Commissioner Of Sales Tax vs Printers House Pvt. Ltd.
1992 Latest Caselaw 75 Del

JUDGMENT

B.N. Kirpal, J.

(1) The appellate tribunal, sales tax, Delhi has referred to this Court the following three questions : "1. Whether 'on the facts; and in the circumstances of the case the sale of the Printing Machine imported by the dealer from Germany and sold to M/s. Union Printers Co-operative Society Ltd.for Rs. 2,39,908.85 was a sale in the course of import within the meaning of Section 5(2) of the Central Sales Tax Act, 1956 ?2. Whether on the .facts and in the circumstances of the case the dealer acted as an agent of the purchasing dealer M/s, Union Printers Co-operative Industrial Society Ltd., New Delhi and made purchases on behalf of the principal ?3. Whether on the facts and in the circumstances of the case the amount of Rs. 2,39,908.85 can be included in the turnover of the dealer for purposes of levying sales tax under the Act ?"

The facts, as found by the tribunal and narrated in the. statement offacts, are as under : "THIS appeal is directed against the order dated 4.8.1972passed by Shri R.K. Goswami, Assistant Commissioner, Sales Tax,Delhi in respect of the assessment year 1966-67. The dealer M/s.Printers House Private Ltd., New Delhi is engaged in the business of printing machinery and allied equipments. In the year underassessment he was charged sales at the rate of 5ø/o on the sale of Rs.2,39,908.85 which was alleged to have been made by the dealer infavor of the M/s. The Union Printers Co-operative Industrial Society Ltd. A penalty of Rs. 5000.00 was also imposed for late filing of the return. The facts are not very much in dispute The import license for import of a printing press from Germany was originally granted by the Chief Controller of Imports and Exports (C.C.I & E.),New Delhi to M/s. Photo Litho Press Pvt. Ltd., Madras. The C.C.I.& E. issued a letter of authority authorising the dealer to import the printing press on behalf of the licensee. On the strength of the letter of authority the dealer imported the printing press from Germany and the same landed in March, 1965, The licensee, however,failed to make the payment and take the delivery of the saidmachinery. The C.C.I. & E., therefore, allotted the machinery toM/s. Bharat Litho Graphic Co. of Calcutta but that company also did not take the delivery. The said machinery was, therefore, finally released by the C.C.I. & E. in favor of the M/s. Union Printers Co-operative Industrial Society Ltd., New Delhi to whom the machinery was delivered on payment of Rs. 2,39,908.85. According to the dealer he was only importer of the machinery oft the authority ofC.C.I. & E. and acted as an agent of the licensee. It was urged that the dealer had no property in goods as he could not sell the machinery to any one he liked and at any price he wished. It was asserted that the dealer could not charge any price other than fixed by theC.C.I. & E. The import license was granted to the licensee and if he did not take the delivery the goods could be delivered only to another person on the instructions and advice of the C.C.I. & E. It was pleaded that the price was worked out by the C.C.I. & E. over which the dealer had no control."

(2) The Sales Tax Tribunal came to the conclusion that the transaction in question amounted to a sale in the course of import and, therefore, was exempt from tax. It took into consideration the fact the sales tax had been realised from the purchaser but this fact alone, according to the Tribunal,would not convert the transaction into sale otherwise than in course of import.From the assessment order, which is on record, it is clear that when the Chief Controller of Imports and Exports allowed M/s. Union Printers Co-operative Industrial Society Ltd. to purchase the imported machinery, a bill was raised by the dealer. It was in this context that sales [email protected] 5% was charged and realised. The question as to what is the sale in the course of import has been subject to a large number of decisions of the Supreme Court.The two leading cases are that of K.G.KhosIa and Co. (17 Stc 473) and Binani Bros. (33 Stc 254). The said decisions of the Supreme Court were analysed by us in the case of Commissioner of Sales Tax, New Delhi v. M/s.The Gramophone Co. of India, S.T.C. No. 47 of 1978, decided on 23/08/1991.

(3) In that case also, the goods had been imported against the import license from abroad. The import license had been issued in favor of All IndiaRadio. The question still arose whether the sales made were in the course of import or not. It was held by this Court that in case of sale of goods in the course of import or export, there should be a privity of contract between the foreign party and the Indian importer or exporter. It was further held that unless such a privity of contract takes place, there would be no sale in the course of export unless, of course, the sale takes place during the movement of goods from India to abroad or vice versa by transfer of documents of title.

(4) In the present case, the original licensee in whose favor the import license had been granted was M/s. Photo Litho Press Pvt. LtdMadras. The original licensee did not take delivery of the imported goods. The second company to whom the machine was allotted also did not take delivery and ultimately it is M/s. Union Printers Co-operative Industrial Society Ltd which purchased the machine. As far as this purchase is concerned, there was no privity of contract between this purchaser and the foreign exporter. When the purchase was made, the goods had already reached India and the privity of contract was only between the dealer and M/s. Union Printers Co-operative Industrial Society Ltd. which was the ultimate purchaser of the machinery There were, therefore, two sales which were effected in the present case One was the sale by German manufacturer in favor of the dealer and the second was the sale by the dealer in favor of the ultimate purchaser, namely M/s Union Printers Co-operative Industrial Society .Ltd. The second sale cannot be regarded as a sale in the course of import. The sale was effected after the goods had reached India and after the goods had been imported. The dealer had rightly raised the bill and realised the sales-tax.

(5) For the aforesaid reasons, the questions of law mentioned above are answered in favor of the Commissioner of Sales-tax and against the dealer.

(6) There will be no order as to costs.