Chittatosh Mookerjee, J. - (1.) The petitioner is a company incorporated in England. It has its works at Altringham, Cheshire, England and it manufactures linotype machines at its said works. The petitioner claims that its office at Calcutta is a branch office. On or about 1st March, 1956 and 30th April, 1956, the Government of India, through the Deputy Controller, Stationery, Calcutta, placed two orders upon the petitioner for sale and supply to the Manager, Government of India Press, New Delhi, of certain linotype machines at the prices and on the terms and conditions mentioned in the said orders. On or about 30th November, 1955, the Controller of Stores, Punjab, Jullundur City, placed an order with the petitioner for sale and supply of linotype machines to the Controller of Printing and Stationery, Chandigarh, at the price and on the terms and conditions mentioned in the said order. The petitioner has claimed that pursuant to the said three orders, the goods were packed at the works of the petitioner at Altringham, Cheshire, England and the same were shipped from England to India and thereafter supplied to the abovenamed purchasers. The petitioner is a registered dealer under the Central Sales Tax Act, 1956. It had submitted to the sales tax authorities its sales tax returns for the half year ended 31st December, 1957, for the quarter ended 31st March, 1958 and for the quarter ending 30th June, 1958. In these returns, the petitioner claimed exemption from the payment of sales tax in respect of the goods sold by the petitioner under the aforesaid three orders. On 25th September, 1958, the Commercial Tax Officer, Sealdah Charge, respondent No. 1, made assessment orders in respect of the said two periods, i.e., 1st July, 1957, to 24th July, 1957 and 25th July, 1957, to 30th June, 1958. Respondent No. 1 rejected the contention of the petitioner that the aforesaid machineries were imported to India for the specific purpose of selling them to the Government and hence they occasioned the imports and that they were exempted from the Central Sales Tax Act, 1956. The Commercial Tax Officer observed that he did not find any such provision under the Bengal Finance (Sales Tax) Act, 1941, exempting such sales from tax. Hence, he disallowed the claims. The Commercial Tax Officer assessed such sales of these linotype machines to sales tax. The Commercial Tax Officer by his assessment orders found that Rs. 11,027.84 was due from the petitioner for the period from 1st July, 1957, to 24th July, 1957. The Commercial Tax Officer found that for the period 25th July, 1957, to 30th June, 1958, a sum of Rs. 9,314.87 was still due as sales tax from the petitioner. After the aforesaid assessments were made, the petitioner-company demanded from the Government of India and the then Government of Punjab payment of the sums which had been assessed as sales tax upon the machineries sold by the petitioner to the said Governments. Both the Government of India and the then Government of Punjab declined to pay these sums towards sales tax assessed on the machineries purchased by them from the petitioner on the ground that such sales were exempted under Section 5(2) of the Central Sales Tax Act, 1956. In the meantime, certificate cases were started against the petitioner in realisation of the outstanding taxes due in respect of the period 1st July, 1957, to 24th July, 1957 and for the period 25th July, 1957, to 30th June, 1958. The petitioner obtained this rule challenging the said assessment orders and also the certificate cases.
(2.) Mr. Chaudhuri, the learned Advocate for the petitioner has submitted that the Commercial Tax Officer committed an error apparent on the face of the record by disregarding the provision of Section 5(2) of the Central Sales Tax Act. According to the petitioner, in view of the said provision, the Commercial Tax Officer has no jurisdiction to assess sales tax under the Central Sales Tax Act, 1956, upon the sales of the machineries made by the petitioner to the Government of India and the then Government of Punjab, as the said sales and purchases occasioned imports from England within the meaning of Section 5(2) of the Act. Reliance has been placed upon the decision of the Supreme Court in K.G. Khosla and Co. (P.) Ltd. v. Deputy Commissioner of Commercial Taxes, Madras Division, Madras [1966] 17 S.T.C. 473 (S.C.).
(3.) In K.G. Khosla and Co. (P.) Ltd. v. Deputy Commissioner of Commercial Taxes, Madras Division, Madras [1966] 17 S.T.C. 473 (S.C.), "the assessee entered into a contract with the Director-General of Supplies and Disposals, New Delhi, for the supply of axle-box bodies. The goods were to be manufactured in Belgium according to the specifications and the D.G.I.S.D., London, or his representative was to inspect the goods at the works of the manufacturers and issue an inspection certificate. Another inspection was provided at Madras. The assessee was paid 90 per cent after inspection and delivery of the stores to the consignee and the balance of 10 per cent was payable on final acceptance by the consignee. In the case of deliveries on f. o. r. basis the assessee was entitled to 90 per cent payment after inspection on proof of despatch and balance of 10 per cent after receipt of stores by the consignee in good condition. The assessee was entirely responsible for the execution of the contract and for the safe arrival of the goods at the destination. The contract provided that notwithstanding any approval or acceptance given by an Inspector, the consignee was entitled to reject the goods, if it was found that the goods were not in conformity with the terms and conditions of the contract in all respects. The manufacturers consigned the goods to the assessee by ship under bills of lading and the goods were cleared at the Madras Harbour by the assessee's clearing agents and despatched for delivery to the Southern Railway in Madras and Mysore. The question was whether the sales by the assessee to the Government departments were in the course of import and exempt from taxation under Section 5(2) of the Central Sales Tax Act, 1956".;