Sales in the course of import are exempt from sales tax.

B.N. KIRPAL, J.

In respect of the assessment year 1971-72, two references (S.T.R. No. 30 of 1979 and S.T.R. No. 31 of 1979), have been made by the Appellate Tribunal, Sales Tax, Delhi, to this Court, which are being disposed of by this common judgment, one under the Bengal Finance (Sales Tax) Act, 1941, as extended to the Union Territory of Delhi, and the other under the Central Sales Tax Act, 1956.

The facts as found by the Tribunal in its order are as follows :

"2. The first controversy pertains to the import of goods by the assessee on the basis of 'actual user licences' which its Indian constituents had obtained from the Chief Controller of Imports. Those licences, it is stated, were not transferable and the holders thereof only were entitled to import the goods. The role played by the assessee was stated to be as a mere agent on behalf of those constituents for the purpose of imports. These imports were mostly effected from the N. V. Philips Holland which was said to be an associate of the assessee there.

3. Letters of authority were stated to have been issued by the Chief Controller of Imports authorising the assessee to effect import of the goods under those licenses on behalf of the licence holders and the assessee was to act as an agent of the licence holders and the goods imported were the property of the licence holders both at the time of clearance through the customs and subsequent thereto. The licence holders were further required to ensure that the goods on importation were delivered to them and were not disposed of otherwise. The assessee was required to clearly indicate on all the customs documents that the goods were imported on behalf of the licence holders.

4. The assessee contended that in terms of these letters of authority, it placed orders with the foreign suppliers. The documents thereof were issued by that supplier in favour of the assessee which paid the price, thereof. The assessee on its part recovered the price, customs duty and its commission, etc., from the licence holders when the goods were delivered to them. The insurance covers on those goods were obtained by the assessee in its name covering the risk from the supplier's destination to the licence holders warehouses. In the orders which the assessee used to place with the foreign supplier the names of the licence holders were disclosed.

5. There was another set of transactions. They were the results of the Director-General of Supplies and Disposals inviting tenders for the supply of various goods to different departments of the Government. In response thereto the assessee used to submit tenders. On their acceptance, the goods were imported from the said foreign suppliers and then supplied to the concerned Government departments. Import recommendation certificates were said to be issued in favour of the assessee by the Controller of Imports. In the orders placed with the foreign suppliers by the assessee, the names of the Indian buyers were stated to be mentioned. The insurance covers were accordingly obtained by the assessee up to the Indian buyers' warehouses.

6. Both these classes of transactions were claimed by the assessee to constitute as sales in the course of import and, therefore, exempt from exigibility to sales tax. It was urged that so far as the import of goods on the actual user's licences were concerned, the assessee merely acted as an agent."

On the aforesaid facts, the dealer claimed exemption from tax both under the local law as well as under the Central Act. The submission of the dealer was that these sales were in the course of import and, therefore, it was not liable to tax. This contention was not accepted by the sales tax authorities.

The Sales Tax Tribunal, however, came to the conclusion that both the transactions amounted to sale in the course of import and were exempt from sales tax.

On an application being filed by the Commissioner of Sales Tax, the Tribunal has referred two identical questions under the tw