J.Gupta, Judicial Member - (1.) BY the instant application under Section 8 of the West Bengal Taxation Tribunal Act, 1987, the assessment for the four quarters ending on December 31, 1985 has been challenged on the ground of wrongful levy of sales tax on sales in course of export. The applicant No. 1, a limited company, is a registered dealer in tea and is a recognised export house (hereinafter referred to as "the company"). On an information that National Corporation of the Socialist Peoples' Libyan Arab Jamabiria (in short, "the Corporation") was interested to import Indian tea, the company and some other exporters made enquiry and learnt that the Corporation was willing to place the order with a single party. But since none of the said exporters had the capacity to undertake the whole order individually, a move was made through the Tea Exporters' Association (in short, "the Association") of which the interested exporters were the members, to form a Consortium of the intending exporters which would undertake the supply -contract. The Association agreed to such proposal and accordingly with the assistance of the Association a Consortium called "Tea Exporters Consortium" was formed. The Association was to act as the agent of the Consortium with the specific understanding that in the event the supply order would be procured each member of the Consortium would assume full responsibility to supply tea according to their respective quota and that the Letter of Credit (in short L.O.C.) should be divisible and transferable to the members. The Corporation, on being contacted by the Association, by a fax message addressed to the Tea Exporters Association Consortium, India invited quotation. In pursuance of the said message the Association in the combined letter head of the Association and the Consortium on November 14, 1984 offered to supply 750 metric tons (tonnes) of Indian Black Orange Pekoe Tea with proposal to make payment by transferable and divisible L.O.C. in favour of the Consortium. Later the quantity was raised from 750 tonnes to 1,000 tonnes. On the same date the Corporation communicated their acceptance to the offer to the Consortium. The National Commercial Bank of Tripoli, intimated the Consortium, in the care of the Association, that by the order of the Corporation L.O.C. for $3,447,500 had been confirmed by their mother company, viz., Arab Banking Corporation. Subsequently the applicant's banker, viz. Bank of Baroda, 8 India Exchange Place, Calcutta, received an L.O.C. for $3,447,500 out of which $496,440 was transferred in favour of the applicant and against this the Bank of Baroda granted a credit loan of Rs. 45,35,000 to be adjusted against the final proceeds of the bill. The applicant then shipped its quota of tea under a bill of lading wherein the applicant was the shipper. The National Commercial Bank, Tripoli, was the consignee and the Corporation was the notified party.
(2.) THE applicant alleges that in assessing its account for the four quarters ending on December 31, 1985 the respondent No. 4 (the Commercial Tax Officer) disallowed the claim under Section 5(2)(a)(v) of the Bengal Finance (Sales Tax) Act, 1941 (in short, "the 1941 Act") in respect of the said sale of tea to the Corporation, on the grounds that in the matter of said sale the privity of contract was not between the applicant and the Corporation but between the Consortium and the Corporation and that the purported agreement between constituent members of the Consortium and the Association was not valid because the latter did not appear in the agreement document as a signatory. The appeal preferred against the assessment before respondent No. 3 (the Assistant Commissioner of Commercial Tax) was of no avail. Even the revision application filed by the applicant against the appellate order before the West Bengal Commercial Taxes Appellate and Revisional Board (in short, "the Board") did not find the favour of the Board. The applicants (applicant No. 2 being a director of the company) contend that the respondents Nos. 3 and 4 and the Board erred in holding that there was no sale agreement between the applicant and the Corporation or that the applicant had no sale in course of export. The applicants accordingly pray for order setting aside the order of the said authorities and for direction on them to proceed according to law. The Commercial Tax Officer, Bowbazar Charge, who is the present assessing officer for the company has filed an affidavit -in -opposition on behalf of all the respondents and has averred therein that the agreement whereon the applicants rest their claim is itself invalid and that there being no privity of contract between the applicants and the foreign buyer, the exemption claimed under Section 5(2)(a){v) was not entertained by the respondents or the Board. In defending the orders of the appellate authority and the Board, the respondents further contend that order of exporting tea was placed by the foreign buyer on the Tea Exporters Consortium, a separate legal entity, distinct from the applicant -company, though the company was a member of the Consortium. Hence, according to the respondents the applicants are not entitled to any exemption under Section 5(2){a)(v) of the 1941 Act.
(3.) IN the affidavit -in -reply the applicants dispute all material averments of the respondents and reiterates the stand as highlighted in their original application.;