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SUPREME COURT OF INDIA
A.M. KHANWILKAR, DINESH MAHESHWARI, JJ.
M/s Vellanki Frame Works - Appellant
Versus
The Commercial Tax Officer, Visakhapatnam - Respondent
Civil Appeal Nos. 1322-1323 of 2019
Decided on : 13-01-2021
Customs Act, 1962 – Central Sales Tax Act, 1956 – Sections 3, 5 – Benefit of concessional rate of tax – Appeals by special leave are directed against the common judgment and order in Writ Petition whereby, High Court of Judicature at Hyderabad for State of Telangana and the State of Andhra Pradesh upheld the assessment orders passed by Commercial Tax Officer, Chinawaltair Circle and held that the transactions in question were not the sales in course of import but had been inter-State sales, liable to Central Sales Tax; and denied exemption claimed under Section 5(2) of the Central Sales Tax Act, 1956 while granting time to the appellant to produce the prescribed C-Forms to the assessing authority for availing the benefit of concessional rate of tax. – Held, Appellant, despite being aware of availability of remedy of statutory appeal, consciously chose to file writ petitions against assessment orders aforesaid and consciously contested entire matter in the High Court. – High Court, even after noticing the framework of certiorari jurisdiction, examined the merits of the case thoroughly and even examined the submission made for first time in writ petitions that the import of goods was occasioned by the sales in question. – Of course, in that regard, the High Court pointed out that it was not a pure question of law but in any case, such submission was belied by the fact that the name of the appellant was reflected in the bill of entry as the importer and not that of the end-buyer. – Court is unable to find any error or fault in approach of High Court in this case. – Prayer that appellant may now be allowed to contest matter in statutory appeal has only been noted to be rejected. – After having consciously invoked writ jurisdiction of High Court and having contested matter on merits, appellant cannot now be allowed to reopen matter in appeal. – Reference to decision of this Court in case of Star Paper Mills Ltd. (supra) is entirely inapposite. – In that case, by a format order High Court of Delhi remitted the matter pending before it in a writ petition to the Assistant Collector who, accordingly, made an adjudication. – This order of the Assistant Collector was permitted to be brought on record in the pending writ petition and petition was ultimately disposed of – Contentions in writ petition by petitioner related to the deductions as post-manufacturing expenses towards freight subsidies, additional trade discounts and cost of special packing. – Though High Court observed that claims involved investigation into disputed question of fact but, in effect, declined relief claimed under those heads of alleged post-manufacturing costs on ground that sufficient material was not placed by petitioner in support of claims for deductions – Observations aforesaid and course permitted in the given set of facts of case of Star Paper Mills Ltd. (supra) cannot be employed in present case because findings against appellant are not on the ground of insufficiency of material but are essentially result of analysis of material placed on record with reference to law applicable. – Extraordinary writ jurisdiction cannot be utilised by a litigant only to take chance and then to seek recourse to other remedy after failing in its attempt on basic merits of case before High Court. – A litigation cannot be allowed to be unendingly kept alive at choice of a litigant. – Court is clearly of the view that the claimed exemption under Section 5(2) of the CST Act has rightly been denied to the appellant and the High Court has been justified in dismissing the writ petitions filed by the appellant. – High Court has yet been considerate and gave time to the appellant to submit C-Forms for availing the benefit of concessional rate of tax. – No case for interference is made out. – Appeals Dismissed
JUDGMENT :
Preliminary and brief outline
1. These appeals by special leave are directed against the common judgment and order dated 18.12.2014 in Writ Petition Nos. 2552 of 2013 and 6258 of 2013 whereby, the High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh[Hereinafter referred to as 'the High Court'] upheld the assessment orders dated 20.01.2010 and 18.05.2010 passed by the Commercial Tax Officer, Chinawaltair Circle[Hereinafter referred to as 'the CTO'.] and held that the transactions in question were not the sales in the course of import but had been inter-State sales, liable to Central Sales Tax; and denied the exemption claimed under Section 5(2) of the Central Sales Tax Act, 1956[Hereinafter referred to as 'the CST Act'.] while granting time to the appellant to produce the prescribed C-Forms to the assessing authority for availing the benefit of concessional rate of tax.
2. We may usefully observe at the outset that, in all, seven transactions of similar nature form the subject matter of these appeals; one relating to the assessment for the year 2005-06 and others relating to the assessment for the year 2006-07. The common salient features of all these transactions had been that they were for supply of timber from a foreign country and were allegedly executed in a similar fashion thus: The supplier (party number 1) sold the goods in question to the first buyer (party number 2) and delivered them at the port of shipment. Thereafter, while the goods were in transit on high seas, party number 2 transferred the goods to the appellant (who was invariably party number 3 in these transactions) by endorsing the bill of lading in favour of the appellant. Further to this and while the goods were on high seas, the appellant allegedly transferred them to the end-buyer (party number 4) by endorsing the bill of lading in favour of the end-buyer.
2.1. However, in each of these transactions, when the goods in question reached the port at Visakhapatnam (also known as Vizag), the appellant carried out the proceedings envisaged by the Customs Act, 1962[Hereinafter referred to as 'the Customs Act'.] and filed a bill of entry for warehousing and thereafter, filed another bill of entry for home consumption (ex-bond). Accordingly and on the basis of such bills of entry, the appellant was duly assessed for customs duty. The appellant later on raised debit notes on the end-buyers.
3. With reference to the aforementioned transactions and the high seas sale agreements, the case of appellant had been that it had only acted as an agent of the end-buyers while filing the bills of entry; and the sales of the goods in question to the end-buyers, being the sales taking place in the course of import of goods into the territory of India, were eligible for exemption from payment of sales tax by virtue of Section 5(2) of the CST Act. However, in the assessment orders dated 20.01.2010 and 18.05.2010, the CTO denied the benefit of exemption to the appellant, particularly for the reason that the appellant cleared the goods from the customs after filing the bills of entry and later on raised debit notes, showing sales to the end-buyers. The CTO held that the goods in question had crossed the customs frontiers of India when the bills of entry were filed by the appellant and the goods were assessed to customs duty and hence, the sales effected by the appellant to the end-buyers could not be said to be high sea sales.
4. The appellant felt aggrieved of the orders so passed by the CTO but, instead of availing the statutory remedy of appeal, chose to challenge the same by way of writ petitions in the High Court. These writ petitions have been considered and dismissed by the High Court by way of the impugned judgment and order dated 18.12.2014. The High Court rejected the contention that the appellant had only acted as an agent of the respective end-buyers while filing the bills of entry at the port of destination with the fin
Hire purchase transactions do not qualify for high sea or transit sales exemption if documents show goods consigned to financier, cleared by them, and title retained until full payment, constituting ....
A contract of sale that occasions movement of goods from one State to another constitutes an inter-state sale under CST provisions; situs remains fixed at delivery point irrespective of later co-ming....
The movement of goods from a manufacturing facility to branch depots is a stock transfer rather than an inter-state sale when initial agreements lack specific quantities or prices and act as standing....
The court ruled that non-furnishing of 'C' Forms by a purchaser due to financial distress does not absolve entitlement to tax exemptions under Section 6(2) of the Central Sales Tax Act, 1956.
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