PUNJAB CONCAST STEELS Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) The Assessee is on appeal as against the order of the Sales Tax Appellate Tribunal (Additional Bench), Chennai-600 104, dated 30.12.2002 in T.A. No. 1195/2002 raising the following questions of law:

(2.) The assessment year herein relates to 1996-97. The Petitioner herein is a dealer in vegetable oil. It returned the turnover of Rs. 65,37,53,240.05. Evidently the Assessee did not return the turnover pertaining to the High Sea Sales. The Petitioner herein is a unit of Nahar International Ltd., Chennai having their office at Ludhiana. It imported Palmolein from foreign countries and stored them in the storage tanks at Chennai Harbour Area. Those tanks were found to be under the custody of Nahar International Limited, Chennai. The Assessee treated the sales as sales in the course of import and hence claimed exemption under Section 5(2) of the Central Sales Tax Act. On 24.04.1997, there was an inspection by the Enforcement Wing Officers in the business premises of the Assessee, where it was found that Tvl. Gargi Trading Corporation had purchased Palmolein from the Assessee-Tvl. Nahar International Ltd., Chennai and transported the same to various places outside the State in Bihar. Apart from that, the documents also showed that the Assessee had effected High Sea Sales in favour of Tvl. Rasi Chem Private Ltd., Chennai. The High Sea sales invoices were found to have been raised at Ludhiyana, whereas Tvl. Rasi Chem Private Ltd., Chennai - the purchaser had taken delivery of the goods at Chennai from the storage tank under the custody of Tvl. Nahar International Ltd., at Chennai. The Revenue viewed that even though the Assessee claimed the sales to these two persons as sales in the course of import and hence exempt from tax of Central Sales Tax Act, the documents in support of the claim were fabricated as the delivery of palm oil itself was only from the storage tanks kept under the custody of Nahar International Ltd. The tanks are located within the Chennai Harbour area, after crossing customs frontier. Thus, the turnover of Rs. 4,17,23,473.00 and Rs. 14,12,73,467.00 were sought to be assessed at the hands of the Assessee herein.

(3.) In the light of the above, the turnover was thus proposed to be assessed under the provisions of Tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as TNGST Act). Accordingly, a notice was issued to the Assessee in this regard. The Assessee filed its objections on 07.06.1999. The Assessee pointed out that the import of palm oil was only by Nahar International Ltd., Ludhiana and not from Nahar International Ltd., Chennai. Further, the Palmolein sold to two parties viz., Rasi Chem Private Ltd. and Tvl. Gargi Trading Corporation was stored in the storage tanks belonging to Tvl. Oswal Oils and Vanaspathi Industries, Chennai and leased out to Tvl. Nahar International Limited, Ludhiyana. The storage charges and other service charges were also paid for the same by Tvl. Gargi Trading Corporation and Rasi Chem Private Ltd., who had taken the storage tanks on lease. The goods were taken delivery from there only by the purchasers. The Assessee had not effected any local sale to attract provisions of TNGST Act. It was further pointed out that Nahar International Ltd. had effected the high sea sales by endorsing Bill of lading; that the above said two purchasers had cleared the consignment and had paid the customs duty and they themselves stored the same in the storage tanks available in the Madras Port. Thus, in respect of the High Sea sales, Nahar International Ltd. claimed 5(2) of the Central Sales Tax Act exemption in their assessment in the State of Punjab. In these circumstances, the Assessee prayed for dropping the proceedings.