HEMANT SPICES Vs. ASSISTANT COMMISSIONER

JUDGEMENT

(1.) THE petitioners in these writ petitions are exporters of goods manufactured by them or otherwise. THEy have filed these writ petitions challenging either the levy, or the proposed levy, of tax under the Kerala General Sales Tax Act, 1963 ("the Act") on the amounts received by them for the transfer of impost replenishment licences (hereinafter referred to as "the REP licences") and of exim scrips to others. THE writ petitions have been filed either at the stage of pre-assessment notices or attempt to reopen completed assessments, or after completion of assessments. THE question for determination is however the same in all the cases.

(2.) THE Government of India formulated a scheme in their Import and Export Policy for 1995-88 for the grant of REP licences to registered exporters to enable them to secure replenishment by import, of materials required by them in the manufacture of the products exported. Chapter XIV sets out the policy in all its detail, namely, the eligibility criteria, extent of the import replenishment, items permissible for import and the like. It will be see therefrom that the holder of the REP licence is conferred a very valuable right of effecting direct import of canalised items as appearing in that licence to the extent permitted therein, as also of samples and others, as mentioned in the various clauses. Clauses 225 and 226 deal with utilisation of REP licences. THE licence will be issued in the name of the registered exporter only, and will not be subject to actual user conditions. THE licence holder may transfer the licence in full or in part in favour of any other person except in certain specified cases. THE licence holder or the transferee may import the goods permitted therein. THE transfer of the licence does not require any endorsement or permission from the licensing authority. It will be governed by the ordinary law. Accordingly, clearance of the goods covered by a REP licence will be allowed by the customs authorities on production by the transferee of only the document of transfer of the licence concerned in his name. THE transferor should give a formal letter to the transferee giving full particulars regarding number, date and value of the licence transferred, and the name and address of the transferee, and complete description of the import items for which the licence is transferred. THEse are some of the salient features of the REP licence.

(3.) THE stand taken by the Revenue is that REP licences constitute "goods" as defined in section 2 (xii) of the Act, meaning all kinds of movable property (other than newspapers, actionable claims, electricity, stocks and shares and securities ). Movable property is not defined in the Act, but it is defined in section 2 (23) of the Interpretation and General Clauses Act 7 of 1125, as meaning property of every description except immovable property. Section 2 (17) of the said Act defines immovable property as including land, benefits to arise out of land and things attached to the earth or permanently fastened to anything attached to the earth, but no standing crops. Respondents have taken the stand that REP licence constitutes movable property, which confers a present right to import goods which otherwise will not be permissible under the Imports and Exports (Control) Act, 1947. It is not a chose in action and therefore not excluded from the definition of "goods" in the Act. THE transfer thereof therefore attracts tax under the Act.