PREMIER MILLS LTD Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THIS appeal is against the order of the Joint Commissioner dated January 31, 1983 in his suo motu revision Ref. No. 01/1494/78, against the order of the Appellate Assistant Commissioner who reversed the order of the assessing authority for the assessment year 1973 -74. The appellants are dealers in staple fibre yarn. In the original assessment dated March 29, 1976, the assessees were given exemption for a turnover of Rs. 17,08,500 of export sales. But, when the accounts were rechecked, it was found that the assessee did not effect any export of staple fibre yarn for the abovesaid turnover, but had sold the yarn to registered exporters - -M/s. Yarn Syndicate Ltd., and Keshavlal Talakchand, Bombay, and they were not entitled to claim exemption as they did not export the yarn. Therefore, notice was issued to the assessee proposing to levy tax on a turnover of Rs. 17,08,500. The assessee, while filing the objections, admitted the liability on a turnover of Rs. 8,02,500 under the Central Sales Tax Act, 1956 as the goods were despatched to Bombay under "C" forms and "C" form also was produced. So, the assessees offered to pay tax under the Central Sales Tax Act for the turnover of Rs. 8,02,500 but claimed exemption for the balance turnover, namely, Rs. 9,06,000 as export sales. The assessing authority, finding that the assessee did not export the staple fibre to the foreign buyer, rejected the claim and has levied tax on the turnover of Rs. 9,06,000 at 3 per cent. But, in the appeal before the Appellate Assistant Commissioner, the assessee contended that the documents of title, were transferred to the inland purchasers, only when the goods had crossed the customs frontiers and therefore, the sale is covered by export sales falling under Section 5(1) of the Central Sales Tax Act, 1956. The Appellate Assistant Commissioner accepted this contention of the assessee and allowed the appeal granting exemption for the turnover of Rs. 9,06,000 treating as export sales falling under Section 5(1) of the Central Sales Tax Act.

(2.) THE Joint Commissioner made suo motu revision of the order of the Appellate Assistant Commissioner and has passed the impugned order, setting aside the order of the Appellate Assistant Commissioner, holding that there was no export sales to enable the assessee to claim exemption under Section 5(1) of the Central Sales Tax Act, and it was only local sales taxable at 3 per cent, as found by the assessing authority and therefore, he restored the order of the assessing authority. It is against this order of the Joint Commissioner, the assessee has come forward with this appeal.

(3.) AGAIN , the Supreme Court in [1977] 40 STC 367 (Member Board of Revenue, West Bengal v. Swaika Oil Mills), following the view taken in [1975] 36 STC 136 (Mod. Serajuddin v. State of Orissa) has held that when the dealer had no contract of sale with the foreign buyers, but the sale was only to the inland exporter, the transaction of the dealer was not a sale in the course of export.