The crossing of the customs barrier is the taxable event, and the timing of duty payment and clearance of goods for home consumption under the Customs Act is crucial in determining whether a sale is in the course of import.

(Writ petitions filed under Article 226 of the Constitution of India for the issue of writ of certiorarified mandamus calling for the records of the second respondent in it's proceedings in T.Cs.(R)No.2682 and 2683 of 2000 and quash the order made therein dated 14.07.2000 and further direct that the petitioner is entitled to exemption on the disputed turnover of Rs.2,62,93,033/- pertaining to the assessment year 1986-87 and Rs.3,71,00,211/- pertaining to the assessment year 1985 -86 under the CST Act, 1956. )

R. Jayasimha Babu, J.

The assessee here sold goods which it had imported and which goods had been assessed to duty after a bill of entry has been filed in respect of those goods, but, on which the duty had not been paid, the same having been warehoused in the Customs Port the Port being Chennai. The sale was effected by transferring the documents of title while the goods were in the Customs warehouse which were located within the Customs station. Duty was paid on these goods by the buyer, who cleared the goods under Section 47 of the Customs Act and removed the goods out of t he Customs station.

2. The goods in question is news print, which the petitioner State Trading Corporation of India as the canalising agent, imported for the users of news print. The sales, which were the subject matter of the assessment for the years 1986-'87 and 1985-'86, were effected to the publishers of news papers in the State of Tamil Nadu, the newspapers being, The Hindu, The Dinakaran and The Daily Thanthi. No sales tax was collected by the assessee on those sales, the dealer having always regarded the sale as one having been effected in the course of import. 3. The dealers claim for exempting that part of it's turnover from assessment to the tax under the Tamil Nadu General Sales Tax Act was negatived by all the authorities under the Act as also by the Special Taxation Tribunal whose order is the subject matter of challenge before us.

4. The law which governs the matter is the Central Sales Tax Act (the Act), Section 5(2) of which deals with sales in the course of import. That sub section 2 of Section 5 reads as under,

"A sale or purchase of goods shall be deemed to take place in the course of the import of the goods into the territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goods have crossed the customs frontiers of India".

5. For a sale to be one in the course of import it has to be either one which has occasioned the import or has been effected by a transfer of documents of title to the goods before the goods have crossed the customs frontiers of India. Admittedly, in this case, the sale effected by the dealer is not one which occasioned the import. The only question required to be considered is as to whether the sale effected by transfer of documents of title to the goods was made before or after the goods had crossed the customs frontiers of India.

6. The words "crossing the customs frontiers of India" have been defined in Section 2 (ab) of the Act. That definition reads as under:

"Crossing customs frontier of India" means crossing the limits of the area of a customs station in which imported goods or exported goods are ordinarily kept before clearance by customs authorities.

Explanation: For the purposes of this clause, "customs station" and "customs authorities" shall have the same meanings as in the Customs Act, 1962."

7. The Customs frontier for the purpose of this Act is thus equated to the limits of the area of the Customs station in which the goods are stored, crossing of such station being regarded as amounting to crossing the customs frontiers of India. The 'customs station' referred to in this definition is the one which is defined as such under Section 2(13) of the Customs Act: "'Customs station' means any customs port, customs airport or land customs station". Customs Port is defined in that act in Section 2(12): "'Cust