COMMERCIAL TAX OFFICER & ORS. Vs. STATE BANK OF INDIA & ANR.
SUPREME COURT OF INDIA
Commercial Tax Officer And Ors.
State Bank of India And Anr.
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DIPAK MISRA,J. -
(1.) The seminal question that emerges for consideration in this appeal is whether the State Bank of India (SBI) and its
branches, which are registered dealers under the Bengal
Finance (Sales Tax) Act, 1941 (for brevity, 'the Act') would be
liable to levy of purchase tax under Section 5(6a) of the Act
for accepting the Exim Scrips (Export Import Licence) on
payment of premium of 20 per cent of the face value of the
scrips in compliance with the direction contained in the
letter of Reserve Bank of India (RBI) dated 18 th March, 1992.
The authorities of the revenue as well as the Taxation Tribunal (for short, 'the tribunal') had held against the SBI but the Division Bench of the High Court of Calcutta in a writ petition has dislodged the said conclusion holding, inter alia, that the purchase of Exim scrips by the Bank did not attract the provisions of Section 4(6) (iii) of the Act and resultantly quashed the orders of fora below and issued consequential directions.
(2.) It is necessary to state the facts in detail to appreciate the controversy at hand. The SBI is a body corporate
constituted under the State Bank of India Act, 1955 for the
extension of banking facilities in the country and for other
public purposes. The bank has to perform various functions
as per the directions issued from time to time by the RBI in
keeping with the economic and monetary policies of the
(3.) Policies are notified by the Government of India under the Imports and Exports (Control) Act, 1947, as amended
from time to time, and the Imports (Control) Order, 1955, to
regulate imports into and exports out of the country and
contain different incentive schemes and subsidies to build
up foreign exchange resources of the country. As the facts
would reveal before July 4, 1991 there was provision for
issuance of Replenishment Licences which were referred to
as "REP Licences". The objective behind the grant of such
licences was to provide the registered exporters the facility
of importing essential goods required for the manufacture of
the products to be exported. Such licences were made freely
transferable and such transfer did not require any
endorsement or permission from the licensing authority and
only a letter from the transferor the transferee became the
lawful holder of the licence and was entitled to either import
the goods for which the licence had been issued or sell the
licence to someone else.;
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