Madras High Court
M/S. Alsa Marine & Harvests ... vs The Sales Tax Appellate Tribunal on 26 October, 2022
W.P.Nos. 15357 to 15360 of 2007
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 26.10.2022
CORAM
THE HON'BLE MR. JUSTICE S. VAIDYANATHAN
AND
THE HON'BLE MR. JUSTICE C. SARAVANAN
W.P. Nos. 15357 to 15360 of 2007
M/s. Alsa Marine & Harvests Limited,
rep. by Eusufal Elias Saith,
Managing Director,
A-54, 11th Main Road, Anna Nagar,
Chennai – 40. ..Petitioner in
all WPs
Vs.
1. The Sales Tax Appellate Tribunal
(Main Bench),
City Civil Court Buildings,
Chennai – 104.
2. The Commercial Tax Officer,
Amaindakarai Assessment Circle,
Chennai – 108. ..Respondents
in all WPs
Prayer: Petitions under Article 226 of the Constitution of India praying
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W.P.Nos. 15357 to 15360 of 2007
for issue of a Writ of Certiorari to call for the records on the files of the 1 st
respondent in T.A. Nos. 1105/01 1054/02, 1055/02 & 1052/02 dated
02.08.2006 relating to the years 1993-94, 1994-95, 1995-96 & 1996-97
(TNGST) respectively and quash the same as invalid, illegal and contrary to
law.
For Petitioner :: Mr.V. Srikanth
For Respondents :: Mr.V. Prashanth Kiran,
Govt. Advocate for R2
ORDER
S. VAIDYANATHAN,J.
AND
C. SARAVANAN,J.
These writ petitions are taken up for final disposal.
2. The dispute in these writ petitions is relating to taxability of sale
of Replenishment (REP) Licence.
3. Though elaborate submissions were made by learned counsel
for the petitioner and the learned Government Advocate for the 2 nd
respondent, the learned counsel for the petitioner fairly submitted that the
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W.P.Nos. 15357 to 15360 of 2007
issue is now squarely covered against the petitioner in the petitioner's own
case in the case in W.P. No. 21219 of 2007 vide order dated 27.02.2020. In
the said order, this Court has referred to the decision of the Hon'ble Supreme
Court in Yasha Overseas V. Commissioner of Sales Tax and others
reported in [2008] 17 VST 182 (SC). The relevant portion of the decision
of this Court referring to the aforesaid judgment of the Hon'ble Supreme
Court is extracted hereunder:
"4. The Honourable Supreme Court in its detailed judgment
delivered on 6th May, 2008, in the case of Yasha Overseas
V.Commissioner of Sales Tax and others reported in [2008] 17
VST 182 [SC], while discussing various preedents on the issue,
held that both REP licence and DEPB licence amounted to 'goods'
and therefore sales thereon, was taxable under the Sales Tax Law
of the State. The relevant paragraph of the said judgment is
quoted hereunder:
'45. Thus on a detailed examination, we are
unable to see how the decision in Sunrise can be said to
alter the position in regard to the sale of REP licenses as
hled by the earlier decision in Vikas. It is noted above
that the Constitution Bench in Sunrise firmly and
expressly declined to go into the question whether REP
licences (or DEPB which replaced REP licences) were
'goods'. It is indeed true that the Constitution Bench in
Sunrise did not approve the decision in Vikas insofar as it
gave their free marketability as an additional reason to
hold that REP licences were not actionable claim but
'goods' properly so called. The Constitution Bench held
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that the assumption that actionable claims were not
transferably for value was quite unfounded and the
conclusion drawn on that basis was quite wrong. In
paragraphs 39 and 40 of the decision, the Sunrise
decision gave illustrations of a number of actionable
claims which are transferable.
46. But to our mind that does not in any way
change the position inso far as REP licences are
concerned. While examining the three- Judge Bench
decision in Vikas earlier in this judgment it is seen that 26
the Court first came to hold that REP licence/exim scrip
fell within the definition of goods quite independently. The
court found and held that REP licences had their own
value; they were freely bought and sold in the market for
their intrinsic value and for that reason alone those were
goods. (See paragraph 29 of the decision in Vikas that is
reproduced above). It was only after coming to
conclusion that the Court proceeded to examine the
matter in light of the observations made in Anraj relating
to lottery tickets and that too because the Karnataka and
Madras High Courts had heavily relied upon the Anraj
decision for holding that the sale of REP licences was
exigible to sales tax. On a careful reading of the decisiion
in Vikas it is apparent that it was the intrinsic value of
REP licence that brought it within the definition for
"goods".
47. At this stage, we feel obliged to put in a
caveat in regard to the observations made in Sunrise
about marketability being a feature of distinction between
'goods' proper and actionable claims. What was said in
Vikas, as we understand it, was that the innate value of
REP licence and its free transferability made it into a
market commodity. The illustrations given in paragraphs
39 and 40 of the decision in Sunrise, namely, (i) a right
on the fulfillment of certain conditions to call for delivery
of goods mentioned in a contract, (ii) negotiable
instruments, (iii) right to recover insurance money (iv) a
partner's right to sue for an account of a dissolved
partnership, (v) the right to claim the benefit of a contract
not coupled with any liability, (vi) a claim for arrears of
rent and (vii) a right to the credit in a provident fund
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account are all indeed transferable for cosideration but
none of these is a market commodity. The holder of any
of the above rights or claims may or may not be able to
find a ready buyer at a given time;conversely a
prospective buyer may not find any of the above rights or
claims available for purchase by going to the market at
any time. Contrary to this, REP licenses had always a
market, that is to say, there were people willing to sell and
others willing to buy REP licences at all times. Its innate
value coupled with free transferability made REP licences
into a market commodity and it was that aspect of the
matter that Vikas referred to for holding that REP licences
could not be classified as actionable claims. Those were
goods properly so-called having innte value and a ready
market. The position becomes further clear by the
completely contrasting findings in Sunrise (in regard to
lottery tickets) and in Vikas ( in regard to REP licences).
In 28 Sunrise after giving illustrations of transferable
actionable claims (paragraphs 39 and 40) paragraph 41
begins as:
"A lottery ticket has no value itself. It is a mere piece
of paper."
48. On the contrary, in Vikas paragraph 29
begins as follows:
"The above provisions do establish tht REP licences have
their own value. They are bought and sold as such."
49. We thus have not the slightest doubt in our
mind that the decision in Sunrise in no way affects the
position insofar as REP licences are concerned and the
legal position in regard to their sale is concluded by the
decision in Vikas.
50. This takes us to the next question, whether
what is said in Vikas in regard to REP licences would also
apply in the case of DEPB. On behalf of the appellants it is
strongly contended that DEPB has materially different
features and hence, the decision in Vikas will have no
application to it. Mr.A.K. Jain, learned counsel appearing
for the appellants in Civil Appeal No. 4075/2007 especially
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W.P.Nos. 15357 to 15360 of 2007
make elaborate arguments to bring out the points of
distinction between REP licence and DEPB. But before
proceedings to examine what is DEPB and how far it is
different from REP licence it will be useful to take a look at
the provisions of law under which the present cases arise
and to establish their similarity with the statutory
provisions that came up for consideration in Vikas and
Sunrise. As noted above, the present appeals arise under
the Delhi Sales Tax Act, 1975, the Kerala General Sales
Tax Act, 1963 and the Bombay Sales Tax Act, 1959.' "
4. In the light of the above, these writ petitions are dismissed. No
costs.
(S.V.N.J.) (C.S.N.J.)
nv 26.10.2022
To
The Commercial Tax Officer,
Amaindakarai Assessment Circle,
Chennai – 108.
S. VAIDYANATHAN,J.
AND
C. SARAVANAN,J.
nv
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