- (1.) Leave granted in Special Leave Petitions. This batch of appeals and writ petitions raise the question - whether the transfer of an Import Licence called R. E. P. Licence/Exim Scrip by the holder thereof to another person constitutes a sale of goods within the meaning of and for the purposes of the Sales Tax enactments of Tamil Nadu, Karnataka and Kerala. if it does, it is exigible to sales tax. Otherwise not. The Karnataka and Madras High Courts have taken the view that R.E.P. Licences/ Exim Scrips constitute goods and, therefore, on their transfer, sales tax is leviable. Their judgment appears to be influenced mainly by the decision of this Court in H. Anraj v. Govt. of Tamil Nadu, 1985 Suppl (3) SCR 342 : (AIR 1986 SC 63).
(2.) With a view to conserve precious foreign exchange and to channelise the nation's economy on desired lines, the Central Legislature enacted the Imports and Exports (Control) Act in 1947. Section 3 empowers the Central Government to make provisions by order published in the official gazette for prohibiting, restricting or otherwise controlling the import into and export of the goods from the country. The expression "licence" is defined in clause (i) of S.2 to mean, a licence granted, including a customs clearance permit issued, under any control order. Pursuant to S.3 and S.4(a) of the said Act, the Central Government issued the Import (Control) Order, 1955. Clause 3(i) of the Order provides that "save as otherwise provided in this Order, no person shall import any goods of the description specified in Schedule I except under and in accordance with a licence or a customs clearance permit granted by the Central Government or by any Officer specified in Schedule II". The Order contains elaborate provisions governing the grant and cancellation of licences and conditions subject to which the licences have to be operated.
(3.) The Central Government has been issuing, from time to time, what is called the Import and Export Policy, published in the form of a broucher. The Import Policy in vogue during the year concerned herein provided for issuance of what is called "replenishment licences" (for short "R.E.P. Licences"). The objective behind the licences was to provide to the registered exporters the facility of importing the essential inputs required for the manufacture of the products exported. The essential idea was to encourage exports and for that purpose import licences called R.E.P. Licences were issued equal to the prescribed percentage of the value of exports. These Licences were made freely transferable. It was provided that the transfer of such licences did not require any endorsement or permission from the licensing authority. It was clarified that such would be "governed by the ordinary law". It only required a latter from the transferor recording and evidencing the transfer. On that basis, the transferee became the due and lawful holder of the licence and could either import the goods permitted thereunder or sell it to another in turn.;