C O M M O N O R D E R

The petitioner has challenged the impugned orders both dated

30.10.2007 passed by the respondent for the Assessment Years 2004- 2005 and 2005-2006. By the impugned orders, the respondent has levied tax on the petitioner under Section 3-A of the Tamil Nadu General Sales Tax Act, 1959 on the ground that “there was transfer of right to use goods” within the State of Tamil Nadu by the petitioner in favour of the following four persons:- i. Sathia Match Works ii. Suriya Match Industries iii.The President Match Co.

iv. Vasan Industries

2. The impugned orders are sought to be challenged primarily on the ground that the petitioner, a non banking financial company engaged in financing and equipment leasing to industrial consumers and the users had transferred a right to use goods, i.e. imported machineries, in favour of the above four persons during the respective Assessment Years prior to clearance of the goods from the customs barriers. Therefore, the sale was in the course of import within the meaning of Section 5(2) of the Central Sales Tax Act, 1956 and these transactions were exempted from levying tax under Section 3-A(2)(a) of the Tamil Nadu General Sales Tax Act, 1959.

3. The other grievances of the petitioner against the impugned orders are that they have been passed in gross violation of Rule 15(6) of the Tamil Nadu General Sales Tax Rules, 1959. It is submitted that as per the said proviso, before making an order of assessment, the Assessing Authority was required to obtain the concurrence of the Deputy Commissioner having jurisdiction over the petitioner if the assessment results in imposition of tax of one lakh rupees or above or results in enhancement of tax over one lakh rupees.

4. It is the case of the petitioner that these transactions are not liable to tax. It is submitted that though there was sale within the meaning of the extended definition of “sale” in Section 2(g)(iv) of the Central Sales Tax Act, 1956 and Section 2(n) of the Tamil Nadu General Sales Tax Act, 1959, it was not liable to tax since the sale took place before the goods were cleared from the customs barriers. In this connection, the learned Senior Counsel for the petitioner placed reliance on the decision of the Hon'ble Supreme Court in J.V.Gokal and Co. (Private) Ltd. and Another Vs. The Assistant Collector Sales-Tax (Inspection) and Others, AIR 1960 SC 595, wherein, the Hon'ble Supreme Court has summarised the position as far as the import-sale. In this connection, a reference was made to Paragraph No.11 of the said decision which reads as under:-

11. The legal position vis-a-vis the import-sale can be summarised thus: (1) The course of import of goods starts at a point when the goods cross the customs barrier of the foreign country and ends at a point in the importing country after the goods cross the customs barrier; (2) the sale which occasions the import is a sale in the course of import; (3) a purchase by an importer of goods when they are on the high seas by payment against shipping documents is also a purchase in the course of import, and (4) a sale by an importer of goods, after the property in the goods passed to him either after the receipt of the documents of title against payment or otherwise, to a third party by a similar process is also a sale in the course of import.

5. The learned Senior Counsel for the petitioner further submitted that the test laid down in the context of transfer of right to use goods in decision of the Hon'ble Supreme Court in 20th Centurary Finance Corporation Limited Vs. State of Maharashtra, (2000) 6 SCC 12 cannot be made applicable to the facts of the present case in as much as the nature of transaction involved “deemed sale” during the course of import.

6. It is submitted that the transactions involved payment of monthly lease rental for a period of 7 years and the ownership of the machinery continued to be with the petitioner and therefore, the Bills of Entry were filed by the petitioner. It i