JUDGMENT:

JUDGMENT

WITH CIVIL APPEAL Nos. of 2004 arising out of SLP (C) Nos.12835-12893, 14836, 17419, 21900, 22013, 22235-22273 OF 2002, CIVIL APPEAL Nos. 2455-2465 of 2004 arising out of SLP (C) Nos.10276-10286 OF 2003, CIVIL APPEAL Nos.6163-6180 OF 2002, 1117-1121, 1131-1139 & 4333- 4337 OF 2003 AND WP(C) Nos.254, 262 & 288 of 2003 & WP (C) No.15 OF 2004.

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KAPADIA, J.

Leave granted.

These civil appeals by special leave involve common question of law as to whether the State has power and competency to levy tax on paddy, purchased by the miller for sale of rice to the exporter, in view of section 5(3) read with section 15(ca) of Central Sales Tax Act, 1956 (hereinafter referred to as "the 1956 Act").

For the sake of convenience, we may refer to the facts of Civil Appeal Nos.3674-3710 of 2002. Appellant is the miller.

It produces paddy, processes it and sells rice to the exporter who exports it out of India. In the assessment proceedings, the appellant claimed that in view of Article 286 of the Constitution and section 5(3) and 15(ca) of the 1956 Act, the State was not competent to levy purchase tax on the paddy purchased by it for sale of rice to the exporter. The appellant filed sales tax returns for four assessment years 1996-1997 to 1999-2000 in accordance with section 25 of the Haryana General Sales Tax Act, 1973 (hereinafter referred to as "the 1973 Act"). On August 16, 1999, the sales tax tribunal accepted a similar claim of dealer M/s Veerumal Monga & Sons vide sales tax appeal No.698 of 1998-99. Later in review by the State, the tribunal held that the assessee was not entitled to exemption from payment of purchase tax on paddy. In pursuance of the order passed by the tribunal, the assessing authority issued notice to the appellant herein to show cause why purchase tax be not levied. The appellant appeared before the assessing authority and produced the necessary forms to show that the rice had been actually exported out of India by the exporter who had a prior order from the foreign buyer. The appellant claimed that no tax was, therefore, leviable. While the matter was pending before the assessing authority, the appellant approached the High Court through writ petition no.8532 of 2000. In the writ petition, the appellant challenged the order of assessment. The department filed its reply. It was averred that the purchase of paddy by the miller-cum-exporter, by virtue of legal fiction in section 15(a), became purchase in the course of export under section 5(3) of 1956 Act, but the legal fiction does not extend to the case of the appellant who purchased the paddy from the market for sale of rice to the exporter. By the impugned judgment and order dated 28.8.2001, the High Court held that the purchase of paddy by the appellant for sale of rice to the exporter is exigible to the levy of purchase tax under the 1973 Act. Hence, these civil appeals.

Before dealing with the arguments advanced by the learned counsel for the parties, four concepts arising from sections 5 and 15 of 1956 Act are required to be understood.

These are \026 local sale, sale in the course of exports, export sale and single point levy of tax for declared goods. These are inbuilt in sections 6 and 17 read with schedule-D to the 1973 Act. For sake of convenience, we quote hereinbelow sections 5 and 15 of the 1956 Act along with sections 6 and 17 read with schedule ’D’ of 1973 Act:\027 Sections 5 and 15 of the 1956 Act:

Section 5. When is a sale or purchase of goods said to take place in the course of import or export.\027(1) A sale or purchase of goods shall be deemed to take place in the course of the export of the goods out of the territory of India only if the sale or purchase either occasions such export or is effected by a transfer of documents of title to the goods after the goods have crossed the customs frontiers of India.

(2) 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 Ind