A R ASSOCIATES Vs. COMMISSIONER OF COMMERCIAL TAXES

JUDGEMENT

(1.) THE appellants before us claim exemption in respect of a consignment of coffee beans that had been sold to Ramesh Exports who are an export house based at Bangalore. In support of their plea that the goods were in fact exported, they produced the requisite form H and the bills of lading. The assessing authority disallowed the exemption claimed by an order dated April 17, 1996 principally on the ground that the assessee had failed to establish the factum of export within the framework of the requirement of Section 5 (3) of the Central Sales Tax Act, 1956 read with Rule 12 (10) (a) of the Central Sales Tax (Registration and Turnover) Rules of 1957. The appellants thereafter preferred an appeal and the appellate authority by order dated August 23, 1996 allowed the appeal. The appellate authority proceeded on the footing that Ramesh Exports was a reputed export house regularly engaged in the export of coffee beans and that it had been pointed out that the consignment was exported to Equatorial Traders Limited, Middlesex, london. The record indicated that the export agreement had been procured on March 8, 1994 and that the appellants had sold their coffee to the export house on March 24, 1994. The appellate authority accepted the evidence produced by the present appellants and allowed the appeal. The revisional authority thereafter issued notice to the appellants indicating its intention to review the order in question. The appellants did not appear before the revisional authority and by an order dated May 15, 1997 the revisional authority set aside the appellate order holding that the requirement of law had not been complied with and that consequently the appellants are not eligible for the exemption from tax. The present appeal assails the correctness of that order.

(2.) THE main submission canvassed by the appellants' learned counsel Mr. Nazeer is that, there is no dispute about the fact that this was a penultimate sale, that the appellants had sold the consignment to Ramesh Exports and he heavily emphasises the fact that the department had conceded the position that this party was a reputed exporter and that they were exporting coffee beans. His submission is that, once form H is produced and the bill of lading is produced, that merely because the agreement with the exporter is not forthcoming that it is not a ground on which the genuineness of the transaction can be doubted and the appellants cannot be disqualified from the exemption. The learned Government Advocate had seriously assailed this position and his principal submission is that in cases of the present type strict compliance with the requirements of law are an absolute necessity and he has further emphasised the point that the appellants did produce three agreements with exporters for export of coffee approximately worth about Rs. 40,00,000 and that they were fully aware of this requirement. His contention is that, if they have failed to produce the export agreement which is an essential requirement in respect of the present consignment, they are totally disqualified from the tax exemption because there is no guarantee that this particular part of the consignment forms a part of the export agreement.

(3.) WE have carefully assessed the rival contentions and we do find on a perusal of the requirements of Section 5 (3) of the Central Sales Tax Act read with Rule 12 (10) (a) of the central Sales Tax (Registration and Turnover) Rules that it is insufficient for the assessee to merely produce the form H and the bill of lading because the most important evidence that is required to be produced as per the requirements of law is the export agreement. The purpose behind the insistence on this provision is in order to ensure that there was not only in existence a valid agreement for export and an order but also to be able to identify the particular export goods and to establish a link or nexus between those goods and the export agreement. In this background there can be no question of either a waiver or a concession being made in so far as the law postulates certain requirements and the non-fulfilment of those requirements will be fatal to the case of the assessee in question. It is not sufficient for an assessee to establish that some exports have taken place or that certain goods had been sold to the export house because the law goes a little further in ensuring that the consignment had in fact left the territory of India, being part of an export consignment and it is only when this last ingredient is fulfilled that the privilege of exemption can be granted. We see no ground on which the revisional order can therefore be interfered with.