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The State of Tamil Nadu Vs. the National Cash Register Co. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtChennai High Court
Decided On
Case NumberTax Cases Nos. 105 and 243 of 1978
Judge
Reported in[1987]66STC264(Mad)
AppellantThe State of Tamil Nadu
RespondentThe National Cash Register Co.
Appellant AdvocateK.S. Bakthavatsalam, Additional Government Pleader
Respondent AdvocateK.C. Rajappa, Adv.
Cases ReferredState of Tamil Nadu v. I.B.M. World Trade Corporation
Excerpt:
- .....[1985] 60 stc 118 : 1984 tax lr 2894 has upheld the view of the tribunal and held that the disputed sales in those cases were sales in the course of import and therefore they could not be brought to charge. the facts in the said decision are identical with those in the present cases and it is for that reason the tribunal has held that the turnovers in these case represented sales in the course of import and therefore they are exempt from tax. 3. hence, following the decision of the supreme court in deputy commissioner of agricultural income-tax and sales tax v. kotak and company [1973] 32 stc 6 and the decision of this court in state of tamil nadu v. i.b.m. world trade corporation [1985] 60 stc 118 : 1984 tax lr 2894, we affirm the decision of the tribunal and dismiss the tax.....
Judgment:

Ramanujam, J.

1. Since the points involved in both the tax cases are same, they are dealt with together. In T.C. No. 105 of 1978 the turnover disputed is Rs. 1,97,000 in respect of which the assessees claimed exemption on the ground that it represented sales in the course of import. In T.C. No. 243 of 1978 the turnover in dispute is Rs. 1,59,477 which, according to the assessees, represented sales in the course of import and as such the said turnover is exempt from tax. The assessing authority, however, disallowed the claim of the assessees in both the cases and brought to charge the disputed turnovers holding that they did not represent sales in the course of import, but they represented the local sales. The denial of exemption in relation to the disputed turnovers was affirmed by the Appellate Assistant Commissioner. When the matter reached the Tribunal, the Tribunal after verification of the records found that the buyers, namely, Hotel Sudarsan International in one case and Savera Hotels Private Limited in another case, obtained import licences for the import of certain machines and also obtained letters of authority in favour of the assessees for importing the goods on their behalf and for making all other arrangements in respect of the imports. The Tribunal also found that the assessees acted on the strength of the actual users' licences of the customers and the letters of authority obtained in their favour by the customers, that the indents placed on the foreign principals were invariably subsequent to the import licences and that there was clear nexus between the manufacturer, import and sale. The Tribunal further stated that the facts of the present cases were similar to those in the decision of the Supreme Court in Deputy Commissioner of Agricultural Income-tax and Sales Tax v. Kotak and Company [1973] 32 STC 6 and the cases decided by the Tribunal earlier in T.A. Nos. 492, 546 and 547 of 1976 - decision dated 26th November, 1976 - and following the said decisions, it held that the disputed turnovers would be exempt from sales tax, as they represented sales in the course of import. The said decision of the Tribunal has been canvassed before us in these tax revision cases.

2. Having regard to the fact that the imports have been effected by the assessees on behalf of the customers on the basis of the import licences and letters of authority, the assessees should be taken to have acted as agents of the actual users and therefore there is only one sale and that is the sale by the foreign seller to the actual users through the medium of the assessees. On more or less similar facts the Supreme Court has held in Deputy Commissioner of Agricultural Income-tax and Sales Tax v. Kotak and Company [1973] 32 STC 6 that the sales are to be sales in the course of import and therefore they are exempt from tax. As already stated, the Tribunal not only followed the decision of the Supreme Court in Deputy Commissioner of Agricultural Income-tax and Sales Tax v. Kotak and Company [1973] 32 STC 6 but also its own earlier decision dated 26th November, 1976, in T.A. Nos. 492, 546 and 547 of 1976 on its file. The said decision of the Tribunal came up before this Court and this Court in State of Tamil Nadu v. I.B.M. World Trade Corporation [1985] 60 STC 118 : 1984 Tax LR 2894 has upheld the view of the Tribunal and held that the disputed sales in those cases were sales in the course of import and therefore they could not be brought to charge. The facts in the said decision are identical with those in the present cases and it is for that reason the Tribunal has held that the turnovers in these case represented sales in the course of import and therefore they are exempt from tax.

3. Hence, following the decision of the Supreme Court in Deputy Commissioner of Agricultural Income-tax and Sales Tax v. Kotak and Company [1973] 32 STC 6 and the decision of this Court in State of Tamil Nadu v. I.B.M. World Trade Corporation [1985] 60 STC 118 : 1984 Tax LR 2894, we affirm the decision of the Tribunal and dismiss the tax revision cases. There will, however, be no order as to costs.

4. Petitions dismissed.


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