires to be referred to the High Court. If the assessee felt aggrieved with any part of the Order of the revising authority, he should have made a separate application under Section 11(1) asking for a reference of the question of law arising out of that part of the Order with which he was aggrieved. In the absence of a separate application, a dealer could not be permitted to ask for a reference on a question of law.

6. M/s. Dhampur Sugar Mills (hereinafter referred to as ' the dealer') is a limited company which carries on the business of manufacture and sale of sugar. In respect of the assessment year 1957-58 the dealer claim ed exemption from Central sales tax on a total turnover of Rs. 4,34,995.00 being the turnover of goods booked to Mahe railway station in the course of export. This claim of the dealer was not accepted by the Sales Tax Officer, nor by the Assistant Commissioner (Judicial) Sales Tax, Saharanpur, before whom an appeal was filed. The dealer then went up in revision under Section 10 of the Act before the Judge (Revisions) Sales Tax. From the facts found by the revising authority, it appears that certain Mahe parties entered into contracts with the dealer for the purchase of sugar. Admittedly Mahe at the material time was in French territory. The dealer in pursuance of such contracts of sale of sugar in favour of the Mahe parties consigned stocks of sugar by rail to the Mahe railway station which is a railway terminus situated within Indian territory. Mahe town which is in the French territory is separated from the Mahe railway station by a hillock and is connected with the Mahe railway station by a road of about one furlong. There is no direct rail link between the town of Mahe and the Mahe rail way station. The buyers of Mahe got the goods unloaded at the Mahe railway station and transported them by other conveyance to Mahe town. The bills were prepared in favour of the Mahe parties and were sent to their bankers at Kozhikode along with the relevant railway receipts. The Mahe buyers retired the documents from the banks and after taking delivery of the goods from the railways at the Mahe railway station trans ported the goods to Mahe town by other means of transport. The revising authority in its order passed under Section 10 has mentioned various letters and documents to show that goods in fact were transported from the Mahe railway station to the French Mahe depot.

7. After appraising the evidence on the point, the revising authority recorded its conclusion in the following words :

Thus it is not correct to say that there was no evidence on the record to prove that the goods had actually crossed into Mahe town and that they crossed the Indian territories. It is clear that the goods having commenced their movement on the agreement of sale all through remained in the stream of export.

8. The revising authority accordingly held the sales in question to be sales in the course of export outside India and exempted the dealer from the payment of Central sales tax.

9. A similar question came up for decision before a Full Bench of this court in National Carbon Co. v. Commissioner of Sales Tax,U.P. 1968 A.L.J. 497 That was a case of sales to dealers in Nepal. There also the stocks were booked by rail to a railway terminus within the Indian territory and there also the delivery of goods was taken by the Nepal buyers at the railway terminus near the Indian Nepal border but within the Indian territory for want of direct rail link between India and Nepal. In that case also the goods were taken to Nepal by the buyers through other means of transport. This court on a consideration of all the circumstances held that the sales were exempt as being sales made in the course of export. The facts in the instant case are almost similar to the facts of that case. There also the sales tax authorities had denied the exemption to the assessee on the ground that the delivery of goods had been made to foreign buyers with in the Indian territory. This court held that that fact did not alter the legal position. It was immaterial as to where the property in the goods passed so long as the export was occasioned by the contract of sale and the goods had in fact been exported. The present case, in our opinion, is covered completely by the decision of the Full Bench. We, therefore, answer question No. (1) in the affirmative.

10. As regards question No. (2), we have already held that the reference of this question is unwarranted. The reference of question No. (2) being incompetent, we decline to answer the same.

11. In the circumstances of the case, there will be no order as to costs.


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